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HomeMy WebLinkAbout2003 - Deed of Trust - International Gateway East - 2003082800283420030828002834 Recorded at the Request of and after Recording Return to. Lisa Pargas Washington Capital Management, Inc 1301 Fifth Avenue, Suite 1500 Seattle, WA 98101 • Legal Descnption (abbreviated) LOT 8 BLA L02 -057, LOTS 6 & 7 BLA L03 -04. Additional legal descnption(s) are on page36 of this document. Assessor's Tax Parcel ID102304- 9084;102304 -9080; 734060 -0602 a0°-301 W /D/�0DE OF,-TRUST AND UCC FIXTURE FILIN G Debtor's Organizational Identification Number 602 050 174 1111 1111 1111 Ili 1111 1111 111. 2003021 22SUU21334.01 THIS DEED OF TRUST AND UCC FIXTURE FILING (herein "Deed of Trust ") is made and granted on , 2003 by INTERNATIONAL GATEWAY EAST III LLC, a Washington limited liability company ( "Borrower "), whose mailing address is 12201 Tukwila International Blvd., Fourth Floor, Attention Chief Financial Officer, Seattle, WA 98168 -5121 to TRANSNATION TITLE INSURANCE COMPANY ( "Trustee "), whose mailing address is 1200 6th Avenue, Suite 100, Seattle, WA 98101, for the benefit of the Beneficiary, WASHINGTON CAPITAL JOINT MASTER TRUST MORTGAGE INCOME FUND, whose mailing address is 1301 Fifth Avenue, Suite 1500, Seattle, Washington 98101 ( "Lender"). For purpose of Article 9 of the Umform Commercial Code RCW 62A.9, the Borrower is the Debtor, Lender is the Secured Party and this Deed of Trust constitutes a Financing Statement. In consideration of the Loan descnbed below, Borrower hereby irrevocably GRANTS, TRANSFERS, CONVEYS and ASSIGNS to Trustee, IN TRUST, WITH POWER OF SALE, all of its present and future estate, nghts, title, claim, interest and demand, either m Iaw or m equity, of, in and to the following property (the `Property"): (a) The real property and all rights to the alleys, streets and roads adjoining or abutting real property in King County, State of Washington descnbed on Exhibit "A" attached hereto (the "Realty"), (b) All buildings, improvements and tenements now or hereafter located on the Realty; FILED FOR RECOR% A. Uf TRANSNATION TITLE INSURANCE CQ (c) All fixtures and articles of property now used or adapted for use in the ownership, development, operation, or maintenance of the buildings and improvements on the DEED OF TRUST FINAL • • Realty (whether such items be leased, be owned absolutely or subject to any title retaining or security instrument, or be otherwise used or possessed), including, without limitation, all heating, coolmg, air - conditioning, ventilating, refrigerating, plumbing, generating, power, lighting, laundry, maintenance, incinerating, lifting, cleaning, fire prevention and extinguishing, security and access control, cooking, gas, electric and communication fixtures, equipment and apparatus, all engines, motors, conduits, pipes, pumps, tanks, ducts, compressors, boilers, water heater and furnaces, all ranges, stoves, disposals, refrigerators and other appliances, all escalators and elevators, baths, sinks, all cabmets, partitions, mantels, built -in mirrors, window shades, blinds, screens, awnings, storm doors, windows and sash, alI carpeting, underpadding, floor covenng, paneling, and drapenes, all furnishings of public spaces, halls and lobbies, and all shrubbery and plants; all of which items shall be deemed part of the real property and not severable, wholly or in part, without matenal injury to the freehold, (d) All easements, all access, air and development rights, all minerals and oil, gas and other hydrocarbon substances, all royalties, all water, water nghts and water stock, and all other nghts, hereditaments, pnvileges, permits, licenses, franchises and appurtenances now or hereafter belonging or in any way appertaining to the Realty; (e) All of the rents, revenues, issues, profits and income of the Property, and all right, title and interest in and to all present and future leases and other agreements for the occupancy or use of all or any part of the Realty, including, without limitation, all cash or security deposits, advance rentals and deposits or payments of similar nature, SUBJECT, HOWEVER, to the assignment of rents and other property to Lender herein contained, (f) All intangible personal property used or useful in connection with the ownership, development, operation or maintenance of the buildings, improvements, and Realty, including, without limitation, all permits, licenses and franchises with respect to the Property, the exclusive right to use of any trade names, all contracts (including, but not limited to, architectural, engineenng, and management agreements), all accounts receivable, leases and rental agreements, escrow accounts, insurance policies, deposits (including, but not limited to, tenant deposits), instruments, documents of title, general intangibles, and business records pertaining to the buildings, improvements, and Realty excluding only cash on hand and in bank accounts; (g) All materials, supplies, and other goods, collectively referred to as "matenals," now owned or hereafter acquired, wherever located, whether in the possession of the Borrower, warehouseman, bailee, or any other person, purchased for use in the construction or furnishing of improvements on the said Realty, together with any documents covenng such materials, all contract rights and general intangibles relating to such materials, and proceeds of such matenals, documents, contract nghts and general intangibles; DEED OF TRUST FINAL 2 • • "LUU3Ut bUULb S4.UU3 (h) All site plans, architectural plans, specifications, work drawings, surveys, engineering reports, test borings, market surveys, and other work products relating to the development of the Property; (i) All of the Borrower's rights under any construction contract, architect's contract or engineering contract relatmg to improvements on the Realty, and all amendments thereto, together with all of the right, title and mterest of the Borrower in, to and under any and all performance, payment, completion, or other surety bonds now, or hereafter, issued by any surety in connection with any construction contract, insofar as the same may be transferable by the Borrower without breach of the agreement or bond referred to, and all transferable warranties related to the Property, and (1) All proceeds of any of the foregoing. TO SECURE THE FOLLOWING (collectively the "Secured Obligations ") (1) Payment of all amounts due to Lender pursuant to that certain Promissory Note of even date herewith, made by Borrower and payable to Lender, or order, together with any and all modifications, extensions, renewals, and replacements thereof (collectively the "Note "). Borrower is obtaining the Loan represented by the Note for the purpose of financing construction of improvements to the Property. (2) Payment of all sums advanced to protect the security of this Deed of Trust, together with interest thereon as herein provided; (3) The performance of the covenants and agreements of Borrower contained in a Loan Agreement between Borrower and Lender, dated of even date herewith (the "Loan Agreement "); (4) Payment of all other sums which are or which may become owing under the Loan Documents; and (5) Performance of all Borrower's other obligations under the Loan Documents. As used herein, the term "Loan Documents" means the Note, this Deed of Trust, the Loan Agreement and Uniform Commercial Code Financing Statements executed in connection herewith, and any other instrument or document securing the Note or otherwise executed in connection therewith, together with all modifications, extensions, renewals, and replacements thereof. Notwithstanding the foregoing, (a) Loan Documents shall not include that certain Environmental Indemnity executed by Borrower dated concurrently herewith (the "Environmental Indemnity"), and (b) this Deed of Trust does not secure Borrower's obligations under the Environmental Indemnity, and does not secure any obligations of Borrower which are the same as the obligations set forth m the Environmental Indemnity, for example, the general indemnity provisions of this Deed of Trust shall not include indemnification of matters covered by the Environmental Indemnity. DEED OF TRUST FINAL, 3 • • LUV' VOhOVV O. 4.Vuw BORROWER HEREBY REPRESENTS, WARRANTS, COVENANTS, AND AGREES AS FOLLOWS 1. TITLE. 1.1 General Borrower warrants, represents, covenants and agrees as follows: (a) Borrower holds marketable title to the Property with the full nght and power to grant, convey and assign the Property; (b) the Property is free from liens, encumbrances, exceptions and other charges of any kind whatsoever, except for the Permitted Exceptions (defined below) (c) no other lien or encumbrance, whether superior or inferior to this Deed of Trust, shall be created or suffered to be created by Borrower without the prior wntten consent of Lender; (d) no default on the part of Borrower or any other person exists under any of the Permitted Exceptions and all of the Permitted Exceptions are in full force and effect and in good standing, without modification, (e) complete and current copies of the Permitted Exceptions have been furnished to Lender, and none of them have been or will be modified by Borrower without Lender's pnor written consent; (f) Borrower shall fully comply with all the terms of the Permitted Exceptions and shall deliver to Lender a copy of all notices delivered in connection with the Permitted Exceptions, (g) Lender has the nght to contact the other parties to the Permitted Exceptions to confirm the status thereof, and Borrower shall, from time to time, at the request of Lender, request of such parties a certificate confirming such information regarding the Permitted Exceptions as Lender may request; and (h) Borrower shall forever warrant and defend the Property unto Lender against all claims and demands of any other person whatsoever, subject only to non - delinquent taxes and assessments and the Permitted Exceptions. As used in this Deed of Trust, "Permitted Exceptions" means the exceptions to title to the Property set out in Schedule B of the policy of title insurance issued to Lender with respect to this Deed of Trust, and those subsequently approved by Lender pursuant to the Loan Documents. 1.2 Status of Borrower. Borrower is and will continue to be (i) duly organized, validly existing and in good standing under the laws of the state of Washington, (11) authorized to do business in and in good standing in the state in which the Property is located, and (in) possessed of all requisite power and authonty to carry on its business and to own and operate the Property. Borrower's exact legal name is correctly set forth at the end of this Deed of Trust Borrower will not cause or permit any change to be made in as name, identity or entity structure unless the Borrower shall have notified Lender in writing of such change at least 30 days prior to the effective date of such change, and shall have first taken all action required by Lender for the purpose of further perfecting or protecting the lien and security interest of Lender in the Property. Borrower's principal place of business and chief executive office, and the place where Borrower keeps its book and records, including recorded data of any kind or nature, regardless of the medium of recording, including software, wnting, plans, specifications and schematics concerning the Property, has been for the preceding four months (or less if for the entire existence of Borrower) and will continue to be the address of Borrower set forth in this Deed of Trust (unless Borrower notifies Lender of any change in wntmg at least 30 days pnor to the date of such change). Borrower's unified business DEED OF TRUST FINAL 4 • • LUU,SUOZOUO i4.UU5 organizational identification number is correctly set forth on the first page of this Deed of Trust Borrower shall promptly notify Lender of any change of its organizational identification number 2. BORROWER'S COVENANTS. 2.1 Payment and Performance of Secured Obligations. Borrower will pay when due all sums which are or which may become owing on the Note, and will pay and perform all other Secured Obligations, in accordance with their terms, subject to the limitations on liability contained in the Note. 2.2 Payment of Taxes, Utilities, Liens and Charges. 2.2.1 Taxes and Assessments. Except as the same may otherwise be paid under Section 3 relating to reserves, Borrower will pay when due directly to the payee thereof all taxes and assessments (including, without limitation, nongovernmental levies or assessments such as maintenance charges, owner association dues or charges, or charges resulting from covenants, conditions or restrictions) charged against or with respect to the Property or this Deed of Trust Upon request, Borrower shall promptly furnish to Lender all notices of amounts due under this Section and all receipts evidencing such payments Borrower may contest any such taxes and assessments in accordance with any applicable procedures so long as such contest does not jeopardize Lender's security in the Property and so long as taxes and assessments do not become delinquent. 2.2.2 Utilities. Borrower will pay when due all utility charges and assessments for services furnished to the Property 2.2.3 Liens and Charges. Borrower will pay when due the valid claims of all persons supplying labor or materials to or in connection with the Property. Without waiving the restrictions of Section 4, Borrower will promptly discharge any hen or other charge, whether superior or inferior to this Deed of Trust, which may be claimed against the Property, either by payment or by posting of a bond or other security sufficient to remove the hen from title. 2.3. Insurance. 2.3.1 Coverages Required. Borrower will keep the following insurance coverages in effect with respect to the Property: (a) Special Causes of Loss form of insurance, in an amount equal at all times to the full insurable value of the improvements then located on the Property and all personal property included in the Property, which, dunng construction of any improvements shall be in the "builder's risk" completed value form. All such insurance coverage shall contain a "100% replacement cost endorsement" without reduction for depreciation and containing deductibles not exceeding $50,000. The insurance shall also contain a fluctuating DEED OF TRUST FINAL 5 • • ZUVJUOLODULO44.VUo value endorsement with a waiver of the co- insurance clause (or an agreed amount endorsement with an inflation guard endorsement; provided, however, that Lender will waive the inflation guard endorsement requirement, so long as the coverage maintained under this Section 2.3 1(a) is part of a blanket policy acceptable to Lender), shall waive all rights of subrogation against Lender, shall, if required by Lender, contain an ordinance or law coverage endorsement (which will contain Coverage A: Loss due to Operation of Law, Coverage B Demolition Cost, and Coverage C: Increased Cost of Construction; and the combined subhmit for Coverages A and B shall be not less that $5 million per occurrence), and shall contain such other endorsements as Lender may request. All such coverage and endorsements shall be in form and substance satisfactory to Lender (b) Difference in Conditions endorsement/coverage insunng against loss from earthquake and earth movement with a deductible of no greater than 10% of the improved value (c) Loss of Rents and/or Business Interruption insurance in an amount sufficient to cover any loss of income for a duration of not less than twelve (12) months, which insurance shall be in effect for the entire term of the loan. (d) Boiler and machinery insurance covenng the major components of the central heating, air conditioning and ventilating systems, boilers, other pressure vessels, high pressure piping and machinery, and other similar equipment installed m the Improvements, in an amount equal to the estimated replacement cost of the Improvements and with a deductible of not greater than $50,000 including Loss of Rents and/or Business Interruption insurance in an amount sufficient to cover any loss of income for a duration of not less than 12 months, which insurance shall be in effect for the entire term of the Loan. (e) Commercial general liability insurance against claims for bodily injury, death or property damage occurring on, in or about the Property in amounts and on terms acceptable to the Lender, in its commercially reasonable judgment, and with a deductible of not greater than $50,000. If this insurance is carved under a blanket policy, the policy must include an endorsement in form acceptable to Lender to the effect that the aggregate limit shall apply separately to each location. (1) FIood insurance in an amount satisfactory to Lender and on terms satisfactory to Lender if required by Lender. (g) Certified and non - certified terrorism insurance coverage (if available for the Property) with respect to the Property on terms satisfactory to Lender in its commercially reasonable judgment, if the equity requirements of the Loan Agreement at Section 5 9.3 are not maintained. (h) Insurance against such similar or other hazards, casualties, liabilities, and contingencies, in such forms and amounts, as Lender may, from time to time, DEED OF TRUST FINAL 6 • • hVUOVOLOUV O44.UU1 require in its commercially reasonable judgment (but excluding terronsm coverage unless required pursuant to subsection (g) above). 2.3.2 Policies. Each insurance policy will be in form acceptable to Lender and issued by a company or companies approved by Lender and rated A- class size VIII or better (subject to change by Lender on notice to Borrower) in the most current issue of Best's Insurance Reports and licensed to do business in the state in which the Premises are located Each hazard insurance policy will include a Form 438BFU or equivalent mortgagee endorsement in favor of and in form acceptable to Lender All required policies will provide for at least 30 days' written notice to Lender pnor to the effective date of any cancellation, nonrenewal or material amendment, which term shall include any reduction in the scope or limits of coverage. Borrower shall provide certificates of Insurance on Acord 27 form for Property, Acord 25 -S for Liability with a CG 20 18 Additional insured Mortgagee, Assignee or Receiver Endorsement evidencing coverages required above and naming Lender as an Additional Insured The certificates and endorsement shall set forth the coverage, the limits of liability, the carrier, the policy number, and the expiration date and Borrower shall provide certified copies of the actual policies and endorsements, if requested. Lender shall be named as loss payee on the hazard insurance and Lender and Washington Capital Management, Inc shall be named as an additional insured on the liability insurance. Lender's name must appear in the followmg form on all certificates of insurance, or in such other form as Lender subsequently specifies to Borrower: Washington Capital Joint Master Trust Mortgage Income Fund, its successors and assigns 1301 Fifth Ave, Ste. 1500 Seattle, WA 98101 Washington Capital Management Inc , name shall appear in addition to Lender in the following form on the certificate of liability insurance: Washington Capital Management, Inc., its successors and assigns 1301 Fifth Ave, Ste. 1500 Seattle, WA 98101 2.3.3 Payment; Renewals. Borrower shall promptly furnish to Lender all renewal notices relating to insurance policies. Except as the same may otherwise be paid under Section 3 relating to reserves, Borrower will pay all premiums on insurance policies directly to the carrier or the broker. As soon as possible but prior to the expiration date of each such policy, Borrower shall furnish to Lender a certificate of the renewal policy in a form acceptable to Lender, together with evidence that the renewal premium has been paid. If Lender receives any notice of cancellation, including without limitation, for non - payment, Borrower shall be in default under this Loan and in addition to all other rights and remedies Lender has hereunder, Lender may (a) invoke the reserves provisions of Section 3.1, (b) procure replacement insurance pursuant to Section 2.3 6, and/or (c) advance the funds DEED OF TRUST FINAL 7 • • LUUSUOLODULOS4.0UO necessary to make any premium payments and the amount advanced shall bear interest at the default rate set forth m the Note. The cure penods and extensions thereof set forth in Section 8 3 and in the other Loan Documents are inapplicable to this Section 2.3.3; provided, however that Lender will permit Borrower 15 days after wntten notice of the default to Borrower before Lender invokes the reserve provisions of Section 3.1 or exercises Lender's remedies under Section 10 below. 2.3.4 Insurance Proceeds. In the event of any loss, Borrower will give prompt written notice thereof to the insurance carver and Lender. Borrower hereby authonzes Lender as Borrower's attorney -in -fact to make proof of loss, to adjust and compromise any claim, to commence, appear in, and prosecute, in Lender's or Borrower's name, any action relating to any claim, and to collect and receive insurance proceeds; provided, however, that Lender shall have no obhgation to do so. Lender shall apply any insurance proceeds received by it hereunder first to the payment of the costs and expenses incurred in the collection of the proceeds and then, in its absolute discretion and without regard to the adequacy of its security, to: (a) The payment of indebtedness secured hereby, whether then due and payable or not. Any such application of proceeds to pnncipal on the Note shall be without the imposition of any prepayment fee otherwise payable under the Note, but shall not extend or postpone the due dates of the installment payments under the Note, or change the amounts thereof, or (b) The reimbursement of Borrower, under Lender's prescribed disbursement control procedures, for the cost of restoration or repair of the Property Lender may, at its option, condition the reimbursement on Lender's approval of the plans and specifications of the reconstruction, contractor's cost estimates, architect's certificates, waivers of liens, sworn statements of mechanics and matenalmen, and such other evidence of costs, percentage completion of construction, application of payments and satisfaction of hens as Lender may require Except to the extent that insurance proceeds are applied to payment of the indebtedness secured hereby under clause (a) above, nothing herein contained shall be deemed to excuse Borrower from restonng, repairing or mamtammg the Property as provided in Section 2.4, regardless of whether or not there are insurance proceeds available or whether any such proceeds are sufficient in amount. 2.3.5 Borrower's Direction of Application of Insurance and Condemnation Proceeds. Notwithstanding the provisions of Section 2.3.4 clause (b) or Section 2 7.1, Borrower, rather than Lender, shall have the nght to direct the application of insurance or condemnation proceeds to payment of the indebtedness secured by this Deed of Trust, or to repair or restoration of the Property on the following conditions. (a) There is then no uncured default hereunder nor any event or condition which with notice or the passage of time or both would be a default hereunder. DEED OF TRUST FINAL 8 • • LUU4UOLODUt0.4.UU4 (b) If the proceeds are to be applied against the indebtedness, the proceeds are sufficient to pay the indebtedness m full, or Borrower pays the difference to the Lender in advance. (c) If the proceeds are to be applied to repair or restoration, then, in addition to the matters required under clause (b) of Section 2.3.4 above, Lender must have approved each of the following with respect to the repair or restoration: (i) the construction contract, and if required by Lender, payment and performance bonds with dual obligee rider, (ii) evidence that the insurance proceeds are adequate to restore the Property to its condition immediately pnor to the casualty, and if insufficient, the deficiency is deposited with Lender to be disbursed pnor to disbursement of insurance proceeds, (in) proof that Borrower has funds sufficient to pay operating expenses, taxes, debt service, and other carrying costs of the Property through the penod of repair or restoration, (iv) in the case of condemnation, evidence that the Property not taken through condemnation can be restored to a functional, architectural and economically viable unit, (v) evidence that upon such repair or restoration, the Property will be in compliance with all applicable laws, ordinances and regulations, (vi) evidence acceptable to Lender that upon the completion of any such repair or restoration, the Property will produce substantially the same rental income as before the casualty, loss or other taking In the case of a partial taking in condemnation, this condition will be deemed satisfied if the remaining property produces enough rental income to provide the same or better debt service coverage ratio as before the partial taking. (d) Each disbursement shall be made m accordance with and subject to the provisions of the Loan Agreement between Lender and Borrower which will be deemed amended to apply to the repair or restoration Without limitation as a condition to each advance, Lender may require endorsements to the title insurance policy as provided in the Loan Agreement. (e) Borrower executes and delivers to Lender such additional security documents and instruments as Lender deems necessary to continue. and to perfect Lender's security interest in the Property. 2.3.6 Proceeds Less than $250,000. Notwithstanding any other provisions of this Section 2 3 to the contrary, Borrower will deliver notice to Lender of all msurance claims, and if the casualty insurance proceeds are less than $250,000, the proceeds shall be paid to /released to Borrower for application m its discretion; provided that (a) such release shall not be deemed to waive Borrower's obligation to restore and maintain the Property pursuant to Section 2 4.1, (b) Borrower shall apply the proceeds to the repair and restoration and deliver evidence of such expenditures to Lender, and (c) any excess may be retained by Borrower. 2.3.7 Failure to Maintain. If Borrower fails or refuses to procure and maintain any of the required insurance, and/or if Lender receives any notice of cancellation of such coverage, whether for non - payment or otherwise, Lender may, at its option, and without DEED OF TRUST FINAL 9 • • LUU3UOLOV VLOS4.U'l U waiting until the cancellation to become effective, (a) advance funds to pay any delinquent premiums, or (b) procure such insurance for Lender's benefit and/or interests and any and all premiums, deductibles, or self-insured retentions, paid by Lender therefor shall be deemed an expense of the Borrower and shall be deemed due on demand or any other payment mode selected by Lender. Lender is not responsible for nor will Lender procure any insurance for Borrower's interests and/or benefit. 2.3.8 Transfer of Title. If the Property is sold pursuant to Section 10 or if Lender otherwise acquires title to the Property, Lender shall have all of the right, title and interest of Borrower m and to any insurance policies and unearned premiums thereon, and in and to the proceeds resulting from any damage to the Property pnor to such sale or acquisition. WARNING UNLESS YOU PROVIDE US WITH EVIDENCE OF THE INSURANCE COVERAGE AS REQUIRED BY OUR CONTRACT OR LOAN AGREEMENT, OR IF WE RECEIVE ANY NOTICE OF CANCELLATION, WE MAY ADVANCE FUNDS TO PAY ANY DELINQUENT PREMIUMS OR PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTEREST. THIS INSURANCE MAY, BUT NEED NOT, ALSO PROTECT YOUR INTEREST. IF THE COLLATERAL BECOMES DAMAGED, THE COVERAGE WE PURCHASE MAY NOT PAY ANY CLAIM YOU MAKE OR ANY CLAIM MADE AGAINST YOU. YOU MAY LATER CANCEL THIS COVERAGE BY PROVIDING EVIDENCE THAT YOU HAVE OBTAINED PROPERTY COVERAGE ELSEWHERE. YOU ARE RESPONSIBLE FOR THE COST OF ANY INSURANCE PURCHASED BY US AND ANY DELINQUENT PREMIUMS PAID BY US. THE AMOUNTS PAID. THE AMOUNTS PAID MAY BE ADDED TO YOUR CONTRACT OR LOAN BALANCE, AND THE DEFAULT INTEREST RATE ON THE LOAN WILL APPLY TO THIS ADDED AMOUNT. THE EFFECTIVE DATE OF COVERAGE MAY BE THE DATE YOUR PRIOR COVERAGE LAPSED OR THE DATE YOU FAILED TO PROVIDE PROOF OF COVERAGE OR ON OR AFTER THE DATE WE RECEIVED NOTICE OF CANCELLATION. THE COVERAGE WE PURCHASE MAY BE CONSIDERABLY MORE EXPENSIVE THAN INSURANCE YOU CAN OBTAIN ON YOUR OWN AND MAY NOT SATISFY ANY NEED FOR PROPERTY DAMAGE COVERAGE OR ANY MANDATORY LIABILITY INSURANCE REQUIREMENTS IMPOSED BY APPLICABLE LAW. 2.4. Preservation and Maintenance of Property; Right of Entry. 2.4.1 Preservation and Maintenance. Borrower (i) will not commit or suffer any waste or permit any impairment or deterioration of the Property, (ii) will restore or DEED OF TRUST FINAL 10 • • LVV. VOLOVVLOJ4.V 1 1 repair promptly, and in a good and workmanlike manner all or any part of the Property to the equivalent of its ongmal condition, or such other condition as Lender may approve in writing, in the event of any damage, injury or loss thereof, whether or not insurance proceeds are available to cover in whole or in part the costs of such restoration or repair, (in) will keep the Property, including improvements, fixtures, equipment, machinery, and appliances thereon, in good condition and repair, and shall replace fixtures, equipment, machinery, and appliances of the Property when necessary to keep such items in good condition and repair, and (iv) will generally operate and maintain the Property m a manner to ensure maximum revenue. 2.4.2 Alterations. No building or other improvement on the Realty will be structurally altered, removed or demolished, in whole or in part, without Lender's pnor written consent, nor will any fixture or chattel covered by this Deed of Trust, and adapted to the use and enjoyment of the Property be removed at any time without hke consent unless actually replaced by an item of equal suitability, owned by Borrower, free and clear of any hen or security interest except such as may be approved in writing by Lender. 2.4.3 Right of Entry. Lender is hereby authorized to enter the Property, including the interior of any structures, for the purpose of inspecting the Property and for the purpose of performing any of the acts it is authonzed to perform hereunder, subject to the nghts of Tenant under the DHS Lease. 2.5 Parking. If any part of the automobile parking areas included within the Property is taken by condemnation, or before said areas are otherwise reduced, Borrower will take all reasonable actions as are necessary to provide parking facilities in kind, size and location to comply with all governmental zoning and other regulations and all leases. Before making any contract for substitute parking facilities, Borrower will furnish to Lender satisfactory assurance of completion thereof, free of liens and in compliance with all governmental zoning and other regulations and all leases. Before making any contract for substitute parking facilities, Borrower will furnish to Lender satisfactory assurance of completion thereof, free of liens and in conformity with all government zoning and other regulations. 2.6 Use of Property. Borrower will comply with all laws, ordinances, regulations and requirements of any governmental body, and all other covenants, conditions and restrictions, applicable to the Property, and pay all fees and charges in connection therewith. Unless required by applicable law or unless Lender has otherwise agreed in wasting, Borrower will not allow changes in the use for which all or any part of the Property was intended at the time this Deed of Trust was executed. Borrower will not initiate or acquiesce in a change in the zoning classification of the Property without Lender's prior written consent The real property conveyed by this Deed of Trust is not used pnncipally for agncultural or farming purposes. DEED OF TRUST FINAL 11 • • 2.7 Condemnation. LUU.SUOLOUVLO34.U11 2.7.1 Proceedings. Borrower will promptly notify Lender of any action or proceeding relating to any condemnation or other taking (including without limitation change of grade), whether direct or indirect, of the Property or part thereof or interest therein, and Borrower will appear in and prosecute any such action or proceeding unless otherwise directed by Lender in writing. Borrower authorizes Lender, at Lender's option, as attorney - in -fact for Borrower, to commence, appear in and prosecute, in Lender's or Borrower's name, any action or proceeding relating to any such condemnation or other taking; provided, however, that Lender shall have no obhgation to do so. All awards, payments, damages, direct, consequential and otherwise, claims, and proceeds thereof, in connection with any such condemnation or other taking, or for conveyances in lieu of condemnation, are hereby assigned to Lender, and all proceeds of any such awards, payments, damages, or claims shall be paid to Lender. 2.7.2 Application of Proceeds. Lender shall apply any such proceeds in the manner and upon the terms and conditions set forth in Sections 2 3 4 and 2.3 5 relating to the application of insurance proceeds. 2.8 Protection of Lender's Security. Borrower will give notice to Lender of and will, at its expense, appear m and defend any action or proceeding that might affect the Property or title thereto or the interests of Lender or Trustee therein or the rights or remedies of Lender or Trustee. If any such action or proceeding is commenced, or if Lender or Trustee is made a party to any such action or proceeding by reason of this Deed of Trust, unless due to the negligence of Lender or due to a claim made against Lender due to no fault of Borrower, or if Borrower fails to perform any obligation on its part to be performed hereunder, then Lender and/or Trustee, each in its own discretion, may make any appearances, disburse any sums, make any entries upon the Property and take any actions as may be necessary or desirable to protect or enforce the secunty of this Deed of Trust, to remedy Borrower's failure to perform their covenants (without, however, waiving any default by Borrower) or otherwise to protect Lender's or Trustee's interests Borrower agrees to pay all loss, damage, costs, and expenses, including attorney's fees, of Lender and Trustee thus incurred This Section shall not be construed to require Lender or Trustee to mcur any expenses, make any appearances or take any actions. 2.9 Reimbursement of Lender's and Trustee's Expenses. All amounts disbursed by Lender and Trustee pursuant to Section 2.8 or any other provision of this Deed of Trust, with interest thereon, shall be additional indebtedness of Borrower secured by this Deed of Trust (except funds deposited with the Lender by Borrower pursuant to Section 3 or Section 2.3.5 or 2 7). All such amounts shall be immediately due and payable, and shall bear interest from the date of disbursement at the default interest rate set forth in the Note. 2.10 Books and Records, Financial Statements. Borrower will keep and maintain at Borrower's address stated above, or such other place as Lender may approve in writing, DEED OF TRUST FINAL 12 • • LUU4VOLODULO.14.U1 :3 books of accounts and records adequate to reflect correctly the results of the operation of the Property and copies of all wntten contracts, leases and other instruments which affect the Property. Such books, records, contracts, leases, and other instruments shall be subject to examination, inspection and copying at any time by Lender Borrower shall provide to Lender within 120 days after the end of Borrower's fiscal year, the financial statements required under the Loan Agreement, plus a balance sheet for the Borrower, Borrower's most recent federal income tax return (if that is not available within the 120 days, then it shall be provided as soon thereafter as it is available), and a statement of income and expenses of the Project (as that term is defined in the Loan Agreement), each in reasonable detail and certified by Borrower At the same time, Borrower shall also furnish a rent roll for the Property, certified by Borrower, showing the name of each tenant, the space occupied, the lease expiration date, the monthly rent, the date to which rent has been paid, and any deposit Borrower is holding. 2.11 Notice of Litigation. Borrower represents that (i) the Property is not subject to any casualty damage; (ii) Borrower has not received any wntten notice of any eminent domain or condemnation proceeding affecting the Property; and (iii) to the best of Borrower's knowledge following due and diligent inquiry, there are no actions, suits or proceedings pending, completed or threatened agamst or affecting Borrower, any guarantor or any person or entity owning an interest (directly or indirectly) in Borrower in any court or before any arbitrator or before or by any governmental authority that has not been disclosed in wnting to Lender. Borrower shall provide written notice to Lender of any future litigation as follows: (a) For litigation commenced against Borrower, notice of claims in excess of $250,000. Such notice must be delivered to Lender within 30 days of the date the litigation is served on Borrower and such notice shall provide sufficient detail regarding such litigation as is acceptable to Lender. Borrower shall keep Lender reasonably informed regarding the subject and status of the litigation (b) For litigation against Guarantor, notice of an individual claim in excess of $2 million, or aggregate outstanding claims in excess of 5% of the guarantor's then current net worth (with such net worth defined by reference to the Loan Agreement at Section 5.9). Such notices must be delivered within 120 days of the date that the Iitigation is served on the guarantor. All such notices may be made within a quarterly financial delivered within such 120 day period, and guarantor shall provide sufficient detail regarding such litigation as is acceptable to Lender. Borrower and guarantor shall keep Lender reasonably informed regarding the subject and status of the litigation. In addition, Borrower and any guarantor shall provide notices as follows (c) In the event of the entry of any judgment against Borrower in excess of $250,000, notice to Lender within 30 days of entry. DEED OF TRUST FINAL 13 • • hUV4UOCOVVtO34.4,114 (d) In the event of the entry of any judgment against any guarantor m excess of $1,000,000, notice to Lender within 30 days of entry. 3. RESERVES. 3.1 Deposits. Subject to the conditional waiver in Section 3.4 below, and if Lender so requires, Borrower will, at the time of making each installment payment under the Note, deposit with Lender a sum, as estimated by Lender, equal to (a) the rents under any ground lease, (b) the taxes and special assessments next due on the Property, and (c) the premiums that will next become due on insurance policies as may be required under this Deed of Trust, less all sums already deposited therefor, divided by the number of months to elapse before 2 months pnor to the date when such rents, taxes, special assessments, and premiums will become delinquent. Lender may require Borrower to deposit with Lender, in advance, such other sums for other taxes, assessments, premiums, charges, and impositions in connection with Borrower or the Property as Lender deems necessary to protect Lender's interest (herein "Other Impositions "). Such sums for Other Impositions shall be deposited in a lump sum or in penodic installments, at Lender's option If requested by Lender, Borrower will promptly deliver to Lender all bills and notices with respect to any rents, taxes, assessments, premiums, and Other Impositions. Unless Borrower and Lender otherwise agree in wnting, Lender shall not be required to pay Borrower any interest, earnings or profit on any sums deposited with Lender. All sums deposited with Lender under this Section 3.1 are hereby pledged as secunty for the Secured Obligations. 3.2 Application of Deposits. All such deposited sums shall be held by Lender and applied m such order as Lender elects to pay such rents, taxes, assessments, premiums and Other Impositions or, if a default occurs hereunder, may be applied, in whole or in part, to pay down the indebtedness secured hereby The arrangement provided for in this Section 3 is solely for the added protection of Lender and entails no responsibility on Lender's part beyond the allowing due credit, without interest, for the sums actually received by it. Upon any assignment of this Deed of Trust by Lender, any funds on hand shall be turned over to the assignee and any responsibility of Lender with respect thereto shall terminate. Each transfer of the Property shall automatically transfer to the grantee all rights of Borrower with respect to any funds accumulated hereunder. Upon payment in full of the Secured Obligations, Lender shall promptly refund to Borrower the remaining balance of any deposits then held by Lender 3.3 Adjustments to Deposits. If the total deposits held by Lender exceed the amount deemed necessary by Lender to provide for the payment of such rents, taxes, assessments, premiums, and Other. Impositions as the same fall due, then such excess shall, provided no Event of Default then exists hereunder, be credited by Lender on the next due installment or installments of such deposits. If, at any time, the total deposits held by Lender is less than the amount deemed necessary by Lender to provide for the payment thereof as the same fall due, then Borrower will deposit the deficiency with Lender within 30 days after written notice to Borrower stating the amount of the deficiency. DEED OF TRUST FINAL 14 • • CUU.3UO COU V ta34.U-I 0 3.4 Conditional Waiver. Notwithstanding any other provision of this Deed of Trust, Lender agrees that it will not require the payment of reserves as provided in this Section 3 so long as there is no delinquency m the payment of any taxes or assessments levied or assessed against the Property, nor any delinquency in the payment of the premiums for any insurance required under this Deed of Trust, and there is no other default under this Deed of Trust. 4. RESTRICTIONS ON TRANSFER OR ENCUMBRANCE. 4.1 No Transfers. Subject to Sections 4 2 and 4.3, neither the Property nor any part thereof or interest therein shall be encumbered, sold (by contract or otherwise), conveyed, or otherwise transferred by Borrower, nor shall there be any change in the ownership of Borrower or any change in the limited liability company manager of Borrower. Any such action without Lender's pnor wntten consent shall constitute a default hereunder and shall be deemed to increase the risk of Lender, and Lender may declare all sums secured hereby immediately due and payable, or may at its sole option, consent to such change in title, occupancy or ownership, subject to any conditions Lender may elect to impose, including but not limited to an increase in the interest rate on the mdebtedness secured hereby 4.2 Related Entity Transfer of Property and Assumption. Notwithstanding the provisions of Section 4.1, Lender shall waive its right to accelerate the balance due or increase the interest rate m order to allow the transfer of the Property and assumption of the Loan on the following conditions: (a) There then exists no default under any of the Loan Documents (b) Sabey Corporation, a Washmgton corporation ( "Sabey") is the sole manager of the transferee entity, with full discretionary authority; (c) More than fifty percent (50 %) ownership and control of the transferee entity is directly or indirectly held by (1) Sabey, (2) Sabey Family (defined in the Loan Agreement), (3) the Sabey Family Trust (the "Sabey Trust "), (4) a related entity created for the estate planning purposes of Sabey Family, or (5) a combination thereof; (d) Borrower pays all of Lender's out of pocket expenses, including without limitation, legal fees, in reviewing the proposed transfer and assumption. 4.3 Related Entity Transfer of Ownership. Notwithstanding the provisions of Section 4.1, Lender shall waive its right to accelerate the balance due or increase the interest rate in order to allow the transfer of ownership of the Borrower on the following conditions: (a) There then exists no default under any of the Loan Documents. (b) Sabey Corporation, a Washington corporation ( "Sabey ") remains the sole manager of the Borrower, with full discretionary authority; DEED OF TRUST FINAL 15 • • ZUUSUOLODUAO.4.U-i o (c) More than fifty percent (50 %) ownership and control of the Borrower remain directly or indirectly held by (1) Sabey, (2) Sabey Family (defined in the Loan Agreement), (3) the Sabey Family Trust (the "Sabey Trust "), (4) a related entity created for the estate planning purposes of Sabey Family, or (5) a combination thereof; (d) Borrower pays all of Lender's out of pocket expenses, including without limitation, legal fees, in reviewing the proposed transfer 4.4 Third Party Transfer and Assumption. Notwithstanding the provisions of Section 4 1, Lender shall waive its right to accelerate the balance due or mcrease the interest rate one time m order to allow the sale of the Property and assumption of the Loan on the following conditions (a) There then exists no default under any of the Loan Documents. (b) Lender's review and approval of all elements relating to the sale and assumption including, but not limited to, the sale agreement and the buyer's credit records, financial statements and tax returns. (c) The buyer evidences a satisfactory history of property management or contracts for property management with a property management firm satisfactory to Lender (d) Borrower pays an assumption fee of 1% of the then outstanding balance of the Loan, plus all of Lender's out of pocket expenses, including without limitation, legal fees, title insurance premiums, and credit report fees 5. UNIFORM COMMERCIAL CODE. 5.1 Security Agreement. This Deed of Trust constitutes a security agreement pursuant to the Uniform Commercial Code with respect to 5.1.1 Any of the Property which, under applicable law, is not real property or effectively made part of the real property by the provisions of this Deed of Trust, and 5.1.2 Any and all other property now or hereafter described on any Uniform Commercial Code Financing Statement naming Borrower as Debtor and Lender as Secured Party, and affecting property in any way connected with the use and enjoyment of the Property (any and all such other property constituting "Property" for purposes of this Deed of Trust). 5.1.3 All of Borrower's personal property, including, without limitation, all . accounts, chattel paper, inventory, equipment, instruments, investment property, documents, deposit accounts, general intangibles, and supporting obligations. DEED OF TRUST FINAL 16 • • LUUSUiSLt lltUtf34.U1 1 5.1.4 All products and proceeds of the property descnbed in Sections 5.1.1, 5 1 2, and 5.1 3 and all supporting obligations ancillary thereto or arismg in any way in connection therewith. 5.2 Grant to Lender. Borrower grants Lender a security interest in all property descnbed in Section 5.1 as secunty for the Secured Obligations. Neither the foregoing grant of a security interest nor the filing, of any such financing statement shall ever be construed as derogating from the parties' hereby stated intention that everything used in connection with the production of income from the Property or adapted for use therein or which is descnbed or reflected m this Deed of Trust is and at all times shall be regarded for all purposes as part of the real property 5.3 Lender's Rights. With respect to the Property subject to the foregoing security interest, Lender has all of the nghts and remedies (i) of a secured party under the Uniform Commercial Code, (ii) provided herein, including without limitation the nght to cause such Property to be sold by Trustee under the power of sale granted by this Deed of Trust, and (in) provided by law. In exercising its remedies, Lender may proceed against the items of real property and any items of personal property, separately or together, and in any order whatsoever, without affecting the availability of Lender's remedies. 5.4 UCC Remedies. Without limitation of Lender's nghts of enforcement with respect to the Property or any part thereof in accordance with the procedures for foreclosure of real estate, Lender may exercise its rights of enforcement with respect to the Property under the Uniform Commercial Code as in effect from time to time (or under the Uniform Commercial Code in force, from time to time, in any other state to the extent the same is applicable law) and in conjunction with, m addition to or in substitution for those nghts and remedies. (i) Lender may enter upon Borrower's premises to take possession of, assemble and collect the Property or to render it unusable; (u) Lender may require Borrower to assemble the Property and make it available at a place Lender designates, (iii) wntten notice mailed to Borrower as provided herein at least 10 days pnor to the date of sale shall constitute reasonable notice; provided that, if Lender fails to comply with this clause (iii) in any respect, its liability for such failure shall be limited to the hability (if any) imposed on it as a matter of law under the Uniform Commercial Code; (iv) any sale made pursuant to the provisions of this Section 5.4 shall be deemed to have been a public sale conducted in a commercially reasonable manner if held contemporaneously with and upon the same notice as required for the sale of the Property under power of sale as provided in Section 10.2; (v) in the event of a foreclosure sale, whether made by Trustee under the terms hereof, or under judgment of a court, the Property may, at the option of Lender, be sold as a whole; (vi) it shall not be necessary for Lender to take possession of the Property prior to the time that any sale pursuant to the provisions of this Section 5 4 is conducted and it shall not be necessary for the Property to be present at the location of such sale; (vii) with respect to application of proceeds from disposition of the Property under Section 10.3 hereof, the costs incident to disposition shall include the reasonable expenses of retaking, holding, prepanng for sale or lease, selling, leasing and the like and the reasonable attorneys' fees and legal expenses incurred by Lender DEED OF TRUST FINAL 17 [UUSUOZODULO44.1.1 t1 (including the allocated cost of services provided by in -house counsel), (vui) Lender may appoint an agent(s) to perform tasks related to a sale; (ix) Lender may comply with any applicable state or federal law or regulatory requirements in connection with the disposition of the Property, and such compliance will not be considered to affect adversely the commercial reasonableness of the sale; (x) Lender may sell the Property without giving any warranties as to the Property, and may specifically disclaim any warranties; and (xii) Borrower acknowledges that the Property may be sold at a loss to Borrower and Lender shall have no liability for such loss 5.5 Fixture Filing. This Deed of Trust shall be effective as (a) a fixture filing with respect to any fixtures included in the Property, with Borrower as debtor and Lender as secured party, and (b) a financing statement covenng all of Borrower's personal property, including, without limitation, all accounts, chattel paper, inventory, equipment, instruments, investment property, documents, deposit accounts, general intangibles, and supporting obligations. This Deed of Trust may be filed m any other appropnate filing or recording office. The mailing addresses of Borrower and Lender are set forth in the introductory paragraph of this Deed of Trust. A copy of this Deed of Trust shall be sufficient as a financing statement for any of the purposes referred to in this Section 5.5. 5.6 Authorization to File Financing Statements; Power of Attorney. Borrower hereby authonzes Lender at any time and from time to time to file any initial financing statements, amendments thereto and continuation statements with or without signature of Borrower as authorized by applicable law including, without limitation a financing statement describing the collateral as all of Borrower's personal property wherever located, now owned or hereafter acquired. For purposes of such filings, Borrower agrees to furnish any information requested by Lender promptly upon request by Lender. Borrower also ratifies its authorization for Lender to have filed any like initial financing statements, amendments thereto or continuation statements filed prior to the date of this Deed of Trust. Borrower hereby irrevocably constitutes and appoints Lender and any officer or agent of Lender, with full power of substitution, as its true and lawful attorneys -in -fact with full irrevocable power and authonty in the place and stead of Borrower or m Borrower's own name to execute in Borrower's name any such document and to otherwise carry out the purposes of this Section 5.6, to the extent that Borrower's authonzation above is not sufficient To the extent permitted by law, Borrower hereby ratifies and affirms all acts said attorneys -in -fact have lawfully done or caused to be done in the past or shall lawfully do or cause to be done in the future by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocable. 6. RENTS AND LEASES. 6.1 Assignment of Rents and Leases. As part of the consideration for the indebtedness evidenced by the Note, and not as additional secunty therefor, to the fullest extent permitted under the DHS Lease and the Assignment of Claims Act 31 USC 3727, Borrower hereby absolutely and unconditionally assigns and transfers to Lender all right, title DEED OF TRUST FINAL 18 • • LUU.SVOLODULO34.Ui and interest of Borrower in and to (a) that certain U.S. Government Lease for Real Property between Borrower and the United States of Amenca General Services Administration ( "GSA ") on behalf of the Department of Homeland Security, executed May 30, 2003 for a portion of the Property (the "DHS Lease ") any and all other future leases, and other agreements for the occupancy or use of all or any part of the Property, and any and all extensions, renewals and replacements thereof (collectively with the DHS Lease, the "Leases "); (b) all cash or security deposits, advance rentals and deposits of a similar nature under the Leases, and (c) all rents, issues, profits, and revenues (collectively "Rents ") now due or which may become due or to which Borrower may now or shall hereafter become entitled or may demand or claim (including Rents coming due during any redemption penod), ansing or issuing from or out of any and all Leases, including, without limitation, minimum, additional, percentage, and deficiency rents and liquidated damages. Pursuant to the foregoing, Lender may, at any time as long as there is an uncured event of default under the Loan, require Borrower tenants to transfer to Lender control over deposits held by Borrower under the Leases, on terms satisfactory to Lender. 6.2 Collection of Rents. Pnor to written notice given by Lender to Borrower of a default hereunder, Borrower shall have a license to, and will, collect and receive all Rents of the Property as trustee for the benefit of Lender and Borrower, to apply the Rents so collected first to the payment of taxes, assessments and other charges on the Property prior to delinquency, second to the cost of insurance, maintenance and repairs required by the terms of this Deed of Trust, third to the costs of discharging any obligation or liability of Borrower under the Leases, and fourth to the indebtedness secured hereby, with the balance, if any, so long as no such default has occurred, to the account of Borrower. Upon delivery of wntten notice by Lender to Borrower of a default hereunder and stating that Lender exercises its nghts to the Rents, and without the necessity of Lender entering upon, and taking and maintaining full control of the Property in person, by agent or by a court- appointed receiver, Lender shall immediately be entitled to possession of all Rents from the Property as the same become due and payable, including, without limitation, Rents then due and unpaid, and all such Rents shall immediately upon delivery of such notice be held by Borrower as trustee for the benefit of Lender only Upon delivery of such written notice by Lender, Borrower hereby agrees to direct each tenant or occupant of the Property to pay all Rents to Lender on Lender's written demand therefor, without any liability on the part of said tenant or occupant to inquire further as to the existence of a default by Borrower; Borrower hereby authonzes Lender as Borrower's attorney -in -fact to make such direction to tenants and occupants upon Borrower's failure to do so as required herein. Payments made to Lender by tenants or occupants shall, as to such tenants and occupants, be in discharge of the payors' obligations to Borrower. Lender may exercise, in Lender's or Borrower's name, all nghts and remedies available to Borrower with respect to collection of Rents. Nothmg herein contained shall be construed as obligating Lender to perform any of Borrower's obhgations under any of the Leases. 6.3 Borrower's Representations and Warranties. Borrower hereby represents and warrants to Lender that Borrower has not executed and will not execute any other assignment of said Leases or Rents, that Borrower has not performed and will not perform DEED OF TRUST FINAL 19 • • •UU$UOLODULtf34.U2U any acts, and has not executed and will not execute any instrument which would prevent Lender from exercising its nghts under this Section 6, and that at the time of execution of this Deed of Trust, there has been no anticipation or prepayment of any of the Rents of the Property for more than 1 month pnor to the due dates thereof. Borrower further represents and warrants to Lender that, to Borrower's knowledge, the DHS Lease is in good standing and there is no default thereunder, whether by Borrower or GSA, nor to Borrower's knowledge any event or condition which, with notice or the passage of time, or both, would be a default thereunder. Borrower will execute and deliver to Lender such further assignments of rents and leases of the Property as Lender may, from time to time, request. 6.4 Leases of the Property. Borrower will comply with and observe Borrower's obligations as landlord under all Leases, and will do all that is necessary to preserve all Leases in force and free from any nght of counterclaim, defense or setoff If Borrower as landlord fails to cure any default by Borrower under the DHS Lease within 20 days following notice by the tenant thereunder, or if Borrower has not initiated a cure as provided in the DHS Lease within that 20 day period, then Lender has the option (but not the requirement) to cure such default and charge Borrower all third -party costs of such plus a oversight fee equal to 10% of such third -party costs. Borrower shall pay such reimbursement and oversight fee immediately upon demand, with interest accruing at the default rate for Part A of the Note, and with any unpaid reimbursement added to the amount due under the Note. Any such cure by Lender shall not be deemed to cure Borrower's default under this Section 6.4. At Lender's request, Borrower will furnish Lender with executed copies of all Leases then existing or hereafter made, and all Leases hereafter entered into will be on a form and in substance satisfactory to Lender All Leases will specifically provide that the tenant attorns to any person succeeding to the interest of Borrower upon any foreclosure of this Deed of Trust or conveyance in lieu thereof, such attornment shall be in such form as Lender may approve, but shall provide that the tenant shall not have the nght of setoff or defense to payment of rents for any event or act that occurred pnor to such successor obtaining title to Borrower's interest, and the successor shall have no liability for matters occurring pnor their obtaining title, except to the extent such event or act is continuing at the time such successor obtains such title (e.g. the obligation to repair a continuing roof leak). The successor owner shall have no liability for return of any deposits not received by the successor. The tenant must also agree to execute such further evidences of subordination and attornment as Lender may, from time to time, request. Without Lender's wntten consent, Borrower will not collect or accept payment of any Rents of the Property more than 1 month pnor to the due dates thereof. 6.5 New Leases; Modifications. Borrower shall not, without the prior written consent of Lender, (i) enter into any Lease or equipment lease or equipment license agreement or similar agreements not approved by Lender in advance, (ii) amend, modify, cancel or terminate (including by exercise of any recapture, leaseback or any similar provision of any Lease) any of the Leases, any equipment lease or equipment license agreement, give any consent or waiver thereunder, make any acceptances or rejections thereunder, (iii) do or permit to be done, or omit to do or permit the omission of, any act or thing under the Leases if, as to any of the foregoing, the same might impair the security of this Deed of Trust, DEED OF TRUST FINAL 20 • • ZUUSUdZbUUZtS 4.UZ1 (iv) discount any rents under any Lease or accept a prepayment of any rent due under the Leases, except a payment of rent one month m advance or a prepayment in the nature of secunty for the performance of obhgations under the Leases, or (v) assign, pledge or encumber its interest in the Leases or the Rents, or permit such interest to be assigned, pledged or encumbered, except pursuant to the Loan Documents. Notwithstanding the foregoing, Lender's approval shall not be required to Lease(s) of all or a portion of the remaining space in the Property to GSA on all of the same terms and conditions of the DHS Lease, but Borrower must deliver to Lender wntten notice of such addition by DHS and copies of all leasing documents reflecting such addition. 6.6 Lender in Possession, Appointment of Receiver. Upon any default hereunder which is not cured within any applicable cure period, Lender may, in person, by agent, or by a court- appointed receiver, regardless of the adequacy of Lender's security, enter upon and take and maintain full control of the Property in order to perform all acts necessary and appropriate for the operation and maintenance thereof in the same manner and to the same extent as Borrower could do the same, including, without Iimitation, the execution, enforcement, cancellation, and modification of Leases, the collection of all Rents of the Property, the removal and eviction of tenants and other occupants, the making of alterations and repairs to the Property, and the execution and termination of contracts providing for management or maintenance of the Property, all on such terms as are deemed best by Lender to protect the security of this Deed of Trust. From and after the occurrence of any default, if any owner of the Property shall occupy the Property or part thereof, such owner shall pay to Lender in advance on the first day of each month a reasonable rental for the space so occupied, and upon failure so to do, Lender shall be entitled to remove such owner from the Property by any appropriate action or proceedings. Following a default hereunder which is not cured within any applicable cure period, Lender shall be entitled (regardless of the adequacy of Lender's security) to the appointment of a receiver, Borrower hereby consenting to the appointment of such receiver. Said receiver may serve without bond and may be Lender or an employee of Lender The receiver shall have, in addition to all the rights and powers customanly given to and exercised by such receivers, all the rights and powers granted to Lender in this Section 6. Lender or the receiver shall be entitled to receive a reasonable fee for so managing the Property. 6.7 Application of Rents. All Rents collected subsequent to delivery of written notice by Lender to Borrower of a default hereunder shall be applied first to the costs, if any, of taking control of and managing the Property and collecting the Rents, including, without limitation, attorney's fees, receiver's fees, premiums on receiver's bonds, costs of maintenance and repairs to the Property, premiums on insurance policies, taxes, assessments, and other charges on the Property, and the costs of discharging any obligation or liability of Borrower under the Leases, and then to the indebtedness secured hereby. Lender and the receiver shall be liable to account only for those Rents actually received. Lender shall not be liable to Borrower, anyone claiming wider or through Borrower, or anyone having an interest in the Property by reason of anything done or left undone by Lender under this Section 6. DEED OF TRUST FINAL 21 • • 2UU3Utf 22$UU2tf 34. U22 6.8 Deficiencies. To the extent, if any, that the costs of taking control of and managing the Property, collecting the Rents, and discharging obligations and liabilities of Borrower under the Leases, exceed the Rents of the Property, the excess sums expended for such purposes shall be indebtedness secured by this Deed of Trust. Such excess sums shall be payable upon demand by Lender and shall bear interest from the date of disbursement at the default interest rate under the Note, or the maximum rate which may be collected from Borrower therefor under applicable law if that is less 6.9 Lender not Mortgagee in Possession. Nothing herein shall constitute Lender a "mortgagee in possession" pnor to its actual entry upon and taking possession of the Property, entry upon and taking possession by a receiver not constituting possession by Lender 6.10 Enforcement. Lender may enforce this assignment without first resorting to or exhausting any secunty or collateral for the indebtedness. As used in this Section 6, the word "lease" shall mean "sublease" if this Deed of Trust is on a leasehold. This assignment shall terminate at such time as this Deed of Trust ceases to secure payment of indebtedness held by Lender. 6.11 Property Management. Sabey Corporation is providing property management services for the Property. Borrower warrants that Sabey Corporation has agreed that if the Loan is foreclosed, or if a deed in lieu of foreclosure is granted, then any property management agreement shall be terminated immediately upon Lender's request and Sabey Corporation shall cooperate in the transition of management of the Property. Borrower shall obtain Lender's approval of any property management contract for the Property, which must include the nght of Lender to terminate the contract following an uncured default under the Loan. Borrower shall not terminate or modify any approved property management contract or allow it to be assigned to another manager without Lender's prior written consent 7. CONSTRUCTION LOAN PROVISIONS. 7.1 Advances. Borrower agrees to comply with covenants and conditions of the Loan Agreement All advances made by Lender pursuant to the Loan Agreement shall be indebtedness of Borrower secured by this Deed of Trust, and such advances may be obligatory as provided in the Loan Agreement All sums disbursed by Lender prior to completion of the improvements to protect the security of this Deed of Trust up to the principal amount of the Note shall be treated as disbursements pursuant to the Loan Agreement All sums disbursed by Lender shall bear interest from the date of disbursement at the rate stated in the Note, unless collection from Borrower of interest at such rate would be contrary to the applicable law, m which event, such amounts shall bear mterest at the highest rate which may be collected from Borrower under applicable law and shall be payable upon notice from Lender to Borrower requesting payment thereof. DEED OF TRUST FINAL 22 • LUV3UOLt UVLi334.U'L:S 7.2 Assignment of Claims. From time to time, as Lender deems necessary to protect Lender's interests, Borrower shall, upon request of Lender, execute and deliver to Lender m such form as Lender shall direct, assignments of any and all nghts or claims which relate to the construction of the Property, and which Borrower may have against any party supplying or who has supplied labor, matenais or services in connection with construction of the Property 8. DEFAULT. 8.1 Default. The occurrence of any one or more of the following shall constitute a default hereunder 8.1.1 Failure to make any payment when due under the Note. 8.1.2 Failure to make any payment due under this Deed of Trust 8.1.3 Failure by Borrower to perform any other covenant, agreement or obligation contained in this Deed of Trust or other Loan Documents. 8.1.4 Any transfer of the Property or any interest therein in contravention of the provisions of Section 4. 8.1.5 A Financial Distress Default (as defined in Section 9). 8.1.6 Any representation or disclosure made to Lender by Borrower or any guarantor of the Loan proves to be matenally false or misleading when made, whether or not that representation or disclosure is contained herein. 8.1.7 A default occurs under any other indebtedness now or hereafter owing to Lender on which Borrower or any other maker of the Note or any guarantor of the Note is a maker or a guarantor. 8.2 Form of Notice. At Lender's option, any written notice of default required to be given to Borrower under Section 8.1 may be given in the form of a statutory notice of default under Washington Deed of Trust Actor any other form as Lender may elect. This provision is not intended and shall not be construed to reduce any grace period or cure period provided in this Deed of Trust, or any other Loan Document for curing any default. 8.3 Cure Periods Notwithstanding a default by Borrower as descnbed in Section 8 1, Lender agrees not to exercise the remedies descnbed in Section 10 if Borrower cures the default within any applicable cure period set forth below. 8.3.1 Failure to make any payment when due under the Note - 5 days after the due date. DEED OF TRUST FINAL 23 • LUUSUOLODULbi4.U14 8.3.2 Failure to make any payment due under this Deed of Trust - 5 days after written notice thereof given to Borrower by Lender. 8.3.3 Failure by Borrower to perform any other covenant, agreement or obligation contained in this Deed of Trust or other Loan Documents - 15 days after written notice thereof to Borrower, provided, however, that if such cure cannot be completed within the 15 day penod, Borrower shall be permitted such additional time to cure the default, not to exceed 180 days, if Borrower commences such cure within 15 days and diligently pursues it thereafter. Provided, however, if the cure is expected (or does) last most than 60 days from the original default, then Borrower shall notify Lender immediately of such projected cure penod, and include in such notice the estimated completion date and documentation acceptable to Lender supporting the estimate (such as bids, back order notices, etc) and if Lender approves such notice and documentation, then the projected cure date shall be approved as estimated 8.3.4 Any transfer of the Property or any interest therein in contravention of the provisions of Section 4 — no cure period. 8.3.5 A Financial Distress Default (as defined in Section 9) — see cure penods set forth in Section 9. 8.3.6 Any representation or disclosure made to Lender by Borrower or any guarantor of the Loan proves to be materially false or misleading when made, whether or not that representation or disclosure is contained herein — no cure penod 8.3.7 A default occurs under any other indebtedness now or hereafter owing to Lender on which Borrower is a maker or a guarantor — any applicable cure period, if any, under the instrument(s) evidencing such indebtedness. 9. FINANCIAL DISTRESS. 9.1 Financial Distress Default. Each of the following shall be a Financial Distress Default by Borrower (a) the making by Borrower of any general assignment or general arrangement for the benefit of creditors; the filing by or against Borrower of a petition to have Borrower adjudged a bankrupt, or a petition for reorganization or arrangement under any law relating to bankruptcy, (b) the appointment of a trustee or a receiver to take possession of all or any part of Borrower's assets, or (c) the entry of any final judgment against Borrower which would have a material adverse effect on the financial condition of Borrower. Borrower shall immediately notify Lender upon the occurrence of any Financial Distress Default Lender agrees not to exercise its remedies for a Financial Distress Default if it is cured within the following cure penods: Clause (a) - 90 days to obtain a dismissal of the petition; Clause (b) - 60 days have the trustee or receiver dismissed or otherwise regain possession of Borrower's assets, and Clause (c) - 90 days to have the judgment discharged or satisfied. DEED OF TRUST FINAL 24 • 'LUU:3UI5 2tSUU2ti:34.0 25 9.2 Filing of Petition. Lender and Borrower (as either debtor or debtor -in- possession) agree that if a petition ( "Petition ") is filed by or against Borrower under Title 11 of the United States Code (the "Bankruptcy Code "): 9.2.1 Adequate protection for Borrower's Loan obligations accruing after filing of the Petition shall be provided within 15 days after filing m the form of a deposit equal to one month's Loan payments, to be held by the court or an escrow agent approved by Lender and the court. 9.2.2 Borrower or Trustee shall give Lender at least 30 days wntten notice of any termination of the Construction Contract or Architect's Contract. If Borrower terminates either without notice, Borrower or Trustee shall stipulate to entry of an order for relief from stay to permit Lender to foreclose on the Property 9.2.3 If Borrower was in default under the Loan before the filing of the Petition, whether or not Lender has given Borrower wntten notice of that default and whether or not any cure penod expired before filing the Petition, Borrower shall be deemed to have been in default on the date the Petition was filed for all purposes under the Bankruptcy Code. 9.2.4 For the purposes of the Bankruptcy Code, adequate assurance of future performance of this Loan by Borrower, Trustee or any proposed purchaser of the Property will require that Borrower, Trustee or the proposed purchaser deposit 2 months of Loan payments into an escrow fund (to be held by the court or an escrow agent approved by Lender and the court) as secunty for such future performance. In addition, if the Property is to be sold, adequate assurance of future performance by the proposed purchaser shall require that: (i) the purchaser have a tangible net worth not less than twice the then Loan balance or that such purchaser's performance be unconditionally guaranteed by a person or entity that has a tangible net worth not less twice the then Loan balance; (ii) the purchaser demonstrates that it possesses a history of success in operating a project of similar size and complexity in a similar market; (iii) purchaser assumes in writing all of Borrower's obligations under the Loan. 9.2.5 If Borrower or Trustee intends to sell the Property, Borrower or Trustee shall provide Lender with 30 days written notice of the proposed action, separate from and in addition to any notice provided to all creditors. Notice of a proposed sale and assumption shall state the assurance of prompt cure, compensation for loss and assurance of future performance to be provided to Lender. Notice of a proposed sale shall state (i) the name, address, and federal tax identification numbers and registration numbers of the proposed purchaser; (ii) all of the terms and conditions of the proposed sale, and (iii) the purchaser's proposed adequate assurance of future performance to be provided to Lender. 9.2.6 If Borrower is in default under the Loan when the Petition is filed, Lender shall not be required to provide Borrower or Trustee with any further disbursements of Loan proceeds until all defaults have been cured. DEED OF TRUST FINAL 25 • • 10. REMEDIES. GUU3000OUVGO.4.0Gb 10.1 Acceleration Upon Default; Additional Remedies. If a default occurs and is not cured within any applicable cure penod, Lender may, at its option and without notice to or demand upon Borrower, exercise any one or more of the following actions: 10.1.1 Declare any and all indebtedness secured by this Deed of Trust to be due and payable immediately. 10.1.2 Brmg a court action to enforce the provisions of this Deed of Trust, or any of the indebtedness or obligations secured by this Deed of Trust. 10.1.3 Foreclose this Deed of Trust as a mortgage. 10.1.4 Cause any or all of the Property to be sold under the power of sale granted by this Deed of Trust in any manner permitted by applicable law. 10.1.5 Elect to exercise its rights with respect to the Leases and the Rents (notice of exercising this right will be given by Lender to Borrower). 10.1.6 Exercise any or all of the other nghts and remedies provided for herein. 10.1.7 Enter upon and take full control of the Property in order to perform all acts necessary or appropnate for the completion of construction and development of the Property, acceptance of the Property by the tenants under the Leases and operation, maintenance and repair of the Property in accordance with the standards set forth in the Lease and required by the Loan Documents, either directly, by agent or by a court- appointed receiver 10.1.8 Exercise any other right or remedy available under law or m equity, including, but not limited to, rights and remedies of a secured party under the UCC. 10.2 Exercise of Power of Sale. For any sale under the power of sale granted by this Deed of Trust, Lender or Trustee shall record, advertise and give all notices required by law and then, upon expiration of such time as is required by law, Trustee may sell the Property upon any terms and conditions specified by Lender and permitted by applicable law. Trustee may postpone any sale by public announcement at the time and place noticed for the sale. If the Property mcludes several lots or parcels, Lender, in its discretion, may designate their order of sale or may elect to sell all of them as an entirety. The Property, real, personal or mixed, may be sold in one parcel. To the extent any of the Property sold by the Trustee is personal property, the Trustee shall be acting as agent of the Lender in selhng such Property. Any person permitted by law to do so may purchase at any sale. Upon any sale, Trustee will execute and deliver to the purchaser or purchasers a deed or deeds conveying the Property sold, but without any covenant or warranty, express or implied, and the recitals in the Trustee's deed showing that the sale was conducted in compliance with all the requirements DEED OF TRUST FINAL 26 • • LUUOVOLOVVLOS4.1.0L1 of law shall be prima facie evidence of such compliance and conclusive evidence thereof in favor of bona fide purchasers and encumbrancers for value. 10.3 Application of Sale Proceeds. The proceeds of any sale under this Deed of Trust will be applied in the following manner. FIRST: Payment of the costs and expenses of the sale, including, without hmitation, Trustee's fees, legal fees and disbursements, title charges and transfer taxes, and payment of all expenses, liabilities and advances of Trustee, together with interest on all advances made by Trustee from date of disbursement at the applicable interest rate under the Note from time to time or at the maximum rate permitted to be charged by Trustee under the applicable law if that is less SECOND: Payment of all sums expended by Lender under the terms of this Deed of Trust and not yet repaid, together with interest on such sums from date of disbursement at the applicable interest rate under the Note from time to time or the maximum rate permitted by applicable law if that is Iess THIRD: Payment of all other indebtedness secured by this Deed of Trust in any order that the Lender chooses. FOURTH: The remainder, if any, to the person or persons legally entitled to it. 10.4 Waiver of Order of Sale and Marshaling. Lender shall have the nght to determine the order in which any or all portions of the secured indebtedness are satisfied from the proceeds realized upon the exercise of any remedies provided herein Borrower, any party who consents to this Deed of Trust and any party who, now or hereafter, acquires a security interest in the Property and who has actual or constructive notice hereof, hereby waives any and all nght to require marshaling of assets in connection with the exercise of any of the remedies permitted by applicable law or provided herein, or to direct the order m which any of the Property will be sold in the event of any sale under this Deed of Trust 10.5 Nonwaiver of Defaults. The entenng upon and taking possession of the Property, the collection of Rents or the proceeds of fire and other insurance policies or compensation or awards for any taking or damage of the Property, and the application or release thereof as herein provided, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 10.6 Expenses During Redemption Period. If this Deed of Trust is foreclosed as a mortgage and the Property sold at a foreclosure sale, the Purchaser may during any redemption penod allowed, make such repairs or alterations on the Property as may be necessary for the proper operation, care, preservation, protection, and insuring thereof. Any sums so paid, together with interest thereon from the time of such expenditure at the default rate of interest stated in the Note or the highest lawful rate, if that is less, shall be added to and become a part of the amount required to be paid for redemption from such sale. DEED OF TRUST FINAL 27 • • LVVJVOGOVVL03'4.000 10.7 Foreclosure Subject to Tenancies. Lender shall have the right at its option to foreclose this Deed of Trust and foreclose out all subordinate tenancies (except those where Lender has entered non - disturbance agreements with the tenant), or foreclose out some subordinate tenancies and leave others in place or foreclose subject to and without eliminating any subordinate tenancies. 10.8 Evasion of Prepayment Terms. If a default has occurred and is continuing, a tender of payment of the amount necessary to satisfy the entire indebtedness secured hereby made at any time pnor to foreclosure sale (including sale under power of sale) by Borrower, its successors or assigns, or by anyone in behalf of Borrower, its successors or assigns, shall constitute an evasion of any prepayment terms of the Note, and be deemed to be a voluntary prepayment thereunder and any such payment to the extent permitted by law, will, therefore, include the additional payment required under the prepayment provisions of the Note. 10.9 Remedies Cumulative. To the extent permitted by law, every nght and remedy provided in this Deed of Trust is distinct and cumulative to all other nghts or remedies under this Deed of Trust, or afforded by law or equity, or any other agreement between Lender and Borrower, and may be exercised concurrently, independently or successively, in any order whatsoever. Lender may exercise any of its nghts and remedies at its option without regard to the adequacy of its security. 10.10 Lender's and Trustee's Expenses. Borrower will pay all of Lender's and Trustee's expenses incurred in any efforts to enforce any terms of this Deed of Trust, whether or not any suit is filed, including, without limitation, legal fees and disbursements, foreclosure costs, and title charges. All such sums, with interest thereon, shall be additional indebtedness of Borrower secured by this Deed of Trust. Such sums shall be immediately due and payable, and shall bear interest from the date of disbursement at the default rate of interest stated in the Note, or the maximum rate which may be collected from Borrower under applicable law if that is less As used in this Deed of Trust and in the other Loan Documents, "attorneys' fees" and "legal fees" shall include attorneys' fees, if any, which shall be incurred whether or not legal action is commenced and any such fees incurred at any tnal, arbitration, or interpleader or bankruptcy hearing or any judicial proceeding, and on appeal or review, and on any collection before or after judgment. 11. GENERAL. 11.1 Application of Payments. Except as applicable law or this Deed of Trust may otherwise provide, all payments received by Lender under the Note or this Deed of Trust shall be applied by Lender in the following order of priority. (a) Lender's and Trustee's expenses incurred in any efforts to enforce any terms of this Deed of Trust; (b) interest payable on advances made to protect the security of this Deed of Trust, (c) principal of such advances; (d) amounts payable to Lender by Borrower under Section 3 for reserves; (e) interest and late charges payable on the Note; (f) principal of the Note; and (g) any other sums secured by this Deed of Trust in such order as Lender, at its option, may determine, provided, however, that DEED OF TRUST FINAL 28 • • LUUSUOLODULt$44.ULy Lender may, at its option, apply any such payments received to interest on or pnncipal of the Note pnor to applying such payments to interest on and pnncipal of advances made to protect the secunty of this Deed of Trust. 11.2 Reconveyance. Upon payment of all sums secured by this Deed of Trust, Lender shall request Trustee to reconvey the Property and shall surrender this Deed of Trust and all Notes evidencing indebtedness secured by this Deed of Trust to Trustee Trustee shall reconvey the Property without warranty to the person or persons legally entitled thereto The grantee in any reconveyance may be descnbed as the "person or persons legally entitled thereto," and the recitals therein of any matters or facts shall be conclusive proof of the truthfulness thereof Such person or persons shall pay Trustee's costs incurred in so reconveying the Property. 11.3 Successor Trustee. In accordance with applicable law, Lender may, from time to time, appoint a successor trustee to any Trustee appointed hereunder. Without conveyance of the Property, the successor trustee shall succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. 11.4 Lender's Powers. Lender may at any time and from time to time by a specific writing intended for the purpose (a) waive any default without waiving any other prior or subsequent Default; (b) waive compliance by Borrower with any covenant herein made by Borrower to the extent and in the manner specified in such wnting; (c) consent to Borrower's doing any act which hereunder Borrower is prohibited from doing, or to Borrower's failing to do any act which hereunder Borrower is required to do, to the extent and in the manner specified in such writing; (d) release or reconvey or cause to be released or reconveyed all or any part of the Property from the lien of this Deed of Trust, without the Joinder of Trustee; (e) extend or otherwise modify the terms and the time for payment of the indebtedness secured hereby or any part thereof, or reduce payment thereon, (f) release any party liable, either directly or indirectly, for the Secured Obligations or for any covenant herein or in any other Loan Document, (g) consent and/or cause Trustee to consent to the making of any map or plat of the Property, (h) consent or cause Trustee to consent to the granting of any easement or creating any restriction on the Property, or (i) join or cause Trustee to ,loin in any subordination or other agreement affecting this Deed of Trust or the hen or charge hereof, without umpainng or releasing the liability of any other party. In addition to the foregoing, Lender may remedy any default without waiving the default remedied Borrower shall pay Lender a service charge, together with such title insurance premiums and attorney's fees as may be incurred at Lender's option, for any action if taken at Borrower's request. No such above descnbed act shall m any way affect the rights or powers of Lender or Trustee hereunder except to the extent specifically agreed to by Lender, as the case may be, in such writing. Neither failure by Lender to exercise, nor delay by Lender in exercising, nor discontinuance of the exercise of any nght, power or remedy (including the nght to accelerate the maturity of the Secured Obligations or any part thereof) upon or after any Default shall be construed as a waiver of such default or as a waiver of the nght to exercise any such nght, DEED OF TRUST FINAL 29 • LUUSUOZODU4044.11JU power or remedy at a later date. No single or partial exercise by Lender 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 time and from time to time. No waiver of any provision hereof or consent to any departure by Borrower therefrom shall in any event be effective unless the same shall be in writing and signed by Lender and then such waiver or consent shall be effective only in the specific instance, for the purpose for which given and to the extent therein specified No notice to or demand on Borrower in any case shall of itself entitle Borrower to any other or further notice or demand in similar or other circumstances. 113 Lender's Assignment and Participation. Lender reserves and is hereby granted by the Borrower the nght to assign the Loan in whole or in part, or to obtain a participation in the Loan from any third party. In the event of such assignment or participation, Borrower shall be responsible for all costs incurred in connection with the assignment or participation and all of the obligations of the Borrower shall inure to the benefit of the Lender's successor, assignee or designee. Any complete assignment by Lender to a bona fide commercial lending organization shall serve to release Lender from any further liability under the Loan Documents. Borrower further agrees to provide any such participant or assignee with such further assurances as may be required including, but not limited to, the outstanding balance of the Note, an agreement to make its payment thereon as directed, and confirming that there exists no defenses or offsets to payment of the Note, or the performance of its obligations under the loan security. 11.6 No Violation of Usury Laws. Interest, fees and charges collected or to be collected in connection with the indebtedness secured hereby shall not exceed the maximum, if any, permitted by any applicable law. If any such law is interpreted so that said interest, fees and/or charges would exceed any such maximum and Borrower is entitled to the benefit of such law, then: (a) such interest, fees and/or charges shall be reduced by the amount necessary to reduce the same to the permitted maximum; and (b) any sums already paid to Lender which exceeded the permitted maximum will be refunded. Lender may choose to make the refund either by treating the payments, to the extent of the excess, as prepayments of principal or by making a direct payment to the person(s) entitled thereto. No prepayment premium shall be assessed on prepayments under this Section The provisions of this Section shall control over any inconsistent provision of this Deed of Trust or the Note or any other Loan Documents. 11.7 Additional Documents; Power of Attorney. Borrower, from time to time, will execute, acknowledge and deliver to Lender upon request, and hereby irrevocably appoints Lender their attomey -in -fact, to execute, acknowledge, deliver and, if appropriate, file and record, such security agreements, assignments for security purposes, assignments absolute, financing statements, affidavits, certificates, and other documents, in form and substance satisfactory to Lender, as Lender may request in order to perfect, preserve, continue, extend, or maintain the assignments herein contained, the lien and security interest under this Deed of Trust, and the pnority thereof. Borrower will pay to Lender, upon request DEED OF TRUST FINAL 30 • • LUUJUOLO4.ULOJ4.UJI therefor, all costs and expenses incurred in connection with the preparation, execution, recording, and filing of any such document. 11.8 Waiver of Statute of Limitations. To the full extent Borrower may do so, Borrower hereby waives the right to assert any statute of limitations as a defense to the enforcement of the hen of this Deed of Trust or to any action brought to enforce the Note or any other obligations secured by this Deed of Trust. 11.9 Forbearance by Lender Not a Waiver. Any forbearance by Lender m exercising any right or remedy hereunder, or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of any nght or remedy, and no waiver by Lender of any particular default by Borrower shall constitute a waiver of any other default or of any similar default in the future. Without limiting the generality of the foregomg, the acceptance by Lender of payment of any sum secured by this Deed of Trust after the due date thereof shall not be a waiver of Lender's right to either require prompt payment when due of all other sums so secured or to declare a default for failure to make prompt payment The procurement of insurance or the payment of taxes or other hens or charges by Lender shall not be a waiver of Lender's right to accelerate the maturity of the indebtedness secured by this Deed of Trust, nor shall Lender's receipt of any awards, proceeds or damages under Sections 2.3 and 2.7 hereof operate to cure or waive Borrower's default in payment of sums secured by this Deed of Trust. 11.10 Modifications and Waivers. This Deed of Trust cannot be waived, changed, discharged, or terminated orally, but only by an instrument, in writing, signed by the party against whom enforcement of any waiver, change, discharge, or termination is sought 11.11 Notice. Except as applicable Iaw may otherwise require, all notices and other communications shall be in writing and shall be deemed given when delivered by personal service, or when mailed, certified or registered mail, postage prepaid, addressed to the address set forth at the beginning of this Deed of Trust, 3 days after such mailing, or upon receipt, whichever is earlier. Any party may at any time change its address for such purposes by delivenng or mailing to the other parties hereto as aforesaid a notice of such change. 11.12 Governing Law. This Deed of Trust shall be interpreted and enforced m accordance with the laws of the state where the Property is located. If any provisions of this Deed of Trust are determined to be unlawful in the state where the Property is located, said provisions are subject to amendment by Lender to comply with such state law or at Lender's sole option, this Deed of Trust will be considered null and void and all fees theretofore paid will be returned to Borrower. 11.13 Venue. If any action is brought to enforce or interpret the provisions of this Deed of Trust, the venue of such action shall be laid in King County, Washington 11.14 Severability; Captions. If any provision or clause of this Deed of Trust conflicts with applicable law, such conflicts shall not affect other provisions or clauses hereof DEED OF TRUST FINAL 31 • • hvv vohouv o34.U32 which can be given effect without the conflicting provision, and to this end the provisions hereof are declared to be severable. The captions and headings of the Sections of this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof. 11.15 Definitions. As used herein. the term "Borrower" means the Borrower herein named, together with any subsequent owner of the Property or any part thereof or interest therein, the term "Trustee" means the Trustee herein named, together with any successor Trustee, and the term "Lender" means the Lender herein named, together with any subsequent owner or holder of the Note or any mterest therein, including pledgees, assignees and participants 11.16 Successors and Assigns Bound, Joint and Several Liability; Lenders. This Deed of Trust shall bind and inure to the benefit of the parties hereto and their respective heirs, devisees, legatees, administrators, executors, successors and assigns, subject to the provisions of Section 4 hereof All obligations of Borrower hereunder are joint and several. In exercising any nghts hereunder or taking actions provided for herein, Lender and Trustee may act through their respective employees, agents or independent contractors as authorized by Lender and Trustee 11.17 Number, Gender. This Deed of Trust shall be construed so that wherever applicable, the use of the singular number shall include the plural number, and vice versa, and the use of any gender shall be applicable to all genders 11.18 Time. Time is of the essence in connection with all obligations of Borrower herein 11.19 Equal Credit Opportunity Act. Borrower acknowledges that no person has been asked to sign the application solely because of a mantal relationship with another Borrower, and all persons who do so sign this Deed of Trust acknowledge that they have done so as the onginal applicant as part of Borrower. In the event the Borrower consists of any person who is married but not such married person's spouse, such person warrants to the Lender that all financial and credit information pertains solely to such persons and does not involved his or her spouse's separate property, that his or her spouse does not participate in the management of any of the Property, that his or her spouse shall sign such security documents as is necessary for the Lender to obtain a fully effective hen against any of the collateral for this loan, and that none of such person's assets of a significant nature and which Lender has relied upon m extending credit to Borrower shall be transferred or conveyed to his or her spouse so long as this loan remains outstanding without Lender's prior written approval. 11.20 Independent Evaluation. Borrower acknowledges that it has independently evaluated the economic viability of this Project and the rehability and skills of its contractor, architect and all other persons engaged to assist m the completion of this Project, and DEED OF TRUST FINAL 32 • • LuuJuocovuL,00v.uas Borrower has relied and will hereafter rely solely on its own independent data, evaluations and business judgment regarding all matters which relate to the legahty, feasibility or financial success of this Project. Borrower confirms and agrees that it has not relied upon Lender in any manner in reaching these conclusions. None of Lender's requirements or waivers m this application or in any of the secunty for this loan (including, but not limited to, appraisal, lease, insurance coverage, governmental, supervision, and inspection requirements) constitute a recommendation, wavier or endorsement by Lender of any particular person, data, policy or procedure or what the Borrower, in its prudent and reasonable business judgments, should obtain for its own purposes. 11.21 Mutual Negotiation. This document has been mutually negotiated and shall not be construed against either party. 11.22 Entire Agreement. This Deed of Trust constitutes the entire agreement between the parties hereto, and no modification of this Deed of Trust shall be deemed effective unless executed in writing by Lender and Borrower subsequent to the date hereof 11.23 Estoppel Certificate. Borrower shall, within 10 days after receipt of Lender's written request, furnish Lender or any other party designated by Lender with a written statement, duly acknowledged, setting forth the amount of the Secured Obligations and otherwise confirming the status of the Secured Obligations, the Property, and the Loan Documents. 11.24 Notice to Account Debtors. In addition to the nghts granted elsewhere in this Deed of Trust, Lender may at any time notify the account debtors or obligors of any accounts, chattel paper, general intangibles, negotiable instruments or other evidences of indebtedness included in the Property to pay Lender directly. 12. RECOURSE LIMITATIONS. Lender's nghts of recourse against Borrower and all guarantors are subject to the limitations contained in Section 8 of the Note. DEED OF TRUST FINAL 33 • • LUUJUOLODUL034.044 IN WITNESS WHEREOF, Borrower has executed this Deed of Trust as of the date first above wntten. "BORROWER" INTERNATIONAL GATEWAY EAST III LLC, a Washington lunited liability company By: Sabey Corporation, a Washington corporation Manager By Its• STATE OF WASHINGTON ) ) ss COUNTY OF KING I certify that I know or have satisfactory evidence that is the person who appeared before me, and said person acKnowledged that he /she signed this instrument, on oath stated that he /she was authorized to execute the instrument and acknowledged it as the C, P .0 . of Sabey Corporation, Manager of INTERNATIONAL GATEWAY EAST III LLC, to be the free and voluntary act of such party for the uses and purposes mentioned in this instrument. az DATED: u d _-_ - 3 . DEED OF TRUST FINAL Owl ture •f Notary Public) (Fruited Name of Notary Public) My Appointment expires Rs -A0-06, 34 • • EXIIIBIT A Property Description PARCEL A: 20030828002834.0 LOT 8, CITY OF TUKWILA BOUNDARY LINE ADJUSTMENT NO. BLA L02 -057, RECORDED UNDER KING COUNTY RECORDING NU. 20030327900002; SITUATE IN THE CITY OF TUKWILA, COUNTY OF KING, STATE OF WASHINGTON PARCEL B LOTS 6 AND 7, CITY OF TUKWILA BOUNDARY LINE ADJUSTMENT NO. BLA L03 -034, RECORDED UNDER KING COUNTY RECORDING NO. 20030725900003; SITUATE IN THE CITY OF TUKWILA, COUNTY OF KING, STATE OF WASHINGTON PARCEL C: NON - EXCLUSIVE EASEMENTS FOR CONDUIT FACILITIES AND ACCESS, PARKING AND DRAINAGE AS ESTABLISHED BY AGREEMENTS RECORDED UNDER KING COUNTY RECORDING NUMBERS 20010809001066 AND 20030523002434. DEED OF TRUST FINAL A -1