Document:

exv10w35

 

Exhibit 10.35

AMENDED AND RESTATED CONSOLIDATED PROMISSORY NOTE SECURED BY

DEED OF TRUST

	 	 	 
	$75,402,559

	 	August 28, 1998

          For value received, BUTERA PROPERTIES, LLC, a Delaware limited
liability company, BUTERA PROPERTIES II, LLC, a Maryland limited
liability company, BUTERA GATEWAY CENTER, LLC, a Maryland limited
liability company, BUTERA GIRARD PLACE, LLC, a Maryland limited liability
company, BUTERA GIRARD BUSINESS CENTER, LLC, a Maryland limited liability
company, BUTERA GOLDENROD LANE, LLC, a Maryland limited liability company
THIRTY WEST LLLP a Maryland limited liability limited partnership, TRB,
INC., a Colorado corporation, and WOODSTONE ASSOC., a Colorado general
partnership (hereinafter referred to as “Maker”), jointly and severally
promise to pay to the order of CREDIT SUISSE FIRST BOSTON MORTGAGE
CAPITAL LLC, a Delaware limited liability company (“Lender” and also
sometimes “Payee”), having its principal office at 11 Madison Avenue, New
York, New York 10010, or at such place as the holder hereof may from time
to time designate in writing, the principal sum of SEVENTY-FIVE MILLION
FOUR HUNDRED TWO THOUSAND FIVE HUNDRED FIFTY-NINE DOLLARS ($75,402,559),
in lawful money of the United States of America, with interest thereon to
be computed on the unpaid principal balance from time to time outstanding
at the Applicable Interest Rate (as hereinafter defined), and to be paid
in installments as follows:

	A.	 	A payment of interest only on the date hereof with
respect to the interest
accrual period from the date hereof to and including
September 10 1998;
	 
	B.	 	A constant payment of $487,056.38 (such amount
hereinafter the
“Consolidated Monthly Payment Amount”), on the eleventh day
of
October, 1998 and on the eleventh day of each calendar
month thereafter
up to and including the eleventh day of September, 2028;
(each a
“Payment Date”); each of such payments to be applied (a) to
the
payment of interest computed at the Initial Term Interest
Rate (as
hereinafter defined); and (b) the balance applied toward
the reduction of
the principal sum;

and the balance of said principal sum together with all accrued and
unpaid interest thereon shall be due and payable on the eleventh day of
September, 2028 (the “Maturity Date”). Interest on the principal sum of
this Note shall be calculated on the basis of the actual number of days
elapsed and a three-hundred-sixty (360) day year. The constant payment
required hereunder is based on an amortization schedule of
three-hundred-sixty (360) months. For purposes of making payments
hereunder, but not for purposes of calculating interest accrual periods
if the eleventh (llth) day of a given month is not a Business Day (as
hereinafter defined), then amounts due on the Payment Date for such
month shall be due on the next

 

 

succeeding Business Day. All amounts due under this Note shall be payable
without setoff, counterclaim or any other deduction whatsoever.

          1.   As used in this Note:

          (a) The term “Annual Budget” shall mean an annual budget submitted by
Maker to Payee in accordance with the terms of paragraph 8(b) herein.

          (b) The term “Anticipated Repayment Date” shall mean September 11,
2008.

          (c) The term “Applicable Interest Rate” shall mean from (i) the date of
this Note through but not including the Anticipated Repayment Date, the
Initial Term Interest
Rate, and (ii) from and after the Anticipated Repayment Date through and
including the date
this Note is paid in full, the Extended Term Rate.

          (d) The term “Approved Annual Budget” shall mean each Annual Budget
approved by Payee in accordance with terms herein.

          (e) The term “Business Day” shall mean a day other than (i) a Saturday or
Sunday, or (ii) any day on which commercial banks in New York City are not
open for
general banking business.

          (f) The term “Capital Expenditures” shall mean for any period, the
amount expended for items capitalized under generally accepted accounting
principles
including expenditures for building improvements or major repairs, leasing
commissions and
tenant improvements.

          (g) The term “Cash Expenses” shall mean, collectively, the Consolidated
Cash Expenses and the Wedgewood Cash Expenses.

          (h) The term “Cash Management Agreement” shall have the meaning assigned
to such term in the Deeds of Trust.

          (i) The term “Consolidated Cash Expenses” shall mean for any period, the
operating expenses for the Consolidated Trust Property as set forth in an
Approved Annual Budget to the extent that such expenses are actually incurred
by Maker minus payments into the Tax and Insurance Impound Fund and the
Replacement Escrow Fund pursuant to the Consolidated Deed of Trust.

          (j) The term “Consolidated Deed of Trust” shall mean the Amended,
Restated and Consolidated Deed of Trust and Security Agreement of even date
herewith in the amount of this Note and the Wedgewood Note, given by Maker for
the use and benefit of Payee covering the fee estate of Maker in certain
premises as more particularly described therein.

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          (k) The term “Consolidated Debt” shall mean, collectively, the whole of
the principal sum of this Note, together with all interest accrued and unpaid
thereon and all other sums due under the Consolidated Loan Documents.

          (1) The term “Consolidated Loan” shall mean that certain loan in the
principal amount of this Note made by Payee to Maker contemporaneously
herewith.

          (m) The term “Consolidated Loan Documents” shall mean collectively this
Note, the Consolidated Deed of Trust, the Wedgewood Deed of Trust and any and
all other documents securing, evidencing, or guaranteeing all or any portion
of the Consolidated Loan or otherwise executed and/or delivered in connection
with this Note and the Consolidated Loan.

          (n) The term “Consolidated Trust Property” shall mean the property
covered by the Consolidated Deed of Trust.

          (o) The term “Debt” shall mean, collectively, the Consolidated Debt
and the Wedgewood Debt.

          (p) The term “Deeds of Trust” shall mean, collectively, the Consolidated
Deed of Trust and the Wedgewood Deed of Trust.

          (q) The term “Default Rate” shall mean, a rate per annum which equal to
the lesser of (a) the maximum rate permitted by applicable law, or (b) five
percent (5%) above the Applicable Interest Rate.

          (r) The term “Defeasance Option” shall mean the right and option of Maker
to release the Trust Property (as defined in each Deed of Trust) from the lien
of such Deed of Trust in accordance with the provisions set forth in Section
4.37 of each Deed of Trust.

          (s) The term “Extended Term Rate” shall mean a rate per annum
equal to
(i) a rate per annum equal to the greater of (A) the Initial Term Interest
Rate plus five (5) percentage points or (B) the Treasury Rate plus five (5)
percentage points, or (ii) for so long as this Note is an asset of the trust,
partnership, corporation or other entity formed in connection with a
Securitization (as defined in the Consolidated Deed of Trust) pursuant to
which securities rated by any Rating Agency (as defined in the Consolidated
Deed of Trust) have been issued, a rate per annum equal to the Initial Term
Interest Rate plus two (2) percentage points.

          (t) The term “Excess Cash Flow” shall mean, for any period, the sum
(determined in accordance with generally accepted accounting principles,
consistently applied) of (i) net operating income (calculated as all income
derived from the operation of the Trust Property after payment of taxes and
expenses), plus (ii) depreciation and amortization (to the extent deducted in
determining net operating income) for such period, plus (iii) disbursements
from the Tax and Insurance Impound Fund, the Replacement Escrow Fund, the
Leasing

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Escrow Fund or any other escrows or reserves approved by Payee or provided for
under the Loan Documents, but only to the extent disbursed by Maker and not
applied to the payment of, or reimbursement for, taxes, insurance and other
amounts for which such reserves were set aside, minus (iv) actual payments of
the regularly scheduled principal and interest payments (calculated at the
Applicable Interest Rate, or at the Default Rate, if applicable) due and
payable in accordance with this Note and the Wedgewood Note during an
applicable period, minus (v) actual Capital Expenditures in excess of payments
from the Replacement Escrow Fund, the Leasing Escrow Fund and funding of
reserves for working capital and Extraordinary Expenses as approved by Lender
in its sole discretion, and minus (vi) payments into the Replacement Escrow
Fund, the Tax and Insurance Impound Fund, the Leasing Escrow Fund and other
reserves required under the Loan Documents.

          (u) The term “Extraordinary Expense” shall mean an extraordinary
operating expense or capital expense not set forth in the Approved Annual
Budget or allotted for in the Replacement Escrow Fund.

          (v) The term “Initial Term Interest Rate” shall mean a rate of Six
and 71/100 percent (6.71 %) per annum.

          (w) The term “Loan Documents” means, collectively, the Consolidated Loan
Documents and the Wedgewood Loan Documents.

          (x) The term “Mezzanine Borrowers” shall mean Butera Equity, LLC and
Kimmel Equity, LLC.

          (y) The term “Mezzanine Cash Collateral Account” shall mean the account
described in Section 3(b)(vi) of the Cash Management Agreement.

          (z) The term “Mezzanine Loan” shall mean the loan in the principal amount
of $8,798,160 from the Payee to the Mezzanine Borrowers, and evidenced by the
Mezzanine
Note.

          (aa) The term “Mezzanine Monthly Principal Payments” shall mean all
monthly principal payments required to be made under the Mezzanine Note.

          (bb) The term “Net Capital Expenditures” shall mean for any period the
amount by which Capital Expenditures during such period exceeds
reimbursements for such items during such period from any fund established
pursuant to the Loan Documents.

          (cc) The term “Sale” shall have the meaning given such term in the Deeds
of Trust.

          (dd) The terms “Tax and Insurance Impound Fund”, “Leasing Escrow Fund”
and “Replacement Escrow Fund” shall have the meanings given such terms in the
Consolidated Deed of Trust and the Wedgewood Deed of Trust, respectively.

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          (ee) The term “Treasury Rate” shall mean, as of the Anticipated Repayment
Date, the yield, calculated by linear interpolation (rounded to the nearest
one-thousandth of one percent (i.e., 0.001%)) of the yields of noncallable
United States Treasury obligations with terms (one longer and one shorter) most
nearly approximating the period from the Anticipated Repayment Date to the
Maturity Date, as determined by Payee on the basis of Federal Reserve
Statistical Release H.15-Selected Interest Rates under the heading U.S.
Governmental Security/Treasury Constant Maturities, or other recognized source
of financial market information selected by Payee.

          (ff) The term “Trust Property” shall mean, collectively, the Consolidated
Trust Property and the Wedgewood Trust Property.

          (gg) The term “Wedgewood Cash Expenses” shall mean for any period, the
operating expenses for the Wedgewood Trust Property as set forth in an
Approved Annual Budget to the extent that such expenses are actually incurred
by the Wedgewood Owner minus payments into the Tax and Insurance Impound,
Leasing Escrow Fund and the Replacement Escrow Fund.

          (hh) The term “Wedgewood Debt” shall mean, collectively, the whole of the
principal sum of the Wedgewood Note, together with all interest accrued and
unpaid thereon and all other sums due under the Wedgwood Loan Documents.

          (ii) The term “Wedgewood Deed of Trust” shall mean that certain Amended
and Restated Deed of Trust and Security Agreement of even date herewith in the
amount of this Note and the Wedgewood Note given by the Wedgewood Owner for
the use and benefit of Payee covering the fee estate of the Wedgewood Owner
in certain premises as more particularly described therein.

          (jj) The term “Wedgewood Loan” shall mean that certain loan in the
principal amount of the Wedgewood Note made by Payee to Maker
contemporaneously herewith.

          (kk) The term “Wedgewood Loan Documents” shall mean collectively the
Wedgewood Note, the Consolidated Deed of Trust, the Wedgewood Deed of Trust
and any and all other documents securing, evidencing, or guaranteeing all or
any portion of the Wedgewood Loan or otherwise executed and/or delivered in
connection with the Wedgewood Note and the Wedgewood Loan.

          (11) The term “Wedgewood Monthly Payment Amount” shall mean the Monthly
Payment Amount specified under the Wedgewood Note.

          (mm) The term “Wedgewood Note” shall mean the Promissory Note Secured by
Deed of Trust of even date herewith from the Wedgewood Owner to the Payee in
the principal amount of $7,597,441.

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          (nn) The term “Wedgewood Trust Property” shall mean the property covered
by the Wedgewood Deed of Trust.

          Notwithstanding the foregoing provisions of this paragraph 1, in the
event that there is a Sale of the Wedgewood Property pursuant to Section 4.41
of the Deeds of Trust (resulting from a Securitization (as defined in the
Deeds of Trust) of this Note that does not simultaneously include a
Securitization of the Wedgewood Note), then (i) all references in this Note to
the Wedgewood Note, the Wedgewood Loan, the Wedgewood Debt, the Wedgewood Cash
Expenses, the Wedgewood Deed of Trust, the Wedgewood Loan Documents, the
Wedgewood Monthly Payment Amount, the Wedgewood Note and the Wedgewood Trust
Property shall be of no further force and effect.

          2. This Note is evidence of the Consolidated Loan and of the obligation of
the Maker to repay the Consolidated Loan in accordance with the terms
hereof. The proceeds
hereof are being used by the Maker (i) to refinance certain outstanding
notes made by one or
more Maker entities and held by Payee (the “Original Notes”), and (ii) to
provide purchase
money financing for the acquisition of certain real estate by one or more
Maker entities. This
Note is being executed and delivered (A) to amend and restate certain of
the Original Notes,
(B) to provide for an increase in the total outstanding indebtedness of
Maker, and (C) to
consolidate all of the Original Notes and such additional indebtedness.
This Note is secured
inter alia by (a) the Consolidated Deed of Trust, (b) the Wedgewood Deed
of Trust (but only
until the earlier to occur of repayment in full of this Note or any Sale
of the Wedgewood Trust
Property pursuant to Section 4.41(d) of the Deeds of Trust), and (c) the
other Consolidated
Loan Documents.

          3. If any sum payable under this Note is not paid on or before the date on
which it is due, Maker shall pay to Payee upon demand an amount equal to
the lesser of three
percent (3%) of such unpaid sum or the maximum amount permitted by
applicable law in
order to defray a portion of the expenses incurred by Payee in handling
and processing such
delinquent payment and to compensate Payee for the loss of the use of such
delinquent
payment. If the day when any payment required under this Note is due is
not a Business Day,
then payment shall be due on the first Business Day thereafter.

          4. The Consolidated Debt, or any portion thereof, shall without notice
become immediately due and payable at the option of Payee upon the
happening of any Event
of Default (as defined in the Deeds of Trust). In the event that it
should become necessary to
employ counsel to collect or enforce the Consolidated Debt or to protect
or foreclose the
security therefor, Maker also shall pay on demand all costs of collection
incurred by Payee,
including attorneys’ fees and costs reasonably incurred for the services of
counsel whether or
not suit be brought.

          5. Maker does hereby agree that upon the occurrence of an Event of
Default (including upon the failure of Maker to pay the Consolidated Debt
in full on the
Maturity Date), Payee shall be entitled to receive and Maker shall pay
interest on the entire
unpaid principal sum and any other amounts due at the Default Rate.

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          6. Maker hereby agrees that upon the occurrence of an Event of Default
Maker shall pay to Payee on the eleventh day of each month while such
Event of Default
continues, an aggregate amount equal to the Excess Cash Flow for the prior
month, such
Excess Cash Flow to be applied by Payee to the payment of the Debt in such
order as Payee
shall determine in its sole discretion, including, without limitation,
alternating applications
thereof between interest and principal and between this Note and the
Wedgewood Note.
Interest at the Default Rate and Excess Cash Flow shall both be computed
from the occurrence
of the Event of Default until the actual receipt and collection of the
Debt. Interest at the
Default Rate shall be added to the Debt and shall be secured by the Deeds
of Trust. This
paragraph, however, shall not be construed as an agreement or privilege to
extend the date of
the payment of the Debt, nor as a waiver of any other right or remedy
accruing to Payee by
reason of the occurrence of any Event of Default; the acceptance of any
payment of Excess
Cash Flow shall not be deemed to cure or constitute a waiver of any Event
of Default; and
Payee retains its rights under this Note to accelerate and to continue to
demand payment of the
Consolidated Debt upon the happening of any Event of Default despite any
payment of Excess
Cash Flow.

          7. This Note may not be prepaid prior to the Anticipated Repayment Date;
provided, however, Maker shall have the right and option to release the
Trust Property from
the lien of the Deeds of Trust in accordance with the terms and provisions
of the Defeasance
Option. Notwithstanding the foregoing sentence, Maker shall have the
privilege to prepay the
entire principal balance of this Note and any other amounts outstanding on
any Payment Date
during the sixty (60) days preceding the Anticipated Repayment Date
without payment of the
Yield Maintenance Premium (as defined in the Deeds of Trust) or any other
premium or
penalty. Any prepayment prior to the Anticipated Repayment Date on a
date other than a
Payment Date shall, in any event, include interest through the following
Payment Date. In
addition, on the Anticipated Repayment Date or on any Payment Date
thereafter, the Maker
may, at its option and upon thirty (30) days prior written notice from
Maker to Payee, prepay
in whole or in part, in $100,000 increments only, the outstanding
principal balance of this
Note and any other amounts outstanding without payment of the Yield
Maintenance Premium
or any other premium or penalty. If prior to the Anticipated Repayment
Date and following
the occurrence of any Event of Default, Maker shall tender payment of an
amount sufficient to
satisfy the Consolidated Debt at any time prior to a sale of the Trust
Property, either through
foreclosure or the exercise of the other remedies available to Payee under
the Deeds of Trust,
such tender by Maker shall be deemed to be voluntary and Maker shall pay,
in addition to the
Consolidated Debt, the Yield Maintenance Premium, if any, that would be
required under the
Defeasance Option. Notwithstanding the foregoing provisions, in the event
of any Sale of the
Wedgewood Property pursuant to the provisions of Section 4.41(d) of the
Deeds of Trust, the
Wedgewood Deed of Trust shall no longer secure this Note and no fee or
penalty shall be
payable upon such Sale.

          8. During any Sweep Period (as defined in the Cash Management
Agreement), Maker shall cause all Rents (as defined in the Deeds of Trust)
to be deposited in
the Clearing Account (as defined in the Cash Management Agreement).

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          (a) On each Business Day of each Collection Period (as defined in the Cash
Management Agreement), all Rents deposited in the Cash Collateral Account (as
defined in the Cash Management Agreement) shall be allocated in the following
order of priority:

	(i)	 	First, to fund the Tax and Insurance Impound
Fund Account (as established pursuant to the Cash Management
Agreement) until the amount on deposit therein is equal to
the amount required to be deposited in the Tax and Insurance
Impound Fund on the related Payment Date in accordance with
the terms and conditions of the Deeds of Trust;
	 
	(ii)	 	Second, to fund the Monthly Debt Service
Subaccount (as established pursuant to the Cash Management
Agreement) until the amount on deposit therein is equal to
the Consolidated Monthly Payment Amount and the Wedgewood
Monthly Payment Amount;
	 
	(iii)	 	Third, to fund the Monthly Debt Service Subaccount with any
other amounts due to the Payee under the Loan Documents not
otherwise addressed by this paragraph;
	 
	(iv)	 	Fourth, to fund the Replacement Reserve Escrow Fund Subaccount (as
established pursuant to the Cash Management Agreement) until the
amount on deposit therein is equal to the amount required to be
deposited in the Replacement Reserve (as defined in each Deed of Trust)
on the related Payment Date in accordance with the terms and conditions
of the Deeds of Trust;
	 
	(v)	 	Fifth, to fund the Leasing Escrow Fund Subaccount
(as established pursuant to the Cash Management Agreement)
until the amount on deposit therein is equal to the amount
required to be deposited in the Leasing Escrow Fund (as
defined in each Deed of Trust) on the related Payment Date in
accordance with the terms and conditions of the Deeds of
Trust; and
	 
	(vi)	 	Sixth, to fund the Operating Expense Subaccount
(as established pursuant to the Cash Management Agreement)
until the amount on deposit therein is equal to the Cash
Expenses, other than management fees payable to affiliates of
Maker or the Wedgewood Owner (with the exception of management
fees payable to Ross Management Co., manager of the individual
Consolidated Trust Property known as Patrick Center, pursuant
to a management agreement approved by Payee), for the month in
which such Collection Period ends pursuant to the terms and
conditions of the related Approved Annual Budget;
	 
	(vii)	 	Seventh, to fund the Operating Expense
Subaccount with any Net Capital Expenditures for the month in
which such Collection Period ends

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	 	 	pursuant to the terms and conditions of the related Approved
Annual Budget;
	 
	(viii)	 	Eighth, to fund the Operating Expense Subaccount with any
Extraordinary Expenses approved by Payee for the for the
month in which such Collection Period ends, if any; and
	 
	(ix)	 	Lastly, to fund the Mezzanine Cash Collateral Account.

          Nothing
in this paragraph 8(a) shall limit, reduce or otherwise affect
Maker’s obligations to pay the Consolidated Monthly Payment Amount, make
payments to the Tax and Insurance Impound Fund, Leasing Escrow Fund,
Replacement Escrow Fund due hereunder and pay other amounts due under the
other Consolidated Loan Documents, whether or not Rents are available to make
such payments.

          (b) For each fiscal year the Maker shall submit to the Payee for the
Payee’s written approval an Annual Budget not later than sixty (60) days prior
to the commencement of such fiscal year, in form satisfactory to Payee setting
forth in reasonable detail budgeted monthly operating income and monthly
operating capital and other expenses for the Trust Property. Each Annual
Budget shall contain, among other things, limitations on management fees,
third party service fees, and other expenses as the Maker may reasonably
determine. Payee shall have the right to approve such Annual Budget which
approval shall not be unreasonably withheld, and in the event that Payee
objects to the proposed Annual Budget submitted by Maker, Payee shall advise
Maker of such objections within fifteen (15) days after receipt thereof (and
deliver to Maker a reasonably detailed description of such objections) and
Maker shall within three (3) days after receipt of notice of any such
objections revise such Annual Budget and resubmit the same to Payee. Payee
shall advise Maker of any objections to such revised Annual Budget within ten
(10) days after receipt thereof (and deliver to Maker a reasonably detailed
description of such objections) and Maker shall revise the same in accordance
with the process described in this subparagraph until the Payee approves an
Annual Budget, provided, however, that if Payee shall not advise Maker of its
objections to any proposed Annual Budget within the applicable time period set
forth in this paragraph, then such proposed Annual Budget shall be deemed
approved by Payee. Until such time that Payee approves a proposed Annual
Budget, the most recently Approved Annual Budget shall apply; provided that,
such Approved Annual Budget shall be adjusted to reflect actual increases in
real estate taxes, insurance premiums and utilities expenses.

          9. In the event that the Maker does not pay the Debt in full prior to the
Anticipated Repayment Date, the provisions of paragraph 8 as set forth above
shall remain in full force and effect, and the following subparagraphs also
shall apply:

          (a) From and after the Anticipated Repayment Date, interest shall accrue
on the unpaid principal balance from time to time outstanding on this Note at
the Extended Term Rate. Interest accrued at the Extended Term Rate and not
paid pursuant to this paragraph 9 shall be deferred and added to the
Consolidated Debt and shall earn interest at the Extended Term Rate to the
extent permitted by applicable law (such accrued interest is hereinafter

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defined as “Accrued Interest”). All of the Consolidated Debt, including any
Accrued Interest, shall be due and payable on the Maturity Date.

          (b) All Rents deposited in the Cash Collateral Account during each
Collection Period shall be allocated to in the following order of priority, in
each case to the extent sufficient funds remain therefor:

	(i)	 	First, to fund the Tax and Insurance Impound
Fund Subaccount until the amount on deposit therein is equal
to the amount required to be deposited in the Tax and
Insurance Impound Fund on the related Payment Date in
accordance with the terms and conditions of the Deeds of
Trust;
	 
	(ii)	 	Second, to fund the Monthly Debt Service Subaccount until the amount
on deposit therein is equal to the Consolidated Monthly Payment Amount and the
Wedgewood Monthly Payment Amount (to be applied first to the payment of
interest computed at the Initial Term Interest Rate
with the remainder applied to the reduction of the
outstanding principal balance of this Note and the Wedgewood
Note, in such manner as the Lender in its sole discretion
may determine);
	 
	(iii)	 	Third, to fund the Monthly Debt Service
Subaccount with any other amounts due to the Payee under the
Loan Documents not otherwise addressed by this paragraph;
	 
	(iv)	 	Fourth, to fund the Replacement Escrow Fund
Subaccount until the amount on deposit therein is equal to
the amount required to be deposited in the Replacement Escrow
Fund on the related Payment Date in accordance with the terms
and conditions of the Deeds of Trust;
	 
	(v)	 	Fifth, to fund the Leasing Escrow Fund
Subaccount until the amount on deposit therein is equal to
the amount required to be deposited in the Leasing Escrow
Fund on the related Payment Date in accordance with the terms
and conditions of the Deeds of Trust; and
	 
	(vi)	 	Sixth, to fund the Operating Expense Subaccount
(as established pursuant to the Cash Management Agreement)
until the amount on deposit therein is equal to the Cash
Expenses, other than management fees payable to affiliates of
Maker or the Wedgewood Owner, for the month in which such
Collection Period ends pursuant to the terms and conditions of
the related Approved Annual Budget;
	 
	(vii)	 	Seventh, to fund the Operating Expense
Subaccount with any Net Capital Expenditures for the month in
which such Collection Period ends pursuant to the terms and
conditions of the related Approved Annual Budget;

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	(viii)	 	Eighth, to fund the Operating Expense Subaccount with any
Extraordinary Expenses approved by Payee for the for the
month in which such Collection Period ends, if any;
	 
	(ix)	 	Ninth, to fund the Monthly Debt Service
Subaccount with any amount equal to the remaining principal
balance of this Note and the Wedgewood Note, to be applied
against the outstanding principal due under this Note and the
Wedgewood Note until such principal amounts are paid in full;
	 
	(x)	 	Tenth, to fund the Monthly Debt Service
Subaccount with any amount equal to any Accrued Interest
hereunder and accrued interest under Paragraph 9 of the
Wedgewood Note (the “Wedgewood Accrued Interest”), to be
applied against the outstanding amount thereof until all such
Accrued Interest and Wedgewood Accrued Interest has been
repaid;
	 
	(xi)	 	Lastly, to pay to the Maker any excess amounts.

          (c) In the event that the Maker must incur an Extraordinary Expense, then
the Maker shall promptly deliver to Payee a reasonably detailed
explanation of such proposed
Extraordinary Expense for the Payee’s approval, which approval may be
granted or denied in
the Payee’s sole discretion.

          (d) Nothing in this paragraph 9 shall limit, reduce or otherwise affect
Maker’s obligations to make payments of the Consolidated Monthly Payment
Amount,
payments to the Tax and Insurance Impound Fund, the Replacement Escrow
Fund, and
Leasing Escrow Fund due hereunder and under the other Consolidated Loan
Documents,
whether or not Rents are available to make such payments.

          10. It is expressly stipulated and agreed to be the intent of Maker and
Payee at all times to comply with applicable state law or applicable United
States federal law (to the extent that it permits Payee to contract for,
charge, take, reserve, or receive a greater amount of interest than under
state law) and that this paragraph (and the similar paragraph contained in the
Deeds of Trust) shall control every other covenant and agreement in this Note
and the other Loan Documents. If the applicable law (state or federal) is ever
judicially interpreted so as to render usurious any amount called for under
this Note or under any of the other Consolidated Loan Documents, or contracted
for, charged, taken, reserved, or received with respect to the Debt, or if
Payee’s exercise of the option to accelerate the Maturity Date, or if any
prepayment or the exercise of any Defeasance Option by Maker results in Maker
having paid any interest in excess of that permitted by applicable law, then
it is Payee’s express intent that all excess amounts theretofore collected by
Payee shall be credited on the principal balance of this Note and all other
Debt and the provisions of this Note and the other Consolidated Loan Documents
immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of
any new documents, so as to comply with the applicable law, but so as to
permit the recovery of the fullest amount otherwise called for hereunder or
thereunder. All sums paid or agreed to

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be paid to Payee for the use, forbearance, or detention of the Consolidated
Debt shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Consolidated Debt
until payment in full so that the rate or amount of interest on account of the
Consolidated Debt does not exceed the maximum lawful rate from time to time in
effect and applicable to the Consolidated Debt for so long as the Consolidated
Debt is outstanding. Notwithstanding anything to the contrary contained herein
or in any of the other Consolidated Loan Documents, it is not the intention of
Payee to accelerate the maturity of any interest that has not accrued at the
time of such acceleration or to collect unearned interest at the time of such
acceleration.

          11. This Note may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the
part of Maker or Payee,
but only by an agreement in writing signed by the party against whom
enforcement of any
modification, amendment, waiver, extension, change, discharge or
termination is sought.
Whenever used, the singular number shall include the plural, the plural
the singular, and the
words “Payee” and “Maker” shall include their respective successors,
assigns, heirs,
executors and administrators. If Maker consists of more than one person
or party, the
obligations and liabilities of each such person or party shall be joint
and several.

          12. Maker and all others who may become liable for the payment of all or
any part of the Consolidated Debt do hereby severally waive presentment
and demand for
payment, notice of dishonor, protest, notice of protest, notice of
nonpayment, notice of intent
to accelerate the maturity hereof and of acceleration. No release of any
security for the
Consolidated Debt or any person liable for payment of the Consolidated
Debt, no extension of
time for payment of this Note or any installment hereof, and no
alteration, amendment or
waiver of any provision of the Consolidated Loan Documents made by
agreement between
Payee and any other person or party shall release, modify, amend, waive,
extend, change,
discharge, terminate or affect the liability of Maker, and any other
person or party who may
become liable under the Consolidated Loan Documents for the payment of all
or any part of
the Consolidated Debt.

          13. Subject to the qualifications below, Payee shall not enforce the
liability
and obligation of Maker or its constituent members, partners,
shareholders, directors,
employees or agents to perform and observe the obligations contained in
this Note, the Deeds
of Trust or the other Loan Documents by any legal, equitable or other
action or proceeding
wherein a judgment shall be sought against Maker or its constituent
members, partners,
shareholders, directors, employees or agents, except that Payee may bring
a foreclosure
action, an action for specific performance or any other appropriate action
or proceeding to
enable Payee to enforce and realize upon its interest under this Note, the
Deeds of Trust and
the other Consolidated Loan Documents, or in the Trust Property, the
Rents, or any other
collateral given to Payee pursuant to the Consolidated Loan Documents;
provided, however,
that, except as specifically provided herein, any judgment in any such
action or proceeding
shall be enforceable against Maker only to the extent of Maker’s interest
in the Trust Property,
in the Rents and in any other collateral given to Payee, and Payee, by
accepting this Note, the
Deeds of Trust and the other Consolidated Loan Documents, agrees that it
shall not sue for,
seek or demand any deficiency judgment against Maker in any such action or
proceeding

-12-

 

under or by reason of or under or in connection with this Note, the Deeds of
Trust or the other Consolidated Loan Documents. The provisions of this
paragraph shall not, however, (a) constitute a waiver, release or impairment of
any obligation evidenced or secured by any of the Consolidated Loan Documents;
(b) impair the right of Payee to name Maker as a party defendant in any action
or suit for foreclosure and sale under the Deeds of Trust or the Wedgewood
Owner as a party defendant in any action or suit for foreclosure and sale under
the Wedgewood Deed of Trust; (c) affect the validity or enforceability of or
any guaranty made in connection with the Consolidated Loan or any of the rights
and remedies of the Payee thereunder; (d) impair the right of Payee to obtain
the appointment of a receiver; (e) constitute a waiver of the right of Payee to
enforce the liability and obligation of Maker, by money judgment or otherwise,
to the extent of any loss, damage, cost, expense, liability, claim or other
obligation incurred by Payee (including attorneys’ fees and costs reasonably
incurred) arising out of or in connection with the following:

	(i)	 	fraud or intentional misrepresentation by
Maker or any guarantor in connection with the Consolidated
Loan;
	 
	(ii)	 	the gross negligence or willful misconduct
of Maker;
	 
	(iii)	 	physical waste of the Trust
Property;
	 
	(iv)	 	the breach of any representation, warranty, covenant or
indemnification
provision in those certain Environmental and Hazardous Substance
Indemnification Agreements of even date herewith given by Maker and
the Wedgewood Owner to Payee or in the Deeds of Trust concerning
environmental laws, hazardous substances or asbestos
(provided, however, that only the Maker and the Wedgewood
Owner, and not any of their constituent members, partners,
shareholders, directors, employees or agents, shall have any
liability for environmental matters)
	 
	(v)	 	the removal or disposal of any portion of
the Trust Property after an Event of Default;
	 
	(vi)	 	the misapplication or conversion by Maker of (A)
any insurance proceeds paid by reason of any loss, damage or
destruction to the Trust Property, (B) any awards or other
amounts received in connection with the condemnation of all
or a portion of the Trust Property, (C) any Rents following
an Event of Default, or (D) any Rents paid more than one
month in advance;
	 
	(vii)	 	failure to pay charges for labor or materials or
taxes or other charges that can create liens on any portion of
the Trust Property; and
	 
	(viii)	 	any security deposits collected with respect to the Trust
Property which are not delivered to Payee upon a foreclosure
of the Trust Property or other action in lieu thereof, except
to the extent any such security

-13-

 

	 	 	deposits were applied in accordance with the terms and
conditions of any of the Leases (as defined in the Deeds of
Trust) prior to the occurrence of the Event of Default that
gave rise to such sale or foreclosure or action in lieu
thereof.

Notwithstanding anything to the contrary in this Note or any of the Loan
Documents, (A) Payee shall not be deemed to have waived any right which Payee
may have under Section 506(a), 506(b), 1lll(b) or any other provisions of the
U.S. Bankruptcy Code to file a claim for the full amount of the Consolidated
Debt secured by the Deeds of Trust or to require that all collateral shall
continue to secure all of the Consolidated Debt owing to Payee in accordance
with the Consolidated Loan Documents, and (B) the Consolidated Debt shall be
fully recourse to Maker in the event that: (i) the first full monthly payment
of principal and interest under this Note is not paid when due; (ii) Maker
fails to maintain its status as a single purpose entity, as required by, and
in accordance with the terms and provisions of, the Deeds of Trust; (iii)
Maker fails to obtain Payee’s prior written consent to any subordinate
financing or other voluntary lien encumbering the Trust Property; (iv) Maker
fails to obtain Payee’s prior written consent to any assignment, transfer, or
conveyance of the Trust Property or any interest therein as required by the
Deeds of Trust, or (v) a receiver, liquidator or trustee of Maker or of any
guarantor shall be appointed or if Maker or any guarantor shall be adjudicated
a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or
state law, shall be filed by, consented to, or acquiesced in by, Maker or any
guarantor or if any proceeding for the dissolution or liquidation of Maker or
of any guarantor shall be instituted by Maker or any guarantor. In no event
shall Sidney Kimmel be liable for the above recourse exceptions.

          14. Maker (and the undersigned representative of Maker, if any) represents
that Maker has full power, authority and legal right to execute, deliver
and perform its
obligations pursuant to this Note, the Deeds of Trust and the other
Consolidated Loan
Documents and that this Note, the Deeds of Trust and the other
Consolidated Loan Documents
constitute valid and binding obligations of Maker.

          15. All notices or other communications required or permitted to be given
pursuant hereto shall be given in the manner specified in the Deeds of
Trust directed to the
parties at their respective addresses as provided therein.

          16. MAKER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY
OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO
TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW
OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY
CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY MAKER, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH
THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. PAYEE IS
HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY MAKER.

-14-

 

          17. This Note shall be governed by and construed in accordance with
the laws of the State of Maryland and the applicable laws of the United States
of America.

-15-

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Maker has duly executed this Note the day and year first above written.
	 
	 	 	 	 	MAKER:	 	 	 	 	 	 
	 	 	 	 	BUTERA PROPERTIES, LLC,	 	 
	 	 	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Butera Equity LLC,	 	 
	 	 	 	 	 	 	a Delaware Limited liability company,	 	 
	 	 	 	 	 	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 
	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	By:	 	/s/ T. Richard Butera	 	 
	

	 	 	 	 	 	 	 	 	 	
	 	 
	

	 	 	 	 	 	 	 	 	 	T. Richard Butera,	 	 
	

	 	 	 	 	 	 	 	 	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	BUTERA PROPERTIES II, LLC,	 	 	 	 
	 	 	 	 	a Maryland limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Butera Equity, LLC,	 	 
	 	 	 	 	 	 	a Delaware limited liability company,	 	 
	 	 	 	 	 	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Butera Equity, Inc,.
	 	 	 	 	 	 	 	 	a Delware corporation,
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 
	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	By:	 	/s/ T. Richard Butera	 	 
	

	 	 	 	 	 	 	 	 	 	
	 	 
	

	 	 	 	 	 	 	 	 	 	T. Richard Butera,	 	 
	

	 	 	 	 	 	 	 	 	 	Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	TRB, INC,	 	 	 	 
	 	 	 	 	a Colorado corporation	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ T. Richard Butera	 	 
	 	 	 	 	 	 	
	 	 
	 	 	 	 	 	 	T. Richard Butera,	 	 
	 	 	 	 	 	 	President	 	 

-16-

 

	 	 	 	 	 	 	 	 	 
	 	 	WOODSTONE ASSOC.,
	 	 	a Colorado general partnership
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Butera Equity, LLC,
	 	 	 	 	a Delaware limited liability company,
	 	 	 	 	Manager
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 
	 	 	 	 
	

	 	 	 	 	 	By:	 	/s/ T. Richard Butera
	

	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	T. Richard Butera,
	

	 	 	 	 	 	 	 	Manager
	 
	 	 	 	 	 	 	 	 
	 	 	THIRTY WEST LLLP,	 
	 	 	a Maryland limited liability limited
	 	 	partnership	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ G. Stephen Ross
	 	 	 	 	

	 	 	 	 	G. Stephen Ross,
	 	 	 	 	General Partner
	 
	 	 	 	 	 	 	 	 
	 	 	BUTERA GATEWAY CENTER, LLC,
	 	 	a Maryland limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Butera Equity, LLC,
	 	 	 	 	a Delaware limited liability company,
	 	 	 	 	Manager
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 
	 	 	 	 
	

	 	 	 	 	 	By:	 	/s/ T. Richard Butera
	

	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	T. Richard Butera,
	

	 	 	 	 	 	 	 	Manager
	 
	 	 	 	 	 	 	 	 
	 	 	BUTERA GIRARD PLACE, LLC,
	 	 	a Maryland limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Butera Equity, LLC,
	 	 	 	 	a Delaware limited liability company,
	 	 	 	 	Manager
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 
	 	 	 	 
	

	 	 	 	 	 	By:	 	/s/ T. Richard Butera
	

	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	T. Richard Butera,
	

	 	 	 	 	 	 	 	Manager

-17-

 

	 	 	 	 	 	 	 	 	 
	 	 	BUTERA GIRARD BUSINESS CENTER,
	 	 	LLC, a Maryland limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Butera Equity, LLC,
	 	 	 	 	a Delaware limited liability company,
	 	 	 	 	Manager
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 
	 	 	 	 
	

	 	 	 	 	 	By:	 	/s/ T. Richard Butera
	

	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	T. Richard Butera,
	

	 	 	 	 	 	 	 	Manager
	 
	 	 	 	 	 	 	 	 
	 	 	BUTERA GOLDENROD LANE, LLC,
	 	 	a Maryland limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Butera Equity, LLC,
	 	 	 	 	a Delaware limited liability company,
	 	 	 	 	Manager
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 
	 	 	 	 
	

	 	 	 	 	 	By:	 	/s/ T. Richard Butera
	

	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	T. Richard Butera,
	

	 	 	 	 	 	 	 	Manager

	 	 	 
	Pay to the order of
______________,
	without recourse.
	 
	 	 
	CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC,
	      a Delaware limited liability company
	 
	By:
	 	 
	

	 	

	

	 	Name:
	

	 	Title:

-18-exv10w36

 

Exhibit 10.36

AMENDED AND RESTATED DEED OF TRUST AND SECURITY AGREEMENT

BUTERA PROPERTIES, LLC,

GRANTOR

to

BARBARA G. BLITZ,

TRUSTEE

for the benefit of

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC,

GRANTEE

DATED: AS OF August 28, 1998

SECURING THE
AGGREGATE PRINCIPAL AMOUNT OF $83,000,000

THIS INSTRUMENT IS TO BE FILED AND INDEXED IN THE LAND RECORDS AND IS ALSO TO
BE INDEXED IN THE INDEX OF FINANCING STATEMENTS UNDER THE NAMES OF GRANTOR, AS
“DEBTOR”, AND GRANTEE, AS “SECURED PARTY”.

	 	 	 	 	 
	 

	 	 
	 	Record and Return to:
	

	 	 	 	Cadwalader, Wickersham & Taft
	

	 	 	 	1333 New Hampshire Ave., N.W.
	

	 	 	 	Washington, D.C. 20036
	

	 	 	 	Attn: Joyce J. Gorman, Esq.

WEDGEWOOD DEED OF TRUST

 

 

     THIS AMENDED AND RESTATED DEED OF TRUST AND SECURITY AGREEMENT (this
“Deed of Trust”) is made as of the 28th day of August, 1998, by BUTERA
PROPERTIES, LLC, a Delaware limited liability company (“Grantor”), the
address of each of which is 241 West Patrick Street, Frederick, Maryland 21701,
to Barbara Blitz (“Trustee”) for the benefit of CREDIT SUISSE FIRST
BOSTON MORTGAGE CAPITAL LLC, a Delaware limited liability company (“Grantee”),
the address of which is 11 Madison Avenue, New York, New York 10010.

W I T N E S S E T
H    T H A T:

     FOR AND IN CONSIDERATION OF THE SUM OF TEN AND NO/100 DOLLARS
($10.00), AND OTHER VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF
WHICH ARE HEREBY ACKNOWLEDGED, GRANTOR HEREBY IRREVOCABLY MORTGAGES,
GRANTS, BARGAINS, SELLS, CONVEYS, TRANSFERS, PLEDGES, SETS OVER AND
ASSIGNS, AND GRANTS A SECURITY INTEREST, TO TRUSTEE, in trust with power
of sale, in all of Grantor’s estate, right, title and interest in, to and
under any and all of the following described property, whether now owned
or hereafter acquired (collectively, the “Property” or “Trust Property”):

     A. All that certain land more particularly described on Exhibit A
attached hereto and incorporated herein by this reference (the
“Land”), together with all of the easements, rights, privileges, franchises, tenements,
hereditaments and appurtenances now or hereafter thereunto belonging or in any way
appertaining and all of the estate, right, title, interest, claim and demand whatsoever of
Grantor therein or thereto, either at law or in equity, in possession or in expectancy,
now or hereafter acquired (the “Premises” or “Parcel”);

     B. All structures, buildings and improvements of every kind and
description now or at any time hereafter located or placed on the
Land (the “Improvements”);

     C. All furniture, furnishings, fixtures, goods, equipment, inventory
or personal property owned by Grantor and now or hereafter located
on, attached to or used in and about the Improvements, including, but not limited to,
all machines, engines, boilers, dynamos, elevators, stokers, tanks, cabinets,
awnings, screens, shades, blinds, carpets, draperies, lawn mowers, and all
appliances, plumbing, heating, air conditioning, lighting, ventilating, refrigerating,
disposal and incinerating equipment, and all fixtures and appurtenances thereto, and such other

goods and chattels and personal property owned by Grantor as are now or
hereafter used or furnished in operating the Improvements, or the activities conducted
therein, and all building materials and equipment hereafter situated on or about
the Land or Improvements, and all warranties and guaranties relating thereto, and
all additions

WEDGEWOOD DEED OF TRUST

 

 

thereto and substitutions and replacements therefor (exclusive of any of the
foregoing owned or leased by tenants of space in the Improvements);

     D. All easements, rights-of-way, strips and gores of land, vaults,
streets, ways, alleys, passages, sewer rights, air rights and other
development rights now or hereafter located on or appurtenant to the Land or under or above
the same or any part or parcel thereof, and all estates, rights, titles,
interests, tenements, hereditaments and appurtenances, reversions and remainders whatsoever, in
any way belonging, relating or appertaining to the Land and/or Improvements or any
part thereof, or which hereafter shall in any way belong, relate or be
appurtenant thereto, whether now owned or hereafter acquired by Grantor;

     E. All water, ditches, wells, reservoirs and drains and all water,
ditch, well, reservoir and drainage rights which are appurtenant to,
located on, under or above or used in connection with the Land or the Improvements, or any
part thereof, whether now existing or hereafter created or acquired;

     F. All minerals, crops, timber, trees, shrubs, flowers and
landscaping features now or hereafter located on, under or above the Land;

     G. All cash funds, deposit accounts and other rights and evidence
of rights to investments or cash, now or hereafter created or held by
Grantee pursuant to this Deed of Trust or any other of the Loan Documents (as hereinafter
defined), including, without limitation, all funds now or hereafter on deposit in
the Impound Account, the Repair and Remediation Reserve, the Replacement Reserve, the
Leasing Escrow Fund and the Payment Reserve (each as hereafter defined);

     H. All leases (including, without limitation, oil, gas and mineral
leases), licenses, concessions and occupancy agreements of all or any part the
Land or the Improvements (each, a “Lease” and collectively, “Leases”) now or
hereafter entered into and all rents, royalties, issues, profits, revenue,
income and other benefits (collectively, the “Rents and Profits”) of the Land
or the Improvements, now or hereafter arising from the use or enjoyment of all
or any portion thereof or from any present or future Lease or other agreement
pertaining thereto or arising from any of the Contracts (as hereinafter
defined) or any of the General Intangibles (as hereinafter defined) and all
cash or securities deposited to secure performance by the tenants, lessees or
licensees (each, a “Tenant” and collectively, “Tenants”), as applicable, of
their obligations under any such Leases, whether said cash or securities are
to be held until the expiration of the terms of said Leases or applied to one
or more of the installments of rent coming due prior to the expiration of said
terms, subject to, however, the provisions contained in Section 1.11
hereinbelow;

     I. All contracts and agreements now or hereafter entered into covering
any part of the Land or the Improvements (collectively, the “Contracts”) and
all revenue, income and other benefits thereof, including, without limitation,
management agreements, service contracts, maintenance contracts, equipment
leases,

	 	 	 	 	 	 	 
	 

	 	 	2	 	 	WEDGEWOOD DEED OF TRUST

 

 

personal property leases and any contracts or documents relating to
construction on any part of the Land or the Improvements (including plans,
drawings, surveys, tests, reports, bonds and governmental approvals) or to the
management or operation of any part of the Land or the Improvements;

     J. All present and future deposits given to any public or private utility
with respect to utility services furnished to any part of the Land or the
Improvements;

     K. All present and future funds, accounts, instruments, accounts
receivable, documents, causes of action, claims, general intangibles
(including without limitation, trademarks, trade names, servicemarks and
symbols now or hereafter used in connection with any part of the Land or the
Improvements, all names by which the Land or the Improvements may be operated
or known, all rights to carry on business under such names, and all rights,
interest and privileges which Grantor has or may have as developer or
declarant under any covenants, restrictions or declarations now or hereafter
relating to the Land or the Improvements) and all notes or chattel paper ‘now
or hereafter arising from or by virtue of any transactions related to the Land
or the Improvements (collectively, the “General Intangibles”);

     L. All water taps, sewer taps, certificates of occupancy, permits,
licenses, franchises, certificates, consents, approvals and other rights and
privileges now or hereafter obtained in connection with the Land or the
Improvements and all present and future warranties and guaranties relating to
the Improvements or to any equipment, fixtures, furniture, furnishings,
personal property or components of any of the foregoing now or hereafter
located or installed on the Land or the Improvements;

     M. All building materials, supplies and equipment now or hereafter placed
on the Land or in the Improvements and all architectural renderings, models,
drawings, plans, specifications, studies and data now or hereafter relating to
the Land or the Improvements;

     N. All right, title and interest of Grantor in any insurance policies or
binders now or hereafter referred to in clauses A.-M.
And O.-P. including any
unearned premiums thereon;

     O. All proceeds, products, substitutions and accessions (including claims
and demands therefor) of the conversion, voluntary or involuntary, of any of
the foregoing into cash or liquidated claims, including, without limitation,
proceeds of insurance and condemnation awards; and

     P. All other or greater rights and interests of every nature in the Land
or the Improvements and in the possession or use thereof and income therefrom,
whether now owned or hereafter acquired by Grantor.

	 	 	 	 	 	 	 
	 

	 	 	3	 	 	WEDGEWOOD DEED OF TRUST

 

 

     FOR THE PURPOSES OF SECURING:

     (1) The debt evidenced by that certain Amended and Restated
Promissory Note Secured by Deed of Trust of even date herewith made by
Grantor to the order of Grantee in the principal amount of $7,597,441, together with
interest as therein provided (such promissory note, together with any and all
renewals, modifications, consolidations and extensions thereof, substitutions therefor,
replacements thereof and any other evidence of indebtedness given in exchange
therefor, being hereinafter referred to as the “Wedgewood Note”) (the
loan evidenced by the Wedgewood Note being herein sometimes called the “Wedgewood
Loan”);

     (2) The debt evidenced by that certain Amended, Restated and
Consolidated Promissory Note Secured by Deed of Trust of even date
herewith, made by Grantor and by Butera Properties II, LLC, Butera Gateway Center, LLC,
Butera Girard Place, LLC, Butera Girard Business Center, LLC, Butera Goldenrod
Lane, LLC, Thirty West LLLP, TRB, INC., and Woodstone Assoc. (collectively,
the “Consolidated Borrower”) to the order of Grantee in the original principal amount of
$75,402,559, together with interest as therein provided (such promissory
note, together with any and all renewals, modifications, consolidations
and extensions thereof, substitutions therefor, replacements thereof and
any other evidence of indebtedness given in exchange therefor, being
hereinafter referred to as the “Consolidated Note”, and the loan
evidenced thereby being herein sometimes called the “Consolidated Loan”);
(the Consolidated Loan and the Wedgewood Loan being herein sometimes
collectively called the “Loan”, and the Consolidated Note and the
Wedgewood Note being herein sometimes collectively called the “Note”);
provided, however, that: (a) the Consolidated Note shall be secured
hereby until the earlier to occur of (i) payment in full of such
Consolidated Note, or (ii) a Sale (hereinafter defined) of the Property
pursuant to the provisions of Section 4.41(d) hereof if the Wedgewood
Note will not be included with the Consolidated Note in a Securitization
(hereinafter defined), and (b) in the event that there is a Sale of the
Property pursuant to the requirements of Section 4.41(d), then after such
Sale all references in this Deed of Trust to “Note” and “indebtedness
secured hereby” shall refer only to the Wedgewood Note, and all
references to “Consolidated Property” shall be of no further force and
effect;

     (3) The full and prompt payment and performance of all of the
provisions, agreements, covenants and obligations herein contained and
contained in any other agreements, documents or instruments now or hereafter
evidencing, securing, guaranteeing or otherwise relating to the indebtedness
evidenced by the Note, including, but not limited to, the Hazardous Substances Indemnity
Agreement (as hereinafter defined) (the Note, this Deed of Trust, the Consolidated
Deed of Trust, and such other agreements, documents and instruments, together with any
and all renewals, amendments, extensions and modifications thereof, supplements
thereof and other changes of any kind thereto being hereinafter collectively referred
to as the

	 	 	 	 	 	 	 
	 

	 	 	4	 	 	WEDGEWOOD DEED OF TRUST

 

 

“Loan Documents”) and the payment of all other amounts therein covenanted to be
paid and performance of all other obligations therein covenanted to be
performed;

     (4) Any and all additional advances made by Grantee to protect or
preserve the Property or the lien or security interest created hereby on
or in the Property, or for taxes, assessments or insurance premiums as hereinafter
provided or for performance of any of Grantor’s obligations hereunder or under the
other Loan Documents or for any other purpose provided herein or in the other Loan
Documents (whether or not the original Grantor remains the owner of the Property at
the time of such advances); and

     (5) Any and all other indebtedness now owing or which may
hereafter be owing by Grantor to Grantee, including, without limitation, all
prepayment fees, however and whenever incurred or evidenced, whether
express or implied, direct or indirect, absolute or contingent, or due or to become
due, and all renewals, modifications, consolidations, replacements and extensions
thereof.

     (All of the sums referred to in Paragraphs (1) through (5) above are
herein sometimes referred to as the “secured indebtedness” or the
“indebtedness secured hereby”, subject to the provisions of Paragraph (2) with
respect to the Consolidated Note).

     TO HAVE AND TO HOLD, IN TRUST WITH POWER OF SALE the Property unto
Trustee, its successors and assigns forever, for the purposes and uses herein
set forth.

     PROVIDED, HOWEVER, that if the principal and interest and all other sums
due or to become due under the Note or under the other Loan Documents,
including, without limitation, any prepayment fees required pursuant to the
terms of the Note, shall have been paid at the time and in the manner
stipulated therein and all other sums payable hereunder and all other
indebtedness secured hereby shall have been paid and all other covenants
contained in the Loan Documents shall have been performed, then, in such case,
this Deed of Trust shall be satisfied and the estate, right, title and
interest of Grantee in the Property shall cease, and, upon payment to Grantee
of all costs and expenses incurred for the preparation of the release
hereinafter referenced and all recording costs, if allowed by law, Grantee
shall release this Deed of Trust and the lien hereof by proper instrument.

ARTICLE I

REPRESENTATIONS, WARRANTIES AND COVENANTS OF GRANTOR

     For the purpose of further securing the indebtedness secured hereby and
for the protection of the security of this Deed of Trust, for so long as the
indebtedness secured hereby or any part thereof remains unpaid, Grantor
covenants and agrees as follows:

	 	 	 	 	 	 	 
	 

	 	 	5	 	 	WEDGEWOOD DEED OF TRUST

 

 

     1.1
Certain Representations, Warranties and Covenants of Grantor.
Grantor, for itself and its successors and assigns, does hereby represent,
warrant and covenant to and with Grantee, its successors and assigns, that:

     (a) Grantor has good and marketable fee simple title to the
Property, subject only to those matters expressly set forth as exceptions to or
subordinate matters in the title insurance policy insuring the lien of
this Deed of Trust which Grantee has agreed to accept, excepting therefrom all preprinted
and/or standard exceptions (the “Permitted Exceptions”), and has full power and
lawful authority to grant, bargain, sell, convey, assign, transfer and mortgage
the Property in the manner and form hereby done or intended. Grantor will preserve its
interest in and title to the Property and will forever warrant and defend the same to
Grantee against any and all claims whatsoever and will forever warrant and defend
the validity and priority of the lien and security interest created herein against the
claims of all persons and parties whomsoever, subject to the Permitted Exceptions. The
foregoing warranty of title shall survive the foreclosure of this Deed of Trust and
shall inure to the benefit of and be enforceable by Grantee in the event Grantee acquires
title to the Property pursuant to any foreclosure.

     (b) No bankruptcy or insolvency proceedings are pending or
contemplated by Grantor or, to the best knowledge of Grantor, against
Grantor or by or against any endorser or cosigner of the Note, or any guarantor or
indemnitor under any guaranty or indemnity agreement executed in connection with the Note
or the loan evidenced thereby and secured hereby.

     (c) To the best of Grantor’s knowledge and belief, all reports,
certificates, affidavits, statements and other data furnished by or on
behalf of Grantor to Grantee in connection with the Loan are true and correct in all
material respects and do not omit to state any material fact or circumstance necessary to make
the statements contained therein not misleading.

     (d) The execution, delivery and performance of this Deed of Trust,
the Note and all of the other Loan Documents have been duly authorized by
all necessary action to be, and are, binding and enforceable against Grantor
in accordance with the respective terms thereof and do not contravene, result in a
breach of or constitute (upon the giving of notice or the passage of time or both) a
default under the partnership agreement, articles of incorporation or other organizational
documents of Grantor or any contract or agreement of any nature to which Grantor is a
party or by which Grantor or any of its property may be bound and do not violate or
contravene any law, order, decree, rule or regulation to which Grantor is subject.

     (e) To the best of Grantor’s knowledge and belief, the Land and the
Improvements, and the intended use thereof by Grantor comply in all
material respects with all applicable restrictive covenants, zoning ordinances, subdivision
and building codes, flood disaster laws, applicable health and environmental laws and
regulations

	 	 	 	 	 	 	 
	 

	 	 	6	 	 	WEDGEWOOD DEED OF TRUST

 

 

and all other ordinances, orders or requirements issued by any state, federal
or municipal authorities having or claiming jurisdiction over the Property. The
Land and Improvements constitute one or more separate tax parcels for purposes
of ad valorem taxation. The Land and Improvements do not require any rights
over, or restrictions against, other property in order to comply with any of
the aforesaid governmental ordinances, orders or requirements.

     (f) All utility services necessary and sufficient for the full use,
occupancy, operation and disposition of the Land and the Improvements for
their intended purposes are available to the Property, including water, storm
sewer, sanitary sewer, gas (if applicable), electric, cable (if applicable) and telephone
facilities, through public rights-of-way or perpetual private easements approved by
Grantee.

     (g) All streets, roads, highways, bridges and waterways necessary
for access to and full use, occupancy, operation and disposition of the
Land and the Improvements have been completed, have been dedicated to and accepted by
the appropriate municipal authority and are open and available to the Land and
the Improvements without further condition or cost to Grantor.

     (h) To the best of Grantor’s knowledge and belief, all curb cuts,
driveways and traffic signals shown on the survey delivered to Grantee prior
to the execution and delivery of this Deed of Trust are existing and have been
fully approved by the appropriate governmental authority.

     (i) There are no judicial, administrative, mediation or arbitration
actions, suits or proceedings pending or threatened against or affecting
Grantor (and, if Grantor is a partnership, any of its general partners; and,
if Grantor is a limited liability company, any of its members) or the Property
which, if adversely determined, would materially impair either the Property or
Grantor’s ability to perform the covenants or obligations required to be
performed under the Loan Documents.

     (j) The Property is free from delinquent water charges, sewer rents,
taxes and assessments.

     (k) As of the date of this Deed of Trust, the Property is free from
unrepaired damage caused by fire, flood, accident or other casualty, except as
previously disclosed to Grantee.

     (1) As of the date of this Deed of Trust, no part of the Land or the
Improvements has been taken in condemnation, eminent domain or like
proceeding nor is any such proceeding pending or, to Grantor’s knowledge and
belief, threatened or contemplated.

	 	 	 	 	 	 	 
	 

	 	 	7	 	 	WEDGEWOOD DEED OF TRUST

 

 

     (m) Grantor possesses all franchises, patents, copyrights, trademarks,
trade names, licenses and permits adequate for the conduct of its business
substantially as now conducted.

     (n) To the best of Grantor’s knowledge and belief, the Improvements are
structurally sound, in good repair and free of defects in materials and
workmanship and have been constructed and installed in substantial compliance
with the plans and specifications relating thereto. All major building systems
located within the Improvements, including, without limitation, the heating,
ventilating and air conditioning systems and the electrical and plumbing
systems, are in good working order and condition.

     (o) Grantor has delivered to Grantee true, correct and complete copies of
all Contracts and all amendments thereto or modifications thereof.

     (p) Each Contract constitutes the legal, valid and binding obligation of
Grantor and, to the best of Grantor’s knowledge and belief, is enforceable
against any other party thereto. No default exists, or with the passing of
time or the giving of notice or both would exist, under any Contract which
would, in the aggregate, have a material adverse effect on Grantor or the
Property.

     (q) No Contract provides any party with the right to obtain a lien or
encumbrance upon the Property superior to the lien of this Deed of Trust.

     (r) Grantor and the Property are free from any past due obligations for
sales and payroll taxes.

     (s) There are no security agreements or financing statements affecting
any of the Property other than (i) as disclosed in writing by Grantor to
Grantee prior to the date hereof and (ii) the security agreements and
financing statements created in favor of Grantee.

     (t) The Property forms no part of any property owned, used or claimed by
Grantor as a residence or business homestead and is not exempt from forced
sale under the laws of the State of Maryland. Grantor hereby disclaims and
renounces each and every claim to all or any portion of the Property as a
homestead.

     (u) Grantor has delivered a true, correct and complete schedule (the
“Rent Roll”) of all Leases affecting the Property as of the date hereof, which
accurately and completely sets forth in all material respects for each Lease,
the following: the name of the Tenant, the Lease expiration date, extension
and renewal provisions, the base rent payable, the security deposit held
thereunder and any other material provisions of such Lease.

     (v) Each Lease constitutes the legal, valid and binding obligation of
Grantor and, to the best of Grantor’s knowledge and belief, is enforceable
against the

	 	 	 	 	 	 	 
	 

	 	 	8	 	 	WEDGEWOOD DEED OF TRUST

 

 

Tenant thereunder. No default exists, or with the passing of time or the giving
of notice or both would exist, under any Lease that would, in the aggregate,
have a material adverse effect on Grantor or the Property.

     (w) No Tenant under any Lease has, as of the date hereof, paid rent more
than thirty (30) days in advance, and the rents under such Leases have not
been waived, released, or otherwise discharged or compromised.

     (x) All work to be performed by Grantor under all Leases in effect on the
date hereof has been or will be substantially performed, all contributions to
be made by Grantor to the Tenants thereunder have been made or will be made
and all other conditions precedent to each such Tenant’s obligations
thereunder have been satisfied.

     (y) Each Tenant under a Lease has entered into occupancy of the premises
demised under such Lease.

     (z) Grantor has delivered to Grantee true, correct and complete copies of
all Leases described in the Rent Roll.

     (aa) To the best of Grantor’s knowledge and belief, each Tenant is free
from bankruptcy, reorganization or arrangement proceedings or a general
assignment for the benefit of creditors.

     (bb) No Lease provides any party with the right to obtain a lien or
encumbrance upon the Property superior to the lien of this Deed of Trust.

     (cc) Grantor is not a “foreign person” within the meaning of §1445(f)(3)
of the Internal Revenue Code of 1986, as amended, and the related Treasury
Department regulations, including temporary regulations.

     (dd) The Property has a minimum tenant occupancy of 85% or has a master
lease in form and substance, which Grantee has accepted.

     (ee) The Debt Service Coverage Ratio (as defined in §4.37 below) is at
least l.00X (with respect to both the Property on an individual basis and also
on an aggregate basis with the Consolidated Property (hereinafter defined)).

     (ff) The Loan-to-Value Ratio (as defined in §4.37 below), based on an MAI
appraisal, is no greater than 80% (with respect to both the Property on an
individual basis and also on an aggregate basis with the Consolidated Property
(hereinafter defined)).

     1.2 Defense of Title. If, while this Deed of Trust is in force, the title
to the Property or the interest of Grantee therein shall be the subject,
directly or indirectly, of any action at law or in equity, or be attached,
directly or indirectly, or

	 	 	 	 	 	 	 
	 

	 	 	9	 	 	WEDGEWOOD DEED OF TRUST

 

 

endangered, clouded or adversely affected, directly or indirectly, in any
manner, Grantor, at Grantor’s expense, shall take all necessary and proper
steps for the defense of said title or interest, including the employment of
counsel approved by Grantee, the prosecution or defense of litigation, and the
compromise or discharge of claims made against said title or interest.
Notwithstanding the foregoing, in the event that Grantee determines that
Grantor is not adequately performing its obligations under this Section, or in
good faith determines that a conflict of interest or potential conflict of
interest exists therein, Grantee may, without limiting or waiving any other
rights or remedies of Grantee hereunder, take such steps, with respect thereto
as Grantee shall deem necessary or proper and any and all reasonable costs and
expenses paid by Grantee in connection therewith, together with interest
thereon at the Default Interest Rate (as defined in the Note) from the date
incurred by Grantee until actually paid by Grantor, shall be immediately paid
by Grantor on demand and shall be secured by this Deed of Trust and by all of
the other Loan Documents securing all or any part of the indebtedness evidenced
by the Note.

     1.3
Performance of Obligations. Grantor shall pay when due the
principal of and the interest on the indebtedness evidenced by the Note.
Grantor shall also pay all charges, fees and other sums required to be paid by Grantor
as provided in the Loan Documents, and shall observe, perform and discharge all
obligations, covenants and agreements to be observed, performed or discharged by
Grantor set forth in the Loan Documents in accordance with their terms. Further,
Grantor shall promptly and strictly perform and comply with all covenants, conditions,
obligations and prohibitions required of Grantor in connection with any other document
or instrument affecting title to the Property, or any part thereof,
regardless of whether such document or instrument is superior or subordinate to this Deed of
Trust.

     1.4
Insurance. Grantor shall, at Grantor’s expense, maintain in
force and effect on the Property at all times while this Deed of Trust
continues in effect the following insurance:

     (a) Insurance against loss or damage to the Property by fire, windstorm,
tornado and hail and against loss and damage by such other, further and
additional risks as may be now or hereafter embraced by an “all-risk” or
“special form” type of insurance policy. The amount of such insurance shall be
not less than one hundred percent (100%) of the full replacement cost
(insurable value) of the Improvements (as established by an MAI appraisal),
without reduction for depreciation. The determination of the replacement cost
amount shall be adjusted annually to comply with the requirements of the
insurer issuing such coverage or, at Grantee’s election, by reference to such
indices, appraisals or information as Grantee determines in its reasonable
discretion in order to reflect increased value due to inflation. Absent such
annual adjustment, each policy shall contain inflation guard coverage insuring
that the policy limit will be increased over time to reflect the effect of
inflation. Full replacement cost, as used herein, means, with respect to the
Improvements, the cost of replacing the Improvements without regard to
deduction for

	 	 	 	 	 	 	 
	 

	 	 	10	 	 	WEDGEWOOD DEED OF TRUST

 

 

depreciation, exclusive of the cost of excavations, foundations and footings
below the lowest basement floor. Grantor shall also maintain insurance against
loss or damage to furniture, furnishing, fixtures, equipment and other items
(whether personalty or fixtures) included in the Property and owned by Grantor
from time to time to the extent applicable. Each policy shall contain a
replacement cost endorsement and either an agreed amount endorsement (to avoid
the operation of any co-insurance provisions) or a waiver of any co-insurance
provisions, all subject to Grantee’s approval. The maximum deductible shall be
the lesser of (i) $25,000 or (ii) five (5%) percent of annual Net Operating
Income from the Property.

     (b) Commercial General Liability Insurance against claims for
personal injury, bodily injury, death and property damage occurring on, in
or about the Land or the Improvements in amounts not less than $2,000,000.00 per
occurrence and $5,000,000.00 in the aggregate plus umbrella coverage in an amount not
less than $5,000,000. Grantee hereby retains the right periodically to review the
amount of said liability insurance being maintained by Grantor and to require an
increase in the amount of said liability insurance should Grantee deem an increase to be
reasonably prudent under then existing circumstances.

     (c) Boiler and machinery insurance is required if steam boilers or
other pressure-fired vessels are in operation at the Property. Minimum
liability coverage per accident must equal the greater of the replacement cost
(insurable value) of the Improvements housing such boiler or pressure-fired
machinery or $2,000,000.00. If one or more large HVAC units is in operation at the
Property, “Systems Breakdowns” coverage shall be required, as determined by
Grantee. Minimum liability coverage per accident must equal the value of such
unit(s).

     (d) If the Improvements or any part thereof is situated in an area
designated by the Federal Emergency Management Agency (“FEMA”) as a
special flood hazard area (Zone A or Zone V), flood insurance in an amount equal
to the lesser of: (a) the minimum amount required, under the terms of
coverage, to compensate for any damage or loss on a replacement basis (or the unpaid
balance of the indebtedness secured hereby if replacement cost coverage is not
available for the type of building insured); or (b) the maximum insurance available
under the appropriate National Flood Insurance Administration program. The
maximum deductible shall be $3,000.00 per building or a higher minimum amount as
required by FEMA or applicable law.

     (e) During the period of any construction, renovation or alteration
of the Improvements which exceeds the lesser of 10% of the principal
amount of the Note or $500,000, at Grantee’s request, a completed value, “All Risk”
Builder’s Risk form or “Course of Construction” insurance policy in nonreporting form, in
an amount approved by Grantee, may be required. During the period of any
construction of any addition to the Improvements, a completed value, “All Risk”
Builder’s Risk

	 	 	 	 	 	 	 
	 

	 	 	11	 	 	WEDGEWOOD DEED OF TRUST

 

 

form or “Course of Construction” insurance policy in non-reporting form, in an
amount approved by Grantee, shall be required.

     (f) When required by applicable law, ordinance or other regulation,
Worker’s Compensation and Employer’s Liability Insurance covering all
persons subject to the worker’s compensation laws of the state in which the
Property is located.

     (g) Business income (loss of rents) insurance in amounts sufficient
to compensate Grantor for all Rents and Profits or income during a period
of not less than eighteen (18) months. The amount of coverage shall be adjusted
annually to reflect the Rents and Profits or income payable during the succeeding
eighteen (18) month period.

     (h) Such other insurance on the Property or on any replacements or
substitutions thereof or additions thereto as may from time to time be
required by Grantee against other insurable hazards or casualties which at the
time are commonly insured against in the case of property similarly situated
including, without limitation, Sinkhole, Mine Subsidence, Earthquake and
Environmental insurance, due regard being given to the height and type of
buildings, their construction, location, use and occupancy.

     All such insurance shall (i) be with insurers fully licensed and
authorized to do business in the state within which the Property is located
and who have and maintain a rating of at least AA from Standard & Poor’s, or
equivalent, (ii) contain the complete address of the Premises (or a complete
legal description), (iii) be for terms of at least one year, with premium
prepaid, and (iv) be subject to the approval of Grantee as to insurance
companies, amounts, content, forms of policies, method by which premiums are
paid and expiration dates, and (v) include a standard, non-contributory,
Grantee clause naming EXACTLY:

     Credit Suisse First Boston Mortgage, LLC

     its Successors and Assigns

     11 Madison Avenue

     New York, New York 10010

(x) as an additional insured under all liability insurance policies, (y) as
the first Grantee on all property insurance policies and (z) as the loss
payee on all loss of rents or loss of business income insurance policies.

     Grantor shall, as of the date hereof, deliver to Grantee evidence that
said insurance policies have been prepaid as required above and certified
copies of such insurance policies and original certificates of insurance
signed by an authorized agent of the applicable insurance companies
evidencing such insurance satisfactory to Grantee. Grantor shall renew all
such insurance and deliver to Grantee certificates and policies evidencing
such renewals at least thirty (30) days before any such

	 	 	 	 	 	 	 
	 

	 	 	12	 	 	WEDGEWOOD DEED OF TRUST

 

 

insurance shall expire. Grantor further agrees that each such insurance policy:
(i) shall provide for at least thirty (30) days’ prior written notice to
Grantee prior to any policy reduction or cancellation for any reason other than
non-payment of premium and at least ten (10) days’ prior written notice to
Grantee prior to any cancellation due to non-payment of premium; (ii) shall
contain an endorsement or agreement by the insurer that any loss shall be
payable to Grantee in accordance with the terms of such policy notwithstanding
any act or negligence of Grantor which might otherwise result in forfeiture of
such insurance; (iii) shall waive all rights of subrogation against Grantee;
(iv) in the event that the Land or the Improvements constitutes a legal
non-conforming use under applicable building, zoning or land use laws or
ordinances, shall include an ordinance or law coverage endorsement which will
contain Coverage A: “Loss Due to Operation of Law” (with a minimum liability
limit equal to Replacement Cost With Agreed Value Endorsement), Coverage B:
“Demolition Cost” and Coverage C: “Increased Cost of Construction” coverages;
and (v) may be in the form of a blanket policy, provided
that, in the event
that any such coverage is provided in the form of a blanket policy, Grantor
hereby acknowledges and agrees that failure to pay any portion of the premium
therefor which is not allocable to the Property or by any other action not
relating to the Property would permit the issuer thereof to cancel the coverage
thereof, Grantee may require the Property to be insured by a separate,
single-property policy. The blanket policy must properly identify and fully
protect the Property as if a separate policy were issued for 100% of
Replacement Cost at the time of loss and otherwise meet all of Grantee’s
applicable insurance requirements set forth in this
Section 1.4. The delivery
to Grantee of the insurance policies or the certificates of insurance as
provided above shall constitute an assignment of all proceeds payable under
such insurance policies relating to the Property by Grantor to Grantee as
further security for the indebtedness secured hereby. In the event of
foreclosure of this Deed of Trust, or other transfer of title to the Property
in extinguishment in whole or in part of the indebtedness secured hereby, all
right, title and interest of Grantor in and to all proceeds payable under such
policies then in force concerning the Property shall thereupon vest in the
purchaser at such foreclosure, or in Grantee or other transferee in the event
of such other transfer of title. Approval of any insurance by Grantee shall not
be a representation of the solvency of any insurer or the sufficiency of any
amount of insurance. In the event Grantor fails to provide, maintain, keep in
force or deliver and furnish to Grantee the policies of insurance required by
this Deed of Trust or evidence of their renewal as required herein, Grantee
may, but shall not be obligated to, procure such insurance and Grantor shall
pay all amounts advanced by Grantee therefor, together with interest thereon at
the Default Interest Rate from and after the date advanced by Grantee until
actually repaid by Grantor, promptly upon demand by Grantee. Any amounts so
advanced by Grantee, together with interest thereon, shall be secured by this
Deed of Trust and by all of the other Loan Documents securing all or any part
of the indebtedness secured hereby. Grantee shall not be responsible for nor
incur any liability for the insolvency of the insurer or other failure of the
insurer to perform, even though Grantee has caused the insurance to be placed
with the insurer after failure of Grantor to furnish such insurance. Grantor
shall not obtain

	 	 	 	 	 	 	 
	 

	 	 	13	 	 	WEDGEWOOD DEED OF TRUST

 

 

insurance for the Property in addition to that required by Grantee without the
prior written consent of Grantee, which consent will not be unreasonably
withheld, provided that (A) Grantee is a named insured on such insurance, (B)
Grantee receives complete copies of all policies evidencing such insurance, and
(C) such insurance complies with all of the applicable requirements set forth
herein.

     1.5
Payment of Taxes. Grantor shall pay or cause to be paid,
except to the extent provision is actually made therefor pursuant to
Section 1.6 of this Deed of Trust, all taxes and assessments which are or may become a lien on
the Property or which are assessed against or imposed upon the Property.
Grantor shall furnish Grantee with receipts (or if receipts are not immediately
available, with copies of canceled checks evidencing payment with receipts to follow promptly
after they become available) showing payment of such taxes and assessments at least
fifteen (15) days prior to the applicable delinquency date therefor. Notwithstanding
the foregoing, Grantor may in good faith, by appropriate proceedings and upon notice to
Grantee, contest the validity, applicability or amount of any asserted tax or
assessment so long as (a) such contest is diligently pursued, (b) Grantee determines, in its
subjective opinion, that such contest suspends the obligation to pay the tax and that
nonpayment of such tax or assessment will not result in the sale, loss, forfeiture or
diminution of the Property or any part thereof or any interest of Grantee therein, and,
(c) prior to the earlier of the commencement of such contest or the delinquency date of
the asserted tax or assessment, Grantor deposits in the Impound Account (as
hereinafter defined) an amount determined by Grantee to be adequate to cover the
payment of such tax or assessment and a reasonable additional sum to cover possible
interest, costs and penalties; provided, however, that Grantor shall promptly cause
to be paid any amount adjudged by a court of competent jurisdiction to be due, with
all interest, costs and penalties thereon, promptly after such judgment becomes
final; and provided, however, that as and when each such contest shall be concluded,
the taxes, assessments, interest, costs and penalties shall be paid prior to the date
any writ or order is issued under which the Property may be sold, lost or forfeited.

     1.6
Tax and Insurance Impound Account. Grantor shall establish
and maintain at all times while this Deed of Trust continues in effect an
impound account (the “Impound Account”) with Grantee for payment of real estate
taxes and assessments and insurance on the Property and as additional
security for the indebtedness secured hereby. Simultaneously with the execution hereof,
Grantor shall deposit in the Impound Account an amount determined by Grantee to be
necessary to ensure that there will be on deposit with Grantee an amount which, when
added to the monthly payments subsequently required to be deposited with Grantee
hereunder on account of real estate taxes, assessments and insurance premiums, will
result in there being on deposit with Grantee in the Impound Account an amount sufficient
to pay the next due installment of real estate taxes and assessments on the Property
at least one (1) month prior to the due date thereof and the next due annual
insurance premiums with respect to the Property at least one (1) month prior to the
due date thereof. Commencing on the first monthly payment date under the Note
and

	 	 	 	 	 	 	 
	 

	 	 	14	 	 	WEDGEWOOD DEED OF TRUST

 

 

continuing thereafter on each monthly payment date under the Note, Grantor
shall pay to Grantee, concurrently with and in addition to the monthly payment
due under the Note and until the Note and all other indebtedness secured hereby
is fully paid and performed, deposits in an amount equal to one-twelfth (1/12)
of the amount of the annual real estate taxes and assessments that will next
become due and payable on the Property, plus one-twelfth (1/12) of the amount
of the annual premiums that will next become due and payable on insurance
policies which Grantor is required to maintain hereunder, each as estimated and
determined by Grantee. So long as no Event of Default (as hereinafter defined),
or event which with the passage of time, the giving of notice, or both, would
constitute an Event of Default (a “Default”) hereunder or under the other Loan
Documents has occurred and is continuing, all sums in the Impound Account shall
be held by Grantee in the Impound Account to pay said taxes, assessments and
insurance premiums in one installment before the same become delinquent.
Grantor shall be responsible for ensuring the receipt by Grantee, the earlier
of thirty (30) days prior to the respective due date for payment thereof, or
two (2) business days from receipt by sender, of all bills, invoices and
statements for all taxes, assessments and insurance premiums to be paid from
the Impound Account, and, so long as no Default or Event of Default hereunder
or under any other Loan Document has occurred and is continuing, Grantee shall
pay the governmental authority or other party entitled thereto directly, to the
extent funds are available for such purpose in the Impound Account. In making
any payment from the Impound Account, Grantee shall be entitled to rely on any
bill, statement or estimate procured from any public office or insurance
company or agent without any inquiry into the accuracy of such bill, statement
or estimate and without any inquiry into the accuracy, validity, enforceability
or contestability of any tax, assessment, valuation, sale, forfeiture, tax lien
or title or claim thereof. The Impound Account shall not, unless otherwise
explicitly required by applicable law, be or be deemed to be escrow or trust
funds. No interest on the funds contained in the Impound Account shall be paid
by Grantee to Grantor. The Impound Account is solely for the protection of
Grantee and entails no responsibility on Grantee’s part beyond the payment of
taxes, assessments and insurance premiums following receipt of bills, invoices
or statements therefor in accordance with the terms hereof and beyond the
allowing of due credit for the sums actually received. Upon assignment of this
Deed of Trust by Grantee, any funds in the Impound Account shall be turned over
to the assignee and any responsibility of Grantee, as assignor, with respect
thereto shall terminate. If the total funds in the Impound Account shall exceed
the amount of payments actually applied by Grantee for the purposes of the
Impound Account, such excess may be credited by Grantee on subsequent payments
to be made hereunder or, at the option of Grantee, refunded to Grantor. If,
however, the Impound Account shall not contain sufficient funds to pay the sums
required when the same shall become due and payable, Grantor shall, within ten
(10) days after receipt of written notice thereof, deposit with Grantee the
full amount of any such deficiency. If the Grantor shall fail to deposit with
Grantee the full amount of such deficiency as provided above, Grantee shall
have the option, but not the obligation, to make such deposit and all amounts
so deposited by Grantee, together with interest thereon at the Default Interest
Rate from the date deposited by

	 	 	 	 	 	 	 
	 

	 	 	15	 	 	WEDGEWOOD DEED OF TRUST

 

 

Grantee until actually paid by Grantor, shall be immediately paid by Grantor on
demand and shall be secured by this Deed of Trust and by all of the other Loan
Documents securing all or any part of the indebtedness evidenced by the Note.
If there is an Event of Default under this Deed of Trust, Grantee may, but
shall not be obligated to, apply at any time the balance then remaining in the
Impound Account against the indebtedness secured hereby in whatever order
Grantee shall subjectively determine. No such application of the Impound
Account shall be deemed to cure any Default or Event of Default hereunder. Upon
full payment of the indebtedness secured hereby in accordance with its terms or
at such earlier time as Grantee may elect, the balance of the Impound Account
then in Grantee’s possession shall be paid over to Grantor and no other party
shall have any right or claim thereto.

     1.7 [Intentionally omitted].

     1.8 Replacement Reserve and Leasing Escrow Fund.

     (a) At Lender’s option, as additional security for the indebtedness secured hereby, Grantor shall establish and maintain at all times while this
Deed of Trust continues in effect a repair reserve (the “Replacement Reserve”)
with Grantee for payment of certain non-recurring types of costs and expenses
incurred by Grantor for interior and exterior work to the Property, including
without limitation, performance of work to the roofs, chimneys, gutters,
downspouts, paving, curbs, driveways, ramps, balconies, porches, patios,
exterior walls, exterior doors and doorways, windows, elevators and mechanical
and HVAC equipment (collectively, the “Repairs”) provided such costs and
expenses are incurred for repairs (i) not incurred for ordinary wear and tear
at the Property and (ii) categorized under generally accepted accounting
principles as a capital expense and not as an operating expense. Commencing on
the first Payment Date under the Note and continuing thereafter on each
monthly Payment Date under the Note until such time as the Property is
transferred pursuant to any Sale pursuant to Section 4.41(d) hereof, this
requirement shall be satisfied by the performance of the Grantor and the other
Consolidated Borrowers under Section 1.8(a) of the Consolidated Deed of Trust.
After any such Sale of the Property, Grantor shall be required to establish a
separate Replacement Reserve for the Property by depositing the amount of
$2,071 per month with Grantee, concurrently with and in addition to the
monthly Payment Date due under the Wedgewood Note until the Wedgewood Note and
all other indebtedness secured hereby is fully paid and performed. Grantee
retains the right to reassess the Replacement Reserve amount at any time. So
long as no Default or Event of Default hereunder or under the other Loan
Documents has occurred and is continuing, all sums in the Replacement Reserve
shall be held by Grantee in the Replacement Reserve to pay the costs and
expenses of Repairs. So long as no Default or Event of Default hereunder or
under the other Loan Documents has occurred and is continuing, Grantee shall,
to the extent funds are available for such purpose in the Replacement Reserve,
disburse to Grantor the amount paid or incurred by Grantor in performing such
Repairs within ten (10) days following: (a) the receipt by Grantee of a
written request

	 	 	 	 	 	 	 
	 

	 	 	16	 	 	WEDGEWOOD DEED OF TRUST

 

 

from Grantor for disbursement from the Replacement Reserve and a certification
by Grantor in the form attached hereto as Exhibit B that the applicable item of
Repair has been completed, (b) the delivery to Grantee of invoices, receipts or
other evidence satisfactory to Grantee verifying the cost of performing the
Repairs; (c) for disbursement requests in excess of $25,000.00, the delivery to
Grantee of affidavits, lien waivers or other evidence reasonably satisfactory
to Grantee showing that all materialmen, laborers, subcontractors and any other
parties who might or could claim statutory or common law liens and have
furnished material or labor to the Property have been paid all amounts due for
labor and materials furnished to the Property; (d) for disbursement requests in
excess of $25,000.00, delivery to Grantee of a certification from an inspecting
architect or other third party acceptable to Grantee describing the completed
Repairs and verifying the completion of the Repairs and the value of the
completed Repairs; (e) for disbursement requests in excess of $25,000,00,
delivery to Grantee of a new certificate of occupancy for the portion of the
Improvements covered by such Repairs, if said new certificate of occupancy is
required by law, or a certification by Grantor that no new certificate of
occupancy is required; and (f) the receipt by Grantee of an administrative fee
in the amount of $150.00. Grantee shall not be required to make advances from
the Replacement Reserve more frequently than once in any sixty (60) day period.
In making any payment from the Replacement Reserve, Grantee shall be entitled
to rely on such request from Grantor without any inquiry into the accuracy,
validity or contestability of any such amount. Grantee may, at Grantor’s
expense, make or cause to be made during the term of this Deed of Trust an
annual inspection at the Property to determine the need, as determined by
Grantee in its reasonable judgment, for further Repairs of the Property. In the
event that such inspection reveals that further Repairs of the Property are
required, Grantee shall provide Grantor with a written description of the
required Repairs and Grantor shall complete such Repairs to the reasonable
satisfaction of Grantee within ninety (90) days after the receipt of such
description from Grantee, or such later date as may be approved by Grantee in
its sole discretion. The Replacement Reserve shall not, unless otherwise
explicitly required by applicable law, be or be deemed to be escrow or trust
funds. Interest on the funds contained in the Replacement Reserve shall be
credited to Grantor as provided in Section 4.31 hereof. The Replacement Reserve
is solely for the protection of Grantee and entails no responsibility on
Grantee’s part beyond the payment of the costs and expenses described in this
Section in accordance with the terms hereof and beyond the allowing of due
credit for the sums actually received. In the event that the amounts on deposit
or available in the Replacement Reserve are inadequate to pay the cost of the
Repairs, Grantor shall pay the amount of such deficiency. Upon assignment of
this Deed of Trust by Grantee, any funds in the Replacement Reserve shall be
turned over to the assignee and any responsibility of Grantee, as assignor,
with respect thereto shall terminate. If there is an Event of Default under
this Deed of Trust, Grantee may, but shall not be obligated to, apply at any
time the balance then remaining in the Replacement Reserve against the
indebtedness secured hereby in whatever order Grantee shall subjectively
determine. No such application of the Replacement Reserve shall be deemed to
cure any Default or Event of Default hereunder. Upon full

	 	 	 	 	 	 	 
	 

	 	 	17	 	 	WEDGEWOOD DEED OF TRUST

 

 

payment of the indebtedness secured hereby in accordance with its terms or at
such earlier time as Grantee may elect, the balance of the Replacement Reserve
including all interest thereon then in Grantee’s possession shall be paid over
to Grantor and no other party shall have any right or claim thereto.

     (b) Grantor shall establish a separate reserve for tenant improvement and
leasing commission obligations in connection with the Property and the
Consolidated Property incurred following the date hereof (the “Leasing Escrow
Fund”). Until such time as there is any Sale of the Property pursuant to the
provisions of Section 4.41 hereof, this requirement shall be satisfied by
Grantor’s and Consolidated Borrowers’ satisfaction of the provisions of
Section 1.8(b) of the Consolidated Deed of Trust. Thereafter, this requirement
shall be satisfied with respect to the Property by Grantor’s depositing with
the Grantee, (i) on the eleventh day of each month, one-twelfth of $                    , and (ii) as and when received,
all funds received by Grantor from tenants in connection with the cancellation
of any Leases, including, but not limited to, any cancellation fees,
penalties, tenant improvements, leasing commissions or other charges. Grantor
hereby pledges to Grantee any and all monies now or hereafter deposited in the
Leasing Escrow Fund as additional security for the payment of the Loan.
Grantee may reassess its estimate of the monthly amount necessary to be
deposited into the Leasing Escrow Fund and, upon notice to Grantor, Grantor
shall be required to deposit into the Leasing Escrow Fund each month such
reassessed amount. Grantee shall make disbursements from the Leasing Escrow
Fund for expenses reasonably incurred by Grantor for new Leases entered into
by Grantor in accordance with the provisions of Section 1.12 below. All such
expenses shall be approved by Grantee in its sole discretion. Grantee shall
make disbursements as requested by Grantor on a quarterly basis in increments
of no less than $5,000.00 upon delivery by Grantor of Grantee’s standard form
of draw request accompanied by copies of paid invoices for the amounts
requested for tenant improvements and leasing commissions, the newly executed
Lease, extension, renewal, or modification, with terms commensurate with the
expired Lease, and, if required by Grantee, lien waivers and releases from all
parties furnishing materials and/or services in connection with the requested
payment. Grantee may require an inspection of the Trust Property at Grantor’s
expense prior to making a quarterly disbursement in order to verify completion
of improvements for which reimbursement is sought. The Leasing Escrow Fund
shall be held in an interest bearing account in Grantee’s name at a financial
institution selected by Grantee in its sole discretion. All earnings or
interest on the Leasing Escrow Fund shall be and become part of such Leasing
Escrow Fund and shall be disbursed as provided in this
Section 1.8 (b). Until
expended or applied as above provided, the Leasing Escrow Fund shall
constitute additional security for the Loan. The Leasing Escrow Fund shall not
constitute a trust fund.

     1.9
Casualty and Condemnation. Grantor shall give Grantee prompt written
notice of the occurrence of any casualty affecting, or the institution of any
proceedings for eminent domain or for the condemnation of, the Property or any

	 	 	 	 	 	 	 
	 

	 	 	18	 	 	WEDGEWOOD DEED OF TRUST

 

 

portion thereof. All insurance proceeds on the Property, and all causes of
action, claims, compensation, awards and recoveries for any damage,
condemnation or taking of all or any part of the Property or for any damage or
injury to it for any loss or diminution in value of the Property, are hereby
assigned to and shall be paid to Grantee. Grantee may participate in any suits
or proceedings relating to any such proceeds, causes of action, claims,
compensation, awards or recoveries and Grantee is hereby authorized, in its own
name or in Grantor’s name, to adjust any loss covered by insurance or any
condemnation claim or cause of action, and to settle or compromise any claim or
cause of action in connection therewith, and Grantor shall from time to time
deliver to Grantee any instruments required to permit such participation;
provided, however, that so long as no Default or Event of Default shall have
occurred and be continuing, Grantee shall not have the right to participate in
the adjustment of any loss which is not in excess of the lesser of (i) ten
percent (10%) of the then outstanding principal balance of the Note and (ii)
$250,000.00. Grantee shall apply any sums received by it under this Section,
first, to the payment of all of its costs and expenses (including, but not
limited to, legal fees and disbursements) incurred in obtaining those sums,
and, then, as follows:

     (a) In the event that less than fifty percent (50%) of the Improvements have been taken or destroyed, then if:

                    (1) no Default or Event of Default is then continuing
hereunder or under any of the other Loan Documents, and

                    (2) the Property can, in Grantee’s judgment, with diligent
restoration or repair, be returned to a condition at least equal to
the condition thereof that existed prior to the casualty or partial taking causing
the loss or damage within the earlier to occur of (i) six (6) months after the
receipt of insurance proceeds or condemnation awards by either Grantor of
Grantee and (ii) sixty (60) days prior to the stated maturity date of the Note, and

                    (3) all necessary governmental approvals can be obtained to
allow the restoration and repair of the Property as
described in Section 1.9(a)(2) above, and the reoccupancy thereof pursuant to
existing Leases, and

                    (4) there are sufficient sums available (through insurance
proceeds or condemnation awards and contributions by Grantor, the
full amount of which shall, at Grantee’s option, have been deposited with
Grantee) for such restoration or repair (including, without limitation, for
any costs and expenses of Grantee to be incurred in administering said restoration
or repair) and for payment of principal and interest to become due and payable
under the Note during such restoration or repair, and

                    (5) the economic feasibility of the Improvements after such
restoration or repair will be such that income from their operation is

	 	 	 	 	 	 	 
	 

	 	 	19	 	 	WEDGEWOOD DEED OF TRUST

 

 

reasonably anticipated to be sufficient to pay operating expenses of the
Property and debt service on the indebtedness secured hereby in full with
the same coverage ratio considered by Grantee in its determination to
make the loan secured hereby including an assessment of the impact of the
termination of any Leases due to such casualty or condemnation, and

                    (6) in the event that the insurance proceeds or condemnation
awards received as a result of such casualty or partial taking
exceed the lesser of (i) five percent (5%) of the then outstanding principal balance
of the Note and (ii) $150,000, Grantor shall have delivered to Grantee, at
Grantor’s sole cost and expense, an appraisal report in form and substance
satisfactory to Grantee appraising the value of the Property as proposed to be
restored or repaired to be not less than the appraised value of the Property
considered by Grantee in its determination to make the loan secured hereby, and

                    (7) Grantor so elects by written notice delivered to Grantee
within five (5) days after settlement of the aforesaid insurance or
condemnation claim,

then, Grantee shall, solely for the purposes of such restoration or repair,
advance so much of the remainder of such sums as may be required for such
restoration or repair, and any funds deposited by Grantor therefor, to Grantor
in the manner and upon such terms and conditions as would be required by a
prudent construction lender, including, but not limited to, the prior approval
by Grantee of plans and specifications, contractors and form of construction
contracts and the furnishing to Grantee of permits, bonds, lien waivers,
invoices, receipts and affidavits from contractors and subcontractors, in form
and substance satisfactory to Grantee in its discretion, with any remainder
being applied by Grantee for payment of the indebtedness secured hereby in
whatever order Grantee directs in its absolute discretion.

     (b) In all other cases, namely, in the event that fifty percent (50%) or
more of the Improvements have been taken or destroyed or Grantor does not
elect to restore or repair the Property pursuant to clause (a), above, or
otherwise fails to meet the requirements of clause (a), above, then, in any of
such events, Grantee shall elect, in Grantee’s absolute discretion and without
regard to the adequacy of Grantee’s security, to do either of the following:
(1) accelerate the maturity date of the Note and declare any and all
indebtedness secured hereby to be immediately due and payable and apply the
remainder of such sums received pursuant to this Section to the payment of the
indebtedness secured hereby in whatever order Grantee directs, in its absolute
discretion, without any prepayment premium or fee with any remainder being
paid to Grantor, or, (2) notwithstanding that Grantor may have elected not to
restore or repair the Property pursuant to the provisions of Section
1.9(a)(7), above, require Grantor to restore or repair the Property in the
manner and upon such terms and conditions as would be required by a prudent
construction lender, including, but not limited to the deposit by Grantor with
Grantee, within thirty (30) days after demand therefor, of any

	 	 	 	 	 	 	 
	 

	 	 	20	 	 	WEDGEWOOD DEED OF TRUST

 

 

deficiency necessary in order to assure the availability of sufficient funds to
pay for such restoration or repair, including Grantee’s costs and expenses to
be incurred in connection therewith, the prior approval by Grantee of plans and
specifications, contractors and form of construction contracts and the
furnishing to Grantee of permits, bonds, lien waivers, invoices, receipt and
affidavits from contractors and subcontractors, in form and substance
satisfactory to Grantee in its discretion, and apply the remainder of such sums
toward such restoration and repair, with any balance thereafter remaining being
applied by Grantee for payment of the indebtedness secured hereby in whatever
order Grantee directs in its absolute discretion.

Any reduction in the indebtedness secured hereby resulting from Grantee’s
application of any sums received by it hereunder shall take effect only when
Grantee actually receives such sums and elects to apply such sums to the
indebtedness secured hereby and, in any event, the unpaid portion of the
indebtedness secured hereby shall remain in full force and effect and Grantor
shall not be excused in the payment thereof. Partial payments received by
Grantee, as described in the preceding sentence, shall be applied, first, to
the final payment due under the Note and, thereafter, to installments due
under the Note in the inverse order of their due date without any prepayment
premium or fee. If Grantor elects or Grantee directs Grantor to restore or
repair the Property after the occurrence of a casualty or partial taking of
the Property as provided above, Grantor shall promptly and diligently, at
Grantor’s sole cost and expense and regardless of whether the insurance
proceeds or condemnation award, as appropriate, shall be sufficient for the
purpose, restore, repair, replace and rebuild the Property as nearly as
possible to its value, condition and character immediately prior to such
casualty or partial taking in accordance with the foregoing provisions and
Grantor shall pay to Grantee all costs and expenses of Grantee incurred in
administering said rebuilding, restoration or repair, provided the Grantee
makes such proceeds or award available for such purpose. Grantor agrees to
execute and deliver from time to time such further instruments as may be
requested by Grantee to confirm the foregoing assignment to Grantee of any
award, damage, insurance proceeds, payment or other compensation. Grantee is
hereby irrevocably constituted and appointed the attorney-in-fact of Grantor
(which power of attorney shall be irrevocable so long as any indebtedness
secured hereby is outstanding, shall be deemed coupled with an interest, shall
survive the voluntary or involuntary dissolution of Grantor and shall not be
affected by any disability or incapacity suffered by Grantor subsequent to the
date hereof), with full power of substitution, subject to the terms of this
section, to settle for, collect and receive any such awards, damages,
insurance proceeds, payments or other compensation from the parties or
authorities making the same, to appear in and prosecute any proceedings
therefor and to give receipts and acquittances therefor.

     1.10
Mechanics’ Liens. Grantor shall pay when due all claims and demands
of mechanics, materialmen, laborers and others for any work performed or
materials delivered for the Land or Improvements; provided,
however, that
Grantor shall have the right to contest in good faith any such claim or
demand, so long as it

	 	 	 	 	 	 	 
	 

	 	 	21	 	 	WEDGEWOOD DEED OF TRUST

 

 

does so diligently, by appropriate proceedings and without prejudice to Grantee
and provided that neither the Property nor any interest therein would be in any
danger of sale, loss or forfeiture as a result of such proceeding or contest.
In the event Grantor shall contest any such claim or demand, Grantor shall
promptly notify Grantee of such contest and thereafter shall, upon Grantee’s
request, promptly provide a bond, cash deposit or other security satisfactory
to Grantee to protect Grantee’s interest and security should the contest be
unsuccessful. If Grantor shall fail to immediately discharge or provide
security against any such claim or demand as aforesaid, Grantee may do so and
any and all expenses incurred by Grantee, together with interest thereon at the
Default Interest Rate from the date paid by Grantee until actually paid by
Grantor, shall be immediately paid by Grantor on demand and shall be secured by
this Deed of Trust and by all of the other Loan Documents securing all or any
part of the indebtedness evidenced by the Note.

     1.11
Rents and Profits. As additional and collateral security for the
payment of the indebtedness secured hereby and cumulative of any and all
rights and remedies herein provided for, Grantor hereby absolutely and
presently assigns to Grantee all existing and future Rents and Profits.
Grantor hereby grants to Grantee the sole, exclusive and immediate right,
without taking possession of the Property, to demand, collect (by suit or
otherwise), receive and give valid and sufficient receipts for any and all of
said Rents and Profits, for which purpose Grantor does hereby irrevocably
make, constitute and appoint Grantee its attorney-in-fact with full power to
appoint substitutes or a trustee to accomplish such purpose (which power of
attorney shall be irrevocable so long as any indebtedness secured hereby is
outstanding, shall be deemed to be coupled with an interest, shall survive the
voluntary or involuntary dissolution of Grantor and shall not be affected by
any disability or incapacity suffered by Grantor subsequent to the date
hereof). Grantee shall be without liability for any loss that may arise from a
failure or inability to collect Rents and Profits, proceeds or other payments.
However, until the occurrence of an Event of Default under this Deed of Trust,
Grantor shall have a license to collect and receive the Rents and Profits when
due and prepayments thereof for not more than one month prior to due date
thereof. Upon the occurrence of an Event of Default hereunder, Grantor’s
license shall automatically terminate without notice to Grantor and Grantee
may thereafter, without taking possession of the Property, collect the Rents
and Profits itself or by an agent or receiver. From and after the termination
of such license, Grantor shall be the agent of Grantee in collection of the
Rents and Profits and all of the Rents and Profits so collected by Grantor
shall be held in trust by Grantor for the sole and exclusive benefit of
Grantee and Grantor shall, within one (1) business day after receipt of any
Rents and Profits, pay the same to Grantee to be applied by Grantee as
hereinafter set forth. Neither the demand for nor collection of Rents and
Profits by Grantee shall constitute any assumption by Grantee of any
obligations under any agreement relating thereto. Grantee is obligated to
account only for such Rents and Profits as are actually collected or received
by Grantee. Grantor irrevocably agrees and consents that the respective payers
of the Rents and Profits shall, upon demand and notice from Grantee of an
Event of Default hereunder, pay said Rents and Profits to Grantee without

 

	 	 	 	 	 	 	 
	 

	 	 	22	 	 	WEDGEWOOD DEED OF TRUST

 

 

liability to determine the actual existence of any Event of Default claimed by
Grantee.

Grantor hereby waives any right, claim or demand which Grantor may now
or hereafter have against any such payor by reason of such payment of Rents and
Profits to Grantee, and any such payment shall discharge such payor’s
obligation to make such payment to Grantor. All Rents and Profits collected or
received by Grantee shall be applied against all expenses of collection,
including, without limitation, reasonable attorneys’ fees, against costs of
operation and management of the Property and against the indebtedness secured
hereby, in whatever order or priority as to any of the items so mentioned as
Grantee directs in its sole subjective discretion and without regard to the
adequacy of its security. Neither the exercise by Grantee of any rights under
this Section nor the application of any Rents and Profits to the secured
indebtedness shall cure or be deemed a waiver of any Event of Default
hereunder. The assignment of Rents and Profits hereinabove granted shall
continue in full force and effect during any period of foreclosure or
redemption with respect to the Property. Grantor has executed an Assignment of
Leases and Rents dated of even date herewith (the “Assignment”) in favor of
Grantee covering all of the right, title and interest of Grantor, as landlord,
lessor or licensor, in and to any leases, licenses and occupancy agreements
relating to all or portions of the Property. All rights and remedies granted to
Grantee under the Assignment shall be in addition to and cumulative of all
rights and remedies granted to Grantee hereunder.

     1.12
Leases and Licenses.

     (a) Grantor covenants and agrees that it shall not enter into any
Lease affecting five (5%) percent or more of the gross rentable square
feet of any Premises or having a term of more than ten (10) years without the prior
written approval of Grantee, which approval shall not be unreasonably withheld.
The request for approval of each such proposed new Lease shall be made to Grantee in
writing and Grantor shall furnish to Grantee (and any loan servicer specified from
time to time by Grantee): (i) such biographical and financial information about the
proposed Tenant as Grantee may require in conjunction with its review, (ii) a copy of the
proposed form of Lease, and (iii) a summary of the material terms of such proposed Lease
(including, without limitation, rental terms and the term of the proposed Lease and
any options). It is acknowledged that Grantee intends to include among its criteria for
approval of any such proposed Lease the following: (i) such Lease shall be with a
bona-fide arm’s-length tenant; (ii) such Lease shall not contain any rental or other
concessions which are not then customary and reasonable for similar properties and
leases in the market area of the Land; (iii) such Lease shall provide that the Tenant
pays for its expenses; (iv) the rental shall be at least at the market rate then
prevailing for similar properties and Leases in the market areas of the Land; and (v) such lease
shall contain subordination and attornment provisions in form and content reasonably
acceptable to Grantee.

     (b) Prior to execution of any Leases of space in the Improvements
after the date hereof, Grantor shall submit to Grantee, for Grantee’s
prior approval,

	 	 	 	 	 	 	 
	 

	 	 	23	 	 	WEDGEWOOD DEED OF TRUST

 

 

which approval shall not be unreasonably withheld, a copy of the form Lease or
Leases Grantor plans to use in leasing space in the Improvements. All Leases of
space in the Improvements shall be on terms consistent with the terms for
similar leases in the market area of the Land, shall provide for free rent only
if the same is consistent with prevailing market conditions and shall provide
for market rents then prevailing in the market area of the Land. Such Leases
shall also provide for security deposits in reasonable amounts. Grantor shall
also submit to Grantee for Grantee’s approval, which approval shall not be
unreasonably withheld, prior to the execution thereof, any proposed Lease of
the Improvements or any portion thereof that differs materially and adversely
from the aforementioned form Lease. Grantor shall not execute any Lease for all
or a substantial portion of the Property, except for an actual occupancy by the
Tenant thereunder, and shall at all times promptly and faithfully perform, or
cause to be performed, all of the covenants, conditions and agreements
contained in all Leases with respect to the Property, now or hereafter
existing, on the part of the landlord, lessor or licensor thereunder to be kept
and performed. Grantor shall furnish to Grantee, within ten (10) days after a
request by Grantee to do so, but in any event by January 1 of each year, a
current Rent Roll certified by Grantor as being true and correct containing the
names of all Tenants with respect to the Property, the terms of their
respective Leases, the spaces occupied and the rentals or fees payable
thereunder and the amount of each tenant’s security deposit. Upon the request
of Grantee, Grantor shall deliver to Grantee a copy of each such Lease. Grantor
shall not do or suffer to be done any act that might result in a default by the
landlord, lessor or licensor under any such Lease or allow the Tenant
thereunder to withhold payment or rent and, except as otherwise expressly
permitted by the terms of Section 1.12 hereof, shall not further assign any
such Lease or any such rents. Grantor, at no cost or expense to Grantee, shall
enforce, short of termination, the performance and observance of each and every
condition and covenant of each of the parties under such Leases. Grantor shall
not, without the prior written consent of Grantee, modify any of the Leases,
terminate or accept the surrender of any Leases, waive or release any other
party from the performance or observance of any obligation or condition under
such Leases except in the normal course of business in a manner which is
consistent with sound and customary leasing and management practices for
similar properties in the community in which the Property is located. Grantor
shall not permit the prepayment of any rents under any of the Leases for more
than one (1) month prior to the due date thereof.

     (c) Each Lease executed after the date hereof affecting any of the Land
or the Improvements must provide, in a manner approved by Grantee, that the
Tenant will recognize as its landlord, lessor or licensor, as applicable, and
attorn to any person succeeding to the interest of Grantor upon any
foreclosure of this Deed of Trust or deed in lieu of foreclosure. Each such
Lease shall also provide that, upon request of said successor-in-interest, the
Tenant shall execute and deliver an instrument or instruments confirming its
attornment as provided for in this Section; provided, however, that neither
Grantee nor any successor-in-interest shall be bound by any payment of rental
for more than one (1) month in advance, or any amendment

	 	 	 	 	 	 	 
	 

	 	 	24	 	 	WEDGEWOOD DEED OF TRUST

 

 

or modification of said Lease made without the express written consent of
Grantee or said successor-in-interest.

     (d) Upon the occurrence of an Event of Default under this Deed of Trust,
whether before or after the whole principal sum secured hereby is declared to
be immediately due or whether before or after the institution of legal
proceedings to foreclose this Deed of Trust, forthwith, upon demand of Grantee,
Grantor shall surrender to Grantee and Grantee shall be entitled to take actual
possession of the Property or any part thereof personally, or by its agent or
attorneys. In such event, Grantee shall have, and Grantor hereby gives and
grants to Grantee, the right, power and authority to make and enter into Leases
with respect to the Property or portions thereof for such rents and for such
periods of occupancy and upon conditions and provisions as Grantee may deem
desirable in its sole discretion, and Grantor expressly acknowledges and agrees
that the term of any such Lease may extend beyond the date of any foreclosure
sale at the Property; it being the intention of Grantor that in such event
Grantee shall be deemed to be and shall be the attorney-in-fact of Grantor for
the purpose of making and entering into Leases of parts or portions of the
Property for the rents and upon the terms, conditions and provisions deemed
desirable to Grantee in its sole discretion and with like effect as if such
Leases had been made by Grantor as the owner in fee simple of the Property free
and clear of any conditions or limitations established by this Deed of Trust.
The power and authority hereby given and granted by Grantor to Grantee shall be
deemed to be coupled with an interest, shall not be revocable by Grantor so
long as any indebtedness secured hereby is outstanding, shall survive the
voluntary or involuntary dissolution of Grantor and shall not be affected by
any disability or incapacity suffered by Grantor subsequent to the date hereof.
In connection with any action taken by Grantee pursuant to this Section,
Grantee shall not be liable for any loss sustained by Grantor resulting from
any failure to let the Property, or any part thereof, or from any other act or
omission of Grantee in managing the Property, nor shall Grantee be obligated to
perform or discharge any obligation, duty or liability under any Lease covering
the Property or any part thereof or under or by reason of this instrument or
the exercise of rights or remedies hereunder. Grantor shall, and does hereby,
indemnify Grantee for, and hold Grantee harmless from, any and all claims,
actions, demands, liabilities, loss or damage which may or might be incurred by
Grantee under any such Lease or under this Deed of Trust or by the exercise of
rights or remedies hereunder and from any and all claims and demands whatsoever
which may be asserted against Grantee by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants or
agreements contained in any such Lease other than those finally determined to
have resulted solely from the gross negligence or willful misconduct of
Grantee. Should Grantee incur any such liability, the amount thereof,
including, without limitation, costs, expenses and reasonable attorneys’ fees,
together with interest thereon at the Default Interest Rate from the date
incurred by Grantee until actually paid by Grantor, shall be immediately due
and payable to Grantee by Grantor on demand and shall be secured hereby and by
all of the other Loan Documents securing all or any part of the indebtedness
evidenced by the Note. Nothing in this

	 	 	 	 	 	 	 
	 

	 	 	25	 	 	WEDGEWOOD DEED OF TRUST

 

 

Section shall impose on Grantee any duty, obligation or responsibility for the
control, care, management or repair of the Property, or for the carrying out of
any of the terms and conditions of any such Lease nor shall it operate to make
Grantee responsible or liable for any waste committed on the Property by the
Tenants or by any other parties or for any dangerous or defective condition of
the Property, or for any negligence in the management, upkeep, repair or
control of the Property. Grantor hereby assents to, ratifies and confirms any
and all actions of Grantee with respect to the Property taken under this
Section.

     1.13
Alienation and Further Encumbrances.

     (a) Grantor acknowledges that Grantee has relied upon the principals of
Grantor and their experience in owning and operating the Property and
properties similar to the Property in connection with the closing of the
Wedgewood Loan evidenced by the Wedgewood Note and the Consolidated Loan
evidenced by the Consolidated Note. Accordingly, except as specifically
allowed hereinbelow in this Section or in Section 4.14 (d) and notwithstanding
anything to the contrary contained in Section 4.6 hereof, in the event that
the Property or any part thereof or interest therein shall be sold, conveyed,
disposed of, alienated, hypothecated, leased (except to Tenants of space in
the Improvements in accordance with the provisions of Section 1.12 hereof),
assigned, pledged, mortgaged, further encumbered or otherwise transferred or
Grantor shall be divested of its title to the Properly or any interest
therein, in any manner or way, whether voluntarily or involuntarily, without
the prior written consent of Grantee being first obtained, which consent may
be withheld in Grantee’s sole discretion, then, the same shall constitute an
Event of Default hereunder and Grantee shall have the right, at its option, to
declare any or all of the indebtedness secured hereby, irrespective of the
maturity date specified in the Note, immediately due and payable and to
otherwise exercise any of its other rights and remedies contained in Article
III hereof. If such acceleration is during any period when a prepayment fee is
payable pursuant to the provisions set forth in the Note, then, in addition to
all of the foregoing, such prepayment fee shall also then be immediately due
and payable to the same end as though Grantor were prepaying the entire
indebtedness secured hereby on the date of such acceleration. For the purposes
of this Section: (i) in the event either Grantor or any of its general
partners or members is a corporation or trust, the sale, conveyance, transfer
or disposition of more than 10% of the issued and outstanding capital stock of
Grantor or any of its general partners or of the beneficial interest of such
trust (or the issuance of new shares of capital stock in Grantor or any of its
general partners or members so that immediately after such issuance the total
capital stock then issued and outstanding is more than 110% of the total
immediately prior to such issuance) shall be deemed to be a transfer of an
interest in the Property, and (ii) in the event Grantor or any general partner
or member of Grantor is a limited or general partnership, a joint venture or a
limited liability company, a change in the ownership interests in any general
partner, any joint venturer or any member, either voluntarily, involuntarily
or otherwise, or the sale, conveyance, transfer, disposition, alienation,
hypothecation or encumbering

	 	 	 	 	 	 	 
	 

	 	 	26	 	 	WEDGEWOOD DEED OF TRUST

 

 

of all or any portion of the interest of any such general partner, joint
venturer or member in Grantor or such general partner (whether in the form of a
beneficial or partnership interest or in the form of a power of direction,
control or management, or otherwise), shall be deemed to be a transfer of an
interest in the Property. Notwithstanding the foregoing (i) any involuntary
transfer caused by the death of Grantor or any general partner, shareholder,
joint venturer, or beneficial owner of a trust shall not be an Event of Default
under this Deed of Trust so long as Grantor is reconstituted, if required,
following such death and so long as those persons responsible for the
management of the Property remain unchanged as a result of such death or any
replacement management is approved by Grantee, (ii) gifts for estate planning
purposes of any individual’s interests in Grantor or in any of Grantor’s
general partners, managing members or joint venturers to the spouse or any
lineal descendant of such individual, or to a trust for the benefit of any one
or more of such individual, spouse or lineal descendant, shall not be an Event
of Default under this Deed of Trust so long as Grantor is reconstituted, if
required, following such gift and so long as those persons responsible for the
management of the Property and Grantor remain unchanged following such gift
or any replacement management is approved by Grantee, and (iii) the sale,
conveyance, transfer or disposition of (A) more than 10% of the issued and
outstanding capital stock of any individual or trust Grantor or any of its
general partners or of the beneficial interest of any such trust (or the
issuance of new shares of capital stock in such Grantor or any of its general
partners or members so that immediately after such issuance the total capital
stock then issued and outstanding is more than 110% of the total immediately
prior to such issuance), (B) in the event any Grantor or any general partner or
member of Grantor is a limited or general partnership, a joint venture or a
limited liability company, a change in the ownership interests in any general
partner, any joint venturer or any member, or the sale, conveyance, transfer,
disposition, alienation, hypothecation or encumbering of all or any portion of
the interest of any such general partner, joint venturer or member in such
Grantor or such general partner (whether in the form of a beneficial or
partnership interest or in the form of a power of direction, control or
management, or otherwise), shall not constitute an Event of Default hereunder
if such transfer is being made to comply with the terms of the [Side Agreement]
of even date herewith between the Grantee and the holders of certain interests
in the Grantor and the other Borrowers (collectively, the “Mezzanine
Borrowers”) pursuant to which the mezzanine loan being made to Mezzanine
Borrowers may be converted to preferred equity.

     (b) Notwithstanding the foregoing provisions of this Section, Grantee
shall consent to a sale, conveyance or transfer of the Property in its
entirety (hereinafter, “Sale”) to any person or entity provided that each of
the following terms and conditions are satisfied:

                    (1) No Default or Event of Default is then continuing
hereunder or under any of the other Loan Documents;

	 	 	 	 	 	 	 
	 

	 	 	27	 	 	WEDGEWOOD DEED OF TRUST

 

 

                    (2) Grantor gives Grantee written notice of the terms of such
prospective Sale not less than sixty (60) days before the date on
which such Sale is scheduled to close and, concurrently therewith, gives
Grantee all such information concerning the proposed transferee of the Property
(hereinafter, “Buyer”) as Grantee would require in evaluating an initial extension
of credit to a borrower and pays to Grantee a non-refundable application fee
in the amount of $2,500.00. Grantee shall have the right to approve or
disapprove the proposed Buyer. In determining whether to give or withhold its
approval of the proposed Buyer, Grantee shall consider the Buyer’s experience
and track record in owning and operating facilities similar to the Property,
the Buyer’s financial strength, the Buyer’s general business standing and the
Buyer’s relationships and experience with contractors, vendors, tenants,
lenders and other business entities; provided, however, that, notwithstanding
Grantee’s agreement to consider the foregoing factors in determining whether
to give or withhold such approval, such approval shall be given or withheld
based on what Grantee determines to be commercially reasonable in Grantee’s
sole discretion and, if given, may be given subject to such conditions as
Grantee may deem appropriate;

                    (3) Grantor pays Grantee, concurrently with the closing of
such Sale, a non-refundable assumption fee in an amount equal
to all out-of-pocket costs and expenses, including, without limitation,
reasonable attorneys’ fees, incurred by Grantee in connection with the Sale
plus an amount equal to one half percent (0.5%) of the then outstanding principal
balance of the Note in connection with the first (1st) Sale and one percent
(1%) of the outstanding principal balance of the Note for any subsequent Sale;

                    (4) The Buyer assumes and agrees to pay the indebtedness
secured hereby subject to the provisions of Section 4.27 hereof and,
prior to or concurrently with the closing of such Sale, the Buyer executes,
without any cost or expense to Grantee, such documents and agreements as Grantee
shall reasonably require to evidence and effectuate said assumption and
delivers such legal opinions as Grantee or the rating agency may require,
including without limitation, a non-consolidation opinion;

                    (5) A party associated with the Buyer approved by Grantee
in its sole discretion assumes the obligations of any current
indemnitor under its guaranty or indemnity agreement and such party associated with
the Buyer executes, without any cost or expense to Grantee, a new guaranty or
indemnity agreement in form and substance satisfactory to Grantee and delivers
such legal opinions as Grantee may require;

                    (6) Grantor and the Buyer execute, without any cost or
expense to Grantee, new financing statements or financing statement
amendments and any additional documents reasonably requested by
Grantee;

	 	 	 	 	 	 	 
	 

	 	 	28	 	 	WEDGEWOOD DEED OF TRUST

 

 

                    (7) Grantor delivers to Grantee, without any cost or expense
to Grantee, such endorsements to Grantee’s title insurance policy,
hazard insurance endorsements or certificates and other similar materials
as Grantee may deem necessary at the time of the Sale, all in form and
substance satisfactory to Grantee, including, without limitation, an
endorsement or endorsements to Grantee’s title insurance policy insuring the lien
of this Deed of Trust, extending the effective date of such policy to the date of
execution and delivery (or, if later, of recording) of the assumption
agreement referenced above in subparagraph (4) of this Section with no additional
exceptions added to such policy and insuring that fee simple title to the Property is
vested in the Buyer;

                    (8) Grantor executes and delivers to Grantee, without any
cost or expense to Grantee, a release of Grantee, its officers,
directors, employees and agents, from all claims and liability relating to the
transactions evidenced by the Loan Documents through and including the date of
the closing of the Sale, which agreement shall be in form and
substance satisfactory to Grantee and shall be binding upon the Buyer;

                    (9)
Subject to the provisions of Section 4.27 hereof, such
Sale is not construed so as to relieve Grantor of any liability
under the Note or any of the other Loan Documents for any acts or events occurring
or obligations arising prior to or simultaneously with the closing of
such Sale and Grantor executes, without any cost or expense to Grantee, such
documents and agreements as Grantee shall reasonably require to evidence and
effectuate the ratification of said liability. Grantor shall be released from and
relieved of any liability under the Note or any of the other Loan Documents for any
acts or events occurring or obligations arising after the closing of such
Sale which are not caused by or arising out of any acts or events occurring or
obligations arising prior to or simultaneously with the closing of such Sale;
and

                    (10) Such Sale is not construed so as to relieve any current
indemnitor of its obligations under any guaranty or indemnity
agreement for any acts or events occurring or obligations arising prior to or
simultaneously with the closing of such Sale, and each such current indemnitor
executes, without any cost or expense to Grantee, such documents and
agreements as Grantee shall reasonably require to evidence and effectuate the
ratification of each such guaranty and indemnity agreement. Each such current
indemnitor shall be released from and relieved of any of its obligations under
any guaranty or indemnity agreement executed in connection with the loan secured
hereby for any acts or events occurring or obligations arising after the
closing of such Sale which are not caused by or arising out of any acts or events
occurring or obligations arising prior to or simultaneously with the closing of
such Sale; and

	 	 	 	 	 	 	 
	 

	 	 	29	 	 	WEDGEWOOD DEED OF TRUST

 

 

                    (11) The Buyer shall furnish, if the Buyer is a corporation,
partnership or other entity, all appropriate papers evidencing the
Buyer’s capacity and good standing, and the qualification of the signers to
execute the assumption of the indebtedness secured hereby, which papers shall
include certified copies of all documents relating to the organization and
formation of the Buyer and of the entities, if any, which are partners,
members or shareholders of the Buyer. The Buyer and such constituent partners,
members or shareholders of Buyer (as the case may be), as Grantee shall
require, shall be single purpose, “bankruptcy remote” entities, whose formation
documents shall be approved by counsel to Grantee. The individual
recommended by the Grantor and approved by Grantee shall serve as independent director
of the Buyer (if the Buyer is a corporation) or the Buyer’s corporate
general partner or as independent members or, in Grantee’s discretion, as managers,
of Buyer if the Buyer a limited liability company. The consent of such
independent party shall be required for, among other things, any merger,
consolidation, dissolution, bankruptcy or insolvency of such independent party or
of the Buyer.

                    (12) The Grantor/Buyer shall furnish to Grantee written
confirmation from the rating agency that such alteration or
expansion shall not result in the downgrade, qualification or the withdrawal of the then
current ratings of the Note.

          Notwithstanding
anything to the contrary contained in this Section 1.13, no consent of Grantee shall be required for transfers of interests
in Grantor, or interests in any entity directly or indirectly holding an
interest in Grantor between T. Richard Butera and Sidney Kimmel provided
that such transfer(s) does not affect Grantor’s or such other entity’s
status as a special purpose entity. Further, Grantee’s consent shall not
be required for transfers by holders of interests in Grantor (or holders
of interests in any entity directly or indirectly holding an interest in
any Grantor) (the “Interest Holders”) of their interest in Grantor (or
any entity directly or indirectly holding an interest in Grantor) to any
other person or entity, provided that:

                    (i) after taking into account any prior transfers pursuant to this
sentence, whether to the proposed transferee or otherwise, no such transfer
(or series of transfers) shall result in (x) the proposed transferee, together
with all members of his/her immediate family or any affiliates thereof, owning
in the aggregate (directly, indirectly or beneficially) more than 49% of the
interests in Grantor (or any entity directly or indirectly holding an interest
in Grantor), or (y) a transfer in the aggregate of more than 49% of the
interests in Grantor as of the date hereof;

                    (ii) T. Richard Butera and/or Sidney Kimmel individually and collectively
shall at all times before and after the proposed transfer continue to own
(directly or indirectly) at least 51 % of the interests in Grantor;

	 	 	 	 	 	 	 
	 

	 	 	30	 	 	WEDGEWOOD DEED OF TRUST

 

 

                    (iii) no such transfer of interest shall result in a change of control of
any Individual Grantor or the day to day operations of the Property;

                    (iv) Grantor shall give Grantee notice of such transfer together with
copies of all instruments effecting such transfer not less than ten (10) days
prior to the date of such transfer; and

                    (v) no Event of Default has occurred and remains uncured.

     (c) For
purposes of this Section 1.13, a change of control of an
Individual Grantor shall be deemed to have occurred if there is any change in
the identity of the individual or entities or group of individuals or entities
who have the right, by virtue of any partnership agreement, articles of
incorporation, by-laws, articles of organization, operating agreement or any
other agreement, with or without taking any formative action, to cause Grantor
to take some action or to prevent, restrict or impede Grantor from taking some
action which, in either case, Grantor could take or could refrain from taking
were it not for the rights of such individuals. Notwithstanding the foregoing,
any transfers by and between T. Richard Butera and Sidney Kimmel of their
direct or indirect interest in Grantor to each other shall not be deemed a
change in control.

     1.14
Payment of Utilities, Assessments, Charges. Etc. Grantor shall
pay when due all utility charges which are incurred by Grantor or which
may become a charge or lien against any portion of the Property for gas, electricity,
water and sewer services furnished to the Land and/or the Improvements and
all other assessments or charges of a similar nature, or assessments payable
pursuant to any restrictive covenants, whether public or private, affecting the Land
and/or the Improvements or any portion thereof, whether or not such assessments or
charges are or may become liens thereon.

     1.15
Access Privileges and Inspections. Grantee and the agents,
representatives and employees of Grantee shall, subject to the rights of
tenants, have full and free access to the Land and the Improvements and any other
location where books and records concerning the Property are kept at all reasonable times
for the purposes of inspecting the Property and of examining, copying and making
extracts from the books and records of Grantor relating to the Property. Grantor
shall lend assistance to all such agents, representatives and employees of Grantee.

     1.16
Waste; Alteration of Improvements. Grantor shall not commit,
suffer or permit any waste on the Property nor take any actions that might
invalidate any insurance carried on the Property. Grantor shall maintain the
Property in good condition and repair. No part of the Improvements may be removed,
demolished or materially altered, without the prior written consent of Grantee.
Without the prior written consent of Grantee, Grantor shall not commence construction
of any improvements on the Land other than improvements required for the
maintenance or repair of the Property.

	 	 	 	 	 	 	 
	 

	 	 	31	 	 	WEDGEWOOD DEED OF TRUST

 

 

     1.17
Zoning. Without the prior written consent of Grantee, Grantor
shall not seek, make, suffer, consent to or acquiesce in any change in the
zoning or conditions of use of the Land or the Improvements. Grantor shall comply
with and make all payments required under the provisions of any covenants,
conditions or restrictions affecting the Land or the Improvements. Grantor shall
comply with all existing and future requirements of all governmental authorities having
jurisdiction over the Property. Grantor shall keep all licenses, permits, franchises
and other approvals necessary for the operation of the Property in full force and
effect. If, under applicable zoning provisions, the use of all or any part of the Land
or the Improvements is or becomes a nonconforming use, Grantor shall not cause or
permit such use to be discontinued or abandoned without the prior written consent
of Grantee. Further, without Grantee’s prior written consent, Grantor shall
not file or subject any part of the Land or the Improvements to any declaration of
condominium or co-operative or convert any part of the Land or the
Improvements to a condominium, co-operative or other form of multiple ownership and
governance.

     1.18
Financial Statements and Books and Records. Grantor shall
keep accurate books and records of account of the Property and its own
financial affairs sufficient to permit the preparation of financial statements
therefrom in accordance with generally accepted accounting principles. Grantee and
its duly authorized representatives shall have the right to examine, copy and audit
Grantor’s records and books of account at all reasonable times. So long as this
Deed of Trust continues in effect, Grantor shall provide to Grantee, in addition to any
other financial statements required hereunder or under any of the other Loan Documents,
the following financial statements and information, all of which must be
certified to Grantee as being true and correct by Grantor or the person or entity to
which they pertain, as applicable, be prepared in accordance with generally accepted
accounting principles consistently applied and be in form and substance reasonably
acceptable to Grantee:

     (a) copies of all tax returns filed by Grantor, within thirty (30) days
after the date of filing;

     (b) monthly operating statements prepared on a cash basis for the
Property within ten (10) days after the end of each month until any
Securitization (as defined in section 4.40 below);

     (c) quarterly operating statements prepared on a cash basis for the
Property, within forty-five (45) days after the end of each calendar
quarter;

     (d) annual balance sheets for the Property and audited annual
financial statements for Grantor, each principal or general partner in
Grantor, and (except Sidney Kimmel) specifically T. Richard Butera and each future
indemnitor and guarantor under any indemnity or guaranty executed in connection with the
loan

	 	 	 	 	 	 	 
	 

	 	 	32	 	 	WEDGEWOOD DEED OF TRUST

 

 

secured hereby, within one hundred twenty (120) days after the end of each
calendar year; and

          (e) such other information with respect to the Property, Grantor, the
principals or general partners in Grantor, and each indemnitor and guarantor
under any indemnity or guaranty executed in connection with the loan secured
hereby, which may be requested from time to time by Grantee, within a
reasonable time after the applicable request.

          If any of the aforementioned materials for the Grantor and T. Richard
Butera are not furnished to Grantee within the applicable time periods or
Grantee is dissatisfied with the contents of any of the foregoing, in addition
to any other rights and remedies of Grantee contained herein, Grantee shall
have the right, but not the obligation, to obtain the same by means of an
audit by an independent certified public accountant selected by Grantee, in
which event Grantor agrees to pay, or to reimburse Grantee for, any expense of
such audit and further agrees to provide all necessary information to said
accountant and to otherwise cooperate in the making of such audit.

          1.19 Further Documentation. a) Grantor shall, on the
request of Grantee and at the expense of Grantor: (a) promptly correct any
defect, error or omission which may be discovered in the contents of this Deed
of Trust or in the contents of any of the other Loan Documents; (b) promptly
execute, acknowledge, deliver and record or file such further instruments
(including, without limitation, further mortgages, deeds of trust, security
deeds, security agreements, financing statements, continuation statements and
assignments of rents or leases) and promptly do such further acts as may be
necessary, desirable or proper to carry out more effectively the purposes of
this Deed of Trust and the other Loan Documents and to subject to the liens
and security interests hereof and thereof any property intended by the terms
hereof and thereof to be covered hereby and thereby, including specifically,
but without limitation, any renewals, additions, substitutions, replacements
or appurtenances to the Property; (c) promptly execute, acknowledge, deliver,
procure and record or file any document or instrument (including specifically
any financing statement) deemed advisable by Grantee to protect, continue or
perfect the liens or the security interests hereunder against the rights or
interests of third persons; and (d) promptly furnish to Grantee, upon
Grantee’s request, a duly acknowledged written statement and estoppel
certificate addressed to such party or parties as directed by Grantee and in
form and substance supplied by Grantee, setting forth all amounts due under
the Note, stating whether any Default or Event of Default has occurred
hereunder, stating whether any offsets or defenses exist against the
indebtedness secured hereby and containing such other matters as Grantee may
reasonably require.

          (b) Grantor acknowledges that Grantee and its successors and assigns may
effectuate a Secondary Market Transaction. Grantor shall cooperate in good
faith with Grantee in effecting any such Secondary Market Transaction and
shall cooperate in good faith to implement all requirements imposed by any
rating agency

	 	 	 	 	 	 	 
	 

	 	 	33	 	 	WEDGEWOOD DEED OF TRUST

 

 

involved in any Secondary Market Transaction including, without
limitation, all reasonable structural or other reasonable changes to the
indebtedness secured hereby, modifications to any documents evidencing or
securing the loan; provided, however, that the Grantor shall not be required to
modify any documents evidencing or securing the indebtedness secured hereby
which would modify (A) the interest rate payable under the Note, (B) the stated
maturity of the Note, (C) the amortization of principal of the Note, or (D) any
other material economic term of the indebtedness secured hereby. To the extent
available or readily available, Grantor shall provide such information, and
documents relating to Grantor, any guarantor or indemnitor, the Property and
any tenants of the Improvements as Grantee may reasonably request in connection
with such Secondary Market Transaction. Grantor shall make available to Grantee
all information concerning its business and operations that Grantee may
reasonably request. Grantee shall be permitted to share all such information
with the investment banking firms, rating agencies, accounting firms, law firms
and other third-party advisory firms involved with the Loan Documents or the
applicable Secondary Market Transaction. It is understood that the information
provided by Grantor to Grantee may ultimately be incorporated into the offering
documents for the Secondary Market Transaction and thus various investors may
also see some or all of the information. Grantee and all of the aforesaid
third-party advisors and professional firms shall be entitled to rely on the
information supplied by, or on behalf of, Grantor, and subject to the
provisions of Section 4.27 hereof Grantor indemnifies
Grantee as to any losses, claims, damages or liabilities that arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in such information or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated in such information or necessary in order to make the statements in such
information, or in light of the circumstances under which they were made, not
misleading. Grantee may publicize the existence of the indebtedness secured
hereby in connection with its marketing for a Secondary Market Transaction or
otherwise as part of its business development. For purposes hereof, a
“Secondary Market Transaction” shall be (a) any sale of the Deed of Trust, Note
and other Loan Documents to one or more investors as a whole loan; (b) a
participation of the indebtedness secured hereby to one or more investors, (c)
any deposit of the Deed of Trust, Note and other Loan Documents with a trust or
other entity which may sell certificates or other instruments to investors
evidencing an ownership interest in the assets of such trust or other entity,
or (d) any other sale or transfer of the indebtedness secured hereby or any
interest therein to one or more investors.

          1.20
Payment of Costs; Reimbursement to Grantee.
Grantor shall pay all costs and expenses of every character incurred in
connection with the closing of the loan evidenced by the Note and secured
hereby or otherwise attributable or chargeable to Grantor as the owner of the
Property, including, without limitation, appraisal fees, recording fees,
documentary, stamp, mortgage or intangible taxes, brokerage fees and
commissions, title policy premiums and title search fees, uniform commercial
code/tax lien/litigation search fees, escrow fees and reasonable attorneys’
fees. If Grantor defaults in any such payment, which default is not cured
within any

	 	 	 	 	 	 	 
	 

	 	 	34	 	 	WEDGEWOOD DEED OF TRUST

 

 

applicable grace or cure period, Grantee may pay the same and Grantor shall
reimburse Grantee on demand for all such costs and expenses incurred or paid by
Grantee, together with such interest thereon at the Default Interest Rate from
and after the date of Grantee’s making such payment until reimbursement thereof
by Grantor. Any such sums disbursed by Grantee, together with such interest
thereon, shall be additional indebtedness of Grantor secured by this Deed of
Trust and by all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. Further, Grantor shall promptly notify
Grantee in writing of any litigation or threatened litigation affecting the
Property, or any other demand or claim which, if enforced, could impair or
threaten to impair Grantee’s security hereunder. Without limiting or waiving
any other rights and remedies of Grantee hereunder, if Grantor fails to perform
any of its covenants or agreements contained in this Deed of Trust or in any of
the other Loan Documents and such failure is not cured within any applicable
grace or cure period, or if any action or proceeding of any kind (including,
but not limited to, any bankruptcy, insolvency, arrangement, reorganization or
other debtor relief proceeding) is commenced which might affect Grantee’s
interest in the Property or Grantee’s right to enforce its security, then
Grantee may, at its option, with or without notice to Grantor, make any
appearances, disburse any sums and take any actions as may be necessary or
desirable to protect or enforce the security of this Deed of Trust or to remedy
the failure of Grantor to perform its covenants and agreements (without,
however, waiving any default of Grantor). Grantor agrees to pay on demand all
expenses of Grantee incurred with respect to the foregoing (including, but not
limited to, reasonable fees and disbursements of counsel), together with
interest thereon at the Default Interest Rate from and after the date on which
Grantee incurs such expenses until reimbursement thereof by Grantor. Any
such expenses so incurred by Grantee, together with interest thereon as
provided above, shall be additional indebtedness of Grantor secured by this
Deed of Trust and by all of the other Loan Documents securing all or any part
of the indebtedness evidenced by the Note. The necessity for any such actions
and of the amounts to be paid shall be determined by Grantee in its discretion.
Grantee is hereby empowered to enter and to authorize others to enter upon the
Property or any part thereof, subject to the right of the Tenants, for the
purpose of performing or observing any such defaulted term, covenant or
condition without thereby becoming liable to Grantor or any person in
possession holding under Grantor. Grantor hereby acknowledges and agrees that
the remedies set forth in this Section 1.20 shall be
exercisable by Grantee, and any and all payments made or costs or expenses
incurred by Grantee in connection therewith shall be secured hereby and shall
be, without demand, immediately repaid by Grantor with interest thereon at the
Default Interest Rate, notwithstanding the fact that such remedies were
exercised and such payments made and costs incurred by Grantee after the filing
by Grantor of a voluntary case or the filing against Grantor of an involuntary
case pursuant to or within the meaning of the Bankruptcy Reform Act of 1978, as
amended, Title 11 U.S.C., or after any similar action pursuant to any other
debtor relief law (whether statutory, common law, case law or otherwise) of any
jurisdiction whatsoever, now or hereafter, in effect, which may be or become
applicable to Grantor, Grantee, any guarantor or indemnitor, the secured
indebtedness or any of the

	 	 	 	 	 	 	 
	 

	 	 	35	 	 	WEDGEWOOD DEED OF TRUST

 

 

Loan Documents subject to the provisions of Section 4.27
hereof. Grantor hereby indemnifies and holds Grantee harmless from and against
all loss, cost and expenses with respect to any Event of Default hereof, any
liens (i.e., judgments, mechanics’ and materialmen’s liens, or otherwise),
charges and encumbrances filed against the Property, and from any claims and
demands for damages or injury, including claims for property damage, personal
injury or wrongful death, arising out of or in connection with any accident or
fire or other casualty on the Land or the Improvements or any nuisance made or
suffered thereon, including, in any case, attorneys’ fees, costs and expenses
as aforesaid, whether at pretrial, trial or appellate level, and such indemnity
shall survive payment in full of the indebtedness secured hereby. This Section
shall not be construed to require Grantee to incur any expenses, make any
appearances or take any actions.

          1.21 Security Interest. This Deed of Trust is also
intended to encumber and create a security interest in, and Grantor hereby
grants to Grantee a security interest in all sums on deposit with Grantee
pursuant to the provisions of Sections 1.6, 1.7,
1.8 and 1.35 hereof or any other Section
hereof and all fixtures, chattels, accounts, equipment, inventory, contract
rights, general intangibles and other personal property included within the
Property, all renewals, replacements of any of the aforementioned items, or
articles in substitution therefor or in addition thereto or the proceeds
thereof (said property being hereinafter referred to collectively as the
“Collateral”), whether or not the same shall be attached to the Land or the
Improvements in any manner. It is hereby agreed that to the extent permitted
by law, all of the foregoing property is to be deemed and held to be a part of
and affixed to the Land and the Improvements. The foregoing security interest
shall also cover Grantor’s leasehold interest in any of the foregoing property
that is leased by Grantor. Notwithstanding the foregoing, all of the foregoing
property shall be owned by Grantor and no leasing or installment sales or
other financing or title retention agreement in connection therewith shall be
permitted without the prior written approval of Grantee. Grantor shall, from
time to time upon the request of Grantee, supply Grantee with a current
inventory of all of the property in which Grantee is granted a security
interest hereunder, in such detail as Grantee may require. Grantor shall
promptly replace all of the Collateral subject to the lien or security
interest of this Deed of Trust when worn or obsolete with Collateral
comparable to the worn out or obsolete Collateral when new and will not,
without the prior written consent of Grantee, remove from the Land or the
Improvements any of the Collateral subject to the lien or security interest of
this Deed of Trust except such as is replaced by an article of equal
suitability and value as above provided, owned by Grantor free and clear of
any lien or security interest except that created by this Deed of Trust and
the other Loan Documents and except as otherwise expressly permitted by the
terms of Section 1.13 of this Deed of Trust. All of the
Collateral shall be kept at the location of the Land except as otherwise
required by the terms of the Loan Documents. Grantor shall not use any of the
Collateral in violation of any applicable statute, ordinance or insurance
policy.

	 	 	 	 	 	 	 
	 

	 	 	36	 	 	WEDGEWOOD DEED OF TRUST

 

 

          1.22 Security Agreement. This Deed of Trust constitutes
a security agreement between Grantor and Grantee with respect to the Collateral
in which Grantee is granted a security interest hereunder, and, cumulative of
all other rights and remedies of Grantee hereunder, Grantee shall have all of
the rights and remedies of a secured party under any applicable Uniform
Commercial Code. Grantor hereby agrees to execute and deliver on demand and
hereby irrevocably constitutes and appoints Grantee the attorney-in-fact of
Grantor to execute and deliver and, if appropriate, to file with the
appropriate filing officer or office such security agreements, financing
statements, continuation statements or other instruments as Grantee may request
or require in order to impose, perfect or continue the perfection of the lien
or security interest created hereby. Except with respect to Rents and Profits
to the extent specifically provided herein to the contrary, Grantee shall have
the right of possession of all cash, securities, instruments, negotiable
instruments, documents, certificates and any other evidences of cash or other
property or evidences of rights to cash rather than property, which are now or
hereafter a part of the Property and Grantor shall promptly deliver the same to
Grantee, endorsed to Grantee, without further notice from Grantee. Grantor
agrees to furnish Grantee with notice of any change in the name, identity,
organizational structure, residence, or principal place of business or mailing
address of Grantor within ten (10) days of the effective date of any such
change. Upon the occurrence of any Event of Default, Grantee shall have the
rights and remedies as prescribed in the Deed of Trust, or as prescribed by
general law, or as prescribed by any applicable Uniform Commercial Code, all at
Grantee’s election. Any disposition of the Collateral may be conducted by an
employee or agent of Grantee. Any person, including both Grantor and Grantee,
shall be eligible to purchase any part or all of the Collateral at any such
disposition. Expenses of retaking, holding, preparing for sale, selling or the
like (including, without limitation, Grantee’s attorneys’ fees and legal
expenses), together with interest thereon at the Default Interest Rate from the
date incurred by Grantee until actually paid by Grantor, shall be paid by
Grantor on demand and shall be secured by this Deed of Trust and by all of the
other Loan Documents securing all or any part of the indebtedness evidenced by
the Note. Grantee shall have the right to enter upon the Land and the
Improvements or any real property where any of the property which is the
subject of the security interest granted herein is located to take possession
of, assemble and collect the same or to render it unusable, or Grantor, upon
demand of Grantee, shall assemble such property and make it available to
Grantee at the Land, a place which is hereby deemed to be reasonably convenient
to Grantee and Grantor. If notice is required by law, Grantee shall give
Grantor at least ten (10) days’ prior written notice of the time and place of
any public sale of such property or of the time of or after which any private
sale or any other intended disposition thereof is to be made, and if such
notice is sent to Grantor, as the same is provided for the mailing of notices
herein, it is hereby deemed that such notice shall be and is reasonable notice
to Grantor. No such notice is necessary for any such property that is
perishable, threatens to decline speedily in value or is of a type customarily
sold on a recognized market. Any sale made pursuant to the provisions of this
Section shall be deemed to have been a public sale conducted in a commercially

	 	 	 	 	 	 	 
	 

	 	 	37	 	 	WEDGEWOOD DEED OF TRUST

 

 

reasonable manner if held contemporaneously with the foreclosure sale as
provided in Section 3.1(e) hereof upon giving the same
notice with respect to the sale of the Property hereunder as is required under
said Section 3.1(e). Furthermore, to the extent permitted
by law, in conjunction with, in addition to or in substitution for the rights
and remedies available to Grantee pursuant to any applicable Uniform Commercial
Code:

          (a) In the event of a foreclosure sale, the Property may, at the
option of Grantee, be sold as a whole or in parts; and

          (b) It shall not be necessary that Grantee take possession of the
aforementioned Collateral, or any part thereof, prior to the time that any
sale pursuant
to the provisions of this Section is conducted and it shall not be
necessary that said
Collateral, or any part thereof, be present at the location of such sale;
and

          (c) Grantee may appoint or delegate any one or more persons as
agent to perform any act or acts necessary or incident to any sale held by
Grantee,
including the sending of notices and the conduct of the sale, but in the
name and on
behalf of Grantee.

	 	 	 	 	 	 	 
	 

	 	 	38	 	 	WEDGEWOOD DEED OF TRUST

 

 

          The name and address of Grantor (as Debtor under any applicable Uniform
Commercial Code) are:

BUTERA PROPERTIES, LLC

 241 West Patrick Street

 Frederick, Maryland 21701

with copies to:

T. Richard Butera 

101 W. 67th Street

New York, NY 10023

and

Herbert Goodfriend, Esq.

c/o Jones New York Group

1411 Broadway 

New York, NY 10018

          The name and address of Grantee (as Secured Party under any
applicable Uniform Commercial Code) are:

CREDIT SUISSE FIRST BOSTON MORTGAGE, LLC

its Successors and Assigns

11 Madison Avenue

New York, New York 10010

          1.23 Easements and Rights-of-Way. Grantor shall not
grant any
easement or right-of-way with respect to all or any portion of the Land or
the
Improvements without the prior written consent of Grantee. The purchaser
at any
foreclosure sale hereunder may, at its discretion, disaffirm
any easement or
right-of-way granted in violation of any of the provisions of this Deed of
Trust and
may take immediate possession of the Property free from, and despite the
terms of,
such grant of easement or right-of-way. If Grantee consents to the
grant of an easement or right-of-way, Grantee agrees to grant such consent provided
that Grantee
is paid a standard review fee together with all other expenses, including,
without
limitation, reasonable attorneys’ fees, incurred by Grantee in the review
of Grantor’s request and in the preparation of documents effecting the subordination.

          1.24 Compliance with Laws. Grantor shall at all times
comply with all statutes, ordinances, orders, regulations and other
governmental or quasi-governmental requirements and private covenants now or hereafter
relating to the ownership, construction, use or operation of the Property, including,
but not limited to, those concerning employment and compensation of persons
engaged in

	 	 	 	 	 	 	 
	 

	 	 	39	 	 	WEDGEWOOD DEED OF TRUST

 

 

operation and maintenance of the Property and any environmental or ecological
requirements, even if such compliance shall require structural changes to the
Property; provided, however, that,
Grantor may, upon providing Grantee with security satisfactory to Grantee,
proceed diligently and in good faith to contest the validity or applicability
of any such statute, ordinance, regulation or requirement so long as during
such contest the Property shall not be subject to any lien, charge, fine or
other liability and shall not be in danger of being forfeited, lost or closed.
Grantor shall not use or occupy, or allow the use or occupancy of, the Property
in any manner which violates any Lease to the Property or any applicable law,
rule, regulation or order or which constitutes a public or private nuisance or
which makes void, voidable or cancelable, or increases the premium of, any
insurance then in force with respect thereto.

          1.25 Additional Taxes. In the event of the enactment
after this date
of any law of the state where the Property is located or of any other
governmental
entity deducting from the value of the Property for the purpose of
taxation any lien or
security interest thereon, or imposing upon Grantee the payment of the
whole or any
part of the taxes or assessments or charges of liens herein required to be
paid by
Grantor, or changing in any way the laws relating to the taxation of
mortgages or
security agreements or debts secured by mortgages or security agreements
or the
interest of the Grantee or secured party in the property covered thereby
(excluding
income taxation), or the manner of collection of such taxes, so as to
adversely affect
this Deed of Trust or the indebtedness secured hereby or Grantee, then,
and in any
such event, Grantor, upon demand by Grantee, shall pay such taxes,
assessments,
charges or liens, or reimburse Grantee therefor;
provided, however,
that if in the
opinion of counsel for Grantee (a) it might be unlawful to require Grantor
to make
such payment, or (b) the making of such payment might result in the
imposition of
interest beyond the maximum amount permitted by law, then and in either
such event,
Grantee may elect, by notice in writing given to Grantor, to declare all
of the
indebtedness secured hereby to be and become due and payable in full
thirty (30) days
from the giving of such notice.

          1.26 Secured Indebtedness. It is understood and
agreed that this
Deed of Trust shall secure payment of not only the indebtedness evidenced
by the
Note but also any and all substitutions, replacements, renewals and
extensions of the
Note, any and all indebtedness and obligations arising pursuant to the
terms hereof and
any and all indebtedness and obligations arising pursuant to the terms of
any of the
other Loan Documents, all of which indebtedness is equally secured with
and has the
same priority as any amounts advanced as of the date hereof. It is agreed
that any
future advances made by Grantee to or for the benefit of Grantor from time
to time
under this Deed of Trust or the other Loan Documents and whether or not
such
advances are obligatory or are made at the option of Grantee, or
otherwise, made for
any purpose, within twenty (20) years from the date hereof, and all
interest accruing
thereon, shall be equally secured by this Deed of Trust and shall have the
same

	 	 	 	 	 	 	 
	 

	 	 	40	 	 	WEDGEWOOD DEED OF TRUST

 

 

priority as all amounts, if any, advanced as of the date hereof and shall be
subject to all of the terms and provisions of this Deed of Trust.

          1.27 Grantor’s Waivers. To the full extent permitted
by law, Grantor agrees that Grantor shall not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, moratorium or extension, or
any law now or hereafter in force providing for the reinstatement of the
indebtedness secured hereby prior to any sale of the Property to be made
pursuant to any provisions contained herein or prior to the entering of any
decree, judgment or order of any court of competent jurisdiction, or any right
under any statute to redeem all or any part of the Property so sold. Grantor,
for Grantor and Grantor’s successors and assigns, and for any and all persons
ever claiming any interest in the Property, to the full extent permitted by
law, hereby knowingly, intentionally and voluntarily with and upon the advice
of competent counsel: (a) waives, releases, relinquishes and forever forgoes
all rights of valuation, appraisement, stay of execution, reinstatement and
notice of election or intention to mature or declare due the secured
indebtedness (except such notices as are specifically provided for herein);
(b) waives, releases, relinquishes and forever forgoes all right to a
marshalling of the assets of Grantor, including the Property, to a sale in the
inverse order of alienation, or to direct the order in which any of the
Property shall be sold in the event of foreclosure of the liens and security
interests hereby created and agrees that any court having jurisdiction to
foreclose such liens and security interests may order the Property sold as an
entirety; and (c) waives, releases, relinquishes and forever forgoes all
rights and periods of redemption provided under applicable law. To the full
extent permitted by law, Grantor shall not have or assert any right under any
statute or rule of law pertaining to the exemption of homestead or other
exemption under any federal, state or local law now or hereafter in effect,
the administration of estates of decedents or other matters whatever to
defeat, reduce or affect the right of Grantee under the terms of this Deed of
Trust to a sale of the Property, for the collection of the secured
indebtedness without any prior or different resort for collection, or the
right of Grantee under the terms of this Deed of Trust to the payment of the
indebtedness secured hereby out of the proceeds of sale of the Property in
preference to every other claimant whatever. Further, Grantor hereby
knowingly, intentionally and voluntarily, with and upon the advice of
competent counsel, waives, releases, relinquishes and forever forgoes all
present and future statutes of limitations as a defense to any action to
enforce the provisions of this Deed of Trust or to collect any of the
indebtedness secured hereby the fullest extent permitted by law. Grantor
covenants and agrees that upon the commencement of a voluntary or involuntary
bankruptcy proceeding by or against Grantor, Grantor shall not seek a
supplemental stay or otherwise shall not seek pursuant to 11 U.S.C. §105 or
any other provision of the Bankruptcy Reform Act of 1978, as amended, or any
other debtor relief law (whether statutory, common law, case law, or
otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which
may be or become applicable, to stay, interdict, condition, reduce or inhibit
the ability of Grantee to enforce any rights of

	 	 	 	 	 	 	 
	 

	 	 	41	 	 	WEDGEWOOD DEED OF TRUST

 

 

Grantee against any guarantor or indemnitor of the secured obligations or any
other party liable with respect thereto by virtue of any indemnity, guaranty or
otherwise.

          1.28 
SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.

          (a) GRANTOR, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL,
(i) SUBMITS TO PERSONAL JURISDICTION IN ANY STATE IN WHICH THE PROPERTY IS
LOCATED OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR
RELATING TO THE NOTE, THIS DEED OF TRUST OR ANY OTHER OF THE LOAN DOCUMENTS,
(ii) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION OVER ANY COUNTY IN WHICH THE
PROPERTY IS LOCATED, (iii) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND,
(iv) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT
BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM (BUT NOTHING
HEREIN SHALL AFFECT THE RIGHT OF GRANTEE TO BRING ANY ACTION, SUIT OR
PROCEEDING IN ANY OTHER FORUM). GRANTOR FURTHER CONSENTS AND AGREES TO
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT,
ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE
PREPAID, TO THE GRANTOR AT THE ADDRESS FOR NOTICES DESCRIBED IN SECTION 4.5
HEREOF, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY
RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE
VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY
LAW).

          (b) GRANTEE AND GRANTOR, TO THE FULL EXTENT PERMITTED BY LAW,
HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON
THE ADVICE OF COMPETENT COUNSEL, WAIVE, RELINQUISH AND FOREVER FORGO THE
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT
OF, OR IN ANY WAY RELATING TO THE INDEBTEDNESS SECURED HEREBY OR ANY
CONDUCT, ACT OR OMISSION OF GRANTEE OR GRANTOR, OR ANY OF
THEIR DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR
ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH GRANTEE OR GRANTOR, IN EACH
OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE.

          1.29 Contractual Statute of Limitations. Grantor
hereby agrees that any claim or cause of action by Grantor against Grantee, or
any of Grantee’s

	 	 	 	 	 	 	 
	 

	 	 	42	 	 	WEDGEWOOD DEED OF TRUST

 

 

directors, officers, employees, agents, accountants or attorneys, based upon,
arising from or relating to the indebtedness secured hereby, or any other
matter, cause or thing whatsoever, whether or not relating thereto, occurred,
done, omitted or suffered to be done by Grantee or by Grantee’s directors,
officers, employees, agents, accountants or attorneys, whether sounding in
contract or in tort or otherwise, shall be barred unless asserted by Grantor by
the commencement of an action or proceeding in a court of competent
jurisdiction by the filing of a complaint within one (1) year after Grantor
first acquires or reasonably should have acquired knowledge of the first act,
occurrence or omission upon which such claim or cause of action, or any part
thereof, is based and service of a summons and complaint on an officer of
Grantee or any other person authorized to accept service of process on behalf
of Grantee, within thirty (30) days thereafter. Grantor agrees that such one
(1) year period of time is reasonable and sufficient time for a borrower to
investigate and act upon any such claim or cause of action. The one (1) year
period provided herein shall not be waived, tolled or extended except by the
specific written agreement of Grantee. This provision shall survive any
termination of this Deed of Trust or any of the other Loan Documents.

          1.30 Management. The management of the Property shall
be by either: (a) Grantor or an entity affiliated with Grantor approved by
Grantee for so long as Grantor or said affiliated entity is managing the
Property in a first class manner; or (b) a professional property management
company approved by Grantee. Such management by an affiliated entity or a
professional property management company shall be pursuant to a written
agreement approved by Grantee. In no event shall any manager be removed or
replaced or the terms of any management agreement modified or amended without
the prior written consent of Grantee. After the occurrence of either, (i) an
Event of Default or default under this Deed of Trust or any other Loan
Document which is not cured within any applicable grace or cure period, (ii)
the Net Operating Income for the Property and the Consolidated Property (as
defined in Section 4.37 below) decreases below 85% of the
Net Operating Income at the date of closing, or (iii) an Event of Default or a
default under any management contract then in effect, which default is not
cured within any applicable grace or cure period, Grantee shall have the right
to terminate, or to direct Grantor to terminate, such management contract upon
thirty (30) days’ notice and to retain, or to direct Grantor to retain, a new
management agent approved by Grantee. All Rents and Profits generated by or
derived from the Property shall first be utilized solely for current expenses
directly attributable to the ownership and operation of the Property,
including, without limitation, current expenses relating to Grantor’s
liabilities and obligations with respect to this Deed of Trust and the other
Loan Documents, and none of the Rents and Profits generated by or derived from
the Property shall be diverted by Grantor and utilized for any other purposes
unless all such current expenses attributable to the ownership and operation
of the Property have been fully paid and satisfied. Grantee hereby
acknowledges that Fitzgerald & Matan Property Management, Inc. is an approved
property management company and Fitzgerald & Matan Realty, Inc. is an approved
property leasing agent.

	 	 	 	 	 	 	 
	 

	 	 	43	 	 	WEDGEWOOD DEED OF TRUST

 

 

          1.31 Hazardous Waste and Other Substances.

          (a) Grantor hereby represents and warrants to Grantee that, as of the date
hereof: (i) to the best of Grantor’s knowledge, information and belief as is
acquired solely through its review of a certain environmental report for the
Property delivered to Grantee prior to the date hereof is not in direct or
indirect violation of any local, state or federal law, rule or regulation
pertaining to environmental regulation, contamination or clean-up
(collectively, “Environmental Laws”), including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. §9601 et seq. and 40 CFR §302.1
et seq.), the Resource Conservation
and Recovery Act of 1976 (42 U.S.C. §6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C.
§1251 et seq. and 40 CFR § 116.1 et
seq.), those relating to lead based paint, and the Hazardous
Materials Transportation Act (49 U.S.C. §1801 et
seq.), and the regulations promulgated pursuant to said
laws, all as amended; (ii) no hazardous, toxic or harmful substances, wastes,
materials, pollutants or contaminants (including, without limitation,
asbestos, lead based paint, polychlorinated biphenyls, petroleum
products, flammable explosives, radioactive materials, infectious substances
or raw materials which include hazardous constituents) or any other substances
or materials which are included under or regulated by Environmental Laws
(collectively, “Hazardous Substances”) are located on or have been handled,
generated, stored, processed or disposed of on or released or discharged from
the Property (including underground contamination) except for those substances
used by Grantor in the ordinary course of its business and in compliance with
all Environmental Laws; (iii) the Property is not subject to any private or
governmental lien or judicial or administrative notice or action relating to
Hazardous Substances; (iv) there are no existing or closed underground storage
tanks or other underground storage receptacles for Hazardous Substances on
the Property; (v) Grantor has received no notice of, and to the best of
Grantor’s knowledge and belief, there exists no investigation, action,
proceeding or claim by any agency, authority or unit of government or by any
third party which could result in any liability, penalty, sanction or judgment
under any Environmental Laws with respect to any condition, use or operation of
the Property nor does Grantor know of any basis for such a claim; and (vi)
Grantor has received no notice of and, to the best of Grantor’s knowledge and
belief, there has been no claim by any party that any use, operation or
condition of the Property has caused any nuisance or any other liability or
adverse condition on any other property nor does Grantor know of any basis for
such a claim.

          (b) Grantor shall keep or cause the Property to be kept free from
Hazardous Substances (except those substances used by Grantor or tenants in the
ordinary course of its business and in compliance with all Environmental Laws)
and in compliance with all Environmental Laws, shall not install or use any
underground storage tanks, shall expressly prohibit the use, generation,
handling, storage, production, processing and disposal of Hazardous
Substances by all tenants of space in the Improvements, and, without limiting
the generality of the foregoing, during the

	 	 	 	 	 	 	 
	 

	 	 	44	 	 	WEDGEWOOD DEED OF TRUST

 

 

term of this Deed of Trust, shall not install in the Improvements or permit to
be installed in the Improvements asbestos or any substance containing asbestos.

          (c) Grantor shall promptly notify Grantee if Grantor shall become aware of
the possible existence of any Hazardous Substances on the Property or if
Grantor shall become aware that the Property is or may be in direct or indirect
violation of any Environmental Laws. Further, immediately upon receipt of the
same, Grantor shall deliver to Grantee copies of any and all orders, notices,
permits, applications, reports, and other communications, documents and
instruments pertaining to the actual, alleged or potential presence or
existence of any Hazardous Substances at, on, about, under, within, near or in
connection with the Property. Grantor shall, promptly and when and as
reasonably required by Grantee, at Grantor’s sole cost and expense, take all
actions as shall be reasonably necessary or advisable for the clean-up of any
and all portions of the Property or other affected property, including, without
limitation, all investigative, monitoring, removal, containment and remedial
actions in accordance with all applicable Environmental Laws (and in all events
in a manner satisfactory to Grantee), and shall further pay or cause to be
paid, at no expense to Grantee, all clean-up, administrative and enforcement
costs of applicable governmental agencies which may be asserted against the
Property. In the event Grantor fails to do so, Grantee may, but shall not be
obligated to, cause the Property or other affected property to be freed from
any Hazardous Substances or otherwise brought into conformance with
Environmental Laws and any and all costs and expenses incurred by Grantee in
connection therewith, together with interest thereon at the Default Interest
Rate from the date incurred by Grantee until actually paid by Grantor, shall be
immediately paid by Grantor on demand and shall be secured by this Deed of
Trust and by all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. Grantor hereby grants to Grantee and its
agents and employees access to the Property and a license to remove any items
deemed by Grantee to be Hazardous Substances and to do all things Grantee shall
deem necessary to bring the Property in conformance with Environmental Laws
subject to the provision of Section 4.27 hereof. Grantor
covenants and agrees, at Grantor’s sole cost and expense, to indemnify, defend
(at trial and appellate levels, and with attorneys, consultants and experts
acceptable to Grantee), and hold Grantee harmless from and against any and all
liens, damages, losses, liabilities, obligations, settlement payments,
penalties, assessments, citations, directives, claims, litigation, demands,
defenses, judgments, suits, proceedings, costs, disbursements or expenses of
any kind or of any nature whatsoever (including, without limitation, reasonable
attorneys’, consultants’ and experts’ fees and disbursements actually incurred
in investigating, defending, settling or prosecuting any claim, litigation or
proceeding) which may at any time be imposed upon, incurred by or asserted or
awarded against Grantee or the Property, and arising directly or indirectly
from or out of: (i) the presence, release or threat of release of any Hazardous
Substances on, in, under or affecting all or any portion of the Property or any
surrounding areas, regardless of whether or not caused by or within the control
of Grantor; (ii) the violation of any Environmental Laws relating to or
affecting the Property, whether or not caused by or

	 	 	 	 	 	 	 
	 

	 	 	45	 	 	WEDGEWOOD DEED OF TRUST

 

 

within the control of Grantor; (iii) the failure by Grantor to comply fully
with the terms and conditions of this Section 1.31; (iv) the
breach of any representation or warranty contained in this Section
1.31; or (v) the enforcement of this
Section 1.31, including, without limitation, the cost of assessment, containment
and/or removal of any and all Hazardous Substances from all or any portion of
the Property or any surrounding areas, the cost of any actions taken in
response to the presence, release or threat of release of any Hazardous
Substances on, in, under or affecting any portion of the Property or any
surrounding areas to prevent or minimize such release or threat of release so
that it does not migrate or otherwise cause or threaten danger to present or
future public health, safety, welfare or the environment, and costs incurred to
comply with the Environmental Laws in connection with all or any portion of the
Property or any surrounding areas. The indemnity set forth in this
Section 1.31(c) shall also include any diminution in the
value of the security afforded by the Property or any future reduction in the
sales price of the Property by reason of any matter set forth in this
Section 1.31(c). Grantee’s rights under this Section shall
survive payment in full of the indebtedness secured hereby and shall be in
addition to all other rights of Grantee under this Deed of Trust, the Note and
the other Loan Documents.

          (d) Upon Grantee’s request, at any time after the occurrence of an Event
of Default hereunder or at such other time as Grantee has reasonable grounds to
believe that Hazardous Substances are or have been released, stored or disposed
of on or around the Property or that the Property may be in violation of the
Environmental Laws, Grantor shall provide, at Grantor’s sole cost and expense,
an inspection or audit of the Property prepared by a hydrogeologist or
environmental engineer or other appropriate consultant approved by Grantee
indicating the presence or absence of Hazardous Substances on the Property or
an inspection or audit of the Improvements prepared by an engineering or
consulting firm approved by Grantee indicating the presence or absence of
friable asbestos or substances containing asbestos on the Property. If
Grantor fails to provide such inspection or audit within sixty (60) days after
such request, Grantee may order the same, and Grantor hereby grants to Grantee
and its employees and agents access to the Property and a license to undertake
such inspection or audit. The cost of such inspection or audit, together
with interest thereon at the Default Interest Rate from the date incurred by
Grantee until actually paid by Grantor, shall be immediately due and payable to
Grantee by Grantor on demand and shall be secured hereby and by all of the
other Loan Documents securing all or any part of the indebtedness evidenced by
the Note.

          (e) Reference is made to that certain Hazardous Substances
Indemnity Agreement of even date herewith by and between Grantor and Grantee
(the “Hazardous Indemnity Agreement”). The provisions of this Deed of Trust
and the Hazardous Indemnity Agreement shall be read together to maximize the
coverage with respect to the subject matter thereof, as determined by Grantee.

          (f) If, prior to the date hereof, it was determined that the Property
contains Lead Based Paint, Grantor had prepared an assessment report describing
the

	 	 	 	 	 	 	 
	 

	 	 	46	 	 	WEDGEWOOD DEED OF TRUST

 

 

location and condition of the Lead Based Paint (a “Lead Based Paint Report”).
If, at any time hereafter, Lead Based Paint is suspected of being present on
the Property, Grantor agrees, at its sole cost and expense and within thirty
(30) days thereafter, to cause to be prepared a Lead Based Paint Report
prepared by an expert, and in form, scope and substance, reasonably acceptable
to Grantee.

          (g) Grantor agrees that if it has been, or if at any time hereafter it
is, determined that the Property contains Lead Based Paint, on or before
thirty (30) days following (i) the date hereof, if such determination was made
prior to the date hereof or (ii) such determination, if such determination is
hereafter made, as applicable, Grantor shall, at its sole cost and expenses,
develop and implement, and thereafter diligently and continuously carry out
(or cause to be developed and implemented and thereafter diligently and
continually to be carried out), an operations, abatement and maintenance plan
for the Lead Based Paint on the Property, which plan shall be prepared by an
expert, and be in form, scope and substance, acceptable to Grantee (together
with any Lead Based Paint Report, the “O&M Plan”). (If an O&M Plan has been
prepared prior to the date hereof, Grantor agrees to diligently and
continually carry out (or cause to be carried out) the provisions thereof).
Compliance with the O&M Plan shall require or be deemed to require, without
limitation, the proper preparation and maintenance of all records, papers and
forms required under the Environmental Laws.

          (h) If required by Grantee, Grantor covenants and agrees to institute,
within thirty (30) days after the date hereof, an operations and maintenance
program (the “Maintenance Program”) designed by an environmental consultant,
satisfactory to the Grantee, with respect to asbestos containing materials
(“ACM’s”), consistent with “Guidelines for Controlling Asbestos-Containing
Materials in Buildings” (USEPA, 1985) and other relevant guidelines, and such
Maintenance Program will hereafter continuously remain in effect until the
indebtedness secured hereby is repaid in full. In furtherance of the
foregoing, Grantor shall inspect and maintain all ACM’s on a regular basis and
ensure that all ACM’s shall be maintained in a condition that prevents
exposure of residents to ACM’s at all tunes. Without limiting the generality
of the preceding sentence, Grantee may reasonably require (i) periodic notices
or reports to Grantee in form, substance and at such intervals as Grantee may
specify, (ii) an amendment to such Maintenance Program to address changing
circumstances, laws or other matters, (iii) at Grantor’s sole expense,
supplemental examination of the Property by consultants specified by Grantee,
and (iv) variation of the Maintenance Program in response to the reports
provided by any such consultants.

          1.32 Indemnification: Subrogation.

          (a) Subject
to the provision of Section 4.27, Grantor
shall indemnify, defend and hold Grantee harmless against: (i) any and all
claims for brokerage, leasing, finders or similar fees which may be made
relating to the Property

	 	 	 	 	 	 	 
	 

	 	 	47	 	 	WEDGEWOOD DEED OF TRUST

 

 

or the secured indebtedness, and (ii) any and all liability, obligations,
losses, damages, penalties, claims, actions, suits, costs and expenses
(including Grantee’s reasonable attorneys’ fees, together with reasonable
appellate counsel fees, if any) of whatever kind or nature which may be
asserted against, imposed on or incurred by Grantee in connection with the
secured indebtedness, this Deed of Trust, the Property, or any part thereof, or
the exercise by Grantee of any rights or remedies granted to it under this Deed
of Trust; provided, however, that nothing herein shall be construed to obligate
Grantor to indemnify, defend and hold harmless Grantee from and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
suits, costs and expenses enacted against, imposed on or incurred by Grantee by
reason of Grantee’s willful misconduct or gross negligence or for any matter
arising after Grantor no longer has title to the Secured Property.

          (b) If Grantee is made a party defendant to any litigation or any claim is
threatened or brought against Grantee concerning the secured indebtedness, this
Deed of Trust, the Property, or any part thereof, or any interest therein, or
the construction, maintenance, operation or occupancy or use thereof, then
Grantor shall
‘ indemnify, defend and hold Grantee harmless from and against all liability
by reason of said litigation or claims, including reasonable attorneys’ fees
(together with reasonable appellate counsel fees, if any) and expenses
incurred by Grantee in any such litigation or claim, whether or not any such
litigation or claim is prosecuted to judgment. If Grantee commences an action
against Grantor to enforce any of the terms hereof or to prosecute any breach
by Grantor of any of the terms hereof or to recover any sum secured hereby,
Grantor shall pay to Grantee its reasonable attorneys’ fees (together with
reasonable appellate counsel fees, if any) and expenses. The right to such
attorneys’ fees (together with reasonable appellate counsel fees, if any) and
expenses shall be deemed to have accrued on the commencement of such action,
and shall be enforceable whether or not such action is prosecuted to judgment.
If Grantor breaches any term of this Deed of Trust, Grantee may engage the
services of an attorney or attorneys to protect its rights hereunder, and in
the event of such engagement following any breach by Grantor, Grantor shall
pay Grantee reasonable attorneys’ fees (together with reasonable appellate
counsel fees, if any) and expenses incurred by Grantee, whether or not an
action is actually commenced against Grantor by reason of such breach. All
references to “attorneys” in this Subsection and elsewhere in this Deed of
Trust shall include without limitation any attorney or law firm engaged by
Grantee and Grantee’s in-house counsel, and all references to “fees and
expenses” in this Subsection and elsewhere in this Deed of Trust shall include
without limitation any fees of such attorney or law firm and any allocation
charges and allocation costs of Grantee’s in-house counsel.

          (c) A waiver of subrogation shall be obtained by Grantor from its
insurance carrier and, consequently, Grantor waives any and all right to claim
or recover against Grantee, its officers, employees, agents and
representatives, for loss of or damage to Grantor, the Property, Grantor’s
property or the property of others

	 	 	 	 	 	 	 
	 

	 	 	48	 	 	WEDGEWOOD DEED OF TRUST

 

 

under Grantor’s control from any cause insured against or required to be
insured against by the provisions of this Deed of Trust.

          1.33 Negative Covenants with Respect to Indebtedness, Operations
and Fundamental Changes of Grantor. Grantor hereby represents,
warrants and covenants, as of the date hereof and until such time as the
indebtedness secured hereby is paid in full, that Grantor:

          (a) will not, nor will any partner, limited or general, member or
shareholder thereof, as applicable, amend, modify or otherwise change its
partnership certificate, partnership agreement, articles of
incorporation, by-laws, operating agreement, articles of organization, or
other formation agreement or document, as applicable, in any material term or
manner, or if such Grantor is a single purpose entity, in a manner which
adversely affects Grantor’s existence as a single purpose entity;

          (b)
 will not enter into any transaction of merger or consolidation, or liquidate or dissolve itself (or suffer any liquidation or dissolution), or
acquire by
purchase or otherwise all or substantially all the business or assets of, or
any stock or other evidence of beneficial ownership of, any entity;

          (c) has not and will not guarantee, pledge its assets for the benefit of,
or otherwise become liable on or in connection with any obligation of any
other person or entity;

          (d) does not own and will not own any asset other than (i) the Property
or any Consolidated Property (to the extent permitted hereunder), and (ii)
incidental personal property necessary for the operation of the Property;

          (e) is not engaged and will not engage, directly or indirectly, in any
business other than the ownership, management and operation of the Property
and the Consolidated Property (to the extent permitted hereunder);

          (f) will not enter into any contract or agreement with any general
partner, principal or Affiliate (as hereinafter defined) of the Grantor or any
Affiliate of the general partner of the Grantor except upon terms and
conditions that are intrinsically fair and substantially similar to those
that would be available on an arms-length basis with third parties other than
an Affiliate;

          (g) has not incurred and will not incur any debt, secured or
unsecured, direct or contingent (including guaranteeing any obligation), other
than (i) the indebtedness secured hereby, (ii) Affiliate advances or trade
payables or accrued expenses incurred in the ordinary course of business of
operating the Property not in excess of 5 % of the gross revenues therefrom
and not outstanding for more than 60 days and (iii) unsecured debt not in
excess of Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate
for all Secured Property and the Consolidated

	 	 	 	 	 	 	 
	 

	 	 	49	 	 	WEDGEWOOD DEED OF TRUST

 

 

Property; no other debt may be secured (senior, subordinate or pari passu) by
the Property or the Consolidated Property;

          (h) has not made and will not make any loans or advances to any third
party (including any Affiliate);

          (i) is and will be solvent and pay its debt from its assets as the same
shall become due;

          (j) has done or caused to be done and will do all things necessary to
preserve its existence, and will not, nor will any partner, limited or
general, or shareholder thereof, amend, modify or otherwise change its
partnership certificate, partnership agreement, articles of incorporation or
bylaws in a manner which adversely affects the Grantor’s existence as a single
purpose entity;

          (k) will conduct and operate its business as presently conducted and
operated;

          (1) will maintain financial statements, books and records and bank
accounts separate from those of its Affiliates, including its general
partners;

          (m) will be, and at all times will hold itself out to the public as, a
legal entity separate and distinct from any other entity (including any
Affiliate thereof, including the general partner or any Affiliate of the
general partner of the Grantor);

          (n) will file its own tax returns;

          (o) will maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations;

          (p) will not seek the dissolution or winding up, in whole or in part, of
the Grantor;

          (q) will not commingle the funds and other assets of Grantor with those
of any general partner, any Affiliate or any other person;

          (r) has and will maintain its assets in such a manner that it is not
costly or difficult to segregate, ascertain or identify its individual assets
from those of any Affiliate or any other person;

          (s) does not and will not hold itself out to be responsible for the debts
or obligations of any other person (other than any other Consolidated Borrower
pursuant to the provisions of a certain Contribution Agreement of even date
herewith being executed and delivered in connection with the Loan);

	 	 	 	 	 	 	 
	 

	 	 	50	 	 	WEDGEWOOD DEED OF TRUST

 

 

          (t) will not do any act which would make it impossible to carry on the
ordinary business of Grantor;

          (u) will not possess or assign the Property or incidental personal
property necessary for the operation of the Property for other than a business
or company purpose;

          (v) will not sell, encumber or otherwise dispose of all or substantially
all of the Property or incidental personal property necessary for the
operation of the Property except as provided herein;

          (w) will not hold title to Grantor’s assets other than in Grantor’s
name; and

          (x) will not institute proceedings to be adjudicated bankrupt or
insolvent; or consent to the institution of bankruptcy or insolvency
proceedings against it; or file a petition seeking, or consent to,
reorganization or relief under any applicable federal or state law relating to
bankruptcy; or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Grantor or a
substantial part of Grantor’s property; or make any assignment for the benefit
of creditors; or admit in writing its inability to pay its debts generally as
they become due; or take any action in furtherance of any such action.

     1.34 Covenants Regarding - Managing Members. By
execution hereof, the managing member of the Granto and any successors or
assigns (hereinafter, the “General Partner”) agree that they:

         
 (a) shall at all times act as the general partner or Manager of Grantor
with all of the rights, powers, obligations and liabilities of general partner
under the limited partnership agreement or management or operating agreemen of
Grantor and shall take any and all actions and do any and all things necessary
or appropriate to the accomplishment of same and will engage in no other
business.

          (b) 
shall not institute proceedings to be adjudicated bankrupt or
insolvent; or consent to the institution of bankruptcy or insolvency
proceedings against it; or file a petition seeking, or consent to,
reorganization or relief under any applicable federal or state law relating to
bankruptcy; or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the General Partner or a
substantial part of its property; or make any assignment for the benefit of
creditors; or admit in writing its inability to pay its debts generally as they
become due; or take any corporate action in furtherance of any such action.

          (c) shall not (a) liquidate or dissolve the General Partner in whole or in
part and (b) consolidate, merge or enter into any form of consolidation with or
into any other entity, nor convey, transfer or lease its assets substantially
as an entirety to any person or entity nor permit any entity to consolidate,
merge or enter into any form

	 	 	 	 	 	 	 
	 

	 	 	51	 	 	WEDGEWOOD DEED OF TRUST

 

 

of consolidation with or into the General Partner, nor convey, transfer or
lease its assets substantially as an entirety to any person or entity.

          (d) shall maintain its principal executive office and telephone and
facsimile numbers separate from that of any Affiliate and shall conspicuously
identify such office and numbers as its own and shall use its own stationary,
invoices and checks which reflect its address, telephone number and facsimile
number, as appropriate;

          (e) shall maintain its corporate records and books and accounts separate
from those of any Affiliate or any other entity and shall prepare unaudited
quarterly and annual financial statements, and said financial statements shall
be in compliance with generally accepted accounting principles and shall
be in form reasonably acceptable to Grantee and its successors and/or assigns;

          (f) shall maintain its own separate bank accounts and correct,
complete and separate books of account;

          (g) shall hold itself out to the public (including any Affiliate’s
creditors) under the General Partner’s own name and as a separate and distinct
corporate entity and not as a department, division or otherwise of any
Affiliate;

          (h) shall observe all customary formalities regarding the corporate
existence of the General Partner, including holding meetings of or obtaining
the consent of its board of directors, as appropriate, and its stockholders
and maintaining current accurate minute books separate from those of any
Affiliate;

          (i) shall act solely in its own corporate name and through its own duly
authorized officers and agents and no Affiliate shall be appointed or act as
agent of the General Partner in its capacity as general partner of Grantor;

          (j) shall make investments in the name of the General Partner directly by
the General Partner or on its behalf by brokers engaged and paid by the
General Partner or its agents;

          (k) except as required by Grantee or any successor to Grantee in
connection with any extension of credit by Grantee or any successor to Grantee
to Grantor (or any refinancing, increase, modification, consolidation or
extension of any such extension of credit), shall not guaranty or assume or
hold itself out or permit itself to be held out as having guaranteed or
assumed any liabilities of any partner of Grantor or any Affiliate other than
Grantor, nor shall the General Partner make any loan, except as permitted in
the applicable Agreement of Limited Partnership of Grantor;

          (1) represents and warrants that the General Partner is and expects to
remain solvent and shall pay its own liabilities, indebtedness and obligations
of any kind, including all administrative expenses, from its own separate
assets;

	 	 	 	 	 	 	 
	 

	 	 	52	 	 	WEDGEWOOD DEED OF TRUST

 

 

          (m) represents and warrants that assets of the General Partner shall be
separately identified, maintained and segregated and the General Partner’s
assets shall at all times be held by or on behalf of the General Partner and if
held on behalf of the General Partner by another entity, shall at all times be
kept identifiable (in accordance with customary usages) as assets owned by the
General Partner (this restriction requires, among other things, that corporate
funds shall not be commingled with those of any Affiliate and it shall maintain
all accounts in its own name and with its own tax identification number,
separate from those of any Affiliates);

          (n) shall not intentionally take any action if, as a result of such
action, the General Partner would be required to register as an investment
company under the Investment Company Act of 1940, as amended;

          (o) shall at all times be adequately capitalized to engage in the
transactions contemplated at its formation;

          (p) represents and warrants that all data and records (including computer
records) used by the General Partner or any Affiliate in the collection and
administration of any loan shall reflect the General Partner’s ownership
interest therein; and

          (q) represents and warrants that none of the General Partner’s funds
shall be invested in securities issued by any Affiliate.

          (r) shall maintain at all times one (1) Independent
Director.

“Independent Directors” shall mean persons who are not, and have not
within the past 3 years been, (i) an officer, director, employee or
10 percent stockholder of the corporation, any Partner or any
Affiliate, (ii) a member of the immediate family of any such person
or of any Affiliate or (iii) a professional retain by the
corporation.

“Affiliate” means any person or entity other than the General Partner
(i) which owns beneficially, directly or indirectly, more than 50
percent of the outstanding shares of Common Stock or which is
otherwise in control of the General Partner, (ii) of which more
than 50 percent of the outstanding voting securities are owned
beneficially, directly or indirectly, by any entity described in
clause (i) above, or (iii) which is controlled by an entity
described in clause (i) above; provided that for the purposes of
this definition the term “control” and “controlled by” shall have
the meanings assigned to them in Rule 405 under the Securities Act
of 1933, as amended.

          (s) Grantor shall conduct its business so that the assumptions made with
respect to Grantor in that certain opinion letter dated the date hereof (the

	 	 	 	 	 	 	 
	 

	 	 	53	 	 	WEDGEWOOD DEED OF TRUST

 

 

“Insolvency Opinion”) delivered by David, Hagner, Kuney & Davison, P.C. in
connection with the Loan shall be true and correct in all respects.

          1.35. Repair and Remediation Reserve. Prior to the
execution of this Deed of Trust, Grantee has caused the Property to be
inspected and such inspection has revealed that the Property is not in need of
any maintenance, repairs and/or remedial or corrective work. Accordingly,
references herein to a “Repair and Remediation Reserve” and “Deferred
Maintenance” shall not require the deposit of any amounts with Grantee.

ARTICLE II

EVENTS OF DEFAULT

          2.1 Events of Default. The occurrence of any of the
following events (each, an “Event of Default”) shall be an Event of Default
hereunder:

          (a) Grantor fails to punctually perform any covenant, agreement,
obligation, term or condition under the Note, this Deed of Trust or any other
Loan Document which requires payment of any money to Grantee at the time or
within any applicable grace period set forth therein or herein.

          (b) Grantor fails to provide insurance as required by Section 1.4
hereof or fails to perform any covenant, agreement, obligation, term
or condition set forth in Sections 1.5, 1.15, 1.31, 1.33 or
1.35 hereof.

          (c) Grantor fails to perform any other covenant, agreement,
obligation, term or condition set forth herein other than those otherwise
described in this Section 2.1 and, to the extent such
failure or default is susceptible of being cured, the continuance of such
failure or default for thirty (30) days after written notice thereof from
Grantee to Grantor; provided, however, that if such default
is susceptible of cure but such cure cannot be accomplished with reasonable
diligence within said period of time, and if Grantor commences to cure such
default promptly after receipt of notice thereof from Grantee, and thereafter
prosecutes the curing of such default with reasonable diligence, such period of
time shall be extended for such period of time as may be necessary to cure such
default with reasonable diligence, but not to exceed an additional sixty (60)
days.

          (d) Any representation or warranty made herein, in or in connection with
any application or commitment relating to the loan evidenced by the Note, or in
any of the other Loan Documents to Grantee by Grantor, by any principal or
general partner in Grantor or by any indemnitor or guarantor under any
indemnity or guaranty executed in connection with the loan secured hereby is
determined by Grantee to have been false or misleading in any material respect
at the time made.

          (e) There shall be a sale, conveyance, disposition,
alienation, hypothecation, leasing, assignment, pledge, mortgage, granting of a
security interest in

	 	 	 	 	 	 	 
	 

	 	 	54	 	 	WEDGEWOOD DEED OF TRUST

 

 

or other transfer or further encumbrancing of the Property, Grantor or
its general partners, or any portion thereof or any interest therein, in
violation of Section 1.13 hereof.

          (f) An Event of Default occurs under the Consolidated Note or the
Amended, Restated and Consolidated Deed of Trust of even date herewith
executed and delivered by the Borrowers (the “Consolidated Deed of Trust”)
covering certain properties located in the State of Maryland and a certain
property located in the State of West Virginia (collectively, the
“Consolidated Property”), as more specifically described therein.

          (g) An Event of Default or default occurs under any of the other Loan
Documents which has not been cured within any applicable grace or cure period
therein provided.

          (h) Grantor, any principal or general partner of Grantor or any
indemnitor or guarantor under any indemnity or guaranty executed in connection
with the loan secured hereby becomes insolvent, or shall make a transfer in
fraud of creditors, or shall make an assignment for the benefit of creditors,
shall file a petition in bankruptcy, shall voluntarily be adjudicated
insolvent or bankrupt or shall admit in writing the inability to pay debts as
they mature, shall petition or apply to any tribunal for or shall consent to
or shall not contest the appointment of a receiver, trustee, custodian or
similar officer for Grantor, for any such principal or general partner of
Grantor or for any such indemnitor or guarantor or for a substantial part of
the assets of Grantor, of any such principal or general partner of Grantor or
of any such indemnitor or guarantor, or shall commence any case, proceeding or
other action under any bankruptcy, reorganization, arrangement, readjustment
or debt, dissolution or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect.

      
    (i) A petition is filed or any case, proceeding or other action is
commenced against Grantor, against any principal or general partner of
Grantor or against any indemnitor or guarantor under any indemnity or
guaranty executed in connection with the loan secured hereby seeking to have
an order for relief entered against it as debtor or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it or its
debts or other relief under any law relating to bankruptcy, insolvency,
arrangement, reorganization, receivership or other debtor relief under any
law or statute of any jurisdiction whether now or hereafter in effect or a
court of competent jurisdiction enters an order for relief against Grantor,
against any principal or general partner of Grantor or against any indemnitor
or guarantor under any indemnity or guaranty executed in connection with the
loan secured hereby, as debtor, or an order, judgment or decree is entered
appointing, with or without the consent of Grantor, of any such principal or
general partner of Grantor or of any such indemnitor or guarantor, a
receiver, trustee, custodian or similar officer for Grantor, for any such
principal or general partner of Grantor or for any such indemnitor or
guarantor, or for any substantial part of any of the properties of Grantor,
of any such

	 	 	 	 	 	 	 
	 

	 	 	55	 	 	WEDGEWOOD DEED OF TRUST

 

 

principal or general partner of Grantor or of any such indemnitor or guarantor,
and if any such event shall occur, such petition, case, proceeding, action,
order, judgment or decree shall not be dismissed within sixty (60) days after
being commenced.

          (j) The Property or any part thereof shall be taken on execution or other
process of law in any action against Grantor.

          (k) Grantor abandons all or a portion of the Property.

          (1) The holder of any lien or security interest on the Property (without
implying the consent of Grantee to the existence or creation of any such lien
or security interest), whether superior or subordinate to this Deed of Trust
or any of the other Loan Documents, declares a default and such default is not
cured within any applicable grace or cure period set forth in the applicable
document or such holder institutes foreclosure or other proceedings for the
enforcement of its remedies thereunder.

          (m) The Property, or any part thereof, is subjected to actual or
threatened waste or to removal, demolition or material alteration so that the
value of the Property is materially diminished thereby and Grantee determines
(in its subjective determination) that it is not adequately protected from any
loss, damage or risk associated therewith.

          (n) Any dissolution, termination, partial or complete liquidation, merger
or consolidation of Grantor, any of its principals or any general partner.

          (o) General Partner fails to perform any covenant, agreement, obligation,
terms or condition of Section 1.34 hereof.

          (p) Grantor fails to deliver to Grantee within thirty days after the date
hereof an income and expense audit of the Property and the Consolidated
Property performed by independent accountants acceptable to Grantee,
confirming financial information given by Grantor to Grantee with respect to
the Property and the Consolidated Property.

ARTICLE III

REMEDIES

          3.1 Remedies Available. If there shall occur an Event
of Default under this Deed of Trust, then this Deed of Trust is subject to
foreclosure as provided by law and Grantee or Trustee may, at its option and
by or through a trustee, nominee, assignee or otherwise, to the fullest extent
permitted by law, exercise any or all of the following rights, remedies and
recourses, either successively or concurrently:

          (a) Acceleration. Accelerate the maturity date of the
Consolidated Note and/or the Wedgewood Note and declare any or all of the
indebtedness secured

	 	 	 	 	 	 	 
	 

	 	 	56	 	 	WEDGEWOOD DEED OF TRUST

 

 

hereby to be immediately due and payable without any presentment, demand,
protest, notice, or action of any kind whatever (each of which is hereby
expressly waived by Grantor), whereupon the same shall become immediately due
and payable. Upon any such acceleration, payment of such accelerated amount
shall constitute a prepayment of the principal balance of the Consolidated Note
or the Wedgewood Note, as applicable, and any applicable prepayment fee
provided for in the applicable Note shall then be immediately due and payable.

          (b) Entry on the Property. Either in person or by
agent, with or without bringing any action or proceeding, or by a receiver
appointed by a court and without regard to the adequacy of its security, enter
upon and take possession of the Property, or any part thereof, without force or
with such force as is permitted by law and without notice or process or with
such notice or process as is required by law unless such notice and process is
waivable, in which case Grantor hereby waives such notice and process, and do
any and all acts and perform any and all work which may be desirable or
necessary in Grantee’s judgment to complete any unfinished construction on the
Land, to preserve the value, marketability or rentability of the Property, to
increase the income therefrom, to manage and operate the Property or to
protect the security hereof and all sums expended by Grantee therefor,
together with interest thereon at the Default Interest Rate, shall be
immediately due and payable to Grantee by Grantor on demand and shall be
secured hereby and by all of the other Loan Documents securing all or any
part of the indebtedness evidenced by the Note.

          (c) Collect Rents and Profits. With or without taking
possession of the Property, sue or otherwise collect the Rents and Profits,
including those past due and unpaid.

          (d) Appointment of Receiver. Upon, or at any time
prior or after, initiating the exercise of any power of sale, instituting any
judicial foreclosure or instituting any other foreclosure of the liens and
security interests provided for herein or any other legal proceedings
hereunder, make application to a court of competent jurisdiction for
appointment of a receiver for all or any part of the Property, as a matter of
strict right and without notice to Grantor and without regard to the adequacy
of the Property for the repayment of the indebtedness secured hereby or the
solvency of Grantor or any person or persons liable for the payment of the
indebtedness secured hereby, and Grantor does hereby irrevocably consent to
such appointment, waives any and all notices of and defenses to such
appointment and agrees not to oppose any application therefor by Grantee, but
nothing herein is to be construed to deprive Grantee of any other right, remedy
or privilege Grantee may now have under the law to have a receiver appointed,
provided, however, that, the appointment
of such receiver, trustee or other appointee by virtue of any court order,
statute or regulation shall not impair or in any manner prejudice the rights of
Grantee to receive payment of the Rents and Profits pursuant to other terms and
provisions hereof. Any such receiver shall have all of the usual powers and
duties of receivers in similar cases, including, without limitation, the full
power to hold, develop, rent, lease, manage, maintain, operate and

	 	 	 	 	 	 	 
	 

	 	 	57	 	 	WEDGEWOOD DEED OF TRUST

 

 

otherwise use or permit the use of the Property upon such terms and conditions
as said receiver may deem to be prudent and reasonable under the circumstances
as more fully set forth in Section 3.3 below. Such
receivership shall, at the option of Grantee, continue until full payment of
all of the indebtedness secured hereby or until title to the Property shall
have passed by foreclosure sale under this Deed of Trust or deed in lieu of
foreclosure.

          (e) Foreclosure. Immediately commence an action to
foreclose this Deed of Trust or to specifically enforce its provisions or any
of the indebtedness secured hereby pursuant to the statutes in such case made
and provided and sell the Property or cause the Property to be sold under the
Trustee’s power of sale in accordance with applicable law and the requirements
and procedures provided by said statutes in a single parcel or in several
parcels at the option of Grantee.

     (1) In the event foreclosure proceedings are filed by
Trustee, all expenses incident to such proceeding, including, but
not limited to, attorneys’ fees and costs, shall be paid by
Grantor and secured by this Deed of Trust and by all of the other
Loan Documents securing all or any part of the indebtedness
evidenced by the Note. The secured indebtedness and all other
obligations secured by this Deed of Trust, including, without
limitation, interest at the Default Interest Rate (as defined in
the Note), any prepayment charge, fee or premium required to be
paid under the Note in order to prepay principal (to the extent
permitted by applicable law), reasonable attorneys’ fees and any
other amounts due and unpaid to Grantee under the Loan Documents,
may be bid by Grantee in the event of a foreclosure sale
hereunder. In the event of a judicial sale pursuant to a
foreclosure decree, it is understood and agreed that Grantee or
its assigns may become the purchaser of the Property or any part
thereof.

     (2) Trustee may, by following the procedures and satisfying
the requirements prescribed by applicable law, foreclose on only a
portion of the Property and, in such event, said foreclosure shall
not affect the lien of this Deed of Trust on the remaining portion
of the Property foreclosed.

          If Grantee elects to have the Property sold under the Trustee’s power of
sale, then the Trustee shall execute a written Notice of Default and of its
election to cause the Property to be sold to satisfy the secured
indebtedness. As a condition precedent to any such sale, Trustee shall give
and record such notice as the law then requires. When the minimum period of
time required by law after such notice has elapsed, Trustee, without notice
to or demand upon Grantor except as is required by law, shall sell the
Property at the time and place of sale fixed by it in the notice of sale, at
one or several sales, either as a whole or in separate parcels and in such
manner and order, all as Grantee in its sole discretion may determine, at
public

	 	 	 	 	 	 	 
	 

	 	 	58	 	 	WEDGEWOOD DEED OF TRUST

 

 

auction to the highest bidder for cash, in lawful money of the United States,
payable at the time of sale. Neither Grantor nor any other person or entity
other than Grantee shall have the right to direct the order in which the
Property is sold. Subject to requirements and limits imposed by law, Trustee
may from time to time postpone sale of all or any portion of the Property by
public announcement at such time and place of sale, Trustee shall deliver to
the purchaser at such sale a deed conveying the Property or portion thereof so
sold, but without any covenant or warranty, express or implied. The recitals
in the deed of any matters or facts shall be conclusive proof of the
truthfulness thereof Any person, including Trustee, Grantor or Grantee may
purchase at the sale. The Trustee shall apply the proceeds of the sale to
payment of (1) the costs and expenses of exercising the power of sale an of
the sale, including the payment of the Trustee’s fees and reasonable
attorneys’ fees; (2) cost of any evidence of title procured in connection with
such sale; (3) all sums from date of expenditure; (4) all other sums then
secured hereby; and (5) the remainder, if any, to the person or persons
legally entitled thereto, or the Trustee, in its discretion, may deposit the
balance of such proceeds with the County Clerk of the county in which the sale
took place.

          (f) Other. Exercise any other right or remedy available
hereunder, under the Consolidated Deed of Trust, and under any of the other
Loan Documents or at law or in equity.

          3.2 Application of Proceeds. To the fullest extent
permitted by law, the proceeds of any sale under this Deed of Trust shall be
applied to the extent funds are so available to the following items in such
order as Grantee in its discretion may determine:

          (a) To payment of the costs, expenses and reasonable fees of taking
possession of the Property, and of holding, operating, maintaining, using,
leasing, repairing, improving, marketing and selling the same and of otherwise
enforcing Grantee’s right and remedies hereunder and under the other
Loan Documents, including, but not limited to, reasonable receivers’ fees,
court costs, reasonable attorneys’, accountants’, appraisers’, managers’
and other professional fees, title charges and transfer taxes.

          (b) To payment of all sums expended by Grantee under the terms of any of
the Loan Documents and not yet repaid, together with interest on such sums at
the Default Interest Rate.

          (c) To payment of the secured indebtedness and all other obligations
secured by this Deed of Trust, including, without limitation, interest at the
Default Interest Rate and, to the extent permitted by applicable law, any
prepayment fee, charge or premium required to be paid under the Note in order
to prepay principal, in any order that Grantee chooses in its sole discretion.

	 	 	 	 	 	 	 
	 

	 	 	59	 	 	WEDGEWOOD DEED OF TRUST

 

 

          The remainder, if any, of such funds shall be disbursed to Grantor or to
the person or persons legally entitled thereto.

          3.3 Right and Authority of Receiver or Grantee in the Event of
Default: Power of Attorney. Upon the occurrence of an Event of
Default hereunder, which default is not cured within any applicable grace or
cure period, and entry upon the Property pursuant to Section
3.1(b) hereof or appointment of a receiver pursuant to
Section 3.l(d) hereof, and under such terms and conditions
as may be prudent and reasonable under the circumstances in Grantee’s or the
receiver’s sole discretion, all at Grantor’s expense, Grantee or said receiver,
or such other persons or entities as they shall hire, direct or engage, as the
case may be, may do or permit one or more of the following, successively or
concurrently: (a) enter upon and take possession and control of any and all of
the Property subject to the rights of Tenant; (b) take and maintain possession
of all documents, books, records, papers and accounts relating to the Property;
(c) exclude Grantor and its agents, servants and employees wholly from the
Property; (d) manage and operate the Property; (e) preserve and maintain the
Property; (f) make repairs and alterations to the Property; (g) complete any
construction or repair of the Improvements, with such changes, additions or
modifications of the plans and specifications or intended disposition and use
of the Improvements as Grantee may in its sole discretion deem appropriate or
desirable to place the Property in such condition as will, in Grantee’s sole
discretion, make it or any part thereof readily marketable or rentable; (h)
conduct a marketing or leasing program with respect to the Property, or employ
a marketing or leasing agent or agents to do so, directed to the leasing or
sale of the Property under such terms and conditions as Grantee may in its sole
discretion deem appropriate or desirable; (i) employ such contractors,
subcontractors, materialmen, architects, engineers, consultants, managers,
brokers, marketing agents, or other employees, agents, independent contractors
or professionals, as Grantee may in its sole discretion deem appropriate or
desirable to implement and effectuate the rights and powers herein granted; (j)
execute and deliver, in the name of Grantee as attorney-in-fact and agent of
Grantor or in its own name as Grantee, such documents and instruments as are
necessary or appropriate to consummate authorized transactions; (k) enter into
such leases, whether of real or personal property, or tenancy agreements, under
such terms and conditions as Grantee may in its sole discretion deem
appropriate or desirable; (1) collect and receive the Rents and Profits from
the Property; (m) eject Tenants or repossess personal property, as provided by
law, for breaches of the conditions of their Leases; (n) sue for unpaid Rents
and Profits, payments, income or proceeds in the name of Grantor or Grantee;
(o) maintain actions in forcible entry and detainer, ejectment for possession
and actions in distress for rent; (p) compromise or give acquittance for Rents
and Profits, payments, income or proceeds that may become due; (q) delegate or
assign any and all rights and powers given to Grantee by this Deed of Trust;
and (r) do any acts which Grantee in its sole discretion deems appropriate or
desirable to protect the security hereof and use such measures, legal or
equitable, as Grantee may in its sole discretion deem appropriate or desirable
to implement and effectuate the provisions of this Deed of Trust. This Deed of
Trust shall constitute a direction to and full authority to any lessee, or
other third party who has heretofore

	 	 	 	 	 	 	 
	 

	 	 	60	 	 	WEDGEWOOD DEED OF TRUST

 

 

dealt or contracted or may hereafter deal or contract with Grantor or Grantee,
at the request of Grantee, to pay all amounts owing under any Lease, contract,
concession, license or other agreement to Grantee without proof of the Event of
Default relied upon. Any such lessee or third party is hereby irrevocably
authorized to rely upon and comply with (and shall be fully protected by
Grantor in so doing) any request, notice or demand by Grantee for the payment
to Grantee of any Rents and Profits or other sums which may be or thereafter
become due under its Lease, contract, concession, license or other agreement,
or for the performance of any undertakings under any such Lease, contract,
concession, license or other agreement, and shall have no right or duty to
inquire whether any Event of Default under this Deed of Trust or under any of
the other Loan Documents has actually occurred or is then existing. Grantor
hereby constitutes and appoints Grantee, its assignees, successors, transferees
and nominees, as Grantor’s true and lawful attorney-in-fact and agent, with
full power of substitution in the Property, in Grantor’s name, place and stead,
to do or permit any one or more of the foregoing described rights, remedies,
powers and authorities, successively or concurrently, and said power of
attorney shall be deemed a power coupled with an interest and irrevocable so
long as any indebtedness secured hereby is outstanding. Any money advanced by
Grantee in connection with any action taken under this
Section 3.3, together with interest thereon at the Default Interest Rate from the
date of making such advancement by Grantee until actually paid by Grantor,
shall be a demand obligation owing by Grantor to Grantee and shall be secured
by this Deed of Trust and by every other instrument securing the secured
indebtedness.

          3.4 Occupancy After Foreclosure. In the event there
is a foreclosure sale hereunder and at the time of such sale, Grantor or
Grantor’s representatives, successors or assigns, or any other persons claiming
any interest in the Property by, through or under Grantor (except tenants of
space in the Improvements subject to Leases entered into prior to the date
hereof), are occupying or using the Property, or any part thereof, then, to the
extent not prohibited by applicable law, each and all shall, at the option of
Grantee or the purchaser at such sale, as the case may be, immediately become
the tenant of the purchaser at such sale, which tenancy shall be a tenancy from
day-to-day, terminable at the will of either landlord or tenant, at a
reasonable rental per day based upon the value of the Property occupied or
used, such rental to be due daily to the purchaser. Further, to the extent
permitted by applicable law, in the event the tenant fails to surrender
possession of the Property upon the termination of such tenancy, the purchaser
shall be entitled to institute and maintain an action for unlawful detainer of
the Property in the appropriate court of the county in which the Land is
located.

          3.5 Notice to Account Debtors. Grantee may, at any
time after an Event of Default notify the account debtors and obligors of any
accounts, chattel paper, negotiable instruments or other evidences of
indebtedness, to Grantor included in the Property to pay Grantee directly.
Grantor shall at any time or from time to time upon the request of Grantee
provide to Grantee a current list of all such account debtors and obligors and
their addresses.

	 	 	 	 	 	 	 
	 

	 	 	61	 	 	WEDGEWOOD DEED OF TRUST

 

 

          3.6 Cumulative Remedies. All remedies contained in
this Deed of Trust are cumulative and Grantee shall also have all other
remedies provided at law and in equity or in any other Loan Documents. Such
remedies may be pursued separately, successively or concurrently at the sole
subjective direction of Grantee and may be exercised in any order and as often
as occasion therefor shall arise. No act of Grantee shall be construed as an
election to proceed under any particular provisions of this Deed of Trust to
the exclusion of any other provision of this Deed of Trust or as an election of
remedies to the exclusion of any other remedy which may then or thereafter be
available to Grantee. No delay or failure by Grantee to exercise any right or
remedy under this Deed of Trust shall be construed to be a waiver of that right
or remedy or of any Event of Default hereunder. Grantee may exercise any one
or more of its rights and remedies at its option without regard to the adequacy
of its security.

          3.7 Payment of Expenses. Grantor shall pay on
demand all of Grantee’s expenses incurred in any efforts to enforce any terms
of this Deed of Trust, whether or not any lawsuit is filed and whether or not
foreclosure is commenced but not completed, including, but not limited to,
reasonable legal fees and disbursements, foreclosure costs and title charges,
together with interest thereon from and after the date incurred by Grantee
until actually paid by Grantor at the Default Interest Rate, and the same shall
be secured by this Deed of Trust and by all of the other Loan Documents
securing all or any part of the indebtedness evidenced by the Note.

ARTICLE IV

MISCELLANEOUS TERMS AND CONDITIONS

          4.1 Time of Essence. Time is of the essence with
respect to all provisions of this Deed of Trust.

          4.2 Release of Deed of Trust. If all of the secured
indebtedness be paid, then and in that event only, all rights under this Deed
of Trust shall terminate except for those provisions hereof which by their
terms survive, and the Property shall become wholly clear of the liens,
security interests, conveyances and assignments evidenced hereby, which shall
be released by Grantee in due form at Grantor’s cost. No release of this Deed
of Trust or the lien hereof shall be valid unless executed by Grantee or its
assigns.

          4.3 Certain Rights of Grantee. Without affecting
Grantor’s liability for the payment of any of the indebtedness secured hereby,
Grantee may from time to time and without notice to Grantor: (a) release any
person liable for the payment of the indebtedness secured hereby; (b) extend
or modify the terms of payment of the indebtedness secured hereby; (c) accept
additional real or personal property of any kind as security or alter,
substitute or release any property securing the indebtedness secured hereby;
(d) recover any part of the Property; (e) consent in writing to the making of
any subdivision map or plat thereof; (f) join in granting any easement therein;
or (g) join in

	 	 	 	 	 	 	 
	 

	 	 	62	 	 	WEDGEWOOD DEED OF TRUST

 

 

any extension agreement of the Deed of Trust or any agreement subordinating
the lien hereof.

     4.4 Waiver of Certain Defenses. No action for the
enforcement of the lien hereof or of any provision hereof shall be subject to
any defense which would not be good and available to the party interposing the
same in an action at law upon the Note or any of the other Loan Documents.

     4.5 Notices. All notices, demands, requests or other
communications to be sent by one party to the other hereunder or required by
law shall be in writing and shall be deemed to have been validly given or
served by delivery of the same in person to the intended addressee, or by
depositing the same with Federal Express or another reputable private courier
service for next business day delivery, or by depositing the same in the United
States mail, postage prepaid, registered or certified mail, return receipt
requested, in any event addressed to the intended addressee at its address set
forth on the first page of this Deed of Trust or at such other address as may
be designated by such party as herein provided. All notices, demands and
requests to be sent to Grantee shall be addressed to Credit Suisse First
Boston Mortgage Capital LLC, 11 Madison Avenue, New York, New York 10010;
Attention: Jeff Altabef. All notices, demands and requests shall be effective
upon such personal delivery, or one (1) business day after being deposited with
the private courier service, or two (2) business days after being deposited in
the United States mail as required above. Rejection or other refusal to accept
or the inability to deliver because of changed address of which no notice was
given as herein required shall be deemed to be receipt of the notice, demand or
request sent. By giving to the other party hereto at least fifteen (15) days’
prior written notice thereof in accordance with the provisions hereof, the
parties hereto shall have the right from time to time to change their
respective addresses and each shall have the right to specify as its address
any other address within the United States of America.

     4.6 Successors and Assigns. The terms, provisions,
indemnities, covenants and conditions hereof shall be binding upon Grantor and
the successors and assigns of Grantor, including all successors in interest of
Grantor in and to all or any part of the Property, and shall inure to the
benefit of Grantee, its directors, officers, shareholders, employees and agents
and their respective successors and assigns and shall constitute covenants
running with the land. All references in this Deed of Trust to Grantor or
Grantee shall be deemed to include all such parties’ successors and assigns,
and the term “Grantee” as used herein shall also mean and refer to any lawful
holder or owner, including pledgees and participants, of any of the
indebtedness secured hereby. If Grantor consists of more than one person or
entity, each will be jointly and severally liable to perform the obligations of
Grantor.

     4.7 Severability. A determination that any provision
of this Deed of Trust is unenforceable or invalid shall not affect the
enforceability or validity of any other provision, and any determination that
the application of any provision of this

	 	 	 
	 

	63	WEDGEWOOD DEED OF TRUST

 

Deed of Trust to any person or circumstance is illegal or unenforceable shall
not affect the enforceability or validity of such provision as it may apply to
any other persons or circumstances.

     4.8 Gender. Within this Deed of Trust, words of any
gender shall be held and construed to include any other gender, and words in
the singular shall be held and construed to include the plural, and vice versa,
unless the context otherwise requires.

     4.9 Waiver: Discontinuance of Proceedings. Grantee
may waive any single Event of Default by Grantor hereunder without waiving any
other prior or subsequent Event of Default. Grantee may remedy any Event of
Default by Grantor hereunder without waiving the Event of Default remedied.
Neither the failure by Grantee to exercise, nor the delay by Grantee in
exercising, any right, power or remedy upon any Event of Default by Grantor
hereunder shall be construed as a waiver of such Event of Default or as a
waiver of the right to exercise any such right, power or remedy at a later
date. No single or partial exercise by Grantee of any right, power or remedy
hereunder shall exhaust the same or shall preclude any other or further
exercise thereof, and every such right, power or remedy hereunder may be
exercised at any tune and from time to time. No modification or waiver of any
provision hereof nor consent to any departure by Grantor therefrom shall in any
event be effective unless the same shall be in writing and signed by Grantee,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose given. No notice to nor demand on Grantor
in any case shall of itself entitle Grantor to any other or further notice or
demand in similar or other circumstances. Acceptance by Grantee of any payment
in an amount less than the amount then due on any of the secured indebtedness
shall be deemed an acceptance on account only and shall not in any way affect
the existence of an Event of Default hereunder. In case Grantee shall have
proceeded to invoke any right, remedy or recourse permitted hereunder or under
the other Loan Documents and shall thereafter elect to discontinue or abandon
the same for any reason, Grantee shall have the unqualified right to do so and,
in such an event, Grantor and Grantee shall be restored to their former
positions with respect to the indebtedness secured hereby, the Loan Documents,
the Property and otherwise, and the rights, remedies, recourses and powers of
Grantee shall continue as if the same had never been invoked.

     4.10 Section Headings. The headings of the sections and
paragraphs of this Deed of Trust are for convenience of reference only, are not
to be considered a part hereof and shall not limit or otherwise affect any of
the terms hereof.

     4.11 Governing Law. This Deed of Trust will be
governed by and construed in accordance with the laws of the State in which the
Land is located provided that to the extent any of such laws may now or
hereafter be preempted by Federal law, in which case such Federal law shall so
govern and be controlling; and provided further

	 	 	 
	 

	64	WEDGEWOOD DEED OF TRUST

 

that the laws of the state in which the Land is located shall govern as to the
creation, priority and enforcement of liens and security interests in property
located in such state.

     4.12 Counting of Days. The term “days” when used
herein shall mean calendar days. If any time period ends on a Saturday,
Sunday or holiday officially recognized by the state within which the Land is
located, the period shall be deemed to end on the next succeeding business day.
The term “business day” when used herein shall mean a weekday, Monday through
Friday, except a legal holiday or a day on which banking institutions in
Maryland are authorized by law to be closed.

     4.13 Relationship of the Parties. The relationship
between Grantor and Grantee is that of a borrower and a lender only and neither
of those parties is, nor shall it hold itself out to be, the agent, employee,
joint venturer or partner of the other party.

     4.14 Application of the Proceeds of the Note. To the
extent that proceeds of the Note are used to pay indebtedness secured by any
outstanding lien, security interest, charge or prior encumbrance against the
Property, such proceeds have been advanced by Grantee at Grantor’s request and
Grantee shall be subrogated to any and all rights, security interests and liens
owned by any owner or holder of such outstanding liens, security interests,
charges or encumbrances, irrespective of whether said liens, security
interests, charges or encumbrances are released.

     4.15 Unsecured Portion of Indebtedness. If any part
of the secured indebtedness cannot be lawfully secured by this Deed of Trust or
if any part of the Property cannot be lawfully subject to the lien and security
interest hereof to the full extent of such indebtedness, then all payments
made shall be applied on said indebtedness first in discharge of that
portion thereof which is unsecured by this Deed of Trust.

     4.16
Cross Default. An Event of Default hereunder
shall be a default under each of the other Loan Documents.

     4.17 Interest After Sale. In the event the Property
or any part thereof shall be sold upon foreclosure as provided hereunder, to
the extent permitted by law, the sum for which the same shall have been sold
shall, for purposes of redemption (pursuant to the laws of the state in which
the Property is located), bear interest at the Default Interest Rate.

     4.18 Inconsistency with Other Loan Documents. In the
event of any inconsistency between the provisions hereof and the provisions in
any of the other Loan Documents, it is intended that the provisions selected by
Grantee in its sole subjective discretion shall be controlling.

     4.19
Construction of this Document. This document may
be construed as a mortgage, security deed, deed of trust, chattel mortgage,
conveyance, assignment, security agreement, pledge, financing statement,
hypothecation or contract, or any one

	 	 	 
	 

	65	WEDGEWOOD DEED OF TRUST

 

or more of the foregoing, in order to fully effectuate the liens and security
interests created hereby and the purposes and agreements herein set forth.

     4.20 No Merger. It is the desire and intention of the
parties hereto that this Deed of Trust and the lien hereof do not merge in fee
simple title to the Property. It is hereby understood and agreed that should
Grantee acquire any additional or other interests in or to the Property or the
ownership thereof, then, unless a contrary intent is manifested by Grantee as
evidenced by an appropriate document duly recorded, this Deed of Trust and the
lien hereof shall not merge in such other or additional interests in or to the
Property, toward the end that this Deed of Trust may be foreclosed as if owned
by a stranger to said other or additional interests.

     4.21 Rights With Respect to Junior Encumbrances. Any
person or entity purporting to have or to take a junior mortgage or other lien
upon the Property or any interest therein shall be subject to the rights of
Grantee to amend, modify, increase, vary, alter or supplement this Deed of
Trust, the Note or any of the other Loan Documents and to extend the maturity
date of the indebtedness secured hereby and to increase the amount of the
indebtedness secured hereby and to waive or forebear the exercise of any of its
rights and remedies hereunder or under any of the other Loan Documents and to
release any collateral or security for the indebtedness secured hereby, in each
and every case without obtaining the consent of the holder of such junior lien
and without the lien or security interest of this Deed of Trust losing its
priority over the rights of any such junior lien.

     4.22 Grantee May File Proofs of Claim. In
the case of any receivership, insolvency, bankruptcy,
reorganization, arrangement, adjustment, composition or other proceedings
affecting Grantor or the principals or general partners in Grantor, or their
respective creditors or property, Grantee, to the extent permitted by law,
shall be entitled to file such proofs of claim and other documents as may be
necessary or advisable in order to have the claims of Grantee allowed in such
proceedings for the entire secured indebtedness at the date of the institution
of such proceedings and for any additional amount which may become due and
payable by Grantor hereunder after such date.

     4.23 Fixture Filing. This Deed of Trust shall be
effective from the date of its recording as a financing statement filed as a
fixture filing with respect to all goods constituting part of the Property
which are or are to become fixtures.

     4.24 After-Acquired Property. All property acquired
by Grantor after the date of this Deed of Trust which by the terms of this Deed
of Trust shall be subject to the lien and the security interest created hereby,
shall immediately upon the acquisition thereof by Grantor and without further
mortgage, conveyance or assignment become subject to the lien and security
interest created by this Deed of Trust. Nevertheless, Grantor shall execute,
acknowledge, deliver and record or file, as appropriate, all and every such
further mortgages, security agreements, financing

	 	 	 
	 

	66	WEDGEWOOD DEED OF TRUST

 

statements, assignments and assurances, as Grantee shall require for
accomplishing the purposes of this Deed of Trust.

     4.25 No Representation. By accepting delivery of any
item required to be observed, performed or fulfilled or to be given to Grantee
pursuant to the Loan Documents, including, but not limited to, any officer’s
certificates balance sheet, statement of profit and loss or other financial
statement, survey, appraisal or insurance policy, Grantee shall not be deemed
to have warranted, consented to, or affirmed the sufficiency, legality,
effectiveness or legal effect of the same, or of any term, provision or
condition thereof, and such acceptance of delivery thereof shall not be or
constitute any warranty, consent or affirmation with respect thereto by
Grantee.

     4.26 Counterparts. This Deed of Trust may be
executed in any number of counterparts, each of which shall be effective only
upon delivery and thereafter shall be deemed an original, and all of which
shall be taken to be one and the same instrument, for the same effect as if all
parties hereto had signed the same signature page. Any signature page of this
Deed of Trust may be detached from any counterpart of this Deed of Trust
without impairing the legal effect of any signatures thereon and may be
attached to another counterpart of this Deed of Trust identical in form hereto
but having attached to it one or more additional signature pages.

     4.27 Personal Liability. Notwithstanding anything
to the contrary contained in this Deed of Trust, the liability of Grantor and
its officer, directors, general partners, managers, members and principals
for the indebtedness secured hereby and for the performance of the other
agreements, covenants and obligations contained herein and in the other Loan
Documents shall be limited as set forth in Section 13 of the Note.

     4.28 Recording and Filing. Grantor will cause the
Loan Documents and all amendments and supplements thereto and substitutions
therefor to be recorded, filed, re-recorded and re-filed in such manner and in
such places as Grantee shall reasonably request, and will pay on demand all
such recording, filing, re-recording and re-filing taxes, fees and other
charges. Grantor shall reimburse Grantee, or its servicing agent, for the
costs incurred in obtaining a tax service company to verify the status of
payment of taxes and assessments on the Property.

     4.29 Entire Agreement and Modification. This Deed of
Trust and the other Loan Documents contain the entire agreements between the
parties relating to the subject matter hereof and thereof and all prior
agreements relative hereto and thereto which are not contained herein or
therein are terminated. This Deed of Trust and the other Loan Documents may
not be amended, revised, waived, discharged, released or terminated orally but
only by a written instrument or instruments executed by the party against which
enforcement of the amendment, revision, waiver, discharge, release or
termination is asserted. Any alleged amendment, revision, waiver, discharge,
release or termination which is not so documented shall not be effective as to
any party.

	 	 	 
	 

	67	WEDGEWOOD DEED OF TRUST

 

     4.30 Maximum Interest. The provisions of this Deed
of Trust and of all agreements between Grantor and Grantee, whether now
existing or hereafter arising and whether written or oral, are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of demand or acceleration of the maturity of the Note or otherwise,
shall the amount paid, or agreed to be paid (“Interest”), to Grantee for the
use, forbearance or retention of the money loaned under the Note exceed the
maximum amount permissible under applicable law. If, from any
circumstance whatsoever, performance or fulfillment of any provision hereof or
of any agreement between Grantor and Grantee shall, at the time performance or
fulfillment of such provision shall be due, exceed the limit for Interest
prescribed by law or otherwise transcend the limit of validity prescribed by
applicable law, then ipso facto the obligation to be
performed or fulfilled shall be reduced to such limit and if, from any
circumstance whatsoever, Grantee shall ever receive anything of value deemed
Interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive Interest shall be applied to the reduction of the
principal balance owing under the Note in the inverse order of its maturity
(whether or not then due) or at the option of Grantee be paid over to
Grantor, and not to the payment of Interest. All Interest (including any
amounts or payments deemed to be Interest) paid or agreed to be paid to
Grantee shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full period until payment in
full of the principal balance of the Note so that the Interest thereon for
such full period will not exceed the maximum amount permitted by applicable
law. This paragraph will control all agreements between Grantor and Grantee.

     4.31 Interest Payable by Grantee. Grantee shall
cause funds to be deposited in the Replacement Reserve in accordance with the
provisions of the Cash Management Agreement.

     4.32 Further Stipulations. The additional covenants,
agreements and provisions set forth in Exhibits D attached
hereto and made a part hereof, if any, shall be a part of this Deed of Trust
and shall, in the event of any conflict between such further stipulations and
any of the other provisions of this Deed of Trust, be deemed to control.

     4.33 Property Encumbered. Grantor represents that
this Deed of Trust does not encumber property principally improved or to be
improved by one or more structures containing in the aggregate not more than
six residential dwelling units.

     4.34 Acceptance of Trust; Powers and Duties of
Trustee. Trustee accepts this trust when this Deed of Trust is
recorded. From time to time upon written request of Grantee and
presentation of this Deed of Trust or a certified copy thereof for
endorsement, and without affecting the personal liability of any person for
payment of any indebtedness or performance of any obligations secured hereby,
Trustee may, without liability therefor and without notice: (a)
reconvey all or any

 

	 	 	 
	 

	68	WEDGEWOOD DEED OF TRUST

 

part of the Property; (b) consent to the making of any map or plat thereof;
and (c) join in any grant of easement thereon, any declaration of covenants
and restrictions, or any extension agreement or any agreement subordinating
the lien or charge of this Deed of Trust. Except as may be required by
applicable law, Trustee or Grantee may from time to time apply to any court of
competent jurisdiction for aid and direction in the execution of the trustee
hereunder and the enforcement of the rights and remedies available hereunder,
and may obtain orders or decrees directing or confirming or approving acts in
the execution of said trust and the enforcement of said remedies. Trustee has
no obligation to notify any party of any pending sale or any action or
proceeding, including, without limitation, actions in which Grantor, Grantee
or Trustee shall be a party unless held or commenced and maintained by Trustee
under this Deed of Trust. Trustee shall not be obligated to perform any act
required of it hereunder unless the performance of the act is requested in
writing and Trustee is reasonably indemnified and held harmless against loss,
cost, liability or expense.

     4.35 Substitution of Trustees. From time to time, by a
writing, signed and acknowledged by Grantee and recorded in the Office of the
Recorder of the County in which the Property is situated, Grantee may appoint
another trustee to act in the place and stead of Trustee or any successor. Such
writing shall set forth any information required by law. The recordation of
such instrument of substitution shall discharge Trustee herein named and shall appoint the new trustee as the
trustee hereunder with the same effect as if originally named Trustee herein. A
writing recorded pursuant to the provisions of this Section
4.35 shall be conclusive proof of the proper substitution of such new
Trustee.

     4.36 Dissemination of Information. If Grantee
determines at any time to sell, transfer or assign the Note, this Deed of Trust
and the other Loan Documents, and any or all servicing rights with respect
thereto, or to grant participations therein (the
“Participations”) or issue
mortgage pass-through certificates or other securities evidencing a beneficial
interest in a rated or unrated public offering or private placement (the
“Securities”), Grantee may forward to each purchaser, transferee, assignee,
servicer, participant, investor, and/or their respective successors in such
Participations and/or Securities (collectively, the “Investor”) and/or any
Rating Agency rating such Securities, each prospective Investor and each of the
foregoing’s respective counsel, all documents and information that Grantee now
has or may hereafter acquire relating to the Loan and to Grantor, any
Guarantor, any Indemnitor and the Mortgaged Property, which shall have been
furnished by Grantor, any Guarantor, and/or any Indemnitor, as Grantee
determines necessary or desirable.

     4.37 Defeasance. (a) Provided no Event of Default has
occurred and is continuing, at any time after the earlier of the date which (I)
is two (2) years after the “startup day,” within the meaning of Section
860G(a)(9) of the Internal Revenue Code of 1986, as amended from time to time
or any successor statute (the “Code”), or a “real estate mortgage investment
conduit,” within the meaning of Section 860D of the Code, that holds the Note
or (II) is four (4) years following the full funding of the

	 	 	 
	 

	69	WEDGEWOOD DEED OF TRUST

 

loan secured hereby, up to and including the Anticipated Repayment Date,
Grantor may voluntarily defease all or any portion of the lien of the Deed of
Trust by providing Grantee with direct non-callable obligations of the United
States of America (“U.S. Obligations”) that produce payments which replicate
the Scheduled Defeasance Payments (as defined herein). Each such defeasance
(hereafter, a “Defeasance Event”) by the Grantor shall be subject to the
satisfaction of the following conditions precedent:

        (i) Grantor shall provide not less than thirty (30) days prior
written notice to Grantee specifying the Payment Date (the “Release
Date”) on which the Defeasance Event is to occur. Such notice shall
indicate the principal amount of the Note to be defeased;

        (ii) Grantor shall pay to Grantee all accrued and unpaid interest
on the principal balance of the Note to but not including the Release
Date. If for any reason the Release Date is not a Payment Date, the
Grantor shall also pay interest that would have accrued on the Note
through the next Payment Date;

        (iii) Grantor shall pay to Grantee all other sums, not including
scheduled interest or principal payments, due under the Note, this Deed
of Trust, and the other Loan Documents;

        (iv) Grantor shall pay to Grantee the required Defeasance
Collateral for the Defeasance Event;

        (v) In the event only a portion of the Loan is the subject of the
Defeasance Event, Grantor shall prepare all necessary documents to amend
and restate the Note and issue two substitute notes, one note having a
principal balance equal to the defeased portion of the original Note
(the “Defeased Note”) and the other note having a principal balance
equal to the undefeased portion of the Note (the “Undefeased Note”). The
Defeased Note and Undefeased Note shall have identical terms as the Note
except for the principal balance. A Defeased Note cannot be the subject
of any further Defeasance Event;

        (vi) Grantor shall execute and deliver a security agreement, in
form and substance satisfactory to Grantee, creating a first priority
lien on the Defeasance Collateral and the U.S. Obligations purchased
with the Defeasance Collateral in accordance with this provision of
this Section 4.37 (the “Defeasance Security
Agreement”);

        (vii) Grantor shall deliver an opinion of counsel for Grantor in
form satisfactory to Grantee in its sole discretion stating, among
other things, that Grantor has legally and validly transferred and
assigned the U.S. Obligations and all obligations, rights and duties
under and to the Note or

	 	 	 
	 

	70	WEDGEWOOD DEED OF TRUST

 

Defeased Note (as applicable) to the Successor Borrower, that Grantee has
a perfected first priority security interest in the Defeasance Collateral
(as defined herein) and the U.S. Obligations delivered by Grantor, and
that any real estate mortgage investment conduit formed pursuant to a
Securitization will not fail to maintain its status as a “real estate
mortgage investment conduit” within the meaning of Section 860D of the
Code as a result of such Defeasance Event;

        (viii) Grantor shall deliver evidence in writing from the
applicable Rating Agencies to the effect that such release will not
result in a downgrading, withdrawal or qualification of the respective
ratings in effect immediately prior to such Defeasance Event for the
Securities issued in connection with a Securitization which are then
outstanding. If required by the applicable Rating Agencies, the Grantor
shall also deliver or cause to be delivered a non-consolidation opinion
with respect to the Successor Borrower (as defined herein) in form and
substance satisfactory to Grantee and the applicable Rating Agencies;

        (ix) Grantor shall deliver a Certificate executed by the managing
member, general partner or other authorized signatory, as applicable, of
each Grantor certifying that the requirements set forth in this
Section 4.37(b) have been satisfied;

        (x) Grantor shall deliver a certificate of a “big six” or other
nationally recognized public accounting firm, acceptable to Grantee
certifying that the U.S. Obligations purchased with the Defeasance
Collateral generate monthly amounts equal to or greater than the
required scheduled Defeasance Payments;

        (xi) Grantor shall deliver such other certificates, documents or
instruments as Grantee may reasonably request; and

        (xii) Grantor shall pay all costs and expenses of Grantee incurred
in connection with the Defeasance Event, including any costs and
expenses associated with a release of the Lien of the Deed of Trust as
provided in Section 4.37(c) hereof as well as
reasonable attorneys’ fees and expenses.

     As used herein, the term “Defeasance Collateral” shall
mean an amount equal to the remaining principal amount of the Note or the
principal amount of the Defeased Note, as applicable, the amount (if any)
which, when added to the remaining principal amount of the Note or the
principal amount of the Defeased Note, as applicable, will be sufficient to
purchase U.S. Obligations providing the required Scheduled Defeasance
Payments, any costs and expenses incurred or to be incurred in the purchase of
U.S. Obligations necessary to meet the Scheduled Defeasance Payments and any
revenue, documentary stamp or intangible taxes or any other tax or charge due
in connection with the transfer of the Note or the Defeased Note, as

	 	 	 
	 

	71	WEDGEWOOD DEED OF TRUST

 

applicable, the creation of the Defeased Note and the Undefeased Note, if
applicable, or otherwise required to accomplish the agreement of this
Section 4.37.

     (b) In connection with each Defeasance Event, Grantor hereby
appoints Grantee as its agent and attorney-in-fact for the purpose of
using the Defeasance Collateral to purchase U.S. Obligations which provide payments
on or prior to, but as close as possible to, all successive scheduled payment
dates after the Release Date upon which interest and principal payments are required under
the Note, in the case of a Defeasance Event for the entire outstanding principal
balance of the Loan, or the Defeased Note, in the case of a Defeasance Event for only a
portion of the outstanding principal balance of the Loan, as applicable, and in
amounts equal to the scheduled payments due on such dates under the Note or the Defeased
Note, as applicable, (including without limitation scheduled payments of principal,
interest and any other amounts due under the Loan Documents on such dates) (the
“Scheduled Defeasance Payments”). Grantor, pursuant to the Defeasance Security
Agreement or
other appropriate document, shall authorize and direct that the payments
received from
the U.S. Obligations may be made directly to the Deposit Account (as
defined in the
Cash Management Agreement), unless otherwise directed by Grantee, and
applied to
satisfy the obligations of Grantor under the Note or the Defeased Note, as
applicable.
Any portion of the Defeasance Collateral in excess of the amount
necessary to purchase the U.S. Obligations required by this
Section 4.37 and satisfy Grantor’s obligations under this
Section 4.37 shall be remitted to Grantor.

     (c) Except
as set forth in this Section 4.37(c), no repayment, prepayment or defeasance of all or any portion of the Note shall
cause, give rise to a right to require, or otherwise result in, the release of
the Lien of the Deed of Trust on the Trust Property.

          (i) (A) If the Grantor has elected to defease the entire Note and the
requirements of Section 4.37(a) and (b) have been
satisfied, all of the Trust Property shall be released from the Lien of the
Deed of Trust and the U.S. Obligations, pledged pursuant to the Defeasance
Security Agreement, shall be the sole source of collateral securing the Note.

            (B) In connection with the release of such Lien, the
Grantor shall submit to Grantee, not less than thirty (30) days prior to the
Release Date, a release of Lien (and related Loan Documents) for the Trust
Property for execution by Grantee. Such release shall be in a form appropriate
in each jurisdiction in which each Parcel is located and satisfactory to
Grantee in its sole discretion. In addition, Grantor shall provide all other
documentation Grantee reasonably requires to be delivered by Grantor in
connection with such release, together with an certificate signed by the
general partner of Grantor certifying that such documentation (1) is in
compliance with all requirements of law, and (2) will effect such releases in
accordance with the terms of this Deed of Trust.

	 	 	 
	 

	72	WEDGEWOOD DEED OF TRUST

 

          (ii) Grantor on one or more occasions may obtain (A) the release of an
individual Parcel from the Lien of this Deed of Trust (and related Loan
Documents) and (B) the release of the applicable Individual Grantor’s
obligations under the Loan Documents with respect to such Parcel (other than
those expressly stated to survive), upon satisfaction of each of the following
conditions:

          (A) The principal balance of the Defeased Note shall equal or
exceed one hundred twenty-five percent (125%) the allocated loan amount
(the “Allocated Loan Amount”) for the applicable Property as set forth on
Schedule I attached hereto; provided, however, that (1)
if the outstanding principal balance of the Undefeased Note is less than the Allocated Loan Amount for the applicable
Parcel to be released, the Defeased Note shall be in an amount equal to the
outstanding principal balance of the Undefeased Note, and (2) if the actual net proceeds
realized by Grantor from the Sale of the Property exceeds the amount of the release price
payable hereunder, the amount of such excess shall be delivered by the Grantor to
the Mezzanine Borrowers (as defined in the Note) to be applied to the
mandatory
prepayment of the Mezzanine Loan (as defined in the Note).

          (B) The
requirements of Section 4.37(a) and (b) have
been satisfied.

          (C) The Property is transferred from the Grantor to another
person or party and such person or party is not any other Borrower or the
general
partner or managing member of Grantor or any other Borrower.

          (D) Grantor shall submit to Grantee, not less than thirty (30)
days prior to the date of such release, a release of Lien (and related
Loan Documents)
for such Parcel for execution by Grantee. Such release shall be in a form
appropriate
in each jurisdiction in which the Parcel is located and satisfactory to
Grantee in its sole
discretion. In addition, Grantor shall provide all other
documentation Grantee
reasonably requires to be delivered by Grantor in connection with such
release,
together with an certificate signed by the general partner of Grantor
certifying that
such documentation (i) is in compliance with all requirements of law, (ii)
will effect
such release in accordance with the terms of this Deed of Trust, and (iii)
will not
impair or otherwise adversely affect the Lien, security interests and
other rights of
Grantee under the Loan Documents not being released (or as to the parties
to the Loan
Documents and Parcels subject to the Loan Documents not being released).

          (E) After giving effect to such release, the Debt Service
Coverage Ratio for all of the Parcels then remaining subject to the Lien
of the
Consolidated Deed of Trust (the remaining Consolidated Property) shall be
equal to
the greater of (1) the Debt Service Coverage Ratio for the twelve (12)
full calendar
months immediately preceding the date hereof, and (2) the Debt Service
Coverage
Ratio for all of the then remaining Consolidated Property Parcels
(including the

	 	 	 
	 

	73	WEDGEWOOD DEED OF TRUST

 

Property to be released) and for the twelve (12) full calendar months
immediately preceding the release of the Property.

     For the purposes of this Deed of Trust, the following terms shall have the
following meanings:

          (A) The term “Net Operating Income” shall mean the
amount obtained by subtracting Operating Expenses from Gross Income from
Operations for the Property and the Consolidated Property (or for an individual
premises if so specified herein).

          (B) The term “Operating Expenses” shall mean the total
of all expenditures, computed in accordance with the accrual method tax basis
of accounting, of whatever kind relating to the operation, maintenance and
management of the Property and the Consolidated Property that are incurred on a
regular monthly or other periodic basis, including without limitation,
utilities, ordinary repairs and maintenance, insurance, license fees,
property taxes and assessments, advertising expenses, management fees, payroll
and related taxes, computer processing charges, operational equipment or other
lease payments as approved by Grantee, and other similar costs, but excluding
depreciation, debt service, capital expenditures, and contributions to the
Tenant Improvements and Leasing Commissions Reserve Subaccount, the
Replacement Reserve Subaccount, the Tax and Insurance Impound Subaccount, and
any other reserves required under the Loan Documents.

          (C) The term “Gross Income from Operations” shall mean
all income, computed in accordance with the accrual method tax basis of
accounting, derived from the ownership and operation of the Property and the
Consolidated Property (or for an individual premises if so specified herein)
from whatever source, including, but not limited to, Rents, utility charges,
escalations, forfeited security deposits, interest on credit accounts, service
fees or charges, license fees, parking fees, rent concessions or credits, and
other pass-through or reimbursements paid by tenants under the Leases of any
nature but excluding sales, use and occupancy or other taxes on receipts
required to be accounted for by Grantor to any government or governmental
agency, refunds and uncollectible accounts, sales of furniture, fixtures and
equipment, proceeds of casualty insurance and condemnation awards (other than
business interruption or other loss of income insurance), and any disbursements
to the Grantor from the Tax and Insurance Impound Subaccount, the Replacement
Reserve Subaccount, or any other escrow fund established by the Loan Documents.

          (D) The term “Debt Service Coverage Ratio” shall mean a
ratio for the applicable period in which: (i) the numerator is Net Operating
Income (excluding interest on credit accounts) for such period as set forth in
the statements required hereunder; and (ii) the denominator is the greater of
(a) an amount equal to the original principal amount of the Note multiplied by
a constant of 9.70% or (b) the aggregate amount of principal and interest due
and payable on the Note.

	 	 	 
	 

	74	WEDGEWOOD DEED OF TRUST

 

          (E) The term “Loan-to-Value Ratio” shall mean a ratio
in which (i) the numerator is the outstanding principal balance under the Note,
and (ii) the denominator is the value of the Property and the Consolidated
Property (as determined by an independent appraisal acceptable to Grantee in
all respects prepared by an appraiser satisfactory to Grantee).

          (iii) In connection with any release of a Lien under this
Section 4.37(c), Grantor may, or at the request of Grantee
shall, establish or designate a successor entity (the “Successor Borrower”)
which shall be a single purpose bankruptcy remote entity approved by Grantee,
and Grantor shall transfer and assign all obligations, rights and duties under
and to the Note or the Defeased Note, as applicable, together with the pledged
U.S. Obligations to such Successor Borrower. Such Successor Borrower shall
assume the obligations under the Note or the Defeased Note, as applicable, and
the Defeasance Security Agreement and Grantor shall be relieved of its
obligations under such documents. The Grantor shall pay $1,000 to any such
Successor Borrower as consideration for assuming the obligations under the
Note or the Defeased Note, as applicable, and the Defeasance Security
Agreement. ‘Notwithstanding anything in this Agreement to the contrary, no
other assumption fee shall be payable upon a transfer of the Note or the
Defeased Note, as applicable, in accordance with this Section
4.37(c), but Grantor shall pay all costs and expenses incurred by
Grantee, including Grantee’s reasonable attorneys’ fees and expenses, incurred
in connection therewith.

     4.38.
Cash Management Agreement. On or before the date
hereof Grantor covenants and agrees to enter into one or more servicing
account agreements, lockbox servicing agreements and/or cash management
agreements acceptable to Grantee between Grantor and the other Borrowers,
Manager, Grantee and, as applicable, one or more certain financial
institutions (together with any modification, amendment, substitution or
replacement thereof, hereinafter collectively referred to as the “Cash
Management Agreement”). All Rents shall be applied as set forth in the Cash
Management Agreement and the escrows and reserves required hereunder shall be
funded as provided therein. The Grantor shall pay all costs and expenses
related to the establishment and maintenance of the accounts
described in the Cash Management Agreement. Upon the occurrence of an Event of Default, Grantee
may apply any sums then held pursuant to the Cash Management Agreement to the
payment of the Loan in any order in its sole discretion. Until expended or
applied, amounts held pursuant to the Cash Management Agreement shall
constitute additional security for the Loan. Upon any Sale of the Property
pursuant to Section 4.41(d) hereof, Grantor shall enter into a new Cash
Management Agreement in form and substance satisfactory to Lender.

     4.39 Cross-Default: Waiver of Marshalling of
Assets.

     (a) The Grantor acknowledges that Grantee has made the Loan to the
Grantor upon the security of Grantor’s interest in the Property and the
collective

	 	 	 
	 

	75	WEDGEWOOD DEED OF TRUST

 

interest of the Borrower in the Consolidated Property and in reliance upon the
aggregate of the Consolidated Property and the Wedgewood Property taken
together being of greater value as collateral security than the sum of each
parcel thereof taken separately.

     (b) To the fullest extent permitted by law, Grantor, for itself and its
successors and assigns, waives all rights to a marshalling of the assets of
Grantor, Grantor’s partners and others with interests in Grantor, and of the
Property and the Consolidated Property, or to a sale in inverse order of
alienation in the event of foreclosure of all or any of the parcels covered by
the Consolidated Deed of Trust and/or the Property, and agrees not to assert
any right under any laws pertaining to the marshalling of assets, the sale in
inverse order of alienation, homestead exemption, the administration of estates
of decedents, or any other matters whatsoever to defeat, reduce or affect the
right of Grantee under the Loan Documents to a sale of the Property and/or the
Consolidated Property for the collection of the Loan without any prior or
different resort for collection or of the right of Grantee to the payment of
the Loan out of the net proceeds of the Property and/or the Consolidated
Property in preference to every other claimant whatsoever. In addition,
Grantor, for itself and its successors and assigns, waives in the event of
foreclosure of the lien hereof, any equitable right otherwise available to the
Grantor which would require the separate sale of the Property or require
Grantee to exhaust its remedies against any individual Property or any
combination of the Property before proceeding against any other individual
Property or combination of Property; and further in the event of such
foreclosure the Grantor does hereby expressly consents to and authorizes, at
the option of the Grantee, the foreclosure and sale either separately or
together of any combination of the Property.

     4.40
Sale of Notes and Securitization.

     (a) Grantor acknowledges that Grantee and its successors and assigns may
(i) sell this Deed of Trust and the Wedgewood Note and/or the Consolidated
Deed of Trust and the Consolidated Note, and any or all of the other Loan
Documents, to one or more investors as a whole loan or loans, (ii) participate
the indebtedness secured by this Deed of Trust to one or more investors, (iii)
deposit this Deed of Trust and the Wedgewood Note and/or the Consolidated Deed
of Trust and the Consolidated Note, and any or all of the other Loan Documents
with a trust, which trust may sell certificates to investors evidencing an
ownership interest in the trust assets, or (iv) otherwise sell the Wedgewood
Loan and/or the Consolidated Loan or any interest therein to investors (the
transactions referred to in clauses (i) through (iv) are hereinafter each
referred to as “Secondary Market Transaction” or “Securitization”). Grantor
shall cooperate with Grantee in effecting any such Secondary Market
Transaction and shall cooperate to implement all requirements imposed by any
Rating Agency involved in any Secondary Market Transaction. Grantor, however,
shall not be required to modify any documents evidencing or securing the Loan
which would modify (A) the interest rate payable under the Note,

	 	 	 
	 

	76	WEDGEWOOD DEED OF TRUST

 

(B) the stated maturity of the Note, (C) the amortization of principal of the
Note, (D) the non-recourse provisions of the Loan or (E) any other material
economic term of the Loan. Grantor shall provide such information, legal
opinions and documents relating to Grantor, Guarantor, if any, the Trust
Property and any tenants of the Improvements as Grantee may reasonably request
in connection with such Secondary Market Transaction. In addition, Grantor
shall make available to Grantee all information concerning its business and
operations that Grantee may reasonably request. Grantee shall be permitted to
share all such information with the investment banking firms, Rating Agencies,
accounting firms, law firms and other third-party advisory firms involved with
the Loan and the Loan Documents or the applicable Secondary Market Transaction.
It is understood that the information provided by Grantor to Grantee may
ultimately be incorporated into the offering documents for the Secondary Market
Transaction and thus various investors may also see some or all of the
information. Grantee and all of the aforesaid third-party advisors and
professional firms shall be entitled to rely on the information supplied by, or
on behalf of, Grantor and Grantor indemnifies Grantee as to any losses, claims,
damages or liabilities that arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in such information
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated in such information or necessary
in order to make the statements in such information, or in light of the
circumstances under which they were made, not misleading. Grantee may publicize
the existence of the Loan in connection with its marketing for a Secondary
Market Transaction or otherwise as part of its business development.

     (b) In the event that the provisions of this Deed of Trust or any Loan
Documents require the receipt of written confirmation from each Rating Agency
with respect to the ratings on any certificates or other securities being
issued, or, in accordance with the terms of the transaction documents relating
to a Secondary Market Transaction, such a rating confirmation is required in
order for the consent of the Grantee to be given, the Grantor shall pay all of
the costs and expenses of the Grantee, Servicer and each Rating Agency in
connection therewith, and, if applicable, shall pay any fees imposed by any
Rating Agency as a condition to the delivery of such confirmation.

     4.41 Obligations of Grantor in Connection with Sale of Notes and
Securitization.

     At the request of the holder of the Consolidated Note or the Wedge wood
Note and, to the extent not already required to be provided by Grantor under
this Agreement, Grantor shall use reasonable efforts to satisfy the market
standards to which the holder of such Note customarily adheres or which may be
reasonably required in the marketplace or by the Rating Agencies in connection
with any Securitization of rated single or multi-class securities (the
“Securities”) secured by or evidencing ownership interests in such Note and
this Deed of Trust and/or the Consolidated Deed of Trust, including, without
limitation, to:

	 	 	 
	 

	77	WEDGEWOOD DEED OF TRUST

 

     (a) (i) provide such financial and other information with respect
to the Property, the Consolidated Property, the Grantor and the Manager,
(ii) provide
budgets relating to the Property and the Consolidated Property, (iii)
perform or permit
or cause to be performed or permitted such site inspection, appraisals,
market studies,
environmental reviews and reports (Phase I’s and, if appropriate,
Phase II’s),
engineering reports and other due diligence investigations of the Trust
Property and
the Wedgewood Property, as may be reasonably requested by the holder of
the Note
or the Rating Agencies or as may be necessary or appropriate in connection
with the
Secondary Market Transaction, and (iii) make such representations and
warranties as
of the closing date of the Secondary Market Transaction with respect to
the Property,
the Consolidated Property, Grantor, and the Loan Documents as are
customarily
provided in securitization transactions and as may be reasonably requested
by the
holder of the Note or the Rating Agencies and consistent with the facts
covered by
such representations and warranties as they exist on the date thereof,
including the
representations and warranties made in the Loan Documents
(collectively, the
“Provided Information”), together, if customary, with appropriate
verification and/or
consents of the Provided Information through letters of auditors or
opinions of counsel
of independent attorneys acceptable to the Grantee and the Rating
Agencies;

     (b) at Grantor’s expense, cause counsel to render opinions, which
may be relied upon by the holder of the Note, the Rating Agencies and
their respective
counsel, agents and representatives, as to non-consolidation, fraudulent
conveyance,
and true sale or any other opinion customary in securitization
transactions with respect
to the Property, the Consolidated Property, and Grantor and its
affiliates, which
counsel and opinions shall be reasonably satisfactory to the holder of the
Note and the
Rating Agencies;

     (c) if the Wedgewood Note will be included in the Securitization
(which inclusion shall be solely in the discretion of the Grantee), if so
requested by
the Grantee, the holder of the Note or the Rating Agencies, execute and
record such
documents as may be necessary to consolidate the lien of this Deed of
Trust with the
lien of the Consolidated Deed of Trust, and/or consolidate the
Consolidated Note
with the Wedgewood Note;

     (d) if the Wedgewood Note will not be included in a Securitization
of the Consolidated Note, then no later than the [business day that is at
least 30 days prior to the anticipated] date of Securitization, cause the Property to be
transferred to a transferee that is not a Borrower or any member or general partner of
the Grantor or any other Borrower pursuant to a Sale that meets the requirements of
Section 1.13(b) hereof (after which Sale this Deed of Trust shall no longer
secure the Consolidated Note), provided, however, that Grantee agrees that a Sale to
an entity at least 51% of which is owned by, and which is also controlled by, T.
Richard Butera and/or Sidney Kimmel shall be acceptable to Grantee, and that assumption
of the Wedgewood Loan by such transferee will not require payment of any
assumption fee or prepayment fee;

	 	 	 
	 

	78	WEDGEWOOD DEED OF TRUST

 

          (e) execute such amendments to the Loan Documents
and organizational documents, enter into a lockbox or
similar arrangement with respect to the Rents and
establish and fund such reserve funds (including,
without limitation, reserve funds for deferred
maintenance and capital improvements) as may be
requested by the holder of the Note or the Rating
Agencies or otherwise to effect the Secondary Market
Transaction; provided, however, that the Grantor shall
not be required to modify or amend any Loan Document
if such modification or amendment would (i) change the
interest rate, the stated maturity or the amortization
of principal set forth in the Note, or (ii) modify or
amend any other material economic term of the Loan.

          All reasonable third party costs and expenses
incurred by Grantee in connection with Grantor’s
complying with requests made under this Section 4.41
shall be paid by the Grantor.

          In the event that the provisions of this Deed of
Trust or any Loan Documents require the receipt of
written confirmation from each Rating Agency with
respect to the ratings on the Certificates, or, in
accordance with the terms of the transaction
documents relating to a Secondary Market Transaction,
such a rating confirmation is required in order for
the consent of the Grantee to be given, the Grantor
shall pay all of the costs and expenses of the
Grantee, Servicer and each Rating Agency in
connection therewith, and, if applicable, shall pay
any fees imposed by any Rating Agency as a condition
to the delivery of such confirmation.

          4.42
Securitization Indemnification.

          (a) Grantor understands that certain of the
Provided Information and
the Required Records may be included in
disclosure documents in connection with the Secondary Market Transaction, including, without
limitation, a prospectus, prospectus
supplement or private placement memorandum (each,
a “Disclosure Document”) and
may also be included in filings with the
Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended (the
“Securities Act”), or the Securities and
Exchange Act of 1934, as amended (the “Exchange
Act”), or provided or made
available to investors or prospective investors
in the Securities, the Rating Agencies,
and service providers relating to the Secondary
Market Transaction. In the event that
the Disclosure Document is required to be revised
prior to the sale of all Securities,
the Grantor will cooperate with the holder of the
Note in updating the Disclosure
Document by providing all current information
necessary to keep the Disclosure
Document accurate and complete in all material
respects.

          (b) Grantor
agrees to provide in connection with
each of (i) a
preliminary and a private placement memorandum or
(ii) a preliminary and final
prospectus or prospectus supplement, as
applicable, an indemnification certificate (A)
indemnifying Grantee (and for purposes of this
Section 4.42, Grantee hereunder
shall
include its officers and directors), the
affiliate of Credit Suisse First Boston Mortgage
Capital LLC (“First Boston”) that has filed the
registration statement relating to the

	 	 	 	 	 	 	 
	 

	 	 	79	 	 	WEDGEWOOD DEED OF TRUST

 

 

Securitization (the “Registration Statement”), each
of its directors, each of its officers who have
signed the Registration Statement and each person or
entity who controls the affiliate within the meaning
of Section 15 of the Securities Act or Section 20 of
the Exchange Act (collectively, the “First Boston
Group”), and First Boston, each of its directors and
each person who controls First Boston within the
meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act (collectively, the
“Underwriter Group”) for any losses, claims, damages
or liabilities (the “Liabilities”) to which Grantee,
the First Boston Group or the Underwriter Group may
become subject insofar as the Liabilities arise out
of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in
the Provided Information or Required Records upon
the omission or alleged omission to state in the
Provided Information or Required Records a material
fact required to be stated in the Provided
Information or Required Records in order to make the
statements in the Provided Information or Required
Records, in light of the circumstances under which
they were made not misleading and (B) reimbursing
Grantee, the First Boston Group or the Underwriter
Group for any legal or other expenses reasonably
incurred by Grantee, the First Boston Group or the
Underwriter Group in connection with defending or
investigating the Liabilities.

          (c) Promptly after receipt by an indemnified
party under this Section 4.42 of notice of the
commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made
against the indemnifying party under this
Section 4.42, notify the
indemnifying party in writing of the commencement
thereof, but the omission to so notify the
indemnifying party will not relieve the indemnifying
party from any liability which the indemnifying
party may have to any indemnified party hereunder
except to the extent that failure to notify causes
prejudice to the indemnifying party. In the event
that any action is brought against any indemnified
party, and its notifies the indemnifying party of
the commencement thereof, the indemnifying party
will be entitled, jointly with any other
indemnifying party, to participate therein and, to
the extent that it (or they) may elect by written
notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof
with counsel satisfactory to such indemnified party.
After notice from the indemnifying party to such
indemnified party under this Section
4.42 for any legal or other expenses
subsequently incurred by such indemnified party in
connection with the defense thereof other than
reasonable costs of investigation; provided,
however, if the defendants in any such action
include both the indemnified party and the
indemnifying party and the indemnified party shall
have reasonably concluded that there are any legal
defenses available to it and/or other indemnified
parties that are different from or additional to
those available to the indemnifying party, the
indemnified party or parties shall have the right to
select separate counsel to assert such legal
defenses and to otherwise participate in the defense
of such action on behalf of such indemnified party
to parties. The indemnifying party shall not be
liable for the expenses of more than one separate
counsel unless an indemnified party shall have
reasonably concluded that there may be

	 	 	 	 	 	 	 
	 

	 	 	80	 	 	WEDGEWOOD DEED OF TRUST

 

 

legal defenses available to it that are different from
or additional to those available to another
indemnified party.

          (d) In order to provide for just and equitable
contribution in circumstances in which the indemnity
agreement provided for in Section
4.42(b) or (c) is for any reason held to be
unenforceable by an indemnified party in respect of
any losses, claims, damages or liabilities (or action
in respect thereof) referred to therein which would
otherwise be indemnifiable under Section
4.42(b) or (c), the indemnifying party shall
contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims,
damages or liabilities (or action in respect thereof);
provided, however, that no person
guilty of fraudulent misrepresentation (within the
meaning of Section ll(f) of the Securities Act) shall
be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
In determining the amount of contribution to which
the respective parties are entitled, the following
factors shall be considered: (i) First Boston’s and
Grantor’s relative knowledge and access to
information concerning the matter with respect to
which claim was asserted; (ii) the opportunity to
correct and prevent any statement or omission; and
(iii) any other equitable considerations appropriate
in the circumstances.
Grantee and Grantor hereby agree that it would not be
equitable if the amount of such contribution were
determined by pro rata or per capita allocation.

     (e) The liabilities and obligations of both
Grantor and Grantee under this Section
4.42 shall survive the termination of this
Agreement and the satisfaction and discharge of the
Loan.

ARTICLE V

MARYLAND SPECIFIC PROVISIONS

          5.1.
Principles of Construction.
In the event of any inconsistencies
between the terms and provisions of Articles I-IV
and Article V of this Deed of Trust,
the terms and provisions of Article V shall govern and control.

          5.2.
Maryland Specific Provisions.

          (a) Financing
Statement. This
Deed of Trust shall also be effective as a financing
statement covering minerals or the like (including
oil and gas) and accounts subject to Subsection (3)
of Section 9-103 of the Maryland Uniform Commercial
Code, as amended, and similar provisions (if any) of
the Uniform Commercial Code as enacted in any other
state where the Trust Property is situated which will
be financed at the wellhead or minehead of the wells
or mines located on the Trust Property and is to be
filed for record in the real estate records of each
county where any part of the Trust Property is
situated. This Deed of Trust shall also be effective
as a financing statement covering any other property
and may be filed in any other appropriate filing or
recording office.

	 	 	 	 	 	 	 
	 

	 	 	81	 	 	WEDGEWOOD DEED OF TRUST

 

 

          (b) Release. If and when Grantor has paid all of
the Loan and
performed all of Grantor’s other obligations
pursuant to the Loan Documents (the
“Obligations”), as the same becomes due and
payable, and all of the covenants,
warranties, undertakings and agreements in this
Deed of Trust are kept and
performed, and all obligations, if any, of Grantee
for future advances have been
terminated, then, and in that event only, all
rights under this Deed of Trust shall
terminate (except to the extent expressly
provided herein with respect to
indemnifications, representations and warranties
and other rights which are to continue
following the release hereof), and the Trustee,
upon request by Grantee, will provide a
release of this Deed of Trust to Grantor.
Grantor shall be responsible for the
recordation of such release and payment of any
recording costs associated therewith.

          (c) Rights and Remedies of
Trustee.

      (i) In addition to any other rights
available at law or in equity, following an Event
of Default hereunder, Trustee may take possession
of and sell the Trust Property, or any part
thereof requested by Grantee to be sold, and in
connection therewith Grantor hereby (A) assents
to the passage of a decree for the sale of the
Trust Property by the equity court having
jurisdiction, and (B) authorizes and empowers
Trustee to take possession of and sell (or in
case of the default of any purchaser to resell)
the Trust Property, or any part thereof, all in
accordance with the laws or rules of court of the
State of Maryland relating to deeds of trust,
including any amendments thereof, or additions
thereto, which do not materially change or impair
the remedy. In connection with any foreclosure,
Grantee and/or Trustee may (y) procure such title
reports, surveys, tax histories and appraisals as
they deem necessary, and (z) make such repairs
and additions to the Trust Property as they deem
advisable, subject to the terms and provisions
contained in the Lease, all of which shall
constitute Expenses (hereinafter defined) In the
case of any sale under this Deed of Trust, by
virtue of judicial proceedings or otherwise, the
Trust Property may be sold as an entirety or in
parcels, by one sale or by several sales, and any
fixtures or collateral encumbered by this Deed of
Trust may be sold at the same sale as the Trust
Property or in one or more sales, as may be
deemed by Trustee to be appropriate and without
regard to any right of Grantor or any other
person to the marshalling of assets, for cash, on
credit or for other property, for immediate or
future delivery, and for such price or prices and
on such terms having first given such notice
prior to the sale of such time, place and terms
by publication in at least one newspaper
published or having general circulation in the
county or counties in which the Trust Property is
located or at such time or times as may be
required by the laws of the State of Maryland or
rule of court of the State of Maryland, and such
other times and by such other methods, if any, as
Trustee, in its sole discretion, shall deem
advantageous and proper. “Expenses” means all
costs and expenses of any nature whatsoever
incurred at any time and from time to time
(whether before or after an Event of Default) by
Grantee or Trustee in exercising or

	 	 	 	 	 	 	 
	 

	 	 	82	 	 	WEDGEWOOD DEED OF TRUST

 

 

enforcing any rights, powers and remedies
provided in this Deed of Trust or any of the
other Loan Documents, including, without
limitation, attorneys’ fees, court costs,
receivers’ fees, management fees and costs
incurred in the repair, maintenance and operation
of, or taking possession of the Trust Property,
subject to the terms and provisions contained in
the Lease as to the costs for maintenance and
repair, or selling, the Trust Property.

      (ii) Any sale hereunder may be made at
public auction, at such time or times, at such
place or places, and upon such terms and
conditions and after such previous public notice
as Trustee shall deem appropriate and
advantageous and as required by the laws of the
State of Maryland.

      (iii) Upon the terms of such sale being
complied with Trustee shall convey to, and at
the cost of, the purchaser or purchasers the
interest of Grantor in the Trust Property so
sold, free and discharged of and from all estate,
title or interest of Grantor, at law or in
equity, such purchaser or purchasers being hereby
discharged from all liability to see to the
application of the purchase money.

      (iv) Grantee and any affiliate thereof may
be a purchaser of the Trust Property or of any
part thereof or of any interest therein at any
public sale thereof, whether pursuant to
foreclosure or power of sale or otherwise
hereunder, without forfeiting its right to
collect any deficiency from Grantor; and Grantee
may apply upon the purchase price the Obligations
secured hereby owing to Grantee. Grantee, upon
any such purchase, shall acquire good title to
the Property so purchased, free of the lien of
this Deed of Trust and free of all rights of
redemption in Grantor and free of all liens and
encumbrances subordinate to this Deed of Trust.

          (d) Application of Foreclosure Sale
Proceeds. The proceeds of such sale or
sales under this Deed of Trust, whether under the
assent to a decree, the power of sale, or by
equitable foreclosure, shall be held by Trustee and
applied as follows: FIRST, (A) all Expenses incurred
in connection with such sale or in preparing the
Trust Property for such sale and of obtaining
possession including, among other things, counsel
fees reasonably incurred shall be allowed and paid
out of the proceeds of such sale or sales as the
court having jurisdiction may deem proper, (B) the
Trustee’s Commission (hereinafter defined) and
expenses and (C) all taxes, levies, assessments or
other charges relating to the Trust Property which
have or in the opinion of Trustee may have, priority
over the lien of this Deed of Trust, including the
pro rata portion thereof applicable to the taxable
period during which any payment is made pursuant to
this subsection; SECOND, to pay all of the Loan and
all interest then due and accrued thereon and any
other payment obligations of Grantor pursuant to the
Loan Documents, which shall include payment of
interest through the date of ratification of the
auditor’s account; THIRD, to pay the amount of any
liens of record inferior to this Deed of Trust,
together with lawful interest, and lawful claims of
third

	 	 	 	 	 	 	 
	 

	 	 	83	 	 	WEDGEWOOD DEED OF TRUST

 

 

parties against the proceeds of any sale; and LASTLY,
to pay the surplus, if any, to Grantor or any person
or entity entitled thereto unless otherwise required
by law or directed by a court of competent
jurisdiction. In the event that the proceeds of any
such sale or sales, together with all other monies at
the time held by Trustee under the Deed of Trust, are
insufficient to pay the foregoing costs and expenses,
Grantee may, at its sole option, advance such sums as
Grantee in its sole and absolute discretion shall
determine for the purpose of paying all or any part
of such costs and expenses and all such sums so
advanced shall be (A) a lien against the Trust
Property
(B) added to the amount due under the Note and secured by
this Deed of Trust, and (C) payable on demand with interest at the rate of
interest applicable to the principal
balance of the Note, from and including the date each
such advance is made. In any
event, Grantor shall be liable to Grantee for any
deficiency if the proceeds of any such
sale or sales are insufficient to pay, in full, all
amounts to be distributed pursuant to
the FIRST clause above. Grantor shall pay to
Trustee all of Trustee’s reasonable
costs and expenses actually incurred hereunder
regardless of whether the Trust
Property is sold (the “Trustee’s Commission”).”

          (e) Assent
to Decree. The
Grantor hereby declares its assent to the
passing of a decree for the sale of any or all of
the Trust Property or any estate (??) interest therein
by any equity court having jurisdiction over the sale
of the trust Property upon the occurrence of an Event
of Default.

          (f) Commercial
Loan. The
Grantor hereby stipulates and warranty
that the Loan evidenced hereby is a commercial
loan and that such Loan is being may
solely to acquire or carry on a business,
professional or commercial enterprise (??)
activity.

          (g) Future
Advances. Until
this Deed of Trust is released of
record, the Grantee may advance or re-advance
additional sums of money to the Grantor from time to time and such advances and
re-advances shall become part of the
Loan secured hereby to the fullest extent
permitted by law.

	 	 	 	 	 	 	 
	 

	 	 	84	 	 	WEDGEWOOD DEED OF TRUST

 

 

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

	 	 	 	 	 	 	 
	 	 	 	 	GRANTOR:
	 
	 	 	 	 	 	 
	 	 	 	 	BUTERA PROPERTIES, LLC, a Delaware
	Consented and Agreed to	 	limited liability
company,
	as to the provisions of	 	 	 	 
	Section 1.34	 	 	 	 
	 
	 	 	 	 	 	 
	G.P. or Managing Member’s name	 	By:	 	Butera Equity, LLC a Delaware limited
	

	 	 	 	 	 	liability company,
	

	 	 	 	 	 	its Manager
	 
	 	 	 	 	 	 
	By:

	 	/s/ T. Richard Butera
	 	By:
	 	/s/ T. Richard Butera
	

	 	

	 	 	 	

	

	 	Name: T. Richard Butera
	 	 	 	Name: T. Richard Butera
	

	 	Title:
	 	 	 	Title: Manager

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	WEDGEWOOD DEED OF TRUST

 

 

ACKNOWLEDGMENT

	 	 	 	 	 
	DISTRICT OF COLUMBIA

	 	*
	 	TO WIT:

     I,
Mary Ann B. Elliott, a Notary Public in and for the
State and County aforesaid, do hereby certify that T.
Richard Butera, the Manager of Butera Equity, LLC, a
Delaware limited liability company (the “Manager”), which
Manager is the manager of Butera Properties, LLC (the
“Limited Liability Company”), being authorized to do so,
has executed the foregoing document on behalf of the
Manager of said Limited Liability Company, as the act and
deed of said manager of the Manager of said Limited
Liability Company, for the purposes therein contained.

     GIVEN
UNDER MY HAND AND OFFICIAL SEAL this 28th day of
August, 1998.

	 	 	 
	 

	 	/s/ Mary Ann B. Elliott
	

	 	

	

	 	Notary Public

My Commission Expires:
      1/31/2003            [NOTARIAL SEAL]

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