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MMD2012-00006
NOTICE OF TYPE I DECISION • MINOR MODIFICATION (MMD) 2012 -00006 1 TIGARD TOWNE SQUARE CHANGE OF USE TIGARD 120 DAYS = 09 -01 -2012 SECTION I. APPLICATION SUMMARY FILE NAME: Tigard Towne Square Change of Use — House of Bread CASE NO.: Minor Modification (MMD) MMD2012 -00006 PROPOSAL: The proposal is to change the use of 2,102 sq. ft. of retail space to fast food eating and drinking establishment. APPLICANT: LEEKA Architects OWNER SN Investment Properties LLC Neil Lee 1121 SW Salmon St. #500 1402 SE Cora Street Portland, OR 97205 Portland, OR 97202 LOCATION: 16230 SW Pacific Highway, Suite 140; WCTM 2S115BA, Tax Lot 02600. ZONING DESIGNATION: C -G: General Commercial District. The C -G zoning district is designed to accommodate a full range of retail, office and civic uses with a City -wide and even regional trade area. Except where non - conforming, residential uses are limited to single-family residences which are located on the same site as a permitted use. A wide range of uses, including but not limited to adult entertainment, automotive equipment repair and storage, mini- warehouses, utilities, heliports, medical centers, major event entertainment, and gasoline stations, are permitted conditionally. APPLICABLE REVIEW CRITERIA: Community Development Code Chapters 18.360. SECTION II. DECISION Notice is hereby given that the City of Tigard Community Development Director's designee has APPROVED the above request. The findings and conclusions on which the decision is based are noted in Section IV. THIS APPROVAL SHALL BE VALID FOR 18 MONTHS FROM THE EFFECTIVE DATE OF THIS DECISION. SECTION III. BACKGROUND INFORMATION Site Information: The subject parcel is located at 16230 SW Pacific Highway, WCTM 2S115BA, Tax Lot 02600. The building addressed by the proposal is the recently constructed 8,000 sq. ft. retail building on the west side of the complex near Pacific Highway. MMD2012 -00006 Tigard Towne Square Change of Use Decision 050912 Page 1 Proposal Description: The proposal is to change the use of 2,102 sq. ft. of retail space to a fast food eating and drinking establishment. SECTION IV. APPLICABLE REVIEW CRITERIA AND FINDINGS MINOR MODIFICATION OF SITE DEVELOPMENT REVIEW: Section 18.360.060.0 states that a minor modification shall be approved, approved with conditions or denied following the Director's review and as follows: 1. The proposed development is in compliance with all applicable requirements of this title; and FINDING: Upon review of the proposal, staff finds that all applicable requirements of this title are satisfied. 2. The modification is not a major modification. FINDING: Staff finds that the changes listed in TDC18.360.050.B.1 -11 are either satisfied or do not apply. Therefore, the proposed development is not a major modification. This criterion is met. .CONCLUSION: The proposal is in compliance with the applicable requirements of this title and it is a minor modification of a site development. SECTION V. PROCEDURE AND APPEAL INFORMATION Notice was posted at City Hall and mailed to: X The applicant and owners X Affected government agencies Final Decision: A Minor Modification is a Type I procedure. As such, the Director's decision is final on the date it is mailed or otherwise provided to the applicant, whichever occurs first. The Director's decision may not be appealed locally and is the final decision of the City. THIS DECISION IS FINAL ON MAY 9, 2012 AND BECOMES EFFECTIVE ON MAY 10, 2012. Questions: If you have any questions, please contact Hap Watkins at (503)718 -2440 or by mail to the City of Tigard Planning Division, Tigard City Hall, 13125 SW Hall Boulevard, Tigard, Oregon, 97223. h 4, Ii May 9, 2012 APPROVED BY: Darrel "Hap" Watkins DATE Livability Compliance Specialist hap @tigard - or.gov MMD2012 -00006 Tigard Towne Square Change of Use Decision 050912 Page 2 RECEIVED APR 2 7 2012 • s City of Tigard CITY OF TIGARD Minor Modification — Type I Apri 9IGINEERING TIGARD ., .: ,,4', . - 4 F , , k. yrposw. . GENERAL INFORMATION Irr addition, the Director must find that the proposed ; change is in compliance with all applicable requirements of Ptope 1 GI 2 3d Scc) Title 18 of the Tigard Development Codc. To complete P4c.4.4. 14. 14 wlr 1-.4 . 1 23 ‘^'n aQvA this review, the Applicant's proposal must include a Tax Map & Tax Lot #(s): I _...,_._._..... ei t 7" F' 1 ¢© discussion indicating how the site expansion /change will continue to comply with the maximum setback, building Site Size: height, parking, and landscaping standards. Other requirements of this title such as clear vision, solid waste Applicant *: LEEIG4 AR e - . ITCGt "QE s' 1'id""' -- storage, non - conforming situations, signs, and tree Address: )¢o? SE 601E4 S? . removal may also be applicable depending on the type and City /State: PateTL.4 1 d Ole- Zip: 9 7 Zo 2_ location of the proposed modifications. Primary Contact 1...1t11,..- L e E. Phone: •/o444ZZZFax: SZ) - lO4. ZZ4-6 E -Mail: 50,cee,4 e Let a-r' • c'c 4 L Property Owner /Deed Holders) *: REQUIRED SUBMITTAL ELEMENTS (Attach list if more than one) Ski 114vVrt Rc20 rz We--- (Applications will gQ1 be accepted without the t following required submittal elements) Address: LISA SW SALAAM' S 4/500Phone: /1.J4 2. - 78 00 City /State: "PGRALA4D, OR __ Zip: 4'7 205_ tp application Form Il' Owner's Signature/Written Authorization * When the owner and the applicant are different people, the p Title Transfer Instrument or Deed SiA applicant must be the purchaser of record or a lessee in 0 Site Plan (4 Large Plans & One - Reduced to 8'/2" x 11") possession with written authorization from the owner or an Applicant's Statement /Narrative (4 copies) agent of the owner. The owner(s) must sign this application in the space provided on the back of this form or submit a Filing t ee 605.00 written authorization with this application. Minor Modifications: Minor Modifications are processed for permitted uses and conditional uses. To review a modification as a Minor FO Modification, the Director must first find that the expansion R STAFF USE ONLY or change does not invoke one or more of the criteria Q�/ discussed within Section 18.360.050(B) - Site Development Case No.(s): � Review or Section 18.330.020(B)(2) - Conditional Use. If the modification exceeds the maximum allowed under any one or Other Cas N _ more of the criteria, a Major Modification review is required. 6 5......g/ Major Modifications are processed in the same manner as a Date:ptN�l; A new Site Development Review or Conditional Use Permit. Dare:, �1 / Applicant's Statement: Application A T ?r Accepted By; S ' The applicant's statement must include a summary of the Date Determi omplete: / proposed changes. Criteria in either 18.360.050(B) or Revised: 7 /1 /ii i /I / 18.330.020(B)(2) must be addressed with a detailed response ;cu \ master, hod ii, a11,1,,,:,,,< >,, .,, ,„ . , ,ry i,r.,,nni_,P1, as to each criterion. Failure to provide the information needed to process the application would be reason to consider an application incomplete and delay review of the proposal. City of Tigard I 13125 SW I -tall Blvd.; Tigard, OR 97223 1 503 - 718 - 2421 I www.tigard- or.gov I Page 1 oft To consider an application complete, you will need to submit ALL of the REQUIRED SUBMITTAL ELEMENTS as ' described on the front of this application in the "Required Submittal Elements" box. (Detailed Submittal Requirement Information sheets can be obtained, upon request, for all types of Land Use Applications.) THE APPLICANT(S) SHALL CERTIFY TIIAT: ♦ The above request does not violate any deed restrictions that may be attached to or imposed upon the subject property. • If the application is granted, the applicant will exercise the rights granted in accordance with the terms and subject to all the conditions and limitations of the approval. ♦ All of the above statements and the statements in the site plan, attachments, and exhibits transmitted herewith, are true; and the applicants so acknowledge that any permit issued, based on this application, and may be revoked if it is found that any such i statements are false. ♦ The applicant has read the entire contents of the application, induding the policies and criteria, and understands the requirements for approving or denying the application. SIGNATURES of each owner of the subject property. DATED this 2s day rat APs2-IL ,20 t 2 SN Invest -nt Properties, LLC —� • '' Ha Investment Properties, LLC, � ta Its Manager s el .ignaturc Owner's Signature Owner's Signature Owner's Signature Owner's Signature Owner's Signature Carr of Tigard 1 13123 S \C 1lall lilvd..'l igard, ()R 9' 1 51)3- 639 -41 - 1 1 www.tigard- or.gov 1 Page 2of2 I CITY OF TIGARD RECEIPT e1 x . 1 3125 SW Hall Blvd., Tigard OR 97223 503.639.4171 TIGARD Receipt Number: 186528 - 04/27/2012 CASE NO. FEE DESCRIPTION REVENUE ACCOUNT NUMBER PAID MMD2012 -00006 Minor Modification to an Approved Plan 100 - 0000 -43116 $527.00 MMD2012 -00006 Minor Modification to an Approved Plan - 100- 0000 -43117 $78.00 LRP Total: $605.00 PAYMENT METHOD CHECK # CC AUTH. CODE ACCT ID CASHIER ID RECEIPT DATE RECEIPT AMT Check 26025274 STREAT 04/27/2012 $605.00 Payor: SN Investment Properties LLC Total Payments: $605.00 Balance Due: $0.00 Page 1 of 1 RECEI%'!ED APR 27 2012 L E E K A Architecture and Planning Project 1 Narrative Creating Creating Positive Impressions in the Built Environment CITY OF TIGARD PLANNING /ENGINEERING 1402 S.E. Cora St. Portland, OR 97202 1 Office - 503 644 4222 Fax - 503.208.2246 I succeed(a�leekainc.com www.leekainc.com April 26, 2012 City of Tigard Community Development 13125 S.W. Hall Blvd. Tigard, Oregon 97223 The proposed project is an interior Tenant Improvement of an existing, remaining unoccupied 2,102 sq. ft. building within the Tigard Towne Square Shopping Center, located at 16230 S.W. Pacific Highway in Tigard, Oregon. The owner of the property, SN Investment Properties, LLC which has signed a lease agreement for Suite 140 with a Bakery franchisee who has targeted the city of Tigard as an exciting place to grow. Suite 140, at the middle part of the building, will be leased by House of Bread, a business specializing in fresh baked bread and sandwiches. The Leasee will complete the interior improvements using their latest prototype concepts. The Type I Minor Modification approval is requested due to the Change in Use to Eating and Drinking Establishment from General Retail Sales, based on the original approval of the new building. Suite 140 has a net leasable area of 2,102 sq.ft. total for new eating establishment space, which will complete the building pad as 100% leased. Please refer to the attached Site Plan for further clarification: parking requirements, code reference, existing conditions, and compliance. Project No 1217 Tigard Towne Square Tenant Data Area Parking Load Mixed Use Current Parking per 1000 Modifier space count Retail - General Sales (A) size 3.70 1.00 Rite Aid i A -1 27,465.00 Albertsons 1 A2 51,710.00 T- Mobile i A3 1,228.00 BbckBuster - Vacant 1 A4 5,343.00 Book store 1 A5 2,647.00 Party Mart A6 5,048.00 Marshal's 1 A7 31,896.00 Dollar Tree 1 A8 15,041.00 Tuesday morning i A9 8,000.00 Vacant (123 FIT) 1 A10 1,408.00 Card Works 1 Al 1 3,322.00 GNC 1Al2 1,200.00 Vacant 1 A -13 2,940.00 157,248.00 581.82 581.82 Postal Services (B) size 2.50 0.80 Postal Connection 1 BI 1,260.00 1,260.00 3.15 2.52 Personal Services ( C) size 2.50 0.80 Bliss Nails I C1 1,310.00 Great Clips C2 1,050.00 Dry Cleaners I C3 1,400.00 3,760.00 9.40 7.52 Sank with Drive -Thru (D) size 4.30 0.80 Chase Bank 1 D 1 3,390.00 Bank of the West 1 D2 2,100.00 Home Street Bank 1 D3 2,166.00 7,656.00 32.92 26.34 Eating and D , 'ng - ,. , Vacant (Tin -Tin Restaurant) 1 El 6,710.00 Biscuits Cafe 1 E2 2,624.00 9' 1+2 $) T14;25 Eating and Drinking =MNIF 9.90 0.90 Dotty's 1 Fl 1,400.00 Starbucks 1 F2 1,378.00 Baskin Robbins 1 F3 960.00 Subway 1 F4 1,400.00 Panda Express 1 F5 2,090.00 Little Caesars 1 F6 1,196.00 House of Bread 1 F7 2,102.00 20.81 18.73 Proposed New Lease Space McDonalds I F8 4,948.00 15, 474.00 153.19 137.87 Office - General (G) size 2.70 0.80 AzumanoTravel 1 G 1 1,200.00 3.24 2.59 195,932.00 926.53 872.911 905 LE E K A Architecture and Planning • 4/24/2012 1 LEEKA Architecture and Planning Project Narrative Creating Positive Impressions in the Built Environment 1402 S.E. Cora St. Portland, OR 97202 1 Office - 503.644.4222 Fax - 503.208.2246 1 succeedCcr7leekainc.com www.leekainc.com April 27, 2012 Project: Tigard Towne Square Shopping Center — The `16230 Building' Tenant Improvement of existing, unoccupied Interior Lease Space Suite 140 from Retail to Fast Food use WCTM 2S1 15BA Tax Lot No. 2600 The following are responses to the City of Tigard Minor Modification - Type I application, Part B of section 18.360.050. The Reference Site Plan is attached as an appendix to this document. Tenant Name: House of Bread Zoning Class: C -G Stories: One Address: 16230 S.W. Pacific Hwy. Construction Type: V -B Fire Sprinklers: Yes Suite 140 Current space use: Retail Hazard: Light Space size — 2,106 s.f. Proposed space use: Fast Food Analysis of Modification Request: Section 18.360.060 of the Tigard Development Code Site Development Review chapter, states: "any modification which is not within the description of a major modification as provided in section 18.360.050 shall be considered a minor modification." Item #1: An increase in dwelling unit density, or lot coverage for residential development; RESPONSE: There are no residential uses for this project Item #2: A change in the ratio or number of different types of dwelling units; RESPONSE: There are no residential uses for this project Item #3: A change that requires additional on -site parking in accordance with Chapter 18.765; RESPONSE: No additional on -site parking is required, existing complies. Please refer to attached Reference Site Plan, see Parking Requirements calculations. Item #4: A change in the type of commercial or industrial structures as defined by the Uniform Building Code; RESPONSE: There are no modifications to the structure as defined in the 2010 OSSC which supersedes the UBC. Item #5: An increase in the height of the building(s) by more than 20 %; RESPONSE: The building shell will not be modified in this project Project No. 1217 Page 1 of 2 LEEK A Architecture and Planning Project • Narrative Creating Positive Impressions in the Built Environment 1402 S.E. Cora St. Portland, OR 97202 1 Office - 503.644.4222 Fax - 503.208.2246 1 succeed(Ieekainc.com www.leekainc.com Item #6: A change in the type and location of accessways and parking areas where off -site traffic would be affected; RESPONSE: No modifications are planned in the parking areas which will affect off -site traffic. Item #7: An increase in vehicular traffic to and from the site and the increase can be expected to exceed 100 vehicles per day; RESPONSE: The change in use will not increase vehicular traffic over the 100 vehicle milestone per day. 10% Item #8: An increase in the floor area proposed for a nonresidential use by more than 10% excludin expansions under Y excluding p 5,000 square feet; RESPONSE: Existing floor area is not being expanded. Item #9: A reduction in the area reserved for common open space and/or usable open space which reduces the open space area below the minimum required by this code or reduces the open space area by more than 10 %; RESPONSE: There will be no modification of this requirement in this project. Item #10: A reduction of project amenities below the minimum established by this code or by more than 10% where specified in the site plan; a. Recreational facilities; b. Screening; and/or c. Landscaping provisions. RESPONSE: There are no modifications to the three items noted in this project Item #11: A modification to the conditions imposed at the time of site development review approval which are not the subject of B1 through 10 above of this subsection. RESPONSE: The Scope of Work for this project takes into account, but does not affect any prior conditions of approval. Project No. 1217 Page 2 of 2 0 • o • 0 0> CID il 7 SR I s. W ittrS ? • P4 C lF Ni I{ ef I X 1 NW 88 we if' Ai' a.� one c a& . 9 aa r 1 . rti u•l 6 V g ,t:/: f c X 4 R • g r 1 . \ \\\\, .1, o A . A . I 1 c s = 0 I - g D .. I I � � � .. 'late S On 11 1 1 I ._... rn I D 1 j ir €EiSr0 I _� ] Z alkali 11 b� A iii 1iiii 11 4 I d ( • 11/4\1 I • ligiliie 1 1 II i ® Co cln � 1 I i aj P 1 1 i 1 i1i11 1 111 R 33 $ _v_A E 11 U TIGARD ti D tl illii I. l I I p " _ 1 I Os Approved ( l till M ' fie€ A Conditionally Appr ( ] ° ! sl+1 a `€ Q t(a 11 ,1 For only the work ai described w ' i I g$ d - g b ail °4 a 4 PERMIT NO. 1j° j j ,j 1#° i f e See Letter to: Follow ( 1 /,teah d i HI /� 1 . Qom i Job Ad 07 '3 iivii,7 - t 1 By: Date: f � I m. a.� • m m 3' P k Tenant Improvemetn Projedct for L E E KA Architecture and Planning � +v; < 0) 1 ! o rMwM Harsch Investment Properties Creating Positive Impressions in the aral Bn o i Dr .3 0 o i Y Tigard Towne Square Shopping Center ea :e . T AA 11 Sue Pacific Highway 99W ant Durham rued I igerd OK voenreo =aorr erne Y...� r 4 .ON* W tgton County, Oregon 2002- 113524 Ob, .. /2002 09:24:03 AM D -M Cnt=6 8tn =8 RECORD81 3180,00 $25.00 56,00 $11.00 - Totala$222.00 Recording requested by: 1111111111 1 1111111 1111 And when recorded mail to: 00171778200201135240380365 I, Jerry Hannon, Director of Assusment and Taxation and Ex- Officio County Clark for WaahIngton County. • do hereby certify that the within lnatrument of writing ;t was received and recorded In the bo k o/records of Often, Johnson, Robinson, 7:4,7)11 laid county ,� � r Neff Sc. Ra onetti, P.C. `� I " i Rag Jerry R. Hannon, Olrectorimertt and Taxadan, • t ✓ ' 950 Seventeenth Street Ex-officio County Clark /19 Suite 1600 Denver, Colorado 80202 Attention: David T. Brennan, Esq. Tax Account No. F 1 i 1 DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING, FINANCING STATEMENT AND ASSIGNMENT OF LEASES AND RENTS THIS DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING, FINANCING STATEMENT AND ASSIGNMENT OF LEASES AND RENTS (this "Deed of Trust ") is given as of September 23, 2002, by SN INVESTMENT PROPERTIES, LLC, a Delaware limited liability company ( "Grantor "), to TICOR TITLE INSURANCE COMPANY CC ( "Trustee "), for the use and benefit of AIG ANNUITY INSURANCE COMPANY, a Texas corporation ( "Beneficiary "). 1 "" ARTICLE 1 Cfl PARTIES, PROPERTY, AND DEFINITIONS The following terms and references shall have the meanings indicated: 1.1 Beneficiary: The Beneficiary named in the introductory paragraph of this Deed of Trust, whose legal address is 1 SunAmerica Center, Century City, Los Angeles, California 90067 -6022, together with any future holder of the Note. 1.2 Chattels: All goods, fixtures, inventory, equipment, building and other materials, supplies, and other tangible personal property of every nature, whether now owned or hereafter acquired by Grantor, used, intended for use, or reasonably required in the construction, development, or operation of the Property, together with all accessions thereto, replacements and substitutions therefor, and proceeds thereof. 1.3 Controlling Persons: Collectively, (a) if Grantor is a partnership or joint venture, all general partners or joint venturers of Grantor, (b) Guarantor, (c) any other party directly or indirectly liable for payment of the Secured Obligations, whether as maker, endorser, guarantor, surety, general partner, or otherwise, and (d) any successor to any of the foregoing. 1.4 Default: Any matter which, with the giving of notice, passage of time, or both, would constitute an Event of Default. 551646.4 DTBREN 09/10/02 2 :U PM 1.5 Environmental Indemnity Agreement: The Environmental Indemnity Agreement of even date herewith made by Grantor and Guarantor for the benefit of Beneficiary. 1.6 ERISA: The Employee Retirement Income Security Act of 1974, as amended, together with all rules and regulations issued thereunder. 1.7 Event of Default: As defined in Article 6. 1.8 Grantor: The Grantor named in the introductory paragraph of this Deed of Trust (Taxpayer I.D. No. 93- 0978365; Organizational I.D. No. 3553529) whose legal address is 1 121 S.W. Salmon Street, 5 Floor, Portland, Oregon 97205, together with any future owner of the Property or any part thereof or interest therein. 1.9 Guarantor: Jordan D. Schnitzer. 1.10 Guaranty Agreement: The Guaranty Agreement of even date herewith made by Guarantor for the benefit of Beneficiary. 1.11 Insurance Agreement: The Agreement Concerning Insurance Requirements of even date herewith executed by Grantor for the benefit of Beneficiary. 1.12 Intangible Personalty: The right to use all trademarks and trade names and symbols or logos used in connection therewith, or any modifications or variations thereof, in connection with the operation of the improvements existing or to be constructed on the Property, together with all accounts, deposit accounts, letter of credit rights, investment property, monies in the possession of Beneficiary (including, without limitation, proceeds from insurance, retainages and deposits for taxes and insurance), Permits, contract rights (including, without limitation, rights to receive insurance proceeds) and general intangibles (whether now owned or hereafter acquired, and including proceeds thereof) relating to or arising from Grantor's ownership, use, operation, leasing, or sale of all or any part of the Property, specifically including but in no way limited to any right which Grantor may have or acquire to transfer any development rights from the Property to other real property, and any development rights which may be so transferred. 1.13 Lease Certificate: The Certificate of even date herewith made by Grantor to Beneficiary concerning Leases of the Property. 1.14 Leases: Any and all leases, subleases and other agreements under the terms of which any person other than Grantor has or acquires any right to occupy or use the Property, or any part thereof. 1.15 Loan: The loan from Beneficiary to Grantor evidenced by the Note. 1.16 Loan Documents: The Note, all of the deeds of trust, mortgages and other instruments and documents securing the Note, including this.Deed of Trust, the Insurance Agreement, the Environmental Indemnity Agreement, the Guaranty Agreement, the Lease Certificate and each other document executed or delivered in connection with the transaction pursuant to which the Note has been executed and delivered. The term "Loan Documents" also 5516164 DTDREN 09/18!022:13 PM 2 III 1111111 1111 111E11 2002 - 113524 includes all modifications, extensions, renewals, and replacements of each document referred to above. 1.17 Note: Grantor's promissory note of even date herewith, payable to the order of Beneficiary in the principal face amount of $12,500,000.00 the last payment under which is due on October 1, 2009, or, if extended by Beneficiary pursuant to its terms, October 1, 2014, unless such due date is accelerated, together with all renewals, extensions and modifications of such promissory note. All terms and provisions of the Note are incorporated by this reference in this Deed of Trust. 1.18 Permits: All permits, licenses, certificates and authorizations necessary for the beneficial development, ownership, use, occupancy, operation and maintenance of the Property. 1.19 Permitted Exceptions: The matters set forth in Schedule B of the title insurance policy insuring the lien created by this Deed of Trust, in form and substance satisfactory to, and accepted by, Beneficiary, that Grantor has caused to be delivered to Beneficiary in connection with the Loan. 1.20 Property: The tract or tracts of land described in Exhibit A attached, together with the following: (a) All buildings, structures, and improvements now or hereafter located on such tract or tracts, as well as all rights -of -way, easements, and other appurtenances thereto; (b) Any land lying between the boundaries of such tract or tracts and the center line of any adjacent street, road, avenue, or alley, whether opened or proposed; (c) All of the rents, income, receipts, revenues, issues and profits of and from such tract or tracts and improvements; (d) All (i) water and water rights (whether decreed or undecreed, tributary, nontributary or not nontributary, surface or underground, or appropriated or unappropriated); (ii) ditches and ditch rights; (iii) spring and spring rights; (iv) reservoir and reservoir rights; and (v) shares of stock in water, ditch and canal companies and all other evidence of such rights, which are now owned or hereafter acquired by Grantor and which are appurtenant to or which have been used in connection with such tract or tracts or improvements; (e) All minerals, crops, timber, trees, shrubs, flowers, and landscaping features now or hereafter located on, under or above such tract or tracts; . (f) All machinery, apparatus, equipment, fittings, fixtures (whether actually or constructively attached, and including all trade, domestic, and omamental fixtures) now or hereafter located in, upon, or under such tract or tracts or improvements and used or usable in connection with any present or future operation thereof, including but not limited to all heating, air - conditioning, freezing, lighting, laundry, incinerating and power equipment; engines; pipes; pumps; tanks; motors; conduits; switchboards; plumbing, lifting, cleaning, fire prevention, 551646.4 DTBREN 09/18/02 2 13 PM 3 11111111111 111E11 2002 - 113524 fire extinguishing, refrigerating, ventilating, cooking, and communications apparatus; boilers, water heaters, ranges, furnaces, and burners; appliances; vacuum cleaning systems; elevators; escalators; shades; awnings; screens; storm doors and windows; stoves; refrigerators; attached cabinets; partitions; ducts and compressors; rugs and carpets; draperies; and all additions thereto and replacements therefor; (g) All development rights associated with such tract or tracts, whether previously or subsequently transferred to such tract or tracts from other real property or now or hereafter susceptible of transfer from such tract or tracts to other real property; (h) All awards and payments, including interest thereon, resulting from the exercise of any right of eminent domain or any other public or private taking of, injury to, or decrease in the value of, any of such property; and (i) All other and greater rights and interests of every nature in such tract or tracts and in the possession or use thereof and income therefrom, whether now owned or subsequently acquired by Grantor. 1.21 Secured Obligations: All present and future obligations of Grantor to Beneficiary evidenced by or contained in the Note, this Deed of Trust and all other Loan Documents, (excluding the Environmental Indemnity Agreement, which is not secured by this Deed of Trust), whether stated in the form of promises, covenants, representations, warranties, conditions, or prohibitions or in any other form. If the maturity of the Note secured by this Deed of Trust is accelerated, the Secured Obligations shall include an amount equal to any prepayment premium which would be payable under the terms of the Note as if the Note were prepaid in full on the date of the acceleration. If under the terms of the Note no voluntary prepayment would be permissible on the date of such acceleration, then the prepayment fee or premium to be included in the Secured Obligations shall be equal to one hundred fifty percent (150 %) of the highest prepayment fee or premium set forth in the Note, calculated as of the date of such acceleration, as if prepayment were permitted on such date. 1.22 Trustee: The Trustee named in the introductory paragraph of this Deed of Trust, whose address is 1000 S.W. Broadway, Suite 1555, Portland, Oregon 97204. ARTICLE 2 GRANTING CLAUSE 2.1 Grant to Trustee. As security for the Secured Obligations, Grantor hereby grants, bargains, sells, warrants and conveys the Property to Trustee, in trust, with power of sale, for the use and benefit of Beneficiary, and subject to all provisions hereof. 2.2 Security Interest to Beneficiary. As additional security for the Secured Obligations, Grantor hereby grants to Beneficiary a security interest in the Property, Chattels and Intangible Personalty. To the extent any of the Property, Chattels or Intangible Personalty may be or have been acquired with funds advanced by Beneficiary under the Loan Documents, this security interest is a purchase money security interest. This Deed of Trust constitutes a security agreement under the Uniform Commercial Code of the state in which the Property is located (the 111 III H111111 11 5516464 D7BREN 09/15102213 PM 4 2002 - 113524 1111 2002 - 113524 "Code ") with respect to any part of the Property, Chattels and Intangible Personalty that may or might now or hereafter be or be deemed to be personal property, fixtures or property other than real estate (all collectively hereinafter called "Collateral "); all of the terms, provisions, conditions and agreements contained in this Deed of Trust pertain and apply to the Collateral as fully and to the same extent as to any other property comprising the Property, and the following provisions of this Section shall not limit the generality or applicability of any other provisions of this Deed of Trust but shall be in addition thereto: (a) The Collateral shall be used by Grantor solely for business purposes, and all Collateral (other than the Intangible Personalty) shall be installed upon the real estate comprising part of the Property for Grantor's own use or as the equipment and furnishings furnished by Grantor, as landlord, to tenants of the Property; (b) Except as provided in Section 5.7 below, the Collateral (other than the Intangible Personalty) shall be kept at the real estate comprising a part of the Property, and shall not be removed therefrom without the consent of Beneficiary (being the Secured Party as that term is used in the Code); and the Collateral (other than the Intangible Personalty) may be affixed to such real estate but shall not be affixed to any other real estate; (c) No financing statement covering any of the Collateral or any proceeds thereof is on file in any public office; and Grantor will, at its cost and expense, upon demand, furnish to Beneficiary such further information and will execute and deliver to Beneficiary such financing statements and other documents in form satisfactory to Beneficiary and will do all such acts and things as Beneficiary may at any time or from time to time reasonably request or as may be necessary or appropriate to establish and maintain a perfected - first - priority security interest in the Collateral as security for the Secured Obligations, subject to no adverse liens or encumbrances; and Grantor will pay the cost of filing the same or filing or recording such financing statements or other documents and this instrument in all public offices wherever filing or recording is deemed by Beneficiary to be necessary or desirable; (d) The terms and provisions contained in this Section and in Section 7.6 of this Deed of Trust shall, unless the context otherwise requires, have the meanings and be construed as provided in the Code; and (e) This Deed of Trust constitutes a financing statement under the Code with respect to the Collateral. As such, this Deed of Trust covers all items of the Collateral that are or are to become fixtures. The filing of this Deed of Trust in the real estate records of the county where the Property is located shall operate as a fixture filing in accordance with Sections 79.3130 and 79.4020 of the Code. Information concerning the security interests created hereby may be obtained at the addresses set forth in Article 1 of this Deed of Trust. Grantor is the "Debtor" and Beneficiary is the "Secured Party" (as those terms are defined and used in the Code) insofar as this Deed of Trust constitutes a financing statement. 2.3 Environmental Indemnity Agreement Not Secured. Notwithstanding any provision of this Deed of Trust or any other Loan Document, the obligations of Grantor and Guarantor arising under the Environmental Indemnity Agreement are not, and shall not be, Secured Obligations under this Deed of Trust. 551696.4 UTBREN 09/11/02 2:13 PM 5 1 11 1111111 1111 h I I 2002 - 113524 ARTICLE 3 GRANTOR'S REPRESENTATIONS AND WARRANTIES 3.1 Warranty of Title. Grantor represents and warrants to Beneficiary that: (a) Grantor has good and marketable fee simple title to the Property, and such fee simple title is free and clear of all liens, encumbrances, security interests and other claims whatsoever, subject only to the Permitted Exceptions; (b) Grantor is the sole and absolute owner of the Chattels and the Intangible Personalty, free and clear of all liens, encumbrances, security interests and other claims whatsoever, subject only to the Permitted Exceptions; (c) This Deed of Trust is a valid and enforceable first lien and security interest in the Property, Chattels and Intangible Personalty, subject only to the Permitted Exceptions; and (d) Grantor, for itself and its successors and assigns, hereby agrees to warrant and forever defend, all and singular, all of the Property and property interests granted and conveyed pursuant to this Deed of Trust, against every person whomsoever lawfully claiming, or to claim, the same or any part thereof; The representations, warranties and covenants contained in this Section shall survive foreclosure of this Deed of Trust, and shall inure to the benefit of and be enforceable by ., any person who may acquire title to the Property, the Chattels, or the Intangible Personalty pursuant to any such foreclosure. 3.2 Due Authorization. If Grantor is other than a natural person, then each individual who executes this document on behalf of Grantor represents and warrants to Beneficiary that such execution has been duly authorized by all necessary corporate, partnership, limited liability company or other action on the part of Grantor. Grantor represents that Grantor has obtained all consents and approvals required in connection with the execution, delivery and performance of this Deed of Trust. 3.3 Other Representations and Warranties. Grantor represents and warrants to Beneficiary as follows: (a) Grantor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Grantor is duly authorized to transact business in and is in good standing under the laws of the State of Oregon. The sole Controlling Persons are Grantor and Guarantor. The members of Grantor are (i) the Jordan Schnitzer Revocable Living Trust As Amended and Restated In Toto U /DIT Dated August 23, 2001, and (ii) the N. Warehousing, Inc. Pension Plan and Trust. The sole manager of Grantor is Harsch Investment Properties Management, LLC, a Delaware limited liability company; 551646.4 DTSREN 09/18/02 2 : 13 PM 6 i 11 11 11 1111 111 2002 -U3524 (b) The execution, delivery and performance by Grantor of the Loan Documents are within Grantor's power and authority and have been duly authorized by all necessary action; (c) This Deed of Trust is, and each other Loan Document to which Grantor or Guarantor is a party will, when delivered hereunder, be valid and binding obligations of Grantor and Guarantor enforceable against Grantor and Guarantor in accordance with their respective terms, except as limited by equitable principles and bankruptcy, insolvency and similar laws affecting creditors' rights; (d) The execution, delivery and performance by Grantor and Guarantor of the Loan Documents will not contravene any contractual or other restriction binding on or affecting Grantor or any Controlling Person and will not result in or require the creation of any lien, security interest, other charge or encumbrance (other than pursuant hereto) upon or with respect to any of its properties; (e) The execution, delivery and performance by Grantor and Guarantor of the Loan Documents does not contravene any applicable law; (f) No authorization, approval, consent or other action by, and no notice to or filing with, any court, governmental authority or regulatory body is required for the due execution, delivery and performance by Grantor and Guarantor of any of the Loan Documents or the effectiveness of any assignment of any of Grantor's rights and interests of any kind to Beneficiary; (g) No part of the Property, Chattels, or Intangible Personalty is in the hands of a receiver, no application for a receiver is pending with respect to any portion of the Property, Chattels, or Intangible Personalty, and no part of the Property, Chattels, or Intangible Personalty is subject to any foreclosure or similar proceeding; (h) Neither Grantor nor any Controlling Person has made any assignment for the benefit of creditors, nor has Grantor or any Controlling Person filed, or had filed against it, any petition in bankruptcy; (i) There is no pending or, to the best of Grantor's knowledge, threatened, litigation, action, proceeding or investigation, including, without limitation, any condemnation proceeding, against Grantor, any Controlling Person or the Property before any court, governmental or quasi - governmental, arbitrator or other authority; (j) Grantor is a "non- foreign person" within the meaning of Sections 1445 and 7701 of the United States Internal Revenue Code of 1986, as amended, and the regulations issued thereunder; (k) Access to and egress from the Property are available and provided by public streets, and Grantor has no knowledge of any federal, state, county, municipal or other governmental plans to change the highway or road system in the vicinity of the Property or to restrict or change access from any such highway or road to the Property; S51646 DTBREN 09/18/022:17 PM 7 • 111111111111 11111111 2002- 113524 (I) All public utility services necessary for the operation of all improvements constituting part of the Property for their intended purposes are available at the boundaries of the land constituting part of the Property, including water supply, storm and sanitary sewer facilities, and natural gas, electric, telephone and cable television facilities; (m) The Property is located in a zoning district designated General Conunercial, by the City of Tigard, Washington County, Oregon. Such designation permits the development, use and operation of the Property as it is currently operated as a permitted, and not as a non- conforming use. The Property complies in all material respects with all zoning ordinances, regulations, requirements, conditions and restrictions, including but not limited to deed restrictions and restrictive covenants, applicable to the Property. For purposes of this subsection, "material compliance" means compliance in all respects, non - compliance with which would interfere with the use of the Property as it is presently used or would materially decrease the value of the Property; (n) There are no special or other assessments for public improvements or otherwise now affecting the Property, nor does Grantor know of any pending or threatened special assessments affecting the Property or any contemplated improvements affecting the Property that may result in special assessments. There are no tax abatements or exceptions affecting the Property; (o) Grantor and each Controlling Person has filed all tax returns it is required to have filed, and have paid all taxes as shown on such returns or on any assessment received pertaining to the Property; (p) Grantor has not received any notice from any governmental body having jurisdiction over the Property as to any violation of any applicable law, or any notice from any insurance company or inspection or rating bureau setting forth any requirements as a condition to the continuation of any insurance coverage on or with respect to the Property or the continuation thereof at premium rates existing at present which have not been remedied or satisfied; (q) Neither Grantor nor any Controlling Person is in default, in any manner which would materially and adversely affect its properties, assets, operations or condition (financial or otherwise), in the performance, observance or fulfillment of any of the obligations, covenants or conditions set forth in any agreement or instrument to which it is a party or by which it or any of its properties, assets or revenues are bound; (r) Except as set forth in the Lease Certificate, there are no occupancy rights (written or oral), Leases or tenancies presently affecting any part of the Property. The Lease Certificate contains a true and correct description of all Leases presently affecting the Property. No written or oral agreements or understandings exist between Grantor and the tenants under the Leases described in the Lease Certificate that grant such tenants any rights greater than those described in the Lease Certificate or that are in any way inconsistent with the rights described in the Lease Certificate; 551646.4 DTBREN 09/11/02 2 13 PM 8 • (s) There are no options, purchase contracts or other similar agreements of any type (written or oral) presently affecting any part of the Property; (t) There exists no brokerage agreement with respect to any part of the Property; (u) Except as otherwise disclosed to Beneficiary in writing prior to the date hereof, (i) there are no contracts presently affecting the Property ( "Contracts ") having a term in excess of one hundred eighty (180) days or not terminable by Grantor (without penalty) on thirty (30) days' notice; (ii) Grantor has heretofore delivered to Beneficiary true and correct copies of each of the Contracts together with all amendments thereto; (iii) Grantor is not in default of any obligations under any of the Contracts; and (iv) the Contracts represent the complete agreement between Grantor and such other parties as to the services to be performed or materials to be provided thereunder and the compensation to be paid for such services or materials, as applicable, and except as otherwise disclosed herein, such other parties possess no unsatisfied claims against Grantor. Grantor is not in default under any of the Contracts and no event has occurred which, with the passing of time or the giving of notice, or both, would constitute a default under any of the Contracts; (v) Grantor has obtained all Permits necessary or desirable for the operation, use, ownership, development, occupancy and maintenance of the Property as a retail shopping center, as it is currently being operated. None of the Permits has been suspended or revoked, and all of the Permits are in full force and effect, are fully paid for, and Grantor has made or will make application for renewals of any of the Permits prior to the expiration thereof; (w) All insurance policies held by Grantor relating to or affecting the Property are in full force and effect and shall remain in full force and effect until all Secured Obligations are satisfied. Grantor has not received any notice of default or notice terminating or threatening to terminate any such insurance policies. Grantor has made or will make application for renewals of any of such insurance policies prior to the expiration thereof; (x) Grantor currently complies with ERISA. Neither the making of the Loan nor the exercise by Beneficiary of any of its rights under the Loan Documents constitutes or will constitute a non - exempt, prohibited transaction under ERISA; (y) The Property is not used principally or primarily for agricultural or farming purposes; and (z) Grantor's exact legal name is correctly set out in the introductory paragraph of this Deed of Trust. Grantor's organizational identification number is correctly set forth in the definition of "Grantor" set forth in Article 1 hereof. Grantor's location (as such term is used in Section 5.8 hereof) is the State of Delaware. 3.4 Continuing Effect. Grantor shall be liable to Beneficiary for any damage suffered by Beneficiary if any of the foregoing representations are inaccurate as of the date hereof, regardless when such inaccuracy may be discovered by, or result in harm to, Beneficiary. Grantor further represents and warrants that the foregoing representations and warranties, as well as all other representations and warranties of Grantor to Beneficiary relative to the Loan 551646.4 DTBREN 099I51022 Il PM 9 III 1111111 im 11E11 2002- 113524 Documents, shall remain true and correct during the term of the Note and shall survive termination of this Deed of Trust. ARTICLE 4 GRANTOR'S AFFIRMATIVE COVENANTS 4.1 Payment of Note. Grantor will pay all principal, interest, and other sums payable under the Note, on the date when such payments are due, without notice or demand. 4.2 Performance of Other Obligations. Grantor will promptly and strictly perform and comply with all other covenants, conditions, and prohibitions required of Grantor by the terms of the Loan Documents. 4.3 Other Encumbrances. Grantor will promptly and strictly perform and comply with all covenants, conditions, and prohibitions required of Grantor in connection with any other encumbrance affecting the Property, the Chattels, or the Intangible Personalty, or any part thereof, or any interest therein, regardless of whether such other encumbrance is superior or subordinate to the lien hereof. 4.4 Payment of Taxes. (a) Property Taxes. Unless Grantor is depositing money into escrow pursuant to Section 4.4(b), Grantor will (i) pay, before delinquency, all taxes and assessments, general or special, which may be levied or imposed at any time against Grantor's interest and ., estate in the Property, the Chattels, or the Intangible Personalty, and (ii) within ten days after each payment of any such tax or assessment, Grantor will deliver to Beneficiary, without notice or demand, an official receipt for such payment. At Beneficiary's option, Beneficiary may retain the services of a firm to monitor the payment of all taxes and assessments relating to the Property, the cost of which shall be borne by Grantor. (b) Deposit for Taxes. On or before the date hereof, Grantor shall deposit with Beneficiary an amount equal to 1 /12th of the amount which Beneficiary estimates will be required to make the next annual payment of taxes, assessments, and similar governmental charges referred to in this Section, multiplied by the number of whole or partial months that have elapsed since the date one month prior to the most recent due date for such taxes, assessments and similar governmental charges. Thereafter, with each monthly payment under the Note, Grantor shall deposit with Beneficiary an amount equal to 1 /12th of the amount which Beneficiary estimates will be required to pay the next annual payment of taxes, assessments, and similar governmental charges referred to in this Section. The purpose of these provisions is to provide Beneficiary with sufficient funds on hand to pay all such taxes, assessments, and other governmental charges thirty (30) days before the date on which they become past due. If the Beneficiary, in its sole discretion, determines that the funds escrowed hereunder are, or will be, insufficient, Grantor shall upon demand pay such additional sums as Beneficiary shall determine necessary and shall pay any increased monthly charges requested by Beneficiary. Provided no Default or Event of Default exists hereunder, Beneficiary will apply the amounts so deposited to the payment of such taxes, assessments, and other charges when due, 551646 4 DTBREN 09/18/02 2 13 PM 1 0 11 1111111 1111 111111 11 2002 - 113524 but in no event will Beneficiary be liable for any interest on any amount so deposited, and any amount so deposited may be held and commingled with Beneficiary's own funds. (c) Intangible Taxes. If by reason of any statutory or constitutional amendment or judicial decision adopted or rendered after the date hereof, any tax, assessment, or similar charge is imposed against the Note, against Beneficiary, or against any interest of Beneficiary in any real or personal property encumbered hereby, Grantor will pay such tax, assessment, or other charge before delinquency and will indemnify Beneficiary against all loss, expense, or diminution of income in connection therewith. In the event Grantor is unable to do so, either for economic reasons or because the legal provisions or decisions creating such tax, assessment or charge forbid Grantor from doing so, then the Note will, at Beneficiary's option, become due and payable in full upon thirty (30) days' notice to Grantor. (d) Right to Contest. Notwithstanding any other provision of this Section, Grantor will not be deemed to be in default solely by reason of Grantor's failure to pay any tax, assessment or similar governmental charge so long as, in Beneficiary's judgment, each of the following conditions is satisfied: (i) Grantor is engaged in and diligently pursuing in good faith administrative or judicial proceedings appropriate to contest the validity or amount of such tax, assessment, or charge; and (ii) Grantor's payment of such tax, assessment, or charge would necessarily and materially prejudice Grantor's prospects for success in such proceedings; and (iii) Nonpayment of such tax, assessment, or charge will not result in the loss or forfeiture of any property encumbered hereby or any interest of Beneficiary therein; and (iv) Grantor deposits with Beneficiary, as security for such payment which may ultimately be required, a sum equal to the amount of the disputed tax, assessment or charge plus the interest, penalties, advertising charges, and other costs which Beneficiary estimates are likely to become payable if Grantor's contest is unsuccessful. If Beneficiary determines that any one or more of such conditions is not satisfied or is no longer satisfied, Grantor will pay the tax, assessment, or charge in question, together with any interest and penalties thereon, within ten days after Beneficiary gives notice of such determination. 4.5 Maintenance of Insurance. (a) Coverages Required. Grantor shall maintain or cause to be maintained, with financially sound and reputable insurance companies or associations satisfactory to Beneficiary, all insurance required under the terms of the Insurance Agreement, and shall comply with each and every covenant and agreement contained in the Insurance Agreement. 551646.4 DTSRPN 09/18/02 2:17 PM 1 1 q1111111 111 2002 - 113524 • WARNING Unless you provide us with evidence of insurance coverage as required by our contract or Joan agreement, we may 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. The cost of this insurance may be added to your contract or loan balance. If the cost is added to your contract or loan balance, the interest rate on the underlying contract or loan will apply to this added amount. The effective date of coverage may be the date your coverage lapsed or the date you failed to provide proof of coverage. The coverage we purchase may be considerably more expensive than insurance you can obtain on your own and may not satisfy the need for property damage coverage or any mandatory liability insurance imposed by applicable law. (b) Renewal Policies. Not less than thirty (30) days prior to the expiration date of each insurance policy required pursuant to the Insurance Agreement, Grantor will deliver to Beneficiary an appropriate renewal policy (or a certified copy thereof), together with evidence satisfactory to Beneficiary that the applicable premium has been prepaid. (c) Deposit for Premiums. Upon demand made by Beneficiary following a Default or an Event of Default, Grantor shall deposit with Beneficiary an amount equal to 1 /12th of the amount which Beneficiary estimates will be required to make the next annual payments of the premiums for the policies of insurance referred to in this Section, multiplied by the number of whole and partial months which have elapsed since the date one month prior to the most recent policy anniversary date for each such policy. Thereafter, with each monthly payment under the Note, Grantor will deposit an amount equal to 1 /12th of the amount which Beneficiary estimates will be required to pay the next required annual premium for each insurance policy referred to in this Section. The purpose of these provisions is to provide Beneficiary with sufficient funds on hand to pay all such premiums thirty (30) days 551646.4 DTBREN 09/I8/0 2 21) PM 12 111 1111111 Hill 11 2 002 - 113 before the date on which they become past due. If the Beneficiary, in its sole discretion, determines that the funds escrowed hereunder are, or will be, insufficient, Grantor shall upon demand pay such additional sums as Beneficiary shall determine necessary and shall pay any increased monthly charges requested by Beneficiary. Provided no Default or Event of Default exists hereunder, Beneficiary will apply the amounts so deposited to the payment of such insurance premiums when due, but in no event will Beneficiary be liable for any interest on any amounts so deposited, and the money so received may be held and commingled with Beneficiary's own funds. (d) Application of Hazard Insurance Proceeds. Grantor shall promptly notify Beneficiary of any damage or casualty to all or any portion of the Property or Chattels. Beneficiary may participate in all negotiations and appear and participate in all judicial arbitration proceedings - concerning any insurance proceeds which may be payable as a result of such casualty or damage, and may, in Beneficiary's sole discretion, compromise or settle, in the name of Beneficiary, Grantor, or both any claim for any such insurance proceeds. Any such insurance proceeds shall be paid to Beneficiary and shall be applied first to reimburse Beneficiary for all costs and expenses, including attorneys' fees, incurred by Beneficiary in connection with the collection of such insurance proceeds. The balance of any insurance proceeds received by Beneficiary with respect to an insured casualty may, in Beneficiary's sole discretion, either (i) be retained and applied by Beneficiary toward payment of the Secured Obligations, or (ii) be paid over, in whole or in part and subject to such conditions as Beneficiary in its sole discretion may impose, to Grantor to pay for repairs or replacements necessitated by the casualty; provided, however, that if all of the Secured Obligations have been performed or are discharged by the application of less than all of such insurance proceeds, then any remaining proceeds will be paid over to Grantor. Notwithstanding the preceding sentence, if (A) no Default or Event of Default shall have occurred and be continuing hereunder, and (B) the proceeds received by Beneficiary (together with any other funds delivered by Grantor to Beneficiary for such purpose) shall be sufficient, in Beneficiary's reasonable judgment, to pay for any restoration necessitated by the casualty, and (C) the cost of such restoration shall not exceed $1,250,000.00, and (D) such restoration can be completed, in Beneficiary's reasonable judgment, at least ninety (90) days prior to the maturity date of the Note, then Beneficiary shall apply such proceeds as provided in clause (ii) of the preceding sentence. Beneficiary will have no obligation to see to the proper application of any insurance proceeds paid over to Grantor, nor will any such proceeds received by Beneficiary bear interest or be subject to any other charge for the benefit of Grantor. Beneficiary may, prior to the application of insurance proceeds, commingle them with Beneficiary's own funds and otherwise act with regard to such proceeds as Beneficiary may determine in Beneficiary's sole discretion. (e) Successor's Rights. Any person who acquires title to the Property or the Chattels upon foreclosure hereunder will succeed to all of Grantor's rights under all policies of insurance maintained pursuant to this Section. 4.6 Maintenance and Repair of Property and Chattels. Grantor will at all times maintain the Property and the Chattels in good condition and repair, will diligently prosecute the completion of any building or other improvement which is at any time in the process of construction on the Property, and will promptly repair, restore, replace, or rebuild any part of the Property or the Chattels which may be affected by any casualty or any public or 5516464 OTBREN 09/18/02 2 13 PM 1 2002 - 113524 • private taking or injury to the Property or the Chattels. All costs and expenses arising out of the foregoing shall be paid by Grantor whether or not the proceeds of any insurance or eminent domain shall be sufficient therefor. Grantor will comply with all statutes, ordinances, and other governmental or quasi - governmental requirements and private covenants relating to the ownership, construction, use, or operation of the Property, including but not limited to any environmental or ecological requirements; provided, that so long as Grantor is not otherwise in default hereunder, Grantor may, upon providing Beneficiary with security reasonably satisfactory to Beneficiary, proceed diligently and in good faith to contest the validity or applicability of any such statute, ordinance, or requirement. Beneficiary and any person authorized by Beneficiary may enter and inspect the Property at all reasonable times, and may inspect the Chattels, wherever located, at all reasonable times. 4.7 Leases. Grantor shall timely pay and perform each of its obligations under or in connection with the Leases, and shall otherwise pay such sums and take such action as shall be necessary or required in order to maintain each of the Leases in full force and effect in accordance with its terms. If Grantor receives at any time any written communication from the tenant(s) under any Lease or Leases covering in the aggregate five percent (5 %) or more of the rentable space in the Property asserting a default by Grantor under such Lease or Leases, Grantor will promptly forward a copy of such communication(s) (and any subsequent communications relating thereto) to Beneficiary. Grantor agrees that Beneficiary, in its sole discretion, may advance any sum or take any action which Beneficiary believes is necessary or required to maintain the Leases in full force and effect, and all such sums advanced by Beneficiary, together with all costs and expenses incurred by Beneficiary in connection with action taken by Beneficiary pursuant to this Section, shall be due and payable by Grantor to Beneficiary upon demand, shall bear interest until paid at the Default Rate (as defined in the Note), and shall be secured by this Deed of Trust. 4.8 Eminent Domain; Private Damage. If all or any part of the Property is taken or damaged by eminent domain or any other public or private action, Grantor will notify Beneficiary promptly of the time and place of all meetings, hearings, trials, and other proceedings relating to such action. Beneficiary may participate in all negotiations and appear and participate in all judicial or arbitration proceedings concerning any award or payment which may be due as a result of such taking or damage, and may, in Beneficiary's reasonable discretion, compromise or settle, in the names of both Grantor and Beneficiary, any claim for any such award or payment. Any such award or payment is to be paid to Beneficiary and will be applied first to reimburse Beneficiary for all costs and expenses, including attorneys' fees, incurred by Beneficiary in connection with the ascertainment and collection of such award or payment. The balance, if any, of such award or payment may, in Beneficiary's sole discretion, either (a) be retained by Beneficiary and applied toward the Secured Obligations, or (b) be paid over, in whole or in part and subject to such conditions as Beneficiary may impose, to Grantor for the purpose of restoring, repairing, or rebuilding any part of the Property affected by the taking or damage. Notwithstanding the preceding sentence, if (i) no Default or Event of Default shall have occurred and be continuing hereunder, and (ii) the proceeds received by Beneficiary (together with any other funds delivered by Grantor to Beneficiary for such purpose) shall be sufficient, in Beneficiary's reasonable judgment, to pay for any restoration necessitated by the taking or damage, and (iii) the cost of such restoration shall not exceed $1,250,000.00, and (iv) such restoration can be completed, in Beneficiary's reasonable judgment, at least 511646.4 DTBREN 13WISIO2 2 13 PM 14 2002 - 113524 ninety (90) days prior to the maturity date of the Note, and (v) the remaining Property shall constitute, in Beneficiary's reasonable judgment, adequate security for the Secured Obligations, then Beneficiary shall apply such proceeds as provided in clause (b) of the preceding sentence. Grantor's duty to pay the Note in accordance with its terms and to perform the other Secured Obligations will not be suspended by the pendency or discharged by the conclusion of any proceedings for the collection of any such award or payment, and any reduction in the Secured Obligations resulting from Beneficiary's application of any such award or payment will take effect only when Beneficiary receives such award or payment. If this Deed of Trust has been foreclosed prior to Beneficiary's receipt of such award or payment, Beneficiary may nonetheless retain such award or payment to the extent required to reimburse Beneficiary for all costs and expenses, including attorneys' fees, incurred in connection therewith, and to discharge any deficiency remaining with respect to the Secured Obligations. 4.9 Mechanics' Liens. Grantor will keep the Property free and clear of all liens and claims of liens by contractors, subcontractors, mechanics, laborers, materialmen, and other such persons, and will cause any recorded statement of any such lien to be released of record within thirty (30) days after the recording thereof. Notwithstanding the preceding sentence, however, Grantor will not be deemed to be in default under this Section if and so long as Grantor (a) contests in good faith the validity or amount of any asserted lien and diligently prosecutes or defends an action appropriate to obtain a binding determination of the disputed matter, and (b) provides Beneficiary with such security as Beneficiary may require to protect Beneficiary against all loss, damage, and expense, including attorneys' fees, which Beneficiary might incur if the asserted lien is determined to be valid. 4.10 Defense of Actions. Grantor will defend, at Grantor's expense, any action, proceeding or claim which affects any property encumbered hereby or any interest of Beneficiary in such property or in the Secured Obligations, and will indemnify and hold Beneficiary harmless from all loss, damage, cost, or expense, including reasonable attorneys' fees, which Beneficiary may incur in connection therewith. 4.11 Expenses of Enforcement. Grantor will pay all costs and expenses, including reasonable attorneys' fees, which Beneficiary may incur in connection with any effort or action (whether or not litigation or foreclosure is involved) to enforce or defend Beneficiary's rights and remedies under any of the Loan Documents, including but not limited to all attorneys' fees, appraisal fees, consultants' fees, and other expenses incurred by Beneficiary in securing title to or possession of, and realizing upon, any security for the Secured Obligations. All such costs and expenses (together with interest thereon at the Default Rate from the date incurred) shall constitute part of the Secured Obligations, and may be included in the computation of the amount owed to Beneficiary for purposes of foreclosing or otherwise enforcing this Deed of Trust. 4.12 Financial Reports. Grantor will furnish to Beneficiary (a) monthly and annual operating statements for the Property, as of the end of and for the preceding month and fiscal year, as applicable, in each case prepared against the budget for such year; (b) contemporaneously with Grantor's delivery of the monthly operating statements of the Property, a certified rent roll detailing the names of all tenants under the Leases, the portion of the improvements on the Property occupied by each tenant, the rent and any other charges 5516464 DTBREN 09/1B/02 2 13 PM I 5 I II 1111111 1111 11111111 2002 - 113324 payable under each Lease, and the term of each Lease; and (c) an annual balance sheet and profit and loss statement of Grantor and Guarantor. The financial statements and reports described in (a) and (c) above shall be in such detail as Beneficiary may require, shall be prepared in accordance with generally accepted accounting principles consistently applied, and shall be certified as true and correct by Grantor or Guarantor (or, if required by Beneficiary, Beneficiary will be provided with an independent accountant's compilation report on current value data and a review report on Guarantor's financial statements). The monthly financial statements and reports described in (a) and (b) above shall be provided to Beneficiary within fifteen (15) days after the end of each calendar month; the annual financial statements and reports described in (a) and (c) above shall be provided to Beneficiary within ninety (90) days after the end of each fiscal year of Grantor. Grantor will also furnish or cause to be furnished to Beneficiary within thirty (30) days of Beneficiary's request, any other financial reports or statements of Grantor, including, without limitation, balance sheets, profit and loss statements, other financial statements, and certified rent rolls, required under any of the Loan Documents, requested by any regulatory or governmental authority exercising jurisdiction over Beneficiary or reasonably requested by Beneficiary from time to time. 4.13 Priority of Leases. To the extent Grantor has the right, under the terms of any Lease, to make such Lease subordinate to the lien hereof, Grantor will, at Beneficiary's request and Grantor's expense, take such action as may be required to effect such subordination. Conversely, Grantor will, at Beneficiary's request and Grantor's expense, take such action as may be necessary to subordinate the lien hereof to any future Lease designated by Beneficiary. 4.14 Inventories; Assembly of Chattels. Grantor will, from time to time at the request of Beneficiary, supply Beneficiary with a current inventory of the Chattels and the ' Intangible Personalty, in such detail as Beneficiary may require. Upon the occurrence of any Event of Default hereunder, Grantor will at Beneficiary's request assemble the Chattels and make them available to Beneficiary at any place designated by Beneficiary which is reasonably convenient to both parties. 4.15 Compliance with Laws, Etc. Grantor shall comply in all material respects with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, maintaining all Permits and paying before the same become delinquent all taxes, assessments and governmental charges imposed upon Grantor or the Property; provided, however, this covenant shall not restrict Grantor from contesting in good faith the applicability of or non - compliance with any such matters upon providing Beneficiary such bond or other security as it may reasonably request to protect its interest. 4.16 Records and Books of Account. Grantor shall keep accurate and complete records and books of account, in which complete entries will be made in accordance with generally accepted accounting principles consistently applied, reflecting all financial transactions relating to the Property. 4.17 Inspection Rights. At any reasonable time, and from time to time, Grantor shall permit Beneficiary, or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the Property and to discuss with Grantor the affairs, finances and accounts of Grantor. 551646 4 DTBREN 09/18/02 2:1; PM 1 2002- 113524 4.18 Change of Grantor's Address or State of Organization. Grantor shall promptly notify Beneficiary if changes are made in Grantor's address from that set forth in Section 9.10 hereof, or if Grantor shall either change its "location" (as such term is used in Section 5.8 hereof), its state of organization or if Grantor shall organize in any state other than the State of Delaware. 4.19 Further Assurances; Estoppel Certificates. Grantor will execute and deliver to Beneficiary upon demand, and pay the costs of preparation and recording thereof, any further documents which Beneficiary may request to confirm or perfect the liens and security interests created or intended to be created hereby, or to confirm or perfect any evidence of the Secured Obligations. Grantor will also, within ten days after any request by Beneficiary, deliver to Beneficiary a signed and acknowledged statement certifying to Beneficiary, or to any proposed transferee of the Secured Obligations, (a) the balance of principal, interest, and other sums then outstanding under the Note, and (b) whether Grantor claims to have any offsets or defenses with respect to the Secured Obligations and, if so, the nature of such offsets or defenses. 4.20 Costs of Closing. Grantor shall on demand pay directly or reimburse Beneficiary for any costs or expenses pertaining to the closing of the Loan, including, but not limited to, fees of counsel for Beneficiary, costs and expenses for which invoices were not available at the closing of the Loan, or costs and expenses which are incurred by Beneficiary after such closing. All such costs and expenses (together with interest thereon at the Default Rate from the date incurred by Beneficiary) shall constitute a part of the Secured Obligations, and may be included in the computation of the amount owed to Beneficiary for purposes of foreclosing or otherwise enforcing this Deed of Trust. 4.21 Fund for Electronic Transfer. All monthly payments of principal and interest on the Note, and escrow deposits under this Deed of Trust, shall be made by Grantor by electronic funds transfer from a bank account established and maintained by Grantor for such purpose. Grantor shall establish and maintain such an account until the Note is fully paid and shall direct the depository of such account in writing to so transmit such payments on or before the respective due dates to the account of Beneficiary as shall be designated by Beneficiary in writing. 4.22 Use. Grantor shall use the Property solely for the operation of a retail shopping center, and for no other use or purpose. 4.23 Management. The Property shall be managed by Harsch Investment Properties Management, LLC ( "Property Manager ") under a management agreement previously delivered to, and approved, by Beneficiary (the "Management Agreement "). Grantor shall not permit any material amendment to or modification of the Management Agreement, or management of the Property by any person or entity other than Property Manager, without the prior written consent of Beneficiary. 4.24 Actions by Beneficiary. If Grantor shall fail to make any payment or perform any covenant as and in the manner provided in any of the Loan Documents, so long as such failure continues, Beneficiary in its sole discretion, without obligation to do so and without notice to or demand upon Grantor and without releasing Grantor from any obligation, may make 551646 4 DTBREN 09/18/02 2:13 PM 1 ! 111 1111111 1111 111011 2002- 113324 or perform the same in such manner and to such extent as it may deem necessary to protect the security hereof. Beneficiary shall be permitted to pay all reasonable expenses incurred in connection therewith, including, without limitation, employment of counsel and other consultants, engineers, contractors, appraisers, surveyors, and other professionals. Grantor shall, upon demand by Beneficiary, pay all reasonable costs and expenses incurred by Beneficiary in connection with the exercise by Beneficiary of the foregoing rights, together with interest thereon at the Default Rate from the date incurred by Beneficiary. ARTICLE 5 GRANTOR'S NEGATIVE COVENANTS 5.1 Waste and Alterations. Grantor will not commit or permit any waste with respect to the Property or the Chattels. Grantor shall not cause or permit any part of the Property, including but not limited to any building, structure, parking lot, driveway, landscape scheme, timber, or other ground improvement, to be removed, demolished, or materially altered without the prior written consent of Beneficiary. 5.2 Zoning and Private Covenants. Grantor will not initiate, join in, or consent to any change in any zoning ordinance or classification, any change in the "zone lot" or "zone lots" (or similar zoning unit or units) presently comprising the Property, any transfer of development rights, any change in any private restrictive covenant, or any change in any other public or private restriction limiting or defining the uses which may be made of the Property or any part thereof, without the prior written consent of Beneficiary. If under applicable zoning provisions the use of all or any part of the Property is or becomes a nonconforming use, Grantor - will not cause such use to be discontinued or abandoned without the prior written consent of Beneficiary, and Grantor will use its best efforts to prevent the tenant under any Lease from discontinuing or abandoning such use. 5.3 Interference with Leases. (a) Grantor will neither do, nor neglect to do, anything which may cause or permit the termination of any Lease of all or any part of the Property, or cause or permit the withholding or abatement of any rent payable under any such Lease; provided, however, that Grantor may permit or cause termination-of any Lease if (i) such lease covers five percent (5 %0) or less of the rentable square footage of the Property, and (ii) such termination has no adverse impact on the Property or its value. (b) Subject to the provisions of Section 5.3(d), without Beneficiary's prior written consent, which may be granted or withheld in Beneficiary's sole discretion, Grantor shall not enter into or modify any Lease of all or any part of the Property. (c) Except with the prior written consent of Beneficiary, which may be granted or withheld in Beneficiary's sole discretion, Grantor will not (i) collect rent from all or any part of the Property for more than one month in advance, (ii) assign the rents from the Property or any part thereof, or (iii) consent to the cancellation or surrender of all or any part of 5516464 DTBItEN 09 /l W022 13 PM - 18 1131 111 1111 11111111 ')!A!A")_ 1 1 "="5 any Lease, except that Grantor may in good faith terminate any Lease for nonpayment of rent or other material breach by the tenant. (d) Grantor shall be entitled to enter into or modify any Lease without the prior consent of Beneficiary provided (i) such Lease concerns five percent (5 %) or less of the rentable square footage of the Property, (ii) the rent payable under such Lease is at market rate, (iii) the Lease is an arm's- length transaction, negotiated in good faith with a third party unrelated to Grantor, (iv) the Lease is on ordinary and commercially reasonable terms consistent with buildings of similar type as the Property in the area where the Property is located, and (v) Grantor provides a copy of the fully executed Lease or modification within ten (10) days following its execution. Grantor shall provide a copy of any Lease not meeting any one or more of the requirements of subsections (i) through (iv) above, to Beneficiary for its approval. If Beneficiary shall fail to respond within three (3) business clays following receipt hereof, then such Lease or modification shall be deemed approved, provided, that the time for responding to any such request for approval shall begin to run only when Beneficiary has actually received a copy of the request for approval, a copy of the Lease to be approved and information related to the tenant required to evaluate the Lease. 5.4 Transfer or Further Encumbrance of Property. Without Beneficiary's prior written consent, which consent may be granted or withheld in Beneficiary's sole and absolute discretion, Grantor shall not (a) sell, assign, convey, transfer or otherwise dispose of any legal, beneficial or equitable interest in all or any part of the Property, (b) permit or suffer any owner, directly or indirectly, of any beneficial interest in the Property or Grantor to transfer such interest, whether by transfer of partnership, membership, stock or other beneficial interest in any entity or otherwise, or (c) mortgage, hypothecate or otherwise encumber or permit to be ' encumbered or grant or permit to be granted a security interest in all or any part of the Property or Grantor or any beneficial or equitable interest in either the Property or Grantor. The provisions of this Section shall not prohibit (i) transfers of title or interest under any will or testament or applicable law of descent, (ii) transfers of member interests in Grantor to immediate family members of Jordan D. Schnitzer, Harold Schnitzer, or Arlene Schnitzer, or to a proprietorship, corporation, partnership, trust or limited liability company (each a "Related Party “) in which Jordan D. Schnitzer, Harold Schnitzer, or Arlene Schnitzer, either alone or any of them together, owns, directly or indirectly, at least fifty -one percent (51 %) of such Related Party; such permitted transfers do not require Beneficiary's consent and may occur without any transfer fee. 5.5 Further Encumbrance of Chattels. Grantor will neither create nor permit any lien, security interest or encumbrance against the Chattels or Intangible Personalty or any part thereof or interest therein, other than the liens and security interests created by the Loan Documents, without the prior written consent of Beneficiary, which may be withheld for any reason. 5.6 Assessments Against Property. Grantor will not, without the prior written approval of Beneficiary, which may be withheld for any reason, consent to or allow the creation of any so- called special districts, special improvement districts, benefit assessment districts or similar districts, or any other body or entity of any type, or allow to occur any other event, that would or might result in the imposition of any additional taxes, assessments or other 551646 4 DTBREN 09/16/02 2 13 PM 1 9 I 11 1111111 1111” 11111111 2002 - 113524 • monetary obligations or burdens on the Property, and this provision shall serve as RECORD NOTICE to any such district or districts or any governmental entity under whose authority such district or districts exist or are being formed that, should Grantor or any other person or entity include all or any portion of the Property in such district or districts, whether formed or in the process of formation, without first obtaining Beneficiary's express written consent, the rights of Beneficiary in the Property pursuant to this Deed of Trust or following any foreclosure of this Deed of Trust, and the rights of any person or entity to whom Beneficiary might transfer the Property following a foreclosure of this Deed of Trust, shall be senior and superior to any taxes, charges, fees, assessments or other impositions of any kind or nature whatsoever, or liens (whether statutory, contractual or otherwise) levied or imposed, or to be levied or imposed, upon the Property or any portion thereof as a result of inclusion of the Property in such district or districts. 5.7 Transfer or Removal of Chattels. Grantor will not sell, transfer or remove from the Property all or any part of the Chattels, unless the items sold, transferred, or removed are simultaneously replaced with similar items of equal or greater value. 5.8 Change of Name, Organizational I.D. No. or Location. Grantor will not change its name or the name under which it does business (or adopt or begin doing business under any other name or assumed or trade name), change its organizational identification number, or change its location, without first notifying Beneficiary of its intention to do so and delivering to Beneficiary such organizational document of Grantor and executed modifications or supplements to this Deed of Trust (and to any financing statement which may be filed in connection herewith) as Beneficiary may require. For the purposes of the foregoing, Grantor's "location" shall mean (a) if Grantor is a registered organization, Grantor's state of registration, (b) if Grantor is an individual, the state of Grantor's principal residence, or (c) if Grantor is neither a registered organization nor an individual, the state in which Grantor's place of business (or, if Grantor has more than one place of business, the Grantor's chief executive office) is located. 5.9 Improper Use of Property or Chattels. Grantor will not use the Property or the Chattels for any purpose or in any manner which violates any applicable law, ordinance, or other governmental requirement, the requirements or conditions of any insurance policy, or any private covenant. 5.10 ERISA. Grantor shall not engage in any transaction which would cause the Note (or the exercise by Beneficiary of any of its rights under the Loan Documents) to be a non - exempt, prohibited transaction under ERISA (including for this purpose the parallel provisions of Section 4975 of the Internal Revenue Code of 1986, as amended), or otherwise result in Beneficiary being deemed in violation of any applicable provisions of ERISA. Grantor shall indemnify, protect, defend, and hold Beneficiary harmless from and against any and all losses, liabilities, damages, claims, judgments, costs, and expenses (including, without limitation attorneys' fees and costs incurred in the investigation, defense, and settlement of claims and in obtaining any individual ERISA exemption or state administrative exception that may be required, in Beneficiary's sole and absolute discretion) that Beneficiary may incur, directly or indirectly, as the result of the breach by Grantor of any warranty or representation set forth in Section 3.3(x) hereof or the breach by Grantor of any covenant contained in this Section. This 551696.4 DTBREN 09118102 2:13 PM 20 I II 11111111111, 111E11 2002- 113524 indemnity shall survive any termination, satisfaction or foreclosure of this Deed of Trust and shall not be subject to the limitation on personal liability described in the Note. 5.11 Use of Proceeds. Grantor will not use any funds advanced by Beneficiary under the Loan Documents for household or agricultural purposes, to purchase margin stock, or for any purpose prohibited by law. ARTICLE 6 EVENTS OF DEFAULT Each of the following events will constitute an event of default (an "Event of Default ") under this Deed of Trust and under each of the other Loan Documents: 6.1 Failure to Pay Note. Grantor's failure to make any payment when due under the terms of the Note or any other Loan Document. 6.2 Due on Sale or Encumbrance. The occurrence of any violation of any covenant contained in Section 5.4, 5.5 or 5.7 hereof. 6.3 Other Obligations. The failure of Grantor to properly perform any obligation contained herein or in any of the other Loan Documents (other than the obligation to make payments under the Note or the other Loan Documents) and the continuance of such failure for a period of thirty (30) days following written notice thereof from Beneficiary to Grantor; provided, however, that if such failure is not curable within such thirty (30) day period, . then, so long as Grantor commences to cure such failure within such thirty (30) day period and is continually and diligently attempting to cure to completion, such failure shall not be an Event of Default unless such failure remains uncured for sixty (60) days after such written notice to Grantor. 6.4 Levy Against Property. The levy against any of the Property, Chattels or Intangible Personalty, of any execution, attachment, sequestration or other writ. 6.5 Liquidation. The liquidation, termination or dissolution of Grantor or any Controlling Person. 6.6 Appointment of Receiver. The appointment of a trustee or receiver for the assets, or any part thereof, of Grantor, or any Controlling Person, or the appointment of a trustee or receiver for any real or personal property, or the like, or any part thereof, representing the security for the Secured Obligations. 6.7 Assignments. The making by Grantor or any Controlling Person of a transfer in fraud of creditors or an assignment for the benefit of creditors. 6.8 Order for Relief. The entry in bankruptcy of an order for relief for or against Grantor or any Controlling Person. 5516464 DTHREN 09/19/022. 11 PM 21 11 11111131 11111111 2002- 113524 6.9 Bankruptcy. The filing of any petition (or answer admitting the material allegations of any petition), or other pleading, seeking entry of an order for relief for or against Grantor or any Controlling Person as a debtor or bankrupt or seeking an adjustment of any of such parties' debts, or any other relief under any state or federal bankruptcy, reorganization, debtor's relief or insolvency laws now or hereafter existing, including, without limitation, a petition or answer seeking reorganization or admitting the material allegations of a petition filed against any such party in any bankruptcy or reorganization proceeding, or the act of any of such parties in instituting or voluntarily being or becoming a party to any other judicial proceedings intended to effect a discharge of the debts of any such parties, in whole or in part, or a postponement of the maturity or the collection thereof, or a suspension of any of the rights or powers of a trustee or of any of the rights or powers granted to Beneficiary herein, or in any other document executed in connection herewith. 6.10 Misrepresentation. If any representation or warranty made by Grantor or any Controlling Person, or in any of the other Loan Documents or any other instrument or document modifying, renewing, extending, evidencing, securing or pertaining to the Note is false, misleading or erroneous in any material respect. 6.11 Judgments. The failure of Grantor or any Controlling Person to pay any money judgment in excess of $10,000.00 against any such party before the expiration of thirty (30) days after such judgment becomes final and no longer appealable. 6.12 Admissions Regarding Debts. The admission of Grantor or any Controlling Person in writing of any such party's inability to pay such party's debts as they become due. 6.13 Assertion of Priority. The assertion of any claim of priority over this Deed of Trust, by title, lien, or otherwise, unless Grantor within thirty (30) days after such assertion either causes the assertion to be withdrawn or provides Beneficiary with such security as Beneficiary may require to protect Beneficiary against all loss, damage, or expense, including attorneys' fees, which Beneficiary may incur in the event such assertion is upheld. 6.14 Other Loan Documents. The occurrence of any default by Grantor, after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any of the Loan Documents other than this Deed of Trust. 6.15 Other Liens. The occurrence of any default by Grantor, after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any other consensual lien encumbering the Property, or any part thereof or interest therein, or any document or instrument evidencing obligations secured thereby. 6.16 Other Indebtedness. The occurrence of any default by Grantor, after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any other indebtedness incurred or owing by Grantor, or any document or instrument evidencing any obligation to pay such indebtedness, if the non- payment or non - performance of such obligation poses, in the reasonable discretion of Beneficiary, any material threat to Grantor's business, operations or property. 551646.4 DTSREN 09/18/02 2.13 PM 22 111 1111111 I 2002- 113524 6.17 Guarantor's Net Worth. The failure of Guarantor to maintain a net worth of at least $50,000,000.00. ARTICLE 7 • BENEFICIARY'S REMEDIES Immediately upon or any time after the occurrence of any Event of Default hereunder, Beneficiary may exercise any remedy available at law or in equity, including but not limited to those listed below and those listed in the other Loan Documents, in such sequence or combination as Beneficiary may determine in Beneficiary's sole discretion: 7.1 Performance of Defaulted Obligations. Beneficiary may make any payment or perform any other obligation under the Loan Documents which Grantor has failed to make or perform, and Grantor hereby irrevocably appoints Beneficiary as the true and lawful attorney -in -fact for Grantor to make any such payment and perform any such obligation in the name of Grantor. All payments made and expenses (including attorneys' fees and expenses) incurred by Beneficiary in this connection, together with interest thereon at the Default Rate from the date paid or incurred until repaid, will be part of the Secured Obligations and will be immediately due and payable by Grantor to Beneficiary. In lieu of advancing Beneficiary's own funds for such purposes, Beneficiary may use any funds of Grantor which may be in Beneficiary's possession, including but not limited to insurance or condemnation proceeds and amounts deposited for taxes, insurance premiums, or other purposes. 7.2 Specific Performance and Injunctive Relief. Notwithstanding the - availability of legal remedies, Beneficiary will be entitled to obtain specific performance, mandatory or prohibitory injunctive relief, or other equitable relief requiring Grantor to cure or refrain from repeating any Default. 7.3 Acceleration of Secured Obligations. Beneficiary may, without notice or demand, declare all of the Secured Obligations immediately due and payable in full. 7.4 Suit for Monetary Relief. Subject to the non - recourse provisions of the Note, with or without accelerating the maturity of the Secured Obligations, Beneficiary may sue from time to time for any payment due under any of the Loan Documents, or for money damages resulting from Grantor's default under any of the Loan Documents. 7.5 Possession of Property. To the extent permitted by law, Beneficiary may enter and take possession of the Property without seeking or obtaining the appointment of a receiver, may employ a managing agent for the Property, and may lease or rent all or any part of the Property, either in Beneficiary's name or in the name of Grantor, and may collect the rents, issues, and profits of the Property. Any revenues collected by Beneficiary under this Section will be applied first toward payment of all expenses (including attorneys' fees) incurred by Beneficiary, together with interest thereon at the Default Rate from the date incurred until repaid, and the balance, if any, will be applied against the Secured Obligations, in such order and manner as Beneficiary may elect in its sole discretion. 551646 4 DTBREN 09/15/02 2 13 PM 23 1 2002 - 113524 7.6 Enforcement of Security Interests. Beneficiary may exercise all rights of a secured party under the Code with respect to the Chattels and the Intangible Personalty, including but not limited to taking possession of, holding, and selling the Chattels and enforcing or otherwise realizing upon any accounts and general intangibles. Any requirement for reasonable notice of the time and place of any public sale, or of the time after which any private sale or other disposition is to be made, will be satisfied by Beneficiary's giving of such notice to Grantor at least five days prior to the time of any public sale or the time after which any private sale or other intended disposition is to be made. 7.7 Foreclosure Against Property. (a) Beneficiary may foreclose this Deed of Trust, insofar as it encumbers the Property, either by judicial action or through Trustee. Foreclosure through Trustee will be initiated by Beneficiary's written request to Trustee to sell the Property in accordance with the laws of the State of Oregon at public auction to the highest bidder. Upon receipt of such written notice, Trustee shall promptly comply with all notice, publication and other requirements of the laws of Oregon then in force with respect to such sales. The proceeds of any sale under this Section shall be applied first to the fees and expenses of sale, including a reasonable Trustee's fee and attorney's fee, and then to the reduction or discharge of the Secured Obligations; any surplus remaining shall be paid over to Grantor or to such other person or persons as may be lawfully entitled to such surplus. At the conclusion of any foreclosure sale, the Trustee shall execute and deliver to the purchaser at the sale its deed, without warranty, which shall convey to purchaser the interest in the Property, which Grantor had or had power to convey at the time of its execution of this Deed of Trust, and such as it may have acquired thereafter. The Trustee's deed shall recite facts showing the sale was conducted in compliance with all requirements of the law and this Deed of Trust, which recitals shall be prima facie evidence of such compliance and conclusive evidence thereof in favor of bona fide purchasers and encumbrancers. Nothing in this Section dealing with foreclosure procedures or specifying particular actions to be taken by Beneficiary or by Trustee or any similar officer shall be deemed to contradict or add to the requirements and procedures now or hereafter specified by Oregon law, and any such inconsistency shall be resolved in favor of Oregon law applicable at the time of foreclosure. (b) The purchaser at any trustee's or foreclosure sale hereunder may disaffirm any easement granted, or rental, Lease or other contract made, in violation of any provision of this Deed of Trust, and may take immediate possession of the Property free from, and despite the terms of, such grant of easement, rental, Lease or other contract. (c) Beneficiary shall have the right to become the purchaser at all sales to enforce this trust, being the highest bidder, and to have the Secured Obligations owing, or any part thereof, credited against the amount for which such property is sold. 7.8 Appointment of Receiver. To the extent permitted by applicable law, Beneficiary shall be entitled, as a matter of absolute right and without regard to the value of any security for the Secured Obligations or the solvency of any person liable therefor, to the appointment of a receiver for the Property upon ex -parte application to any court of competent jurisdiction. Grantor waives any right to any hearing or notice of hearing prior to the 551646.4 UTHIEN 09/13/02213rii 24 1 11 1111111 1111 11111111 2002 - 113524 appointment of a receiver. Such receiver and its agents shall be empowered, but shall not be obligated, to (a) take possession of the Property and any businesses conducted by Grantor or any other person thereon and any business assets used in connection therewith, (b) exclude Grantor and Grantor's agents, servants, and employees from the Property, (c) collect the rents, issues, profits, and income therefrom, (d) complete any construction which may be in progress, (e) do such maintenance and make such repairs and alterations as the receiver deems necessary, (f) use all stores of materials, supplies, and maintenance equipment on the Property and replace such items at the expense of the receivership estate, (g) pay all taxes and assessments against the Property and the Chattels, all premiums for insurance thereon, all utility and other operating expenses, and all sums due under any prior or subsequent encumbrance, and (h) generally do anything which Grantor could legally do if Grantor were in possession of the Property. All expenses incurred by the receiver or its agents shall constitute a part of the Secured Obligations. Any revenues collected by the receiver shall be applied first to the expenses of the receivership, including attorneys' fees incurred by the receiver and by Beneficiary, together with interest thereon at the Default Rate from the date incurred until repaid, and the balance shall be applied toward the Secured Obligations in such order or manner as Beneficiary may in its sole discretion elect or in such other manner as the court may direct. Unless sooner terminated with the express consent of Beneficiary, any such receivership will continue until the Secured Obligations have been discharged in full, or until title to the Property has passed after foreclosure sale and all applicable periods of redemption have expired. 7.9 Right to Make Repairs, Improvements. Should any part of the Property come into the possession of Beneficiary, whether before or after an Event of Default, Beneficiary may, but shall not be obligated to, use, operate, and/or make repairs, alterations, additions and improvements to the Property for the purpose of preserving it or its value. Grantor covenants to promptly reimburse and pay to Beneficiary, at the place where the Note is payable, or at such other place as may be designated by Beneficiary in writing, the amount of all reasonable expenses (including the cost of any insurance, taxes, or other charges) incurred by Beneficiary in connection with its custody, preservation, use or operation of the Property, together with interest thereon from the date incurred by Beneficiary at the Default Rate, and all such expenses, costs, taxes, interest, and other charges shall be a part of the Secured Obligations. It is agreed, however, that the risk of accidental loss or damage to the Property is undertaken by Grantor and, except for Beneficiary's willful misconduct or gross negligence, Beneficiary shall have no liability whatsoever for decline in value of the Property, for failure to obtain or maintain insurance, or for failure to determine whether any insurance ever in force is adequate as to amount or as to the risks insured. 7.10 Surrender of Insurance. Beneficiary may surrender the insurance policies maintained pursuant to the terms hereof, or any part thereof, and receive and apply the unearned premiums as a credit on the Secured Obligations and, in connection therewith, Grantor hereby appoints Beneficiary (or any officer of Beneficiary), as the true and lawful agent and attorney -in -fact for Grantor (with full powers of substitution), which power of attomey shall be deemed to be a power coupled with an interest and therefore irrevocable, to collect such premiums. 7.11 Collateral for All Obligations. Grantor acknowledges that the Property is collateral for the full amount of the Secured Obligations. Neither Beneficiary nor Trustee shall 551646.4 DTBREN 09/18/02 2:13 PM 25 2002- 113524 be required to marshall all or any part of the Property or proceed against all or any part of the Property in any particular sequence, and Beneficiary shall not be limited in the amount it can recover from the Property to satisfy the Secured Obligations. 7.12 Prima Facie Evidence. Grantor agrees that, in any assignments, deeds, bills of sale, notices of sale, or postings, given by Beneficiary, any and all statements of fact or other recitals therein made as to the identity of Beneficiary, or as to the occurrence or existence of any Event of Default, or as to the acceleration of the maturity of the Secured Obligations, or as to the request to sell, posting of notice of sale, notice of sale, time, place, terms and manner of sale and receipt, distribution and application of the money realized therefrom, and without being limited by the foregoing, as to any other act or thing having been duly done by Beneficiary, shall be taken by all courts of law and equity as prima facie evidence that such statements or recitals state facts and are without further question to be so accepted, and Grantor does hereby ratify and confirm any and all acts that Beneficiary may lawfully do by virtue hereof. 7.13 Lockbox. If the subject Event of Default is one described in Section 6.17 of this Deed of Trust, Beneficiary may require Grantor to, and Grantor shall, within thirty (30) days after Beneficiary's demand: (a) establish and maintain at a bank reasonably selected by Beneficiary ( "Depository Bank ") (i) a cash collateral account in the name and under the control of Beneficiary or its loan servicer (the "Cash Collateral Account ") to accept proceeds and revenues from the Property, and (ii) a depository post office box with Depository Bank to accept such proceeds and revenues (the "Post Office Box "); (b) notify all tenants of the Property to remit all amounts due under their respective Leases directly to the Cash Collateral Account (in the case of wire or bank transfers) or the Post Office Box (with respect to payments by check); and (c) enter into all agreements reasonably requested by Beneficiary to implement and maintain such lockbox and deposit arrangements, grant to, evidence and secure for Beneficiary a perfected security interest in the Cash Collateral Account, funds on deposit therein and proceeds thereof, and addressing such other matters with respect to the lockbox and deposit arrangements as Beneficiary may reasonably request. ARTICLE 8 ASSIGNMENT OF LEASES AND RENTS 8.1 Assignment of Leases and Rents. Grantor hereby unconditionally, absolutely and presently grants, transfers and assigns unto Beneficiary all rents, royalties, issues, profits and income ( "Rents ") now or hereafter due or payable for the occupancy or use of the Property, and all Leases, whether written or oral, with all security therefor, including all guaranties thereof, now or hereafter affecting the Property; on the condition that Beneficiary hereby grants to Grantor a license to collect and retain such Rents prior to the occurrence of any Event of Default hereunder. Such license shall be revocable by Beneficiary without notice to Grantor at any time after the occurrence of an Event of Default. Grantor represents that the Rents and the Leases have not been heretofore sold, assigned, transferred or set over by any instrument now in force and will not at any time during the life of this assignment be sold, assigned, transferred or set over by Grantor or by any person or persons whomsoever; and Grantor has good right to sell, assign, transfer and set over the same and to grant to and confer upon Beneficiary the rights, interest, powers and authorities herein granted and conferred. 551646.4 DTBREN 09/18/02 2.13 PM 2 1111111 1111 11111111 2002 - 113524 Failure of Beneficiary at any time or from time to time to enforce the assignment of Rents and Leases under this Section shall not in any manner prevent its subsequent enforcement, and Beneficiary is not obligated to collect anything hereunder, but is accountable only for sums actually collected. 8.2 Further Assignments. Grantor shall give Beneficiary at any time upon demand any further or additional forms of assignment of transfer of such Rents, Leases and security as may be reasonably requested by Beneficiary, and shall deliver to Beneficiary executed copies of all such Leases and security. 8.3 Application of Rents. Beneficiary shall be entitled to deduct and retain a just and reasonable compensation from monies received hereunder for its services or that of its agents in collecting such monies. Any monies received by Beneficiary hereunder may be applied when received from time to time in payment of any taxes, assessments or other liens affecting the Property regardless of the delinquency thereof, such application to be in such order as Beneficiary may determine. The acceptance of this Deed of Trust by Beneficiary or the exercise of any rights by it hereunder shall not be, or be construed to be, an affirmation by it of any Lease nor an assumption of any liability under any Lease. 8.4 Collection of Rents. Upon or at any time after an Event of Default shall have occurred and be continuing, Beneficiary may declare all sums secured hereby immediately due and payable, and may, at its option, without notice, and whether or not the Secured Obligations shall have been declared due and payable, either in person or by agent, with or without bringing any action or proceeding, or by a receiver to be appointed by a court, (i) enter upon, take possession of, manage and operate the Property, or any part thereof (including without limitation making necessary repairs, alterations and improvements to the Property); (ii) make, cancel, enforce or modify Leases; (iii) obtain and evict tenants; (iv) fix or modify Rents; (v) do any acts which Beneficiary deems reasonably proper to protect the security thereof; and (vi) either with or without taking possession of the Property, in its own name sue for or otherwise collect and receive such Rents, including those past due and unpaid. In connection with the foregoing, Beneficiary shall be entitled and empowered to employ attorneys, and management, rental and other agents in and about the Property and to effect the matters which Beneficiary is empowered to do, and in the event Beneficiary shall itself effect such matters, Beneficiary shall be entitled to charge and receive reasonable management, rental and other fees therefor as may be customary in the area in which the Property is located; and the reasonable fees, charges, costs and expenses of Beneficiary or such persons shall be additional Secured Obligations. Beneficiary may apply all funds collected as aforesaid, less costs and expenses of operation and collection, including reasonable attorneys' and agents' fees, charges, costs and expenses, as aforesaid, upon any Secured Obligations, and in such order as Beneficiary may determine. The entering upon and taking possession of the Property, the collection of such Rents and the application thereof as aforesaid shall not cure or waive any default or waive, modify or affect notice of default under the Note or this Deed of Trust or invalidate any act done pursuant to such notice. 8.5 Authority of Beneficiary. Any tenants or occupants of any part of the Property are hereby authorized to recognize the claims of Beneficiary hereunder without investigating the reason for any action taken by Beneficiary, or the validity or the amount of 551646.4 OTOREN 09/16/022.13 PM 77 2002- 113524 indebtedness owing to Beneficiary, or the existence of any default in the Note or this Deed of Trust, or under or by reason of this assignment of Rents and Leases, or the application to be made by Beneficiary of any amounts to be paid to Beneficiary. The sole signature of Beneficiary shall be sufficient for the exercise of any rights under this assignment and the sole receipt of Beneficiary for any sums received shall be a full discharge and release therefor to any such tenant or occupant of the Property. Checks for all or any part of the rentals collected under this assignment of Rents and Leases shall be drawn to the exclusive order of Beneficiary. 8.6 Indemnification of Beneficiary. Prior to the time that Beneficiary obtains title to the Property through foreclosure or acceptance of a deed in lieu of foreclosure, nothing herein contained shall be deemed to obligate Beneficiary to perform or discharge any obligation, duty or liability of any lessor under any Lease of the Property, and Grantor shall and does hereby indemnify and hold Beneficiary harmless from any and all liability, loss or damage which Beneficiary may or might incur prior to such time under any Lease of the Property or by reason of this Deed of Trust; and any and all such liability, loss or damage incurred by Beneficiary, together with the costs and expenses, including reasonable attorneys' fees, incurred by Beneficiary in defense of any claims or demands therefor (whether successful or not), shall be additional Secured Obligations, and Grantor shall reimburse Beneficiary therefor on demand. ARTICLE 9 MISCELLANEOUS PROVISIONS 9.1 Time of the Essence. Time is of the essence with respect to all provisions of the Loan Documents. 9.2 Joint and Several Obligations. If Grantor is more than one person or entity, then (a) all persons or entities comprising Grantor are jointly and severally liable for all of the Secured Obligations; (b) all representations, warranties, and covenants made by Grantor shall be deemed representations, warranties, and covenants of each of the persons or entities comprising Grantor; (c) any breach, Default or Event of Default by any persons or entities comprising Grantor hereunder shall be deemed to be a breach, Default or Event of Default of Grantor; (d) any reference herein contained to the knowledge or awareness of Grantor shall mean the knowledge or awareness of any of the persons or entities comprising Grantor; and (e) any event creating personal liability of any of the persons or entities comprising Grantor shall create personal liability for all such persons or entities. 9.3 Waiver of Homestead and Other Exemptions. To the extent permitted by law, Grantor hereby waives all rights to any homestead or other exemption to which Grantor would otherwise be entitled under any present or future constitutional, statutory, or other provision of applicable state or federal law. Grantor hereby waives any right it may have to require Beneficiary to marshall all or any portion of the security for the Secured Obligations. 9.4 Non - Recourse; Exceptions to Non - Recourse. Except as expressly set forth in the Note, the recourse of Beneficiary with respect to the obligations evidenced by the Note and the other Loan Documents shall be solely to the Property, Chattels and Intangible Personalty, and any other collateral given as security for the Note. 551646.4 DTBR.EN 09/18/02 2 13 PM 28 111 1111111 1111 11111111 2002- 113524 9.5 Rights and Remedies Cumulative. Beneficiary's rights and remedies under each of the Loan Documents are cumulative of the right and remedies available to Beneficiary under each of the other Loan Documents and those otherwise available to Beneficiary at law or in equity. No act of Beneficiary shall be construed as an election to proceed under any particular provision of any Loan Document to the exclusion of any other provision in the same or any other Loan Document, or as an election of remedies to the exclusion of any other remedy which may then or thereafter be available to Beneficiary. 9.6 No Implied Waivers. Beneficiary shall not be deemed to have waived any provision of any Loan Document unless such waiver is in writing and is signed by Beneficiary. Without limiting the generality of the preceding sentence, neither Beneficiary's acceptance of any payment with knowledge of a Default by Grantor, nor any failure by Beneficiary to exercise any remedy following a Default by Grantor shall be deemed a waiver of such Default, and no waiver by Beneficiary of any particular Default on the part of Grantor shall be deemed a waiver of any other Default or of any similar Default in the future. 9.7 No Third -Party Rights. No person shall be a third -party beneficiary of any provision of any of the Loan Documents. All provisions of the Loan Documents favoring Beneficiary are intended solely for the benefit of Beneficiary, and no third party shall be entitled to assume or expect that Beneficiary will waive or consent to modification of any such provision in Beneficiary's sole discretion. 9.8 Preservation of Liability and Priority. Without affecting the liability of Grantor or of any other person (except a person expressly released in writing) for payment and performance of all of the Secured Obligations, and without affecting the rights of Beneficiary - with respect to any security not expressly released in writing, and without impairing in any way the priority of this Deed of Trust over the interests of any person acquired or first evidenced by recording subsequent to the recording hereof, Beneficiary may, either before or after the maturity of the Note, and without notice or consent: (a) release any person liable for payment or performance of all or any part of the Secured Obligations; (b) make any agreement altering the terms of payment or performance of all or any of the Secured Obligations; (c) exercise or refrain from exercising, or waive, any right or remedy which Beneficiary may have under any of the Loan Documents; (d) accept additional security of any kind for any of the Secured Obligations; or (e) release or otherwise deal with any real or personal property securing the Secured Obligations. Any person acquiring or recording evidence of any interest of any nature in the Property, the Chattels, or the Intangible Personalty shall be deemed, by acquiring such interest or recording any evidence thereof, to have agreed and consented to any or all such actions by Beneficiary. 9.9 Subrogation of Beneficiary. Beneficiary shall be subrogated to the lien of any previous encumbrance discharged with funds advanced by Beneficiary under the Loan Documents, regardless of whether such previous encumbrance has been released of record. 9.10 Notices. Any notice required or permitted to be given by Grantor or Beneficiary under this Deed of Trust shall be in writing and will be deemed given (a) upon personal delivery, (b) on the first business day after receipted delivery to a courier service which guarantees next- business -day delivery, or (c) on the third business day after mailing, by 5516464 DTBREN 09/18/022.12 PM 29 1 11 1111111 1111 11111111 2002- 113524 registered or certified United States mail, postage prepaid, in any case to the appropriate party at its address set forth below: If to Grantor: SN Investment Properties, LLC 1121 S.W. Salmon Street, 5 Floor Portland, Oregon 97205 Attention: Richard A. Seltzer with a copy to: Stoel Rives LLP 900 S. W. Fifth Avenue, Suite 2300 Portland, Oregon 97204 -1268 Attention: Thomas R. Nicolai, Esq. If to Beneficiary: AIG Annuity Insurance Company 1 SunAmerica Center Century City Los Angeles, California 90067 -6022 Attention: Director - Mortgage Lending and Real Estate with a copy to: Otten, Johnson, Robinson, Neff & Ragonetti, P.C. 950 Seventeenth Street, Suite 1600 Denver, Colorado 80202 Attention: David T. Brennan, Esq. Either party may change such party's address for notices or copies of notices by giving notice to the other party in accordance with this Section. 9.11 Defeasance. Upon payment and performance in full of all of the Secured Obligations, Beneficiary will execute and deliver to Grantor such documents as may be required to release this Deed of Trust of record. 9.12 Illegality. If any provision of this Deed of Trust is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Deed of Trust, the legality, validity, and enforceability of the remaining provisions of this Deed of Trust shall not be affected thereby, and in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Deed of Trust a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable. If the rights and liens created by this Deed of Trust shall be invalid or unenforceable as to any part of the Secured Obligations, then the unsecured portion of the 551646.4 DTBREN 09 /18102 2 .13 PM 30 111 1111111 11111111 2002 - 113524 Secured Obligations shall be completely paid prior to the payment of the remaining and secured portion of the Secured Obligations, and all payments made on the Secured Obligations shall be considered to have been paid on and applied first to the complete payment of the unsecured portion of the Secured Obligations. 9.13 Usury Savings Clause. It is expressly stipulated and agreed to be the intent of Beneficiary and Grantor at all times to comply with the applicable law governing the highest lawful interest rate. If the applicable law is ever judicially interpreted so as to render usurious any amount called for under the Note or under any of the other Loan Documents, or contracted for, charged, taken, reserved or received with respect to the Loan, or if acceleration of the maturity of the Note, any prepayment by Grantor, or any other circumstance whatsoever, results in Grantor having paid any interest in excess of that permitted by applicable law, then it is the express intent of Grantor and Beneficiary that all excess amounts theretofore collected by Beneficiary be credited on the principal balance of the Note (or, at Beneficiary's option, paid over to Grantor), and the provisions of the Note and other Loan Documents immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder. The right to accelerate maturity of the Note does not include the right to accelerate any interest which has not otherwise accrued on the date of such acceleration, and Beneficiary does not intend to collect any unearned interest in the event of acceleration. All sums paid or agreed to be paid to Beneficiary for the use, forbearance or detention of the Secured Obligations evidenced hereby or by the Note shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such Secured Obligations until payment in full so that the rate or amount of interest on account of such Secured Obligations does not exceed the maximum rate or amount of interest permitted under applicable law. The term "applicable law" as used herein shall mean any federal or state law applicable to the Loan. 9.14 Obligations Binding Upon Grantor's Successors. This Deed of Trust is binding upon Grantor and Grantor's successors and assigns, and shall inure to the benefit of Beneficiary, and its successors and assigns, and the provisions hereof shall likewise be covenants running with the land. The duties, covenants, conditions, obligations, and warranties of Grantor in this Deed of Trust shall be joint and several obligations of Grantor and Grantor's successors and assigns. 9.15 Construction. All pronouns and any variations of pronouns herein shall be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the identity of the parties may require. Whenever the terms herein are singular, the same shall be deemed to mean the plural, as the identity of the parties or the context requires. 9.16 Attorneys' Fees. Any reference in this Deed of Trust to attorneys' or counsel's fees paid or incurred by Beneficiary shall be deemed to include paralegals' fees and legal assistants' fees. Moreover, wherever provision is made herein for payment of attorneys' or counsel's fees or expenses incurred by Beneficiary, such provision shall include but not be limited to, such fees or expenses incurred in any and all judicial, bankruptcy, reorganization, administrative, or other proceedings, including appellate proceedings, whether such fees or 551646.4 DTBREN 09/19/02 2:13 PM 3 1 I 11 1111111 1111 1111111 2002 - 113524 expenses arise before proceedings are commenced, during such proceedings or after entry of a final j udgment. 9.17 Waiver and Agreement. GRANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE UNDER APPLICABLE LAW TO PREPAY THE NOTE, IN WHOLE OR IN PART, WITHOUT PREPAYMENT CHARGE, UPON ACCELERATION OF THE MATURITY DATE OF THE NOTE, AND AGREES THAT, IF FOR ANY REASON A PREPAYMENT OF ALL OR ANY PART OF THE NOTE IS MADE, WHETHER VOLUNTARILY OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF THE NOTE BY BENEFICIARY ON ACCOUNT OF THE OCCURRENCE OF ANY EVENT OF DEFAULT ARISING FOR ANY REASON, INCLUDING, WITHOUT LIMITATION, AS A RESULT OF ANY PROHIBITED OR RESTRICTED TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION OF THE PROPERTY OR ANY PART THEREOF SECURING THE NOTE, THEN GRANTOR SHALL BE OBLIGATED TO PAY, CONCURRENTLY WITH SUCH PREPAYMENT, THE PREPAYMENT PREMIUM PROVIDED FOR IN THE NOTE (OR, IN THE EVENT OF ACCELERATION WHEN THE NOTE IS CLOSED TO PREPAYMENT, AS PROVIDED IN THE DEFINITION OF "SECURED OBLIGATIONS" SET FORTH IN ARTICLE 1 HEREOF). GRANTOR HEREBY DECLARES THAT BENEFICIARY'S AGREEMENT TO MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THE NOTE CONSTITUTES ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY GRANTOR, FOR THIS WAIVER AND AGREEMENT. 9.18 Waiver of Jury Trial. BENEFICIARY AND GRANTOR KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS DEED OF TRUST, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THE NOTE OR ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO ANY LOAN DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BENEFICIARY AND GRANTOR TO ENTER INTO THE LOAN. 9.19 Governing Laws. The substantive laws of the State of Oregon shall govern the validity, construction, enforcement, and interpretation of this Deed of Trust. 9.20 Inconsistency. In the event of any inconsistency between the terms of the Loan Documents and the terms of that certain AIG Global Investment Corp. Mortgage Loan Application between Grantor and Beneficiary, as amended, the terms of the Loan Documents shall govern and control in all respects. 9.21 Substitute or Successor Trustee. Trustee may resign by an instrument in writing addressed to Beneficiary, or Trustee may be removed at any time with or without cause by an instrument in writing executed by Beneficiary. In case of the death, resignation, removal or disqualification of Trustee or if for any reason Beneficiary shall deem it desirable to appoint a substitute or successor trustee to act instead of the herein named Trustee or any substitute or successor trustee, then Beneficiary shall have the right and is hereby authorized and empowered 551646.4 DTBREN Mi/02 2 - .13 PM 32 111'1111111 1111 11111 2002 - 113524 to appoint a successor trustee, or a substitute trustee, without other formality than appointment and designation in writing executed by Beneficiary, and the authority hereby conferred shall extend to the appointment of other successor and substitute trustees successively until the Secured Obligations secured hereby have been paid in full or until the Property is sold hereunder. Such appointment and designation by Beneficiary shall be full evidence of the right and authority to make the same and of all facts therein recited. If Beneficiary is a corporation and such appointment is executed in its behalf by an officer of such corporation, such appointment shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the board of directors or any superior officer of the corporation. Upon the making of any such appointment and designation, all of the estate and title of Trustee in the Property shall vest in the named successor or substitute trustee and he shall thereupon succeed to and shall hold, possess and execute all the rights, powers, privileges, immunities and duties herein conferred upon Trustee; but nevertheless, upon the written request of Beneficiary or of the successor or substitute Trustee, the Trustee ceasing to act shall execute and deliver an instrument transferring to such successor or substitute Trustee all of the estate and title in the Property of the Trustee so ceasing to act, together with all the rights, powers, privileges, immunities and duties herein conferred upon Trustee, and shall duly assign, transfer and deliver any of the properties and moneys held by said Trustee hereunder to said successor or substitute Trustee. All references herein to Trustee shall be deemed to refer to the trustee (including any successor or substitute appointed and designated as herein provided) from time to time acting hereunder. Grantor hereby ratifies and confirms any and all acts which the herein named Trustee or his successor or successors, substitute or substitutes, in this trust, shall do lawfully by virtue hereof. [Balance of Page Intentionally Left Blank] 551646.4 DTBREN 09/181022 13 PM 33 111 1111111 1111 11111111 2002- 113524 IN WITNESS WHEREOF, Grantor has executed and delivered this Deed of Trust as of the date first mentioned above. SN INVESTMENT PROPERTIES, LLC, a Delaware limited liability company By: HARSCH INVESMENT PROPERTIES MANAGEMENT, LLC, a Delaware limited liability company, its Manager • By: Jor D. Schnitzer Prey'. ent STATE OF OREGON ) ) ss. COUNTY OF This instrument was acknowledged before me on September /f , 2002, by Jordan D. Schnitzer as President of Harsch Investment Properties Management, LLC, a Delaware limited liability company, the Manager of SN Investment Properties, LLC, a Delaware limited liability company, on behalf of SN Investment Properties, LLC. OFFICIAL M seal_ �� K�ti � uc fV � [SEA 1 `+7:y'�` NOFARl' PU!_IC- UREGO,! V �� COMMISSION NO. 335.94 r MY COMMISSION EXPIRES SEPT 21, 2G7' r Notary Public for My commission expires: a2 /- O SG 551646.4 DTBREN 09!16102 2 U Ptvl 11 1111111 1111 111111 1 901019_111g9a M I 1111111 2002 - 113524 EXHIBIT A to DEED OF TRUST (Legal Description) PARCEL 1: Parcels 1 and 2, PARTITION PLAT NO. 1994 -028, in the City of Tigard, County of Washington and State of Oregon; EXCEPTING THEREFROM that portion of Parcel 2 conveyed to Albertsons, Inc., by Deed recorded July 9, 1999 as Recorder's Fee No. 99082159 and described as follows: Beginning at the Southwest corner of said Parcel 2, PARTITION PLAT NO. 1994 -028; thence along the Westerly line of said Parcel 2 North 00 °02'39" West, 144.43 feet; thence South 89 °57'21" West, 7.00 feet; thence North 00 °02'39" West, 345.83 feet; thence North 89 °57'21" East, 44.30 feet; thence leaving said Westerly line South 00 °02'39" East, 345.85 feet; thence North 89 °57'21" East, 7.00 feet; thence South 00 °02'39" East, 144.46 feet to the Southerly line of said Parcel 2; thence along said Southerly line North 89 °58'42" West, 44.30 feet to the point of beginning. PARCEL 2: That portion of the Northwest quarter of Section 15, Township 2 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at a point on the East line of the Northwest quarter of Section 15, Township 2 South, Range 1 West of the Willamette Meridian, in the County of Washington and State of Oregon, which point bears South 00 °08'50" East 645.17 feet from the quarter corner on the North line of - said Section; thence South 00 °08'50" East along the East line of the Northwest quarter of said section, a distance of 383.17 feet to a point which is 20.00 feet North 00 °08'50" West from the Southeast corner of that tract of land conveyed to Mountain Park Health Care Facilities, Inc. by Real Estate Contract recorded in Book 1121 page 125, Deed Records for Washington County, Oregon; thence South 88 °19'48" West 650.21 feet to an iron rod on the Easterly right of way line of SW Pacific Highway and marking the Southwest corner of said Mountain Park Health Care Facilities Tract; thence Northeasterly along said right of way line on the arc of a 3769.72 foot radius curve to the right (the chord of which bears North 14 °35'31" East 400.72 feet) a distance of 400.91 feet to an iron rod opposite Engineers Station Ln 212 +45.73 P.S.C.; thence Northeasterly continuing along said right of way line on the arc of a spiral curve to the right (the chord of which bears North 17°46'13" East 1.13 feet) a distance of 1.13 feet to a point on the South line of that tract of land conveyed to Herbert W. Dayson and Betty Jean Dayson by deed recorded in Book 479 page 136, Deed Records of Washington County, Oregon; thence North 89°50'18" West along said South line, a distance of 10.49 feet to a point marking an angle point in said Highway right of way line; thence Northeasterly along said right of way line on the arc of a 3779.72 foot radius curve to the right (the chord of which bears North 17 °37'24" East 2.02 feet) a distance of 2.02 feet to a point opposite Engineers Station Ln 212 +45.73 P.S.C.; thence Northeasterly along said right of way line on the are of a spiral curve to the right (the chord of which bears North 19 °31'45" East 372.85 feet) a distance of 372.89 feet to an iron rod opposite Engineers Station Ln 208 +70.73 P.S.; thence North 20 °34'58" East continuing along said right of way line, a distance of 362.67 feet to an iron rod; thence North 65 °27'40" East 28.16 feet to an iron rod on the Southerly right of way of the relocated portion of Durham Road; thence South 69 °30'00" East along the Southerly right of way line of said Durham Road, a distance of 135.49 feet; thence South 00 °02'39" East 362.38 feet; thence North 89 °57'21" East 29.18 feet; thence 555511.1 KPSAVA 09/17/02 11:04 AA} A-1 �:ii � 2002- 113524 South 00 °02'39" East 137.33 feet; thence South 89 °57'21" West 7.00 feet; thence South 00 °02'39" East 144.12 feet; thence South 89 °58'42" East 130.18 feet to the point of beginning. EXCEPTING THEREFROM that portion thereof conveyed to System Capital Real Property Corporation by Deed recorded May 17, 1999 as Recorders Fee No. 99059949 and described as follows: Beginning at a point that is South 00 °08'50" East, 59.00 feet along the East line of the Northwest one - quarter of said Section 15, and North 89 °55'20" West, 179.96 feet from the North one - quarter corner of said Section 15; thence South 00 °04'40" West, 200.00 feet; thence North 89 °55'20" West, 200.00 feet; thence North 0 °04'40" East, 89.97 feet to a point on the Easterly right -of -way line of S.W. Pacific Highway; thence along said Easterly right -of -way, North 20 °34'58" East, 117.47 feet; thence South 89 °55'20" East, 158.85 feet to the point of beginning. PARCEL 3: Beginning at the Southwest comer of Parcel III as described in a Real Estate Contract to William Brownson II and Judith M. Brownson, recorded September 16,1980, as Recorders Fee No. 80032465, which point bears South 00 °08'50" East 695.17 feet from the one - quarter corner on the North line of Section 15, Township 2 South, Range 1 West of the Willamette Meridian, in the County of Washington and State of Oregon; thence North 00 °08'50" West along the East line of the Northwest one - quarter of said Section 15, a distance of 50.00 feet; thence South 89 °58'42" East parallel with the South line of said Brownsen tract, 629.86 feet to a point on the West line of S.W. 113th Avenue; thence South 00 °09'02" East along the West line of said street, 50.00 feet to a point on the South line of said Brownson tract; thence North 89 °58'42" West along said South line, a distance of 629.86 feet to the point of beginning. PARCEL 4: An easement for parking, ingress and egress, over the land described therein pursuant to the terms and provisions thereof as granted in that certain Declaration of Restrictions and Grant of Easements recorded June 12, 1987 as Recorders Fee No. 87030100, as amended by instrument recorded July 9, 1999 as Fee No. 99082160, Records of Washington County, Oregon. 555511.1 KPSAVA 09117/02 11 .09 AM A -2