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MMD2014-00033
VOIDED MMD2O14 -. 00033 S & H Fitness , LLC Cd ` 0. 6\-:{‘(fr City of Tigard • COMMUNITY DEVELOPMENT DEPART SENT dk.A' Q,�'1 Request for Permit Action T I G A R D 13125 SW Hall Blvd. • Tigard, Oregon 97223 • 503-718-2439 • www.tigard-or.gov TO: CITY OF TIGARD O lD Building Division V YY 13125 SW Hall Blvd.,Tigard, OR 97223 Phone: 503-718-2439 Fax: 503-598-1960 TigardBuildingPermits@tigard-or.gov FROM: ❑ Owner ❑ Applicant ❑ Contractor ►4 City Staff Check(✓)one REFUND OR Name: S & H Fitness, LLC INVOICE TO: (Business or Individual) Mailing Address: 248 NE 64th P1. City/State/Zip: Hillsboro, OR 97124 Phone No.: 949-697-8935 PLEASE TAKE ACTION FOR THE ITEM(S) CHECKED (✓): ® CANCEL/VOID PERMIT APPLICATION. 174 REFUND PERMIT FEES (attach copy of original receipt and provide explanation below). ❑ INVOICE FOR FEES DUE (attach case fee schedule and provide explanation below). ❑ REMOVE/REPLACE CONTRACTOR ON PERMIT (do not cancel permit). Permit #: MMD2014-00033 Site Address or Parcel #: 12268 SW Scholls Ferry Rd. Subdivision Name: Lot #: EXPLANATION: Minor modification not necessary. A change of use from restaurant to personal services was approved in 2012 for this tenant space. The proposed use is personal services, so no change of use. Signature: aW,t,DC Date: ( � 02 0/ Print Name: Refund Policy 1. The city's Community Development Director,Building Official or City Engineer may authorize the refund of: • Any fee which was erroneously paid or collected. • Not more than 80%of the application or plan review fee when an application is withdrawn or canceled before review effort has been expended. • Not more than 80%of the application or permit fee for issued permits prior to any inspection requests. 2. All refunds will be returned to the original paver in the form of a check via US postal service. 3. Please allow 3-4 weeks for processing refund requests. FOR OFFICE USE ONLY Route to Sys Admin: Date Be Route to Records: Date By Refund Processed: Date By Invoice Processed: Date By Permit Canceled: Date By Parcel Tag Added: Date By I:A Building\Forms\RegPcrrnitAction_0023I4_doc • City of Tigard MEMORANDUM T I GARD V �J TO: Case File MMD2014-00033 FROM: Cheryl Caines,Associate Planner RE: S& H Fitness Minor Modification DATE: January 13,2015 This permit has been voided. During review, staff determined that a Minor Modification is not necessary. A change of use from restaurant to personal services was approved in 2012 for this tenant space (MMD2012-00015). Personal fitness training is considered a personal service; therefore a change of use is not necessary. 1 IEC QED nEC 0 9 2014 CITY OF TIGARD • City of Tigard r ANNING/ENGINEERING TIGALU) Minor Modification — Type I Application GENERAI.INFORMATION Property Address/Location(s): 12 e (rI ,P.A./ Se.")oi/5 In addition, the Director must find that the proposed %-errN R d e /,a.ci oR 97 2.z3 change is in compliance with all applicable requirements of Tax Map&Tax Logit#(s): Glee R-1f� c/ Title 18 of the Tigard Development Code. To complete Loup Dese4Pt4-- sl S/iofip 7 Co i tit this review, the Applicant's proposal must include a Site Sue: 4p,,-0x 3(ec ;>< p discussion indicating how the sue expansion/change will — continue to comply with the maximum setback, building Applicant*: .Applicant*: IllidOttialkait S t Ai /c74-le 51 4.L` height, parking, and landscaping standards. Other Address: olY1, Nr 4,y Lk P/ace requirements of this title such as dear vision, solid waste City/State: ,'-1;IIs/io cQ Zip: 97/2`/ storage, non-conforming situations, signs, and tree Primary Contact: J'/e 4-I k Ito-kiwi removal may also be applicable depending on the type and Phone: X9-6?7 473S- Fax: location of the proposed modifications. E-Mail: SK/Leve' e or a".1 tteorf I ih&.rS.cost Property Owner/Deed Holder(s)*: (Attach list if more than one) ------ e-ier7 Con/e-f-5 (it./Oil—ofecri t,' To,,,,,, C.�., u. k �y5 Phone:� 6��z �y,,� REQUIRED SUBMITTAL ELEMENTS Address: 1-336 S.J .'nta�Pcw 5 '314, (Applications will not be accepted without the City/State:Ler_ tic-ye dig Zip: ..7e'3.5" following required submittal elements) *When the owner and the applicant are different people,the [r Application Fomi applicant must be the purchaser of record or a lessee in C3' Owner's Signature/Written Authorization possession with written authorization from the owner or an 'nide"transfer Instrument or Deed agent of the owner. The owner(s) must sign this application in the space provided on the back of this form or submit a Er Sire Plan(4 Large Plans&One-Reduced to H'."a 1 I'', written authorization with this application. Q Applicant's Statement/Narrative(4 copies) 2( Fling Fee Minor Modifications: -------- Minor Modifications are processed for permitted uses and conditional uses. To review a modification as a Minor Modification, the Director must first find that the expansion or change does not invoke one or more of the criteria discussed within Section 18.360.050(B) --- Site Development FOR STAFF USE ONLY Review or Section 18.330.020(B)(2) -Conditional Use. If the M rn D a 0 i y - 000 modification exceeds the maximum allowed under any one or Case?�o.(s): '3 more of the criteria, a Mayor Modification review is required. Major Modifications are processed in the same manner as a Other Case No(si _ new Site Development Review or Conditional Use Permit. 0 lee: Applicant's Statement Receipt No.: ,C 6 �!' The applicant's statement must include a summary of the nal`. i " nu proposed changes. Criteria u1 either 18.360.050(B) or I8.330.020(B)(2) must be addressed with a detailed response Application Accepted By: to each criterion. failure to provide the information needed Date Determined Complete: to process the application would be reason to consider an Rectsca ( 24;2013 application incomplete and delay review of the proposal. i:`•.cuxN1 ,Masters\ilu,d L cr nppluauu i•:Wiwr Mod t,calan.aots City of Tigard 1 13125 SW I Iall Blvd.,Tigard,OR 97223 I 503-718-2421 I www.tigard-or.gciv I Page 1 of 2 ti rTo consider an application complete,you will need to submit ALL of the REOUIREDSUBMITTAL 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 THAT: • The above request does noj violate any deed restrictions that may be attached to or imposed upon the subject F • 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. • Au 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 statements are false. • The applicant has read the entire contents of the application, including the policies and criteria, and understands the requirements for approving or denying the application. SIGNATURES of each owner of the subject property. DATED this le) day of /t7o II ? ,20 /Y er., ---.;,4,4./.- -;‘," 's Signature Owner's Signature Owner's Signature Owner's Signature Owner's Signature Owner's Signature City of Tigard 13125 SW Hall Blvd.,Tigard,OR 97223 I 503-639-4171 I www.tigard-or.gov I Page 2 of 2 ti EXHIBIT A • LEGAL DESCRIPTION OF SHOPPING CENTER Part of the Northwest one-quarter of section 34, Township I 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 the point of intersection of the North right-of-way.line of Springwood Drive, extended, and the East right-of-way line of SW 122nd Avenue (now vacated), said point lying North 89°54'50" East 1,077.94 feet and North 0°05'42" West 635.10 feet from the West one-quarter corner of said Section 34; thence North 89°52'27" East 4 feet; thence North 0°05'45" West paralled with the West right of way of said Avenue, 150 feet to a point; thence South 89°52'27" West paralled to center line of Springwood Drive, 44 feet to a point on the West right of way of said Avenue(now vacated); thence North 0°05'45"West, 180 feet along said right of way to a point; thence North 89°52'2r East 20 feet parallel to the center line of Sgingwood Drive to a point on the center line of said Avenue (now vacated); thence North 0°05'45" West 276 feet on and along said center line to a point on the South right of way of Scholls Ferry Road, being 50 feet from center line thereof; thence South 84°22'I8" West on and along said South right of way of Scholls Ferry Road, 577.71 feet to an iron rod; thence South 0°05'45" East 550.61 feet to an iron rod on the North right-of-way line of Springwood Drive, being 25 feet from center line thereof; thence North 89°52'27"East on and along said North right-of- way line 595.02 feet to the point of beginning. Together with those certain easement rights as set forth in the Declaration orRestrictions estrictions and Grant of Easements, dated May 11, 1979 and recorded June 22, 1979, under recorder's Fee No. 79 245332, Washington County Records, as modified by the addendum thereto, recorded March 28, 1980, under Recorders's Fee No. 80010910 of said'records. • EXHIBIT B PART 1 -SITE PLAN OF THE SHOPPING CENTER (DESIGNATING THE"LANDLORD'S BUILDING") [The site plan is presented solely for the purpose of identifying the approximate location and size of the improvements in the Shopping Center. Subject to the terms and conditions of this Lease,building sizes,dimensions,access and parking area,existing tenant locations and identities are subject to change without notice and at Landlord's discretion. Unit numbers as indicated are not necessarily the actual suite numbers and are intended for use as a reference only. Without limiting any other specific designations set forth on the site plan as of the date of this Lease,those buildings depicted below which are either designated with the letters"NAP" (i.e.,not a part)or are not shaded shall not be considered a part of Landlord's Building.] S.W. 121ST AVENUE I MI * tam 21.ti Al .. v HIN o CA o = �aokri -c3 oci _. � O G 0 in 0. T O �. si 0 CO G411) tril _ X17 q©.+ '1 , n {� 6'0 3 m H a f! 1 :r'''-'41't .rte el cril: IL 1 1 f — r N 1 — _ _ _ F 4 N N r - N N �.f a, COCD N - a, W a, N ti I i at H O 7 t mir err, ._�--- ._---1'1 WI*, 2 Ill r'\j SFEW11'aD.(STATE IfW✓It01 -- -- —__ - �`i I i g- 91A'9C+10:'L _�:- _ c NAP —-- 0 lli II ` T (:%(.- caosloNE I. I t0 • �\ 1."i 4_'� vsGNRvrM .• VG+ e` EAIA FRESH (.44111 • � 1+{ , / �'` }/" *, W •�f►'*;�\` A 41r a a NAP 111114:1" V n siuw Tires ��,•` ' •Alt• �,\�.. .�. 'y;�R`A AC \—_,_.._ ;• f'--� ! 2 –– xxc®,•_E°• Z ER LRAE CLAMP'S ♦ - 1 4Z �� r !01100 1 O ' �� Q • \R SIZE INFORMATION f/) � + re MCMENAMIN'S ,I- _: 1\ 'Y j �7+`� \ �4 NAP i , .n......e...Hees. S �U' rue V \ •�O�O �O4 e0 a VTC'; , , • _ Y's^'�I i i ,a....,... Z O Oar s Ill L >- 1Z.Z4..3 ��� �� �' r L _• W W Z �` '4o� I Q UE 1 ♦ \: / W `^ w c5 oosrrs I--- �,'` - ♦d NAP J V W H • SNAP HMESS , —441 A .! � I 1� �• a iii _. . ! e CLASSY NMS Vj yT1_ I : ' /C;yl?;i .. � r 'N�eitt9rx } f � NAP 1 ' ' iip 1 s.: � 1 \ ., 1 ,.... R \...,,,.. 1 : u1 I ....,.,. >, ,,, ... ,,,-, --. , ,I ,,,,,...._, (Th s .... m4O — r ��-a1 .1! s aY� #� \�__ i I MEADOW CREED APARTMENTSI•p.. MfA00W CIRCLE I++•'. • .i I•Aww i �'eLL*• ImemT SITE A 1 OF 1 Site Plan Springwood Drive 11111mme RITE mminuiraM40 3. pi DOLLAR TREE .1..: WHbLE FOODS AID ,. , 12244 . 1 12290 P^ • . ... 1.ft - i.' '''.;''''' '..-* 12220 I I il Wilig, I men E . .f._ •• " 12262 Opening May 2014 12264 12268 Center Size 93,101 SF 12268 Available Space 1-1 12272 , , ,` n/CErteltiagat • f 1 ' , 1 • itialerainme ZZI Clink nt Retailers 12212 espipt* .1,HIE FOOD kIM•ftE11 • pi;E ries,...C.I. - 12286 RITE A1O 1 1,, •f1-1 , .• E01100 TRFE l,' 11.1 Pr 0,5' Cap MONE 12280 • •11i,v,sy NAI111 i i• M WIMENAMIN S PUB 1...ff.. .'f .- 11111E CAESARS OF OREGON 2 f,p)S11 • HflARMALK FRESH BURGERS&FRIES • 1.'17 ." 1-01A FRESH .1 111 YF Pylon ,., ,10 V S(ONE CREAMERY 1 125cf Pion 10 ....., SV i Scholls Ferry Road N Kahn Beige: I KahnBergerARegencyCnnteis rorn I 503 603 4700 Applicants Statement The property is currently vacant and located in the Greenway Town Center. It's my understanding the property was previously occupied by a restaurant. The new intended use of the property is a fitness studio. The build-out of the fitness studio would not require any structural changes to the exterior of the premise. Modifications and changes would include interior improvements (i.e., partition walls and ceiling, plumbing and electrical, etc). Based on the proposed minor modification, the following criteria were evaluated: 1. An increase in dwelling unit density, or lot coverage for residential development; Not Applicable 2. A change in the ratio or number of different types of dwelling units; Not Applicable 3. A change that requires additional on-site parking in accordance with Chapter 18.765; Not Required 4. A change in the type of commercial or industrial structures as defined by the Uniform Building Code; Not Required 5. An increase in the height of the building(s) by more than 20%; Not Applicable 6. A change in the type and location of accessways and parking areas where off-site traffic would be affected; Not Applicable 7. An increase in vehicular traffic to and from the site and the increase can be expected to exceed 100 vehicles per day; Not Applicable 8. An increase in the floor area proposed for a nonresidential use by more than 10% excluding expansions under 5,000 square feet; Not Applicable 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%; Not Applicable 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. Not Applicable 11. A modification to the conditions imposed at the time of site development review approval which are not the subject of paragraphs 1 through 10 of this subsection. Not Applicable Stefan Klemm Partner S & H, Fitness, LLC 248 NE 64th Place Hillsboro, OR 97124 Signature Date Washington County,Oregon 2006-025678 :}4( 03/03/2006 03:35:03 P61 D-M Cnto2 BBtn=16 0 HOFFMAN $340.00$5.00$6.00$11.00•Total a$362.00 `` 111111111111111 111111111111111 11111 111 00918956200600256780680684 C✓ 1,Jerry Hanson,Director of Assessment and Taxation UPON RECORDATION RETURN TO: and tex•Dfficio County Clerk for Washington County, i, T Oregon, was received herebyrecorded r.dIn book fent of. i, ♦ writing . Return to: records Jerry R ' !of said county. �._� l Ack Landmerica Financial Group,Inc. a' ' JerHanson,Director ment and Taxation, 'y Ex-Officio County Clerk Attn: Denny White 06-001075 1015 15th Street,N.W.,Suite 300 1 Washington,D.C.20005 FW OR-GREENWAY TOWN CENTER,LLC, as trustor (Borrower) • to 3 M or LAWYERS TITLE INSURANCE CORPORATION, as trustee (Trustee) 9 for the benefit of 0 WACHOVIA BANK,NATIONAL ASSOCIATION, as beneficiary a (Lender) 0 DEED OF TRUST AND SECURITY AGREEMENT This document serves as a Fixture Filing under the Uniform Commercial Code. Dated as of March 1, 2006 The name and address of the entity holding a lien or other interest created by this instrument is Wachovia Bank,National Association Commercial Real Estate Services, 8739 Research Drive URP—4,NC 1075,Charlotte, North Carolina 28262 The tax account number(s)of the property subject to the lien of this Deed of Trust: R983537 NCLIB 1323033.4 THIS DEED OF TRUST AND SECURITY AGREEMENT (the "Security Instrument") is made as of the ls` day of March, 2006, by FW OR-GREENWAY TOWN CENTER, LLC, a Delaware limited liability company, having its principal place of business at do Regency Centers, L.P., 121 West Forsyth Street, Suite 200, Jacksonville, Florida 32202, as trustor ("Borrower"), to LAWYERS TITLE INSURANCE CORPORATION, a Virginia corporation, having an address at 1120 NW Couch Street, Suite 500, Portland, Oregon 97209, as trustee ("Trustee"), for the benefit of WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as beneficiary, having an address at Commercial Real Estate Services, 8739 Research Drive URP — 4, NC 1075, Charlotte, North Carolina 28262, as beneficiary (together with its successors and/or assigns, "Lender"). RECITALS: Borrower by its promissory note of even date herewith given to Lender is indebted to Lender in the principal sum of TEN MILLION THREE HUNDRED SEVENTY FIVE THOUSAND AND NO/100 DOLLARS ($10,375,000.00) in lawful money of the United States of America (the note together with all extensions, renewals, modifications, substitutions and amendments thereof shall collectively be referred to as the "Note"); with interest from the date thereof at the rates set forth in the Note, principal and interest to be payable in accordance with the terms and conditions provided in the Note. Borrower desires to secure the payment of the Debt (as defined in Article 2) and the performance of all of its obligations under the Note and the Other Obligations (as defined in Article 2) and also to secure payment of the indebtedness described in Article 24. The total principal amount of all such indebtedness (including, without limitation, the Note) is $213,000,000.00 and the final maturity date of all such indebtedness is March 16,2016. ARTICLE 1 GRANTS OF SECURITY Section 1.1 PROPERTY CONVEYED. Borrower does hereby irrevocably, grant, bargain, sell, pledge, assign, warrant, transfer and convey to Trustee and its successors and assigns in trust, with power of sale and right of entry and possession and grant a security interest to Trustee and, with respect to the personal property described below. Lender, in all of Borrower's right, title and interest in and to the following property, rights, interests and estates now owned, or hereafter acquired by Borrower (the "Property"): (a) the real property described in Exhibit A attached hereto and made a part hereof(the "Land"); (b) all additional lands,estates and development rights hereafter acquired by Borrower for use in connection with the Land and the development of the Land and all additional lands and estates therein which may, from time to time, by supplemental mortgage or otherwise be expressly made subject to the lien of this Security Instrument; (c) the buildings, structures, fixtures, additions, enlargements, extensions, modifications, repairs, replacements and improvements now or hereafter erected or located on the Land (the "Improvements"); (d) all easements, rights of way or use, rights,strips and gores of land, streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers, air rights and development rights, and all estates, rights, titles, interests, privileges, liberties, servitudes, tenements, hereditaments and appurtenances of any nature whatsoever, in any way now or hereafter belonging, relating or pertaining to the Land and the Improvements and the reversion and reversions, remainder and remainders, and all land lying in the bed of any street, road or avenue, opened or proposed, in front of or adjoining the Land, to the center line thereof and all the estates, rights, titles, interests, dower and rights of dower, curtesy and rights of curtesy, property, possession, claim and demand whatsoever, both at law and in equity, of Borrower of, in and to the Land and the Improvements and every part and parcel thereof, with the appurtenances thereto; (e) all machinery, equipment, fixtures (including, but not limited to, all heating, air conditioning, plumbing, lighting, communications and elevator fixtures) and other property of every kind and nature whatsoever owned by Borrower, or in which Borrower has or shall have an interest, now or hereafter located upon the Land and the Improvements, or appurtenant thereto, and usable in connection with the present or future operation and occupancy of the Land and the Improvements and all building equipment, materials and supplies of any nature whatsoever owned by Borrower, or in which Borrower has or shall have an interest, now or hereafter located upon the Land and the Improvements, or appurtenant thereto, or usable in connection with the present or future operation and occupancy of the Land and the Improvements (collectively, the "Personal Property"), and the right, title and interest of Borrower in and to any of the Personal Property which may be subject to any security interests, as defined in the Uniform Commercial Code, as adopted and enacted by the state or states where any of the Property is located (the "Uniform Commercial Code"), superior in lien to the lien of this Security Instrument and all proceeds and products of the above; (f) all leases and other agreements affecting the use, enjoyment or occupancy of the Land and the Improvements heretofore or hereafter entered into, including a guaranty of any such lease (a "Lease" or "Leases") and all right, title and interest of Borrower, its successors and assigns therein and thereunder, including, without limitation, cash or securities deposited thereunder to secure the performance by the lessees of their obligations thereunder and all rents, additional rents, revenues, issues and profits (including all oil and gas or other mineral royalties and bonuses) from the Land and the Improvements (the "Rents") and all proceeds from the sale or other disposition of the Leases and the right to receive and apply the Rents to the payment of the Debt; (g) all awards or payments, including interest thereon, which may heretofore and hereafter be made with respect to the Property, whether from the exercise of the right of eminent domain (including but not limited to any transfer made in lieu of or in anticipation of the exercise of the right), or for a change of grade, or for any other injury to or decrease in the value of the Property; (h) all proceeds of and any unearned premiums on any insurance policies covering the Property, including, without limitation, the right to receive and apply the proceeds of any insurance, judgments, or settlements made in lieu thereof, for damage to the Property; (i) all refunds, rebates or credits in connection with a reduction in real estate taxes and assessments charged against the Property as a result of tax certiorari or any applications or proceedings for reduction; (j) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing including, without limitation, proceeds of insurance and condemnation awards, into cash or liquidation claims; (k) the right, in the name and on behalf of Borrower, to appear in and defend any action or proceeding brought with respect to the Property and to commence any action or proceeding to protect the interest of Lender in the Property; (1) to the extent permitted thereunder, all agreements, contracts, certificates, instruments, franchises, permits, licenses, plans, specifications and other documents, now or hereafter entered into, and all rights therein and -2- thereto, respecting or pertaining to the use, occupation,construction,management or operation of the Land and any part thereof and any Improvements or respecting any business or activity conducted on the Land and any part thereof and all right, title and interest of Borrower therein and thereunder, including, without limitation, the right, upon the happening of any default hereunder,to receive and collect any sums payable to Borrower thereunder; (m) all tradenames, trademarks, servicemarks, logos, copyrights, goodwill, books and records and all other general intangibles relating to or used in connection with the operation of the Property; (n) all letter of credit rights (whether or not the letter of credit is evidenced by a writing) Borrower now has or hereafter acquires relating to the properties, rights, titles and interests referred to in this Section 1.1; (o) all commercial tort claims Borrower now has or hereafter acquires relating to the properties, rights, title and interest referred to in this Section 1.1; and (p) any and all other rights of Borrower in and to the items set forth in Subsections (a) through (o) above. CONDITIONS TO GRANT TO HAVE AND TO HOLD the above granted and described Property unto Trustee, and to its successors in trust and assigns,forever; IN TRUST, WITH THE POWER OF SALE, to secure payment to Lender of the Debt at the time and in the manner provided for in the Note and in this Security Instrument; PROVIDED, HOWEVER, these presents are upon the express condition that, if Borrower shall well and truly pay to Lender the Debt at the time and in the manner provided in the Note and this Security Instrument, shall well and truly perform the Other Obligations as set forth in this Security Instrument and shall well and truly abide by and comply with each and every covenant and condition set forth herein and in the Note, these presents and the estate hereby granted shall cease, terminate and be void, and at Borrower's request, this Security Instrument shall be released of record. Section 1.2 ASSIGNMENT OF RENTS. Borrower hereby absolutely and unconditionally assigns to Lender Borrower's right, title and interest in and to all current and future Leases and Rents; it being intended by Borrower that this assignment constitutes a present, absolute assignment and not an assignment for additional security only. Nevertheless, subject to the terms of this Section 1.2 and Section 3.7, Lender grants to Borrower a revocable license to collect and receive the Rents. Borrower shall hold the Rents, or a portion thereof sufficient to discharge all current sums due on the Debt, for use in the payment of such sums. Section 1.3 SECURITY AGREEMENT. This Security Instrument is both a real property deed of trust and a "security agreement" within the meaning of the Uniform Commercial Code. The Property includes both real and personal property and all other rights and interests, whether tangible or intangible in nature,of Borrower in the Property. By executing and delivering this Security Instrument, Borrower hereby grants to Lender, as security for the Obligations (defined in Section 2.1), a security interest in the Property to the full extent that the Property may be subject to the Uniform Commercial Code and authorizes Lender to file this Security Instrument and/or a separate fixture filing financing statement as a fixture filing in the real property records of Washington County, Oregon and to file a financing statement in any other location, including without limitation the office of the Secretary of State of the State of -3- Delaware, necessary under the Uniform Commercial Code to evidence Lender's security interest in the Personal Property. The information contained in this Section 1.3 is provided in order that this Security Instrument shall comply with the requirements of the Uniform Commercial Code for mortgages to be effective as financing statements filed as a fixture filing. The name of the "Debtor" is the name of Borrower as set forth in the introductory paragraph of this Security Instrument; and the name of the "Secured Party" is the name of Lender as set forth in the introductory paragraph of this Security Instrument: the mailing address of the "Secured Party" from which information concerning the security interest may be obtained and the mailing address of the "Debtor" are as set forth in the preamble to this Security Instrument. The types, or the items, of collateral covered hereby consist of the Personal Property and all other items set forth hereinabove in Section 1.1 which constitute fixtures or personal property. Borrower is the record owner of the Land. The jurisdiction of Borrower is the State of Delaware. Borrower is a limited liability company and the organizational ID # of the Borrower in the State of Delaware is 3963271. Section 1.4 PLEDGE OF MONIES HELD. Borrower hereby pledges to Lender any and all monies now or hereafter held by Lender, including, without limitation, any sums deposited in the Escrow Fund (as defined in Section 3.5), Net Proceeds (as defined in Section 4.4) and condemnation awards or payments described in Section 3.6, as additional security for the Obligations until expended or applied as provided in this Security Instrument, ARTICLE 2 PAYMENTS Section 2.1 DEBT AND OBLIGATIONS SECURED. This Security Instrument and the grants, assignments and transfers made in Article 1 are given for the purpose of securing the following, in such order of priority as Lender may determine in its sole discretion (the "Debt"): (a) the payment of the indebtedness evidenced by the Note in lawful money of the United States of America; (b) the payment of interest, prepayment premiums, default interest, late charges and other sums, as provided in the Note, this Security Instrument or the Other Security Documents (defined below); (c) the payment of all other moneys agreed or provided to be paid by Borrower in the Note, this Security Instrument or the Other Security Documents; (d) the payment of all sums advanced pursuant to this Security Instrument to protect and preserve the Property and the lien and the security interest created hereby; and (e) the payment of all sums advanced and costs and expenses incurred by Lender in connection with the Debt or any part thereof, any renewal, extension, or change of or substitution for the Debt or any part thereof, or the acquisition or perfection of the security therefor, whether made or incurred at the request of Borrower or Lender. This Security Instrument and the grants, assignments and transfers made in Article 1 are also given for the purpose of securing the performance of all other obligations of Borrower contained herein and the performance of each obligation of Borrower contained in any renewal, extension, amendment, modification, consolidation, change of, or substitution or replacement for, all or any part of this Security Instrument, the Note or the Other Security Documents (collectively, the "Other Obligations"). Borrower's obligations for the payment of the Debt and the performance of the Other Obligations shall be referred to collectively below as the"Obligations." -4- Section 2.2 PAYMENTS. Unless payments are made in the required amount in immediately available funds at the place where the Note is payable, remittances in payment of all or any part of the Debt shall not, regardless of any receipt or credit issued therefor, constitute payment until the required amount is actually received by Lender in funds immediately available at the place where the Note is payable (or any other place as Lender, in Lender's sole discretion, may have established by delivery of written notice thereof to Borrower) and shall be made and accepted subject to the condition that any check or draft may be handled for collection in accordance with the practice of the collecting bank or banks. Acceptance by Lender of any payment in an amount less than the amount then due shall be deemed an acceptance on account only, and the failure to pay the entire amount then due shall be and continue to be an Event of Default (defined below). ARTICLE 3 BORROWER COVENANTS Borrower covenants and agrees that: Section 3.1 PAYMENT OF DEBT. Borrower will pay the Debt at the time and in the manner provided in the Note and in this Security Instrument. Section 3.2 INCORPORATION BY REFERENCE. All the covenants, conditions and agreements contained in (a) the Note and (b) all and any of the documents other than the Note or this Security Instrument now or hereafter executed by Borrower and/or others and by or in favor of Lender, which wholly or partially secure or guaranty payment of the Note (the "Other Security Documents"), are hereby made a part of this Security Instrument to the same extent and with the same force as if fully set forth herein. Section 3.3 INSURANCE. (a) Borrower, at its sole cost and expense, for the mutual benefit of Borrower and Lender, shall obtain and maintain, or cause to be maintained, during the entire term of this Security Instrument policies of insurance for Borrower and the Property providing at least the following coverages: (i) comprehensive all risk insurance ("Special Form") including, but not limited to, loss caused by any type of windstorm or hail on the Improvements and the Personal Property, (A) in an amount equal to one hundred percent (100%) of the "Full Replacement Cost," which for purposes of this Agreement shall mean actual replacement value (exclusive of costs of excavations, foundations, underground utilities and footings) with a waiver of depreciation, but the amount shall in no event be less than the outstanding principal balance of the Loan; (B) containing an agreed amount endorsement with respect to the Improvements and Personal Property waiving all co insurance provisions or to be written on a no co insurance form; (C) providing for no deductible in excess of Fifty Thousand and No/100 Dollars ($50,000.00) for all such insurance coverage (except as set forth herein) and (D) if any of the Improvements or the use of the Property shall at any time constitute legal non conforming structures or uses,coverage for -5- loss due to operation of law in an amount equal to the Full Replacement Cost, coverage for demolition costs and coverage for increased costs of construction. In addition, Borrower shall obtain: (x) if any portion of the Improvements is currently or at any time in the future located in a federally designated "special flood hazard area", flood hazard insurance in an amount equal to the lesser of(1) the outstanding principal balance of the Note or (2) the maximum amount of such insurance available under the National Flood Insurance Act of 1968, the flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be amended (collectively, "National Flood Insurance") or such greater amount as Lender shall require, and with a deductible not to exceed the lesser of $250,000 and 5% of the Full Replacement Cost (after payment of proceeds of insurance provided under National Flood Insurance); (y) intentionally omitted; and (z) if the.Property is located in an area with a high degree of seismic activity, earthquake insurance in amounts and in form and substance satisfactory to Lender, with a deductible not to exceed the lesser of $500,000 and 5% of the Full Replacement Cost; (ii) business income insurance (A) with loss payable to Lender; (B) covering all risks required to be covered by the insurance provided for in subsection (i) above; (C) in an annual aggregate amount equal to all rents or estimated gross revenues from the operation of the Properties (as reduced to reflect expenses not incurred during a period of Restoration) and covering rental losses or business interruption, as may be applicable, for a period of at least twelve (12)months, after the date of the casualty, and notwithstanding that the Policy may expire prior to the end of such period; and(D) containing an extended period of indemnity endorsement which provides that after the physical loss to the Improvements and the Personal Property has been repaired, the continued loss of income will be insured until such income returns to the same level it was prior to the loss, or the expiration of six (6) months from the date of the completion of the Restoration, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period. The amount of such business income insurance shall be determined prior to the date hereof and at least once each year thereafter based on Borrower's reasonable estimate of the gross income from the Property for the succeeding twelve (12) month period. All proceeds payable to Lender pursuant to this subsection shall be held by Lender and shall be applied to the obligations secured by the Loan Documents from time to time due and payable hereunder and under the Note, with any excess to be released to Borrower; provided, however, that nothing herein contained shall be deemed to relieve Borrower of its obligations to pay the obligations secured by the Loan Documents on the respective dates of payment provided for in the Note and the other Loan Documents except to the extent such amounts are actually paid out of the proceeds of such business income insurance; (iii) at all times during which structural construction, repairs or alterations are being made with respect to the Improvements, and only if the Property coverage form does not otherwise apply, (A) owner's contingent or protective liability insurance, covering claims not covered by or under the terms or provisions of the commercial general liability insurance policy in (v) below; and (B) the insurance provided for in subsection (i) above written in a so called builder's risk completed value form (1) on a non reporting basis, (2) against all risks insured against pursuant to subsection (i) above, -6- (3) including permission to occupy the Property, (4) with an agreed amount endorsement waiving co insurance provisions, and(5) with a deductible of not more than $25,000; (iv) comprehensive boiler and machinery insurance, if steam boilers or other pressure fixed vessels are in operation, in amounts as shall be reasonably required by Lender on terms consistent with the commercial property insurance policy required under subsection (i) above; (v) commercial general liability insurance against claims for personal injury, bodily injury, death or property damage occurring upon, in or about the Property, such insurance (A) to be on the so called "occurrence" form with a combined limit of not less than Two Million and No/100 Dollars ($2,000,000.00) in the aggregate and One Million and No/100 Dollars ($1,000,000.00) per occurrence; (B) to continue at not less than the aforesaid limit until required to be changed by Lender in writing by reason of changed economic conditions making such protection inadequate; and (C) to cover at least the following hazards: (1) premises and operations; (2)products and completed operations on an "if any"basis; (3) independent contractors; (4)blanket contractual liability for all legal contracts and (5) contractual liability covering the indemnities contained in Article 13.1 to the extent the same is available; (vi) automobile liability coverage for all owned and non owned vehicles, including rented and leased vehicles containing minimum limits per occurrence of One Million and No/100 Dollars ($1,000,000.00); (vii) worker's compensation and employee's liability subject to the worker's compensation laws of the applicable state; (viii) umbrella liability insurance in an amount not less than Three Million and No/100 Dollars ($3,000,000.00) per occurrence on terms consistent with the commercial general liability insurance policy required under subsection (ii) above, including, but not limited to, supplemental coverage for workers' compensation and automobile liability, which umbrella liability coverage shall apply in excess of the automobile liability coverage in clause (vi)above; and (ix) upon sixty (60) days' written notice, such other reasonable insurance such as sinkhole or land subsidence insurance, and in such reasonable amounts as Lender from time to time may reasonably request against such other insurable hazards which at the time are commonly insured against for property similar to the Property located in or around the region in which the Property is located. (x) Borrower shall use commercially reasonable efforts, consistent with those of prudent owners of commercial real estate to maintain, at commercially reasonable rates, insurance against damage resulting from acts of terrorism, or an insurance policy without a terrorism exclusion, on terms consistent with the commercial property insurance policy required under subsection (a) above and otherwise satisfactory to Lender; provided, however, if such terrorism insurance is obtainable at commercially reasonable rates from any insurer or the United States of America or any agency or -7- instrumentality thereof and the lack of such insurance in and of itself-will result in a downgrade by any rating agency issuing any statistical rating in any Secondary Market Transaction to the then current ratings assigned, or to be assigned, to the Securities or any class thereof in any applicable Securitization, Borrower shall obtain such insurance. Notwithstanding the foregoing, Lender acknowledges that Borrower's current insurance satisfies the foregoing requirement in all respects. Lender further acknowledges and agrees that if lenders similar to Lender (that is, other lenders that originate loans for securitization, or REMIC's that hold commercial mortgage loans, as applicable) no longer require the maintenance of such terrorism coverage for properties in the vicinity of the Property encumbered by loans under $20,000,000 and owned by single asset borrowers such as Borrower (in each case, as determined by Lender in its sole but reasonable discretion), then Borrower shall not be required to carry such coverage from and after the date on which Lender confirms such determination to Borrower in writing. (xi) All insurance provided for in Section 3.3(a) shall be obtained under valid and enforceable policies (collectively, the "Policies" or in the singular, the "Policy"), shall be satisfactory in form and substance to Lender and shall be subject to the approval of Lender as to insurance companies, amounts, deductibles, loss payees and insureds. The Policies (i) shall be issued by financially sound and responsible insurance companies approved by Lender and authorized or licensed to do business in the state where the Property is located, with a claims paying ability rating of "A" or better by Standard & Poor's Corporation (it being understood that United States Fire Insurance Company shall be deemed acceptable so long as they maintain a claims paying ability or a rating of "BBB" or better by Standard &Poor's Corporation); (ii) except for the Policy referenced in Section 3.3(a)(vii) shall name Borrower as the insured and Lender as an additional insured, as its interests may appear; (iii) in the case of property damage, boiler and machinery, flood and earthquake insurance, shall contain, a so called New York Non Contributory Standard Mortgagee Clause and (other than those strictly limited to liability protection) a Lender's Loss Payable Endorsement (Form 438 BFU NS), or their equivalents, naming Lender as the person to which all payments made by such insurance company shall be paid; (iv) shall contain a waiver of subrogation against Lender; (v) shall be maintained throughout the term of this Security Instrument without cost to Lender; (vi) shall be assigned and the originals (or duplicate originals certified to be true and correct by the related insurer) delivered to Lender; and (vii) shall contain such provisions as Lender deems reasonably necessary or desirable to protect its interest including, without limitation, endorsements providing that neither Borrower, Lender nor any other party shall be a co insurer under said Policies and that Lender shall receive at least thirty (30) days prior written notice of any modification, reduction or cancellation. Any blanket Policy shall specifically allocate to the Property the amount of coverage from time to time required hereunder and shall otherwise provide the same protection as would a separate Policy insuring only the Property in compliance with the provisions of Section 3.3(a), and with respect to any blanket Policy, Borrower may provide, in lieu of the original (or certified copy of the) Policy, a certificate thereof in form satisfactory to Lender, provided, upon Lender's request, Borrower shall obtain and provided to Lender the original or certified copy of such Policy. Borrower shall pay the premiums for such Policies (the "Insurance Premiums") as the same become due and payable and shall furnish to Lender evidence of the renewal of each of the new Policies with receipts for -8- the payment of the Insurance Premiums or other evidence of such payment reasonably satisfactory to Lender (provided that such Insurance Premiums have not been paid to Lender or Lender's servicing agent pursuant to Section 3.5 hereof). If Borrower does not furnish such evidence and receipts at least thirty (30) days prior to the expiration of any apparently expiring Policy, then Lender may procure, but shall not be obligated to procure, such insurance and pay the Insurance Premiums therefor, and Borrower agrees to reimburse Lender for the cost of such Insurance Premiums promptly on demand. Subject to the limitations contained in Section 3.3(a)(x), within thirty (30) days after request by Lender, Borrower shall obtain such increases in the amounts of coverage required hereunder as may be reasonably requested by Lender, taking into consideration changes in the value of money over time, changes in liability laws, changes in prudent customs and practices, and the like. Lender acknowledges that the insurance, carried by Borrower as of the date hereof satisfies the requirements under this Section 3.3(a). (b) If the Property shall be damaged or destroyed, in whole or in part, by fire or other casualty, Borrower shall give prompt notice of such damage to Lender and shall promptly commence and diligently prosecute the completion of the repair and restoration of the Property as nearly as possible to the condition the Property was in immediately prior to such fire or other casualty, with such alterations as may be approved by Lender (the "Restoration") and otherwise in accordance with Section 4.4 of this Security Instrument. Borrower shall pay all costs of such Restoration whether or not such costs are covered by insurance. In case of loss covered by Policies, Lender may either (1) settle and adjust any claim without the consent of Borrower, or (2) allow Borrower to agree with the insurance company or companies on the amount to be paid upon the loss; provided, that (A) Borrower may adjust losses aggregating not in excess of$100,000 if such adjustment is carried out in a competent and timely manner and (B) if no Event of Default shall have occurred, Lender shall not settle or adjust any such claim without the consent of Borrower, which consent shall not be unreasonably withheld or delayed. In any case Lender shall and is hereby authorized to collect and receipt for any such insurance proceeds; and the expenses incurred by Lender in the adjustment and collection of insurance proceeds shall become part of the Debt and be secured hereby and shall be reimbursed by Borrower to Lender upon demand. Section 3.4 PAYMENT OF TAXES,ETC. (a) Borrower shall pay all taxes, assessments, water rates, sewer rents, governmental impositions, and other charges, including without limitation vault charges and license fees for the use of vaults, chutes and similar areas adjoining the Land, now or hereafter levied or assessed or imposed against the Property or any part thereof(the "Taxes"), all ground rents, maintenance charges and similar charges, now or hereafter levied or assessed or imposed against the Property or any part thereof(the "Other Charges"), and all charges for utility services provided to the Property prior to the same becoming delinquent. Borrower will deliver to Lender, promptly upon Lender's request, evidence satisfactory to Lender that the Taxes, Other Charges and utility service charges have been so paid or are not then delinquent. Borrower shall not suffer and shall promptly cause to be paid and discharged any lien or charge whatsoever which may be or become a lien or charge against the Property. Except to the extent sums -9- sufficient to pay all Taxes and Other Charges have been deposited with Lender in accordance with the terms of this Security Instrument; Borrower shall furnish to Lender paid receipts for the payment of the Taxes and Other Charges prior to the date the same shall become delinquent. (b) Notwithstanding Section 3.4(a) above, after prior written notice to Lender, Borrower, at its own expense, may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the amount or validity or application in whole or in part of any of the Taxes,provided that(i) no Event of Default has occurred under the Note, this Security Instrument or any of the Other Security Documents, (ii) Borrower is permitted to do so under the provisions of any other mortgage, deed of trust or deed to secure debt affecting the Property, (iii) such proceeding shall suspend the collection of the Taxes from Borrower and from the Property or Borrower shall have paid all of the Taxes under protest, (iv) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower is subject and shall not constitute a default thereunder, (v) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost, and (vi) Borrower shall have'deposited with Lender adequate reserves for the payment of the Taxes, together with all interest and penalties thereon, unless Borrower has paid all of the Taxes under protest, or shall have furnished the security as may be required in the proceeding, or as may be requested by Lender to insure the payment of any contested Taxes,together with all interest and penalties thereon. • Section 3.5 ESCROW FUND. (a) In addition to the initial deposits (if any) with respect to Taxes and Insurance Premiums made by Borrower to Lender on the date hereof to be held by Lender in escrow, Borrower shall pay to Lender on each Monthly Payment Date (as defined in the Note) (i) one twelfth of an amount which would be sufficient to pay the Taxes payable, or estimated by Lender to be payable, during the next ensuing twelve (12) months and (ii) one twelfth of an amount which would be sufficient to pay the Insurance Premiums due for the renewal of the coverage afforded by the Policies upon the expiration thereof(the amounts in (i) and (ii) above shall be called the "Escrow Fund"). Borrower agrees to notify Lender immediately of any changes to the amounts, schedules and instructions for payment of any Taxes and Insurance Premiums of which it has obtained knowledge and authorizes Lender or its agent to obtain the bills for Taxes and Other Charges directly from the appropriate taxing authority. The Escrow Fund and the payments of interest or principal or both, payable pursuant to the Note shall be added together and shall be paid as an aggregate sum by Borrower to Lender. Lender will apply the Escrow Fund to payments of Taxes and Insurance Premiums required to be made by Borrower pursuant to Sections 3.3 and 3_4 hereof. If the amount of the Escrow Fund shall exceed the amounts due for Taxes and Insurance Premiums pursuant to Sections 3.3 and 3_4 hereof, Lender shall, in its discretion, return any excess to Borrower or credit such excess against future payments to be made to the Escrow Fund. In allocating such excess, Lender may deal with the person shown on the records of Lender to be the owner of the Property. If the Escrow Fund is not sufficient to pay the items set forth in (i) and (ii) above, Borrower shall promptly pay to Lender, upon written demand, an amount which Lender shall reasonably estimate as sufficient to make up the deficiency. The Escrow Fund shall not constitute a trust fund and may be commingled with other monies held by Lender. No earnings or interest on the Escrow Fund shall be payable to Borrower. -10- (b) Notwithstanding the foregoing, Borrower shall not be required to contribute to the Escrow Fund provided (1) no Event of Default shall have occurred and (2) there has not been an assignment and assumption of the Note pursuant to Section 8.4 hereof, and Borrower satisfies the following: Borrower shall furnish to Lender satisfactory evidence of (i) the renewal of the Policies at least thirty (30) days prior to expiration of such Policies, (ii) the payment of Insurance Premiums within ten (10) days of Lender's written request therefor, and (iii) the payment of Taxes prior to same becoming delinquent. Upon notice from Lender following (a) an Event of Default or (b) the failure of Borrower to provide satisfactory evidence of any of the foregoing, Borrower shall begin to deposit into the Escrow Fund as described in Section 3.5(a) above beginning on the Monthly Payment Date (as defined in the Note) immediately following the date of such notice. Section 3.6 CONDEMNATION. Borrower shall promptly give Lender notice of the actual or threatened commencement of any condemnation or eminent domain proceeding and shall deliver to Lender copies of any and all papers served in connection with such proceedings. Lender is hereby irrevocably appointed as Borrower's attorney in fact coupled with an interest, with exclusive powers to collect, receive and retain any award or payment for any taking accomplished through a condemnation or eminent domain proceeding and to make any compromise or settlement in connection therewith. All condemnation awards or proceeds shall be either (a) paid to Lender for application against the Debt or (b) applied to Restoration of the Property in accordance with Section 4.4 hereof. Notwithstanding any taking by any public or quasi public authority through eminent domain or otherwise (including but not limited to any transfer made in lieu of or in anticipation of the exercise of such taking),Borrower shall continue to pay the Debt at the time and in the manner provided for its payment in the Note and in this Security Instrument and the Debt shall not be reduced until any award or payment therefor shall have been actually received and applied by Lender, after the deduction of reasonableexpenses of collection, to the reduction or discharge of the Debt. Lender shall not be limited to the interest paid on the award by the condemning authority but shall be entitled to receive out of the award interest at the rate or rates provided herein or in the Note. Any award or payment to be applied to the reduction or discharge of the Debt or any portion thereof may be so applied whether or not the Debt or such portion thereof is then due and payable. If the Property is sold, through foreclosure or otherwise, prior to the receipt by Lender of the award or payment, Lender shall have the right, whether or not a deficiency judgment on the Note shall have been or may be sought, recovered or denied, to receive the award or payment, or a portion thereof sufficient to pay the Debt. Section 3.7 LEASES AND RENTS. (a) Borrower does hereby absolutely and unconditionally assign to Lender, Borrower's right, title and interest in all current and future Leases and Rents, it being intended by Borrower that this assignment constitutes a present, absolute assignment and not an assignment for additional security only. Such assignment to Lender shall not be construed to bind Lender to the performance of any of the covenants, conditions or provisions contained in any such Lease or otherwise impose any obligation upon Lender. Borrower agrees to execute and deliver to Lender such additional instruments, in form and substance satisfactory to Lender, as may hereafter be requested by Lender to further evidence and confirm such assignment. Nevertheless, subject to the terms of this Section 3.7, Lender grants to Borrower a revocable license to operate and -11- manage the Property and to collect the Rents. Borrower shall hold the Rents, or a portion thereof sufficient to discharge all current sums due on the Debt, in trust for the benefit of Lender for use in the payment of such sums. Upon an Event of Default, without the need for notice or demand, the license granted to Borrower herein shall automatically be revoked, and, to the extent permitted by applicable law, Lender shall immediately be entitled to possession of all Rents, whether or not Lender enters upon or takes control of the Property. Lender is hereby granted and assigned by Borrower the right, at its option, upon revocation of the license granted herein, to enter upon the Property in person, by agent or by court appointed receiver to collect the Rents. Any Rents collected after the revocation of the license may be applied toward payment of the Debt in such priority and proportions as Lender in its sole discretion shall deem proper in accordance with the terms of this Security Instrument and the Note. (b) All Leases shall be written on the standard form of lease which has been approved by Lender. No changes may be made to the Lender approved standard lease without the prior written consent of Lender except for commercially reasonable changes agreed to in the ordinary course of Borrower's business. All Leases shall provide that they are subordinate to this Security Instrument and that the tenant thereunder agrees to attorn to Lender. (c) Borrower (i) shall observe and perform in all material respects all the obligations imposed upon the lessor under the Leases and shall not do or permit to be done anything to materially impair the value of the Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive thereunder; (iii) shall not collect any of the Rents more than one (1) month in advance; and (iv) shall not execute any other assignment of the lessor's interest in the Leases or the Rents. Borrower shall promptly send copies to Lender of all notices of default which Borrower shall send under any Lease (x) in excess of 15,000 square feet, (y) in excess of twenty percent (20%) of the gross leasable area at the property, or (z) representing twenty percent (20%) or greater of the gross base rent from the Property (each, a "Major Lease") and, (A) shall enforce all of the material terms, covenants and conditions contained in the Lease upon the part of the lessee thereunder to be observed or performed, short of termination thereof; (B) shall not alter, modify or change the terms of the Major Leases in any material respect without the prior written consent of Lender; (C) shall not convey or transfer or suffer or permit a conveyance or transfer of the Property or of any interest therein so as to effect a merger of the estates and rights, or a termination or diminution of the obligations of, tenants under the Leases; (D) shall not consent to any assignment of or subletting under any Major Lease not in accordance with the terms of the Leases, without the prior written consent of Lender; and (E) shall not cancel or terminate the Leases or accept a surrender thereof, except that any Lease which is not a Major Lease may be canceled if at the time of the cancellation thereof a new Lease is entered into on substantially the same terms or more favorable terms as the canceled Lease. (d) Borrower, as the lessor thereunder,may enter into proposed lease renewals and new leases without the prior written consent of Lender, provided each such proposed lease: (i) is not a Major Lease; (ii) shall have an initial term of not less than three (3) years or greater than ten (10) years; (iii) shall provide for rental rates comparable to then existing local market rates and shall be an arm's length transaction; (iv) shall not contain any options for renewal or expansion by the tenant thereunder at rental rates which are either below comparable market levels or less than the rental rates paid by the tenant during the initial lease term; (v) shall be to a -12- tenant which is experienced, creditworthy and reputable; and (vi) shall comply with the provisions of subsection (b) above. Borrower may enter into a proposed lease which does not satisfy all of the conditions set forth in clauses (i) through (v) immediately above, provided Lender consents in writing to such proposed lease, such consent not to be unreasonably withheld. If Borrower has not received Lender's consent within five (5) business days of written notification to Lender, Borrower shall provide a second written notification to Lender which written notification to Lender specifies with particularity the following: "IMMEDIATE RESPONSE REQUIRED. CONSENT DEEMED GIVEN IF RESPONSE NOT RECEIVED WITHIN FIVE (5) BUSINESS DAYS". Lender's failure to respond within five (5) business days of receipt of such written request and any and all required information and documentation relating thereto shall be deemed acceptance of the proposed lease renewal or new lease. Borrower expressly understands that any and all proposed leases are included in the definition of "Lease" or "Leases" as such terms may be used throughout this Security Instrument, the Note, and the Other Security Documents. Borrower shall furnish Lender with executed copies of all Leases and any amendments or other agreements pertaining thereto within ten (10)days of the execution thereof. All security deposits of tenants, whether held in cash or any other form, shall not be commingled with any other funds of Borrower and, if cash, shall be deposited by Borrower at such commercial or savings bank or banks as may be reasonably satisfactory to Lender. Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits under any applicable legal requirements shall be maintained in full force and effect in the full amount of such deposits unless replaced by cash deposits as hereinabove described, shall be issued by an institution reasonably satisfactory to Lender, shall,if permitted pursuant to any legal requirements, name Lender as payee or lender thereunder (or at Lender's option, be fully assignable to Lender) and shall, in all respects, comply with any applicable legal requirements and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower's compliance with the foregoing. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender's request, if permitted by any applicable legal requirements, turn over to Lender the security deposits (and any interest theretofore earned thereon) with respect to all or any portion of the Property, to be held by Lender subject to the terms of the Leases. Section 3.8 MAINTENANCE OF PROPERTY. Borrower shall cause the Property to be maintained in a good and safe condition and repair and in keeping with similar retail properties in the Washington County, Oregon area. The Improvements and the Personal Property shall not be removed, demolished or materially altered if such removal, demolition or alteration materially reduces the value of the Property (except for normal replacement of the Personal Property) without the consent of Lender. Borrower shall promptly repair, replace or rebuild any part of the Property which may be destroyed by any casualty, or become damaged, worn or dilapidated or which may be affected by any proceeding of the character referred to in Section 3.6 hereof and shall complete and pay for any structure at any time in the process of construction or repair on the Land. Borrower shall not initiate,join in, acquiesce in, or consent to any change in any private restrictive covenant, zoning law or other public or private restriction, limiting or defining the uses which may be made of the Property or any part thereof which may have a material adverse affect on the use, operation or value of the Property. If under applicable zoning provisions the use of all or any portion of the Property is or shall become a -13- nonconforming use,Borrower will not cause or permit the nonconforming use to be discontinued or abandoned without the express written consent of Lender. Section 3.9 WASTE. Borrower shall not commit or suffer any waste of the Property or make any change in the use of the Property which will in any way materially increase the risk of fire or other hazard arising out of the operation of the Property, or take any action that might invalidate or give cause for cancellation of any Policy, or do or permit to be done thereon anything that may in any way impair the value of the Property or the security of this Security Instrument. Borrower will not, without the prior written consent of Lender, permit any drilling or exploration for or extraction, removal, or production of any minerals from the surface or the subsurface of the Land, regardless of the depth thereof or the method of mining or extraction thereof. Section 3.10 COMPLIANCE WITH LAWS. Borrower shall promptly comply in all material respects with all existing and future federal, state and local laws, orders, ordinances, governmental rules and regulations or court orders affecting or which may be interpreted to affect the Property, or the use thereof ("Applicable Laws"). Borrower shall from time to time,upon Lender's request,provide Lender with evidence satisfactory to Lender that the Property complies with all Applicable Laws or is exempt from compliance with Applicable Laws. Borrower shall give prompt notice to Lender of the receipt by Borrower of any notice related to a violation of any Applicable Laws and of the commencement of any proceedings or investigations which relate to compliance with Applicable Laws. Section 3.11 BOOKS AND RECORDS. (a) Borrower shall keep adequate books and records of account in accordance with generally accepted accounting principles ("GAAP") or other accounting methods acceptable to Lender in its sole discretion, consistently applied and furnish to Lender: (i) monthly,prior to a Secondary Market Transaction,and thereafter quarterly rent rolls signed, dated and certified by Borrower (or an officer, general partner or principal of Borrower if Borrower is not an individual) to be true and complete to the best knowledge of such person after having made due inquiry, detailing the names of all tenants of the Improvements, the portion of Improvements occupied by each tenant, the base rent and any other charges payable under each Lease and the term of each Lease, including the expiration date, and any other information as is reasonably required by Lender, within fifteen (15) days after the end of each calendar month or quarter, as applicable; (ii) monthly, prior to a Secondary Market Transaction, and thereafter quarterly, an operating statement of the Property certified by Borrower (or an officer, general partner or principal of Borrower if Borrower is not an individual) to be true and complete to the best knowledge of such person after having made due inquiry, detailing the total revenues received, total expenses incurred, total capital expenditures (including, but not limited to, all capital improvements (including, but not limited to, tenant improvements)), leasing commissions and other leasing costs, total debt service and total -14- cash flow, within thirty (30) days after the close of each calendar month or quarter, as applicable; and (iii) an annual balance sheet and profit and loss statement of Borrower, in the form required by Lender, prepared and certified by Borrower, and, financial and operating statements, in a form acceptable to Lender (it being understood that a consolidated financial and operating statements shall be acceptable to Lender so long as such statements contain a footnote-detailing the financial information with respect to the Borrower and otherwise comply with the requirements of Section 4.3(a) hereof) audited by an independent certified public accountant within ninety (90) days after the close of each fiscal year of Borrower. (b) Upon request from Lender, Borrower and its affiliates shall furnish to Lender: (i) a property management report for the Property, showing the number of inquiries made and/or rental applications received from tenants or prospective tenants and deposits received from tenants and any other information requested by Lender, in reasonable detail and certified by Borrower (or an officer, general partner or principal of Borrower if Borrower is not an individual) under penalty of perjury to be true and complete, but no more frequently than quarterly; (ii) an accounting of all security deposits held in connection with any Lease of any part of the Property, including the name and identification number of the accounts in which such security deposits are held, the name and address of the financial institutions in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to obtain information regarding such accounts directly from such financial institutions; and (iii) an annual operating budget presented on a monthly basis consistent with the annual operating statement described above for the Property and all proposed capital replacements and improvements at least fifteen (15) days prior to the start of each calendar year. (c) Borrower and its affiliates shall furnish Lender with such other additional financial or management information as may, from time to time, be reasonably required by Lender in form and substance satisfactory to Lender. Section 3.12 PAYMENT FOR LABOR AND MATERIALS. Borrower will promptly pay when due all bills and costs for labor, materials, and specifically fabricated materials incurred in connection with the Property and never permit to exist beyond the due date thereof in respect of the Property or any part thereof any lien or security interest, even though inferior to the liens and the security interests hereof, and in any event never permit to be created or exist in respect of the Property or any part thereof any other or additional lien or security interest other than the liens or security interests hereof, except for the Permitted Exceptions (defined below). Nothing contained herein shall affect or impair Borrower's ability to diligently and in good faith contest any lien or bill for labor or materials, provided that any lien placed upon the Property must be fully and irrevocably discharged (by bond or otherwise) within 60 days after the date the same is first placed upon the Property. Section 3.13 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall observe and perform each and every term to be observed or performed by Borrower pursuant to the terms of any agreement or recorded instrument affecting or pertaining to the Property, or -15- given by Borrower to Lender for the purpose of further securing an obligation secured hereby and any amendments, modifications or changes thereto. Section 3.14 PROPERTY MANAGEMENT. Borrower, Lender and Regency Realty Group, Inc., a Florida corporation (the "Property Manager") have executed that certain Conditional Assignment of Management Agreement of even date herewith which sets forth, among other things, certain rights of Lender to terminate the property management agreement between Borrower and Property Manager, as more particularly set forth therein. ARTICLE 4 SPECIAL COVENANTS. • Borrower covenants and agrees that: Section 4.1 PROPERTY USE. The Property shall be used only for general retail and related commercial uses and for no other use without the prior written consent of Lender, which consent may be withheld in Lender's sole and absolute discretion. Section 4.2 ERISA. (a) Borrower shall not engage in any transaction which would cause any obligation, or action taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the Note, this Security Instrument and the Other Security Documents) to be a non exempt (under a statutory or administrative class exemption) prohibited transaction under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). (b) Borrower further covenants and agrees to deliver to Lender such certifications or other evidence from time to time throughout the term of the Security Instrument, as requested by Lender in its sole discretion, that (i) Borrower is not an "employee benefit plan" as defined in Section 3(3) of ERISA, or other retirement arrangement, which is subject to Title I of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), or a "governmental plan" within the meaning of Section 3(32) of ERISA; (ii)Borrower is not subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans; and (iii) one or more of the following circumstances is true: (A) Equity interests in Borrower are publicly offered securities, within the meaning of 29 C.F.R. § 2510.3 101(b)(2); (B) Less than 25 percent of each outstanding class of equity interests in Borrower are held by "benefit plan investors" within the meaning of 29 C.F.R. § 2510.3 101(0(2); or (C) Borrower qualifies as an "operating company" or a "real estate operating company" within the meaning of 29 C.F.R. § 2510.3 101(c) or(e) or an investment company registered under The Investment Company Act of 1940. -16- Section 4.3 SINGLE PURPOSE ENTITY. (a) Borrower has not and shall not: (i) engage in any business or activity other than the ownership, operation and maintenance of the Property, and activities incidental thereto; (ii) acquire or own any material assets other than (A) the Property, and (B) such incidental Personal Property as may be necessary for the operation of the Property; (iii) merge into or consolidate with any person or entity or dissolve, terminate, or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure, without in each case Lender's consent; (iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its organization or formation, or without the prior written consent of Lender, amend, modify, terminate or fail to comply with the provisions of Borrower's Partnership Agreement, Articles or Certificate of Incorporation or similar organizational documents, as the case may be, as same may be further amended or supplemented, if such amendment, modification, termination or failure to comply would adversely affect the ability of Borrower to perform its obligations hereunder, under the Note or under the Other Security Documents; (v) own any subsidiary or make any investment in, any person or entity without the consent of Lender; (vi) commingle its assets with the assets of any of its general partners, affiliates, principals or of any other person or entity; (vii) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the Debt, except with respect to trade payables in the ordinary course of its business of owning and operating the Property, provided that such debt is paid within sixty (60) days of the date of invoice, unless Borrower is contesting such trade payable debt in good faith and has set aside commercially reasonable reserves with respect thereto; (viii) become insolvent and fail to pay its debts and liabilities from its assets as the same shall become due; (ix) fail to maintain its records, books of account and bank accounts separate and apart from those of the general partners, principals and affiliates of Borrower, the affiliates of a general partner.of Borrower, and any other person or entity; (x) enter into any contract or agreement with any general partner, principal or affiliate of Borrower, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms length basis with third parties other than any general partner,principal or affiliate of Borrower; (xi) seek the dissolution or winding up in whole, or in part, of Borrower; (xii) maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any general partner, principal or affiliate of Borrower, or any general partner, principal or affiliate thereof or any other person; (xiii) hold itself out to be responsible for the debts of another person; (xiv) make any loans or advances to any third party, including any general partner, principal or affiliate of Borrower, or any general partner, principal or affiliate thereof; (xv) fail to file its own tax returns; (xvi) agree to, enter into or consummate any transaction which would render Borrower unable to furnish the certification or other evidence referred to in Section 4.2(b) hereof; (xvii) fail either to hold itself out to the public as a legal entity separate and distinct from any other entity or person or to conduct its business solely in its own name in order not (A) to mislead others as to the identity with which such other party is transacting business, or (B) to suggest that Borrower is responsible for the debts of any third party (including any general partner, principal or affiliate of Borrower, or any general partner, principal or affiliate thereof); (xviii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; (xix) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or -17- reorganization statute, or make an assignment for the benefit of creditors and (xx) fail to conduct its business so that the assumptions made with respect to the Borrower and SPE Principal in that certain "substantive non-consolidation" opinion letter (the "Insolvency Opinion") delivered by Foley & Lardner LLP in connection with the origination of the Loan shall be true and correct in all respects. (b) The sole general partner or managing member (the "SPE Principal") of Borrower, as applicable, is and shall be at all times a limited liability company or a corporation whose sole asset is its interest in Borrower and such SPE Principal of Borrower will at all times comply, and will cause Borrower to comply, with each of the covenants, terms and provisions contained in Section 4.3(a) as if such representation, warranty or covenant was made directly by such SPE Principal. If Borrower is a single member limited liability company formed pursuant to clause (c)below, then the SPE Principal or Borrower shall not fail at any time to have at least one (1) independent manager who is not at the time of initial appointment and has not been at any time during the preceding five (5) years: (a) a stockholder, director, officer, employee, partner or member of the Borrower or the SPE Principal or any affiliate of either of them; (b) a customer, supplier or other person who purchases any goods or services from or derives any revenues from its activities with the Borrower or the SPE Principal or any affiliate of either of them; (c) a person or other entity controlling or under common control with any such stockholder, member, partner, customer, supplier or other person; (d) an attorney or counsel to the Borrower or the SPE Principal or any of their affiliates or (e) a member of the immediate family of any such stockholder, director, officer, employee, member, partner, customer, supplier or other person. As used herein, the term "affiliate" means any person controlling, under common control with, or controlled by the person in question, and the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a person or entity, whether through ownership of voting securities, by contract or otherwise. (c) (i) In the event Borrower is a single member limited liability company, Borrower shall be a Delaware limited liability company, and the limited liability company agreement of Borrower (the"LLC Agreement") shall provide that (i) upon the occurrence of any event that causes the sole member of Borrower ("Member") to cease to be the member of Borrower (other than (A) upon an assignment by Member of all of its limited liability company interest in Borrower and the admission of the transferee, or (B) the resignation of Member and the admission of an additional member, in either case in accordance with the terms of the Loan Documents and the LLC Agreement), the person executing the LLC Agreement as a "Special Member" (as such term is defined in the LLC Agreement) ("Special Member") shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower, automatically be admitted to Borrower and shall continue Borrower without dissolution and (ii) Special Member may not resign from Borrower or transfer its rights as Special Member unless a successor Special Member has been admitted to Borrower as Special Member in accordance with requirements of Delaware law. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower upon the admission to Borrower of a substitute Member, (ii) Special Member shall be a member of Borrower that has no interest in the profits, losses and capital of Borrower and has no right to receive any distributions of Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited Liability Company Act (the "Act"), Special Member shall not be required to make any -18- capital contributions to Borrower and shall not receive a limited liability company interest in Borrower, (iv) Special Member, in its capacity as Special Member, may not bind Borrower and (v)except as required by any mandatory provision of the Act, Special Member,in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, Borrower, including, without limitation, the merger, consolidation or conversion of Borrower. In order to implement the admission to Borrower of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower as Special Member, Special Member shall not be a member of Borrower. (ii) Upon the occurrence of any event that causes the Member to cease to be a member of Borrower, to the fullest extent permitted by law, the Special Member shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of Member in Borrower, agree in writing (i)to continue Borrower and (ii)to the admission of the Special Member, as a substitute member of Borrower, effective as of the occurrence of the event that terminated the continued membership of Member of Borrower in Borrower. Any action initiated by or brought against Member or Special Member under any creditors rights laws shall not cause Member or Special Member to cease to be a member of Borrower and upon the occurrence of such an event, the business of Borrower shall continue without dissolution. The LLC Agreement shall provide that each of Member and Special Member waives any right it might have to agree in writing to dissolve Borrower upon the occurrence of any action initiated by or brought against Member or Special Member under any Creditors Rights Laws, or the occurrence of an event that causes Member or Special Member to cease to be a member of Borrower. (d) Borrower Entity/Separateness. Borrower hereby represents that in all material respects since the date of formation of Borrower to the date of this Agreement that Borrower: (i) is and always has been duly formed, validly existing, and in good standing in the state of its organization and in all other jurisdictions where it is qualified to do business; (ii) has no judgments or liens of any nature against it except for tax liens not yet due; (iii) is in compliance with all laws, regulations, and orders applicable to it and, except as otherwise disclosed in this Agreement, has received all permits necessary for it to operate; (iv) is not involved in any dispute with any taxing authority; (v) has paid all taxes which it owes as of the Closing Date; (vi) has never owned any real property other than the Property and personal property necessary or incidental to its ownership or operation of the Property and has never engaged in any business other than the ownership and operation of the Property and has complied with all separateness covenants set forth in its organizational documents from time to time; -l 9- (vii) is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that is still pending or that resulted in a judgment against it that has not been paid in full; (viii) has provided Lender with complete financial statements that reflect a fair and accurate view of the entity's financial condition; (ix) has received a Phase One environmental audit for the Property, and such report provided that no further recommendation was required; (x) has no material contingent or actual obligations not related to the Property; (xi) has not entered into any contract or agreement with any of its affiliates, constituents, or owners, or any guarantors of any of its obligations or any Affiliate of any of the foregoing (individually, a "Related Party" and collectively, the "Related Parties"), except upon terms and conditions that are commercially reasonable and substantially similar to those available in an arm's-length transaction with an unrelated party; (xii) has paid all of its debts and liabilities from its assets; (xiii) has done or caused to be done all things necessary to observe all organizational formalities applicable to it and to preserve its existence; (xiv) has maintained all of its books, records, financial statements and bank accounts separate from those of any other Person; (xv) has not had its assets listed as assets on the financial statement of any other Person; (xvi) has filed its own tax returns (except to the extent that it has been a tax-disregarded entity not required to file tax returns under applicable law); (xvii) has been, and at all times has held itself out to the public as, a legal entity separate and distinct from any other Person (including any affiliate or other Related Party); (xviii) has corrected any known misunderstanding regarding its status as a separate entity; (xix) has conducted all of its business and held all of its assets in its own name; (xx) has not identified itself or any of its affiliates as a division or part of the other; -20- (xxi) has maintained and utilized separate stationery, invoices and checks bearing its own name; (xxii) has not commingled its assets with those of any other Person and has held all of its assets in its own name; (xxiii) has not guaranteed or become obligated for the debts of any other Person; (xxiv) has not held itself out as being responsible for the debts or obligations of any other Person; (xxv) has allocated fairly and reasonably any overhead expenses that have been shared with an affiliate, including paying for office space and services performed by any employee of an affiliate or Related Party; (xxvi) has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding except in connection with the Loan; (xxvii) has maintained adequate capital in light of its contemplated business operations; (xxviii) has maintained a sufficient number of employees in light of its contemplated business operations and has paid the salaries of its own employees from its own funds; (xxix) has not owned any subsidiary or any equity interest in any other entity; (xxx) has not incurred any indebtedness that is still outstanding other than indebtedness that is permitted under the Loan Documents; and (xxxi) has not had any of its obligations guaranteed by an affiliate, except for guarantees that have been either released or discharged (or that will be discharged as a result of the closing of the Loan) or guarantees that are expressly contemplated by the Loan Documents. Section 4.4 CASUALTY AND CONDEMNATION. Borrower shall give Lender prompt written notice of the occurrence of any casualty affecting, or the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property (the "Net Proceeds"), are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries, and Lender is hereby authorized, in its own name or in Borrower's name, to adjust any loss covered by insurance or -21- any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall.from time to time deliver to Lender any instruments required to permit such participation;provided,however,that, so long as no Event of Default shall have occurred, Lender shall not have the right to participate in the adjustment of any loss which is not in excess of the lesser of (i) five percent (5%) of the then outstanding principal balance of the Note and (ii) $515,000. Lender shall apply any sums received by it under this Section first to the payment of all of its costs and expenses (including, but not Iimited to, reasonable legal fees and disbursements) incurred in obtaining those sums, and then, as follows: (a) In the event that less than forty percent (40%) of the Improvements located on the Land have been taken or destroyed, then if and so long as: (1) no Event of Default has occurred hereunder or under any of the other Loan Documents, and (2) the Property can, in Lender's judgment, with diligent restoration or repair, be returned to a condition at least equal to the condition thereof that existed prior to the casualty or partial taking causing the loss or damage within the earlier to occur of (i) nine (9) months after the receipt of insurance proceeds or condemnation awards by either Borrower or Lender, and (ii) sixty (60) days prior to the stated maturity date of the Note, and (3) all necessary governmental approvals can be obtained to allow the rebuilding and reoccupancy of the Property as described in Section (a)(2) above, and (4) there are sufficient sums available (through insurance proceeds or condemnation awards and contributions by Borrower, the full amount of which shall, at Lender's option, have been deposited with Lender) for such restoration or repair (including,.without limitation, for any costs and expenses of Lender to be incurred in administering said restoration or repair) and for payment of principal and interest to become due and payable under the Note during such restoration or repair, and (5) the economic feasibility of the Improvements after such restoration or repair will be such that income from their operation is reasonably anticipated to be sufficient to pay operating expenses of the Property and debt service on the Debt in full with the same coverage ratio considered by Lender in its determination to make the loan secured hereby, and (6) in the event that the insurance proceeds or condemnation awards received as a result of such casualty or partial taking exceed the lesser of(i) five percent (5%) of the then outstanding principal balance of the Note and (ii) $515,000, Borrower shall have delivered to Lender, at -22- Borrower's sole cost and expense, an appraisal report in form and substance satisfactory to Lender appraising the value of the Property as proposed to be restored or repaired to be not less than the appraised value of the Property considered by Lender in its determination to make the loan secured hereby, and (7) Borrower so elects by written notice delivered to Lender within five (5) days after settlement of the aforesaid insurance or condemnation claim, Lender shall, solely for the purposes of such restoration or repair, advance so much of the remainder of such sums as may be required for such restoration or repair, and any funds deposited by Borrower therefor, to Borrower in the manner and upon such terms and conditions as would be required by a prudent interim construction lender, including, but not limited to, the prior approval by Lender of plans and specifications, contractors and form of construction contracts and the furnishing to Lender of permits, bonds, lien waivers, invoices, receipts and affidavits from contractors and subcontractors, in form and substance satisfactory to Lender in its discretion, with any remainder being applied by Lender for payment of the Debt in whatever order Lender directs in its absolute discretion. (b) In all other cases, namely, in the event that forty percent (40%) or more of the Improvements located on the Land have been taken or destroyed or Borrower does not elect to restore or repair the Property pursuant to clause (a) above or otherwise fails to meet the requirements of clause (a) above, then, in any of such events, Lender shall elect, in Lender's absolute discretion and without regard to the adequacy of Lender's security, to do either of the following: (1) accelerate the maturity date of the Note and declare any and all of the Debt to be immediately due and payable and apply the remainder of such sums received pursuant to this Section to the payment of the Debt in whatever order Lender directs in its absolute discretion, with any remainder being paid to Borrower, or (2) notwithstanding that Borrower may have elected not to restore or repair the Property pursuant to the provisions of Section 4.4(a)(7) above, require Borrower to restore or repair the Property in the manner and upon such terms and conditions as would be required by a prudent interim construction lender, including, but not limited to, the deposit by Borrower with Lender, within thirty (30) days after demand therefor, of any deficiency reasonably determined by Lender to be necessary in order to assure the availability of sufficient funds to pay for such restoration or repair, including Lender's costs and expenses to be incurred in connection therewith, the prior approval by Lender of plans and specifications, contractors and form of construction contracts and the furnishing to Lender of permits, bonds, lien waivers, invoices, receipts and affidavits from contractors and subcontractors, in form and substance satisfactory to Lender in its discretion, and apply the remainder of such sums toward such restoration and repair, with any balance thereafter remaining being applied by Lender for payment of the Debt in whatever order Lender directs in its absolute discretion. Any reduction in the Debt resulting from Lender's application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Debt and, in any event, the unpaid portion of the Debt shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Partial -23- payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects or Lender directs Borrower to restore or repair the Property after the occurrence of a casualty or partial taking of the Property as provided above, Borrower shall promptly and diligently, at Borrower's sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided that Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Lender is hereby irrevocably constituted and appointed the attorney in fact of Borrower (which power of attorney shall be irrevocable so long as any portion of the Debt is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this Section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor. ARTICLE 5 REPRESENTATIONS AND WARRANTIES Borrower represents and warrants to Lender that: Section 5.1 WARRANTY OF TITLE. Borrower has good title to the Property (excluding after acquired property and adjacent streets, roads or avenues) and has the right to mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the same and that Borrower possesses an unencumbered fee simple absolute estate in the Land and the Improvements and that it owns the Property free and clear of all liens, encumbrances.and charges whatsoever except for those exceptions (other than standard printed exceptions) shown in the title insurance policy insuring the lien of this Security Instrument or otherwise disclosed, in writing, to Lender (the "Permitted Exceptions"). Borrower shall forever warrant, defend and preserve the title and the validity and priority of the lien of this Security Instrument and shall forever warrant and defend the same to Lender against the claims of all persons whomsoever. Section 5.2 AUTHORITY. Borrower (and the undersigned representative of Borrower, if any) has full power, authority and legal right to execute this Security Instrument, and to mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the Property pursuant to the terms hereof and to keep and observe all of the terms of this Security Instrument on Borrower's part to be performed. Section 5.3 LEGAL STATUS AND AUTHORITY. Borrower (a) is duly organized, validly existing and in good standing under the laws of its state of organization or -24- incorporation; (b) is duly qualified to transact business and is in good standing in the State of Oregon and the State of Delaware; and (c) has all necessary approvals, governmental and otherwise, and full power and authority to own the Property and carry on its business as now conducted and proposed to be conducted. Borrower now has and shall continue to have the full right, power and authority to operate and lease the Property, to encumber the Property as provided herein and to perform all of the other obligations to be performed by Borrower under the Note, this Security Instrument and the Other Security Documents. Borrower's exact legal name is set forth at the end of this Security Instrument. Borrower's organizational identification number, if any, assigned by the State of Delaware is correctly set forth in Section 1.3 of this Security Instrument. Borrower shall notify Lender (i) of any change of its organizational identification number, or (ii) if Borrower does not now have an organizational identification number and later obtains one, of such organizational identification number. Section 5.4 VALIDITY OF DOCUMENTS. (a) The execution, delivery and performance of the Note, this Security Instrument and the Other Security Documents and the borrowing evidenced by the Note (i) are within the corporate/partnership/limited liability company (as the case may be) power of Borrower; (ii) have been authorized by all requisite corporate/partnership/limited liability company (as the case may be) action; (iii) have received all necessary approvals and consents, corporate, governmental or otherwise; (iv) will not violate, conflict with, result in a breach of or constitute (with notice or lapse of time, or both) a default under any provision of law, any order or judgment of any court or governmental authority, the articles of incorporation, by laws, partnership, trust or operating agreement, or other governing instrument of Borrower, or any indenture, agreement or other instrument to which Borrower is a party or by which it or any of its assets or the Property is or may be bound or affected; (v) will not result in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of its assets, except the lien and security interest created hereby; and (vi) will not require any. authorization or license from, or any filing with, any governmental or other body (except for the recordation of this instrument in appropriate land records in the State where the Property is located and except for Uniform Commercial Code filings relating to the security interest created hereby); and (b) the Note, this Security Instrument and the Other Security Documents constitute the legal, valid and binding obligations of Borrower. • Section 5.5 LITIGATION. There is no action, suit or proceeding, or any arbitration; or to the best of Borrower's knowledge; any governmental investigation, in each case pending or, to the knowledge of Borrower, threatened against Borrower or the Property before any governmental or administrative body, agency or official which (i) challenges the validity of this Security Instrument, the Note or any of the Other Security Documents or the authority of Borrower to enter into this Security Instrument, the Note or any of the Other Security Documents or to perform the transactions contemplated hereby or thereby or (ii) if adversely determined would have a material adverse effect, on the occupancy of the Property or the business, financial condition or results of operations of Borrower or the Property. Section 5.6 STATUS OF PROPERTY. (a) Based on a current survey and to the best of Borrower's knowledge, no portion of the Improvements is located in an area identified by the Secretary of Housing and Urban Development or any successor thereto as an area having special flood hazards pursuant to -25- the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended, or any successor law, or, if located within any such area, Borrower has obtained and will maintain the insurance prescribed in Section 3.3 hereof. (b) Borrower has obtained all necessary certificates, licenses and other approvals, governmental and otherwise, necessary for the operation of the Property and the conduct of its business and all required zoning, building code, land use, environmental and other similar permits or approvals, all of which are in full force and effect as of the date hereof and not subject to revocation, suspension, forfeiture or modification,except for such certificates, licenses and other approvals which if not obtained would not have a material adverse effect on the occupancy of the Property or the business, financial condition or operation of Borrower or the Property. (c) The Property and the present and contemplated use and occupancy thereof are in compliance in all material respects with all applicable zoning ordinances, building codes, land use and environmental laws and other similar laws. (d) The Property is served by all utilities required for the current or contemplated use thereof. All utility service is provided by public utilities and the Property has accepted or is equipped to accept such utility service. (e) All public roads and streets necessary for service of and access to the Property for the current or contemplated use thereof have been completed, are reasonably serviceable and all weather and are physically and legally open for use by the public. (f) The Property is served by public water and sewer systems. (g) The Property is free from damage caused by fire or other casualty. (h) All costs and expenses of any and all labor, materials, supplies and equipment used in the construction of the Improvements have been paid in full. (i) Borrower has paid in full for, and is the owner of, all furnishings, fixtures and equipment (other than tenants property) used in connection with the operation of the Property, free and clear of any and all security interests, liens or encumbrances, except the lien and security interest created hereby. (j) All liquid and solid waste disposal, septic and sewer systems located on the Property are in a good and safe condition and repair and in compliance with all Applicable Laws. Section 5.7 NO FOREIGN PERSON. Borrower is not a "foreign person" within the meaning of Sections 1445(f)(3) of the Code and the related Treasury Department regulations, including temporary regulations. Section 5.8 SEPARATE TAX LOT. The Property is assessed for real estate tax purposes as one or more wholly independent tax lot or lots, separate from any adjoining land -26- or improvements not constituting a part of such lot or lots, and no other land or improvements is assessed and taxed together with the Property or any portion thereof. Section 5.9 ERISA COMPLIANCE. (a) As of the date hereof and throughout the term of this Security Instrument, (i) Borrower is not and will not be an "employee benefit plan" as defined in Section 3(3) of ERISA, or other retirement arrangement, which is subject to Title I of ERISA or Section 4975 of the Code, and (ii) the assets of Borrower do not and will not constitute "plan assets" of one or more such plans for purposes of Title I of ERISA or Section 4975 of the Code; and (b) As of the date hereof and throughout the term of this Security Instrument (i) Borrower is not and will not be a"governmental plan"within the meaning of Section 3(32) of ERISA and (ii) transactions by or with Borrower are not and will not be subject to state statutes applicable to Borrower regulating investments of and fiduciary obligations with respect to governmental plans. Section 5.10 LEASES. (a) Borrower is the sole owner of the entire lessor's interest in the Leases except for such assignments and other documents entered into in connection with the Note; (b) the Leases are valid and enforceable except as may be limited by bankruptcy, insolvency or other similar laws affecting the rights of creditors generally; (c) the terms of all alterations, modifications and amendments to the Leases are reflected in the certified occupancy statement delivered to and approved by Lender; (d) none of the Rents reserved in the Leases have been assigned or otherwise pledged or hypothecated; (e) none of the Rents have been collected for more than one (1) month in advance; (1) except as otherwise disclosed in writing to Lender, the premises demised under the Leases have been completed and the tenants under the Leases have accepted the same and have taken possession of the same on a rent paying. basis; and (g) except as may be set forth in any tenant estoppels delivered to Lender, there exist no offsets or defenses to the payment of any portion of the Rents. Section 5.11 FINANCIAL CONDITION. (a) Borrower is solvent, and no bankruptcy, reorganization, insolvency or similar proceeding under any state or federal law with respect to Borrower has been initiated, and (b) Borrower has received reasonably equivalent value for the granting of this Security Instrument. Section 5.12 BUSINESS PURPOSES. The loan evidenced by the Note is solely for the business purpose of Borrower, and is not for personal, family, household, or agricultural purposes. Section 5.13 TAXES. Borrower has filed all federal, state, county, municipal, and city income and other tax returns required to have been filed by it and has paid all taxes and related liabilities which have become due pursuant to such returns or pursuant to any assessments received by them. Borrower does not know of any basis for any additional assessment in respect of any such taxes and related liabilities for prior years. Section 5.14 MAILING ADDRESSES. Borrower's mailing address, as set forth in the opening paragraph hereof or as changed in accordance with the provisions hereof, is true and correct. -27- Section 5.15 NO CHANGE IN FACTS OR CIRCUMSTANCES. All information submitted to Lender in writing in connection with any request by Borrower for the loan evidenced by the Note and/or any letter of application, preliminary commitment letter, final commitment letter or other application or letter of intent (including, but not limited to, all financial statements, rent rolls, reports and certificates) are accurate, complete and correct in all material respects. There has been no adverse change in any condition, fact, circumstance or event that would make any such information inaccurate, incomplete or otherwise misleading. Section 5.16 DISCLOSURE. Borrower has disclosed to Lender all material facts and has not failed to disclose any material fact that could cause any representation or warranty made herein to be materially misleading. Section 5A7 LETTER OF CREDIT RIGHTS. If Borrower is at any time a beneficiary under a letter of credit relating to the properties, rights, titles and interests referenced in Section 1.1 of this Security Instrument now or hereafter issued in favor of Borrower, Borrower shall promptly notify Lender thereof and, at the request and option of Lender, Borrower shall, pursuant to an agreement in form and substance satisfactory to Lender, either (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to Lender of the proceeds of any drawing under the letter of credit or (ii) arrange for the Lender to become the transferee beneficiary of the letter of credit, with Lender agreeing, in each case that the proceeds of any drawing under the letter of credit are to be applied as provided in Section 11.2 of this Security Instrument. Section 5.18 AUTHORIZATION TO FILE FINANCING STATEMENTS, POWER OF ATTORNEY. The Borrower hereby authorizes the Lender at any time and from time to time to file any initial financing statements, amendments thereto and continuation statements with or without the signature of the Borrower as authorized by applicable law, as applicable to all or part of the fixtures or Personal Property. For purposes of such filings, the Borrower agrees to furnish any information requested by the Lender promptly upon request by the Lender. The Borrower also ratifies its authorization for the Lender to have filed any like initial financing statements, amendments thereto and continuation statements, if filed prior to the date of this Security Instrument. The Borrower hereby irrevocably constitutes and appoints the Lender and any officer or agent of the Lender, with full power of substitution, as its true and lawful attorneys in fact with full irrevocable power and authority in the place and stead of the Borrower or in the Borrower's own name to execute in the Borrower's name, any documents and otherwise to carry out the purposes of this Section 5.18, to the extent that the Borrower's authorization above is not sufficient. To the extent permitted by law, the Borrower hereby ratifies all acts said attorneys in fact have lawfully done in the past or shall lawfully do or cause to be done in the future by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocable. Section 5.19 INSOLVENCY OPINION. Each of the assumptions contained in the Insolvency Opinion relating to the Borrower, SPE Principal and their operations are true and accurate in all material respects. -28- ARTICLE 6 OBLIGATIONS AND RELIANCES Section 6.1 RELATIONSHIP OF BORROWER AND LENDER. The relationship between Borrower and Lender is solely that of debtor and creditor, and Lender has no fiduciary or other special relationship with Borrower, and no term or condition of any of the Note, this Security Instrument and the Other Security Documents shall be construed so as to deem the relationship between Borrower and Lender to be other than that of debtor and creditor. Section 6.2 NO RELIANCE ON LENDER. The general partners, shareholders, members, principals or other beneficial owners of Borrower are experienced in the ownership and operation of properties similar to the Property, and Borrower and Lender are relying solely upon such expertise and business plan in connection with the ownership and operation of the Property. Borrower is not relying on Lender's expertise, business acumen or advice in connection with the Property. Section 6.3 NO LENDER OBLIGATIONS. (a) Notwithstanding any of the provisions of this Security Instrument (including, but not limited to, the provisions of Subsections 1.1(f) and (1), Section 1.2 or Section 3.7), Lender is not undertaking the performance of (i) any obligations under the Leases; or (ii) any obligations with respect to such agreements, contracts, certificates, instruments, franchises, permits, trademarks, licenses and other documents. (b) By accepting or approving anything required to be observed, performed or fulfilled or to be given to Lender pursuant to this Security Instrument, the Note or the Other Security Documents, including without limitation, any officer's certificate, balance sheet, statement of profit and loss or other financial statement, survey, appraisal, or insurance policy, Lender shall not be deemed to have warranted, consented to, or affirmed the sufficiency, the legality or effectiveness of same, and such acceptance or approval thereof shall not constitute any warranty or affirmation with respect thereto by Lender. Section 6.4 RELIANCE. Borrower recognizes and acknowledges that in accepting the Note, this Security Instrument and the Other Security Documents, Lender is expressly and primarily relying on the truth and accuracy of the warranties and representations set forth in Article 5 without any obligation to investigate the Property and notwithstanding any investigation of the Property by Lender; that such reliance existed on the part of Lender prior to the date hereof; that the warranties and representations are a material inducement to Lender in accepting the Note, this Security Instrument and the Other Security Documents; and that Lender would not be willing to make the loan evidenced by the Note, this Security Instrument and the Other Security Documents and accept this Security Instrument in the absence of the warranties and representations as set forth in Article 5. -29- ARTICLE 7 FURTHER ASSURANCES Section 7.1 RECORDING OF SECURITY INSTRUMENT, ETC. Borrower forthwith upon the execution and delivery of this Security Instrument and thereafter, from time to time, will cause this Security Instrument and any of the Other Security Documents creating a lien or security interest or evidencing the lien hereof upon the Property and each instrument of further assurance to be filed, registered or recorded in such manner and in such places as may be required by any present or future law in order to publish notice of and fully to protect and perfect • the lien or security interest hereof upon, and the interest of Lender in, the Property. Borrower will pay all taxes, filing, registration or recording fees, and all expenses incident to the preparation, execution, acknowledgment and/or recording of the Note, this Security Instrument, the Other Security Documents, any note or mortgage supplemental hereto, any security instrument with respect to the Property and any instrument of further assurance, and any modification or amendment of the foregoing documents, and all federal, state, county and municipal taxes, duties,imposts, assessments and charges arising out of or in connection with the execution and delivery of this Security Instrument, any mortgage supplemental hereto, any security instrument with respect to the Property or any instrument of further assurance, and any modification or amendment of the foregoing documents, except where prohibited by law so to do. Section 7.2 FURTHER ACTS, ETC. Borrower will, at the cost of Borrower, and without expense to Lender, do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, mortgages, assignments, notices of assignments, transfers and assurances as Lender shall, from time to time, require, for the better assuring, conveying, assigning, transferring, and confirming unto Lender the property and rights hereby mortgaged, granted, bargained, sold, conveyed, confirmed, pledged, assigned, warranted and transferred or intended now or hereafter so to be, or which Borrower may be or may hereafter become bound to convey or assign to Lender,or for carrying out the intention or facilitating the performance of the terms of this Security Instrument or for filing, registering or recording this Security Instrument, or for complying with all Applicable Laws. Borrower, on demand, will execute and deliver and hereby authorizes Lender to execute in the name of Borrower or without the signature of Borrower to the extent Lender may lawfully do so, one or more financing statements, chattel mortgages or other instruments, to evidence more effectively the security interest of Lender in the Property. Borrower grants to Lender an irrevocable power of attorney coupled with an interest for the purpose of exercising and perfecting any and all rights and remedies available to Lender at law and in equity, including without limitation such rights and remedies available to Lender pursuant to this Section 7.2. Section 7.3 CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS. (a) If any law is enacted or adopted or amended after the date of this Security Instrument which deducts the Debt from the value of the Property for the purpose of taxation or which imposes a tax, either directly or indirectly, on the Debt or Lender's interest in the Property, Borrower will pay the tax, with interest and penalties thereon, if any. If Lender is -30- advised by counsel chosen by it that the payment of tax by Borrower would be unlawful or taxable to Lender or unenforceable or provide the basis for a defense of usury, then Lender shall have the option by written notice of not less than ninety (90) days to declare the Debt immediately due and payable, without any requirement for payment of any prepayment consideration or premium provided, however, if such prepayment is made on a day other than a Monthly Payment Date, such prepayment shall include interest that would be payable through the next Monthly Payment Date. (b) Borrower will not claim or demand or be entitled to any credit or credits on account of the Debt for any part of the Taxes or Other Charges assessed against the Property, or any part thereof, and no deduction shall otherwise be made or claimed from the assessed value of the Property, or any part thereof, for real estate tax purposes by reason of this Security Instrument or the Debt. If such claim, credit or deduction shall be required by law, Lender shall have the option, by written notice of not less than ninety (90) days, to declare the Debt immediately due and payable, without any requirement for payment of any prepayment consideration or premium provided, however, if such prepayment is made on a day other than a Monthly Payment Date, such prepayment shall include interest that would be payable through the next Monthly Payment Date. (c) If at any time the United States of America, any State thereof or any subdivision of any such State shall require revenue or other stamps to be affixed to the Note, this Security Instrument, or any of the Other Security Documents or impose any other tax or charge on the same,Borrower will pay for the same, with interest and penalties thereon, if any. Section 7.4 ESTOPPEL CERTIFICATES. (a) After request by Lender, Borrower, within ten (10) business days, shall furnish Lender or any proposed assignee or Investor (as defined in Section 19.1) with a statement, duly acknowledged and certified, setting forth (i) the amount of the original principal amount of the Note, (ii) the unpaid principal amount of the Note, (iii) the rate of interest of the Note, (iv) the terms of payment and maturity date of the Note, (v) the date installments of interest and/or principal were last paid, (vi) that, except as provided in such statement, there are no defaults or events which with the passage of time or the giving of notice or both, would constitute an event of default under the Note or the Security Instrument, (vii) that the Note and this Security Instrument are valid, legal and binding obligations and have not been modified or if modified, giving particulars of such modification, (viii) whether to Borrower's knowledge any offsets or defenses exist against the obligations secured hereby and, if any are alleged to exist, a detailed description thereof, (ix) that all Leases are in full force and effect and (provided the Property is not a residential multifamily property) have not been modified (or if modified, setting forth all modifications), (x) the date to which the Rents thereunder have been paid pursuant to the Leases, (xi) whether or not, to the best knowledge of Borrower, any of the lessees under the Leases are in default under the Leases, and, if any of the lessees are in default, setting forth the specific nature of all such defaults, (xii) the amount of security deposits held by Borrower under each Lease and that such amounts are consistent with the amounts required under each Lease, and (xiii) as to any other matters reasonably requested by Lender and reasonably related to the Leases, the obligations secured hereby, the Property or this Security Instrument. -31- (b) Borrower shall use commercially reasonable efforts to deliver to Lender, promptly upon request (provided such request is not made more than once in any calendar year, unless required in the context of a Secondary Market Transaction), duly executed estoppel certificates from any one or more lessees as reasonably required by Lender attesting to such facts regarding the Lease as Lender may require, including but not limited to attestations that each Lease covered thereby is in full force and effect with no defaults thereunder on the part of any party, that none of the Rents have been paid more than one month in advance, and that the lessee claims no defense or offset against the full and timely performance of its obligations under the Lease. (c) Lender, by its acceptance of this Security Instrument, agrees to deliver to Borrower promptly upon Borrower's request therefor (provided such request is not made more than once in any calendar year) a written statement setting forth the unpaid principal amount of the Note,the accrued and unpaid interest thereon and the date on which an installment of interest and/or principal were last paid thereunder. Section 7.5 FLOOD INSURANCE. After Lender's request, Borrower shall deliver evidence satisfactory to Lender that no portion of the Improvements is situated in a federally designated"special flood hazard area." Section 7.6 SPLITTING OF SECURITY INSTRUMENT. This Security Instrument and the Note shall, at any time until the same shall be fully paid and satisfied, at the sole election of Lender, be split or divided into two or more notes and two or more security instruments, each of which shall cover all or a portion of the Property to be more particularly described therein. To that end, Borrower, upon written request of Lender and at Lender's sole cost and expense, shall execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered by the then owner of the Property, to Lender and/or its designee or designees substitute notes and security instruments in such principal amounts, aggregating not more than the then unpaid principal amount of this Security.Instrument, and on the same terms, provisions and clauses as those contained herein and in the Note, and such other documents and instruments as may be required by Lender. Section 7.7 REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of an officer of Lender as to the loss, theft, destruction or mutilation of the Note or any Other Security Document which is not of public record, and, in the case of any such mutilation, upon surrender and cancellation of such Note or Other Security Document, Borrower will issue, in lieu thereof, a replacement Note or Other Security Document, dated the date of such lost, stolen, destroyed or mutilated Note or Other Security Document in the same principal amount thereof and otherwise of like tenor. ARTICLE 8 DUE ON SALE/ENCUMBRANCE Section 8.1 LENDER RELIANCE. Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its general partners, principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in -32- agreeing to make the loan secured hereby, and will continue to rely on Borrower's ownership of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property. Section 8.2 NO SALE/ENCUMBRANCE. Borrower agrees that Borrower shall not, without the prior written consent of Lender, sell, convey, mortgage, grant, bargain, encumber, pledge, assign, or otherwise transfer the Property or any part thereof or permit the Property or any part thereof to be sold, conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned, or otherwise transferred. Section 8.3 SALE/ENCUMBRANCE DEFINED. A sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer within the meaning of this Article 8 shall be deemed to include, but not limited to, (a) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (b) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower's right, title and interest in and to any Leases or any Rents; (c) if Borrower or any managing member of Borrower is a corporation, the voluntary or involuntary sale, conveyance, transfer or pledge of such corporation's stock or the creation or issuance of new stock by which an aggregate of more than 49% of the ownership of such corporation's stock shall be vested in or pledged to a party or parties who are not now stockholders; (d) if Borrower or any managing member of Borrower is a limited liability company, the voluntary or involuntary sale, conveyance, transfer or pledge of membership interests in the capital or profits of such company or the creation or issuance of new membership interests by which an aggregate of more than 49% of the ownership of such company's membership interests shall be vested in or pledged to a party or parties who do not now hold membership interests in such company other than a transfer to an entity wholly owned and controlled directly or indirectly by any or all of Regency Centers Corporation, Macquarie CountryWide Trust and Macquarie Bank (the "Parent Entities") (e) if Borrower or any managing member or general partner of Borrower is a limited or general partnership or joint venture, (i) the change, removal or resignation of a general partner or managing partner other than a transfer to an entity wholly owned and controlled directly or indirectly by any or all of the Parent Entities, (ii) the transfer or pledge of the partnership interest of any general partner or managing partner or any profits or proceeds relating to such partnership interest, (iii) the transfer or pledge of more than 49% of the capital or profits of the partnership or (iv) the creation or issuance of new partnership interests by Borrower or its general partner which an aggregate of more than 49% of the ownership of partnership interests in such partnership shall be vested in a party or parties who do not now hold partnership interests in such partnership or joint venture; and (f) without limitation to the foregoing, any voluntary or involuntary sale, transfer, conveyance or pledge by any person or entity which directly or indirectly controls Borrower (by operation or law or otherwise) (a "Principal") of its direct or indirect controlling interest in Borrower, other than to an entity wholly owned and controlled directly or indirectly by any or all of the Parent Entities. Notwithstanding the foregoing, the following transfers shall not be deemed to be a sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment or transfer within the -33- meaning of this Article 8 and shall not required to consent of the Lender or the payment of a transfer fee: (A) transfer by devise or descent or by operation of law upon the death of a partner,. member or stockholder of Borrower or any general partner thereof, (B) a sale, transfer or hypothecation of a partnership, shareholder or membership interest in Borrower, whichever the case may be, by the current partner(s), shareholder(s) or member(s), as applicable, to an immediate family member (i.e., parents, spouses, siblings, children or grandchildren) of such partner, or shareholder or member or to a Principal (or a trust for the benefit of any such persons), and (C) a transfer of interests in Borrower by and among the Parent Entities (or an entity wholly owned and controlled directly or indirectly by any or all of them, including a new managing member of Borrower). Notwithstanding anything to the contrary set forth in this Section 8.3, no such transfer shall be permitted pursuant to this Section 8.3 unless, after giving effect to such transfer, (x) there is no adverse effect on the single purpose entity nature of the Borrower and its managing member, and (y) one or more of the Parent Entities continue to control the day to day operations of the Borrower and own, directly or indirectly, not less than fifty one percent(51%) of the equity interests in the Borrower. Section 8.4 LENDER'S RIGHTS. (a) Lender shall not unreasonably withhold its consent required under this Article 8, so long as no Event of Default has occurred and is continuing, upon (in each case, to Lender's reasonable satisfaction): (i) a modification of the terms hereof and on assumption of the Note,this Security Instrument and the Other Security Documents as so modified by the proposed transferee, (ii) on payment of a transfer fee equal to the lesser of (x) $150,000 and (y) one percent (1%) of the principal balance of the Note and all of Lender's expenses incurred in connection with such transfer, including without limitation the approval by any and all Rating Agencies, required by Lender, of the proposed transferee, (iii) the proposed transferee's continued compliance with the covenants set forth in Section 4.3 hereof, (iv) the Property having a Debt Service Coverage Ratio (as hereinafter defined) of not less than 1.25 to 1.0, (v) the Loan to Value Ratio (as hereinafter defined) with respect to the Property being not greater than eighty percent (80%), (vi) the property securing each Additional Loan, which has not been previously transferred, having a Pool Debt Service Coverage Ratio (as hereinafter defined) of not less than 1.20 to 1.0, (vii) the Loan to Value Ratio with respect to each property securing an Additional Loan being not greater than seventy five percent (75%), (viii) the modification of the Loan Documents to provide for reserves for capital replacements at the Property in an amount equal to $3,259.00 per month and tenant improvement and leasing commissions in an amount equal to $6,250.00 per leasable square foot at the Property per annum or (ix) such other conditions as Lender shall, determine in its sole discretion to be in the interest of Lender. An assignment and assumption of the Note shall not be permitted within the first twelve (12) months from the date hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower's sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the Property without Lender's consent. This provision shall apply to every sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the Property regardless of whether voluntary or not, or whether or not Lender has consented to any previous sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the Property. -34- Section 8.5 MEZZANINE LOAN OPTION. Notwithstanding anything set forth in this Article 8 to the contrary, provided that no Event of Default exists hereunder or under any of the Loan Documents, upon sixty (60) days prior written notice to Lender, the owners of equity interests in the Borrower following an assignment and assumption of the Note pursuant to Section 8.4 shall be permitted to exercise the option (the "Mezzanine Loan Option") to incur subordinate financing in the form of a mezzanine loan (the "Mezzanine Loan") provided that the following conditions are met: (i) The entity(ies) exercising the Mezzanine Loan Option do not include the SPE Principal and the exercising of the Mezzanine Loan Option shall not violate any of the provisions of Section 4.3 hereof; (ii) The Loan-to-Value Ratio (calculated based on the aggregate of the then outstanding principal balance of the Loan and the Mezzanine Loan) is not greater than eighty five percent(85%); (iii) The Property (A) has maintained a Debt Service Coverage Ratio of not less than 1.15 to 1.0 for the twelve (12) month period ending on the date the entities so exercising intend to exercise the Mezzanine Loan Option and (B) has a projected Debt Service Coverage Ratio of not less than 1.15 to 1.0 for the twelve (12) months commencing on the date exercises the Mezzanine Loan Option is exercised; (iv) The Mezzanine Loan holder is acceptable to Lender in its reasonable discretion and shall not be permitted to assign or transfer its interest in the Mezzanine Loan without Lender's prior written consent; (v) The Mezzanine Loan (i) is not secured in whole or in any part by any of the general partnership or managing member interests in the Borrower, as applicable, or (ii) is not secured in whole or in any part by the Property, and (iii) shall in no way have a material adverse affect on the Property or Lender's security interest therein; (vi) The Mezzanine Loan shall provide that payments shall only be due from Borrower to the extent there is sufficient cash flow for payment of the same; (vii) All documents executed in connection with the Mezzanine Loan shall be satisfactory to Lender in its reasonable discretion, including, without limitation, a subordination and intercreditor agreement, which agreement shall (i) include standstill provisions with respect to the Mezzanine Loan holder exercising any remedies in connection with collection or enforcement of the Mezzanine Loan, (ii) provide that prior to taking actions in connection with collection or enforcement with respect to the Mezzanine Loan, the Mezzanine Loan holder shall be required to have received a no-downgrade letter from the Rating Agencies, and (iii) such other provisions as are normal and customary for such agreements; (viii) The Lender has received evidence that the existence of the Mezzanine Loan will not result in a downgrade by any rating agency issuing any statistical rating in any Secondary Market Transaction to the then current ratings assigned, or to be assigned, to the Securities or any class thereof in any applicable Securitization; and -35- (ix) Borrower shall pay all of Lender's reasonable costs and expenses incurred in connection with the Lender's consent and approval of the Mezzanine Loan. For purposes of this Section 8.5: "Appraisal" shall mean an "as is" appraisal of the Property or the property securing any Additional Loan, as applicable, conforming to FIRREA and USPAP requirements acceptable to Lender and prepared at the Borrower's expense by a qualified appraiser designated by and satisfactory to the Lender, in accordance with written instructions from the Lender, dated as of a date reasonably acceptable to the Lender (it being acknowledged and agreed that in the event that any such Appraisal is dated less than twelve (12) months prior to the date of the calculation of the Loan to Value Ratio then the date of such Appraisal shall be acceptable to Lender) and otherwise reasonably satisfactory in form and substance to the Lender. "Cash Available for Debt Service" shall mean: (i) all gross receipts received or (with respect to a projected Debt Service Coverage Ratio) anticipated from the Property, including, without limitation, from tenants in the Property and paying rent under leases in effect during the applicable period, calculated on a cash basis which reflects only the income actually received during the applicable period as of the date of such calculation, and for a projected Debt Service Coverage Ratio any income anticipated to be received during the following applicable period based on leases in effect as of the date of calculation, for such time as those leases are contracted to remain in effect without expiration by their terms or optional termination by the tenant (unless the tenant has waived its termination rights in writing or the term of the lease has been extended in writing), including without limitation all amounts to be received from tenants as payment of operating expenses but not including refundable deposits, late fees or charges, interest income or other non-operating income, lease termination payments, excess tenant improvement and leasing commission payments included as additional rent, principal or interest payments received by Borrower on loans to tenants and fees and reimbursements for work performed for tenants by Borrower,less: (ii) all expenses actually incurred by Borrower (without duplication), for the operation or maintenance of the Property for the applicable period, including ground rents, the cost of property management (which shall be the greater of the actual management fee payable under a management contract in effect for the applicable period, market or the minimum fee applied by nationally recognized rating agencies), marketing, franchise fees (which shall be the greater of the actual fees payable under franchise or license agreements, market, or the minimum fee applied by nationally recognized rating agencies), maintenance, cleaning, security, legal, administrative, landscaping, parking maintenance, utilities, real estate taxes and assessments and other taxes related to the operation of the Property, insurance premiums, necessary repairs and future replacements of equipment and other capital expenditures, tenant improvements, leasing commissions and other costs and expenses incurred by Borrower during the applicable period, and for a projected Debt Service Coverage Ratio, amounts reasonably estimated by Lender for each of the foregoing items. Payments under the Note and non-cash deductions for income tax purposes shall not be deducted in determining Cash Available for Debt Service. -36- Cash Available for Debt Service shall be determined by Lender in a manner substantially the same as that utilized by Lender in underwriting loans secured by similar property types at the time of determination of the Debt Service Coverage Ratio or Pool Debt Service Coverage Ratio, as applicable. In addition, Cash Available for Debt Service shall be adjusted by applying (i) vacancy and/or credit loss rates to gross income at the higher of actual, market or the rate applied by nationally recognized rating agencies, (ii) rental or average daily room rates (as applicable) at the lower of actual, market or the rate applied by nationally recognized rating agencies, (iii) deductions for operating expenses based on the higher of actual historical levels, market or as otherwise applied by nationally recognized rating agencies and (iv) deducting expenses for capital replacements and repairs, tenant improvements and leasing commissions, calculated at the greater of actual or minimum amounts per square foot of the Property or any property securing an Additional Loan, as applicable, required by Lender and/or nationally recognized rating agencies for properties of similar types, location and condition. "Debt Service Coverage Ratio" shall mean the ratio of Cash Available for Debt Service to annual debt service (i.e., principal assuming a thirty (30) year amortization schedule and interest payments) due under (i) the Note (utilizing solely for purposes of calculating the Debt Service Coverage Ratio an assumed interest rate equal to the Applicable Interest Rate in effect on the date of determination of the Debt Service Coverage Ratio), and (ii) any other notes secured by the Property or by direct or indirect pledges of equity in the Borrower, including, without limitation, the Mezzanine Loan. "Loan-to-Value Ratio" shall mean the ratio, expressed as a percentage of (i) the actual outstanding principal amount of the Loan (and for purposes of§ 8.5 the Mezzanine Loan) and each Additional Loan and any existing mezzanine loan with respect to any Additional Loan, to the extent necessary for such calculation, at the time the Loan-to-Value Ratio is being calculated to (ii) the appraised value of the Property and the property securing each Additional Loan,to the extent required for such calculation,based on an Appraisal. "Pool Debt Service Coverage Ratio" shall mean the ratio of Cash Available for Debt Service to annual debt service (i.e., principal assuming a thirty (30) year amortization schedule and interest payments) due under (i) the Note (utilizing solely for purposes of calculating the Pool Debt Service Coverage Ratio an assumed interest rate equal to the Applicable Interest Rate in effect on the date of determination of the Pool Debt Service Coverage Ratio), (ii) any other notes secured by the Property or by direct or indirect pledges of equity in the Borrower, including, without limitation, the Mezzanine Loan, (iii) each Additional Note and (iv) any other notes secured by the property securing any Additional Loan or by direct or indirect pledges of equity in the borrower under any Additional Loan. ARTICLE 9 PREPAYMENT Section 9.1 PREPAYMENT. The Debt may not be prepaid in whole or in part except in strict accordance with the express terms and conditions of the Note. -37- ARTICLE 10 DEFAULT Section 10.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following events shall constitute an "Event of Default": (a) if any portion of the Debt is not paid prior to the date the same is due or if the entire Debt is not paid on the Maturity Date; (b) if any of the Taxes or Other Charges are not paid within ten (10) days following the date the same are due and payable except to the extent sums sufficient to pay such Taxes and Other Charges have been deposited with Lender in accordance with the terms of this Security Instrument or to the extent Borrower contests such taxes or other charges in good faith and has set aside commercially reasonable reserves with respect thereto; (c) if the Policies are not kept in full force and effect, or if the Policies are not delivered to Lender within ten (10) days of Lender's request; (d) if the Property is subject to actual waste; (e) if Borrower violates or does not comply with any of the provisions of Sections 3.7 or 4.3 or Articles 8, 12 or 13, or Borrower sells, conveys, mortgages, grants, bargains, encumbrances, pledges, assigns, or otherwise transfers the Property, or any part thereof or any direct or indirect interest therein in violation of Section 8.3, without the prior written consent of Lender, or permits same; (f) if any representation or warranty of Borrower or any person guaranteeing payment of the Debt or any portion thereof or performance by Borrower of any of the terms of this Security Instrument or any general partner, managing member, principal or beneficial owner of any of the foregoing, made herein or any guaranty or indemnity, or in any certificate, report, financial statement or other instrument or document furnished to Lender shall have been false or misleading in any material respect when made; (g) if (i) Borrower shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Borrower shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Borrower any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against the Borrower or any managing member of Borrower any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of any order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) the Borrower shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Borrower shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; (h) if Borrower shall be in default under any other mortgage, deed of trust, deed to secure debt or other security agreement covering any part of the Property whether it be superior or junior in lien to this Security Instrument; (i) if the Property becomes subject to any mechanic's, materialman's or other lien other than a lien for local real estate taxes and assessments not then due and, payable and the lien shall remain undischarged of record (by payment,bonding or otherwise) for a period -38- of sixty (60) days; (j) if any federal tax lien is filed against Borrower or the Property and same is not discharged of record within sixty (60) days after same is filed; (k) if Borrower fails to cure any violations of Applicable Laws within sixty (60) days of first having received notice thereof; (1) if (i) Borrower fails to timely provide Lender with the written certification and evidence referred to in Section 4.2 hereof within ten (10) days of Lender's written notice of such failure, or (ii) Borrower consummates a transaction which would cause the Security Instrument or Lender's exercise of its rights under this Security Instrument, the Note or the Other Security Documents to constitute a nonexempt prohibited transaction under ERISA or result in a violation of a state statute regulating governmental plans, subjecting Lender to liability for a violation of ERISA or a state statute; (m) if Borrower shall fail to reimburse Lender on demand, with interest calculated at the Default Rate (defined below), for all Insurance Premiums or Taxes, together with interest and penalties imposed thereon, paid by Lender pursuant to this Security Instrument; (n) if Borrower shall fail to timely deliver to Lender an estoppel certificate pursuant to the terms of Subsection 7.4(a); (o) if Borrower shall fail to timely deliver to Lender, after request by Lender, the statements referred to in Section 3.11 in accordance with the terms thereof within ten (10) days after Lender's written notice of such failure; (p) if any default occurs in the performance of any guarantor's or indemnitor's obligations under any guaranty or indemnity executed in connection herewith and such default continues after the expiration of applicable grace periods set forth in such guaranty or indemnity, or if any representation or warranty of any guarantor or indemnitor thereunder shall be false or misleading in any material respect when made; (q) if any of the assumptions contained in any opinion relating to issues of substantive consolidation delivered to the Lender in connection with the Loan, or in any other opinion relating to substantive consolidation delivered subsequent to the closing of the Loan, is or shall become untrue in any material respect; (r) if for more than thirty (30) days after written notice from Lender, Borrower shall continue to be in default under any other term, covenant or condition of the Note, this Security Instrument or the Other Security Documents in the case of any default which can be cured by the payment of a sum of money or for sixty (60) days after notice from Lender in the case of any other default, provided that if such default cannot reasonably be cured within such sixty (60) day period and Borrower shall have commenced to cure such default within such sixty (60) day period and thereafter diligently and expeditiously proceeds to cure the same, such sixty (60) day period shall be extended for so long as it shall require Borrower in the exercise of due diligence to cure such default, it being agreed that no such extension shall be for a period in excess of one hundred twenty (120) days; or (s) a default beyond applicable notice or cure periods (if any) shall occur under any Other Security Documents. Section 10.2 LATE PAYMENT CHARGE. If any sum payable under this Security Instrument or any of the Other Security Documents is not paid prior to the date on which it is due, Borrower shall pay to Lender upon demand an amount equal to the lesser of four percent (4%) of such unpaid sum or the maximum amount permitted by applicable law, to defray the expenses incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment and the amount shall be secured by this Security Instrument and the Other Security Documents. Borrower hereby waives the provisions of any law hereafter adopted imposing prerequisites to the imposition of the foregoing late payment charge. -39- Section 10.3 DEFAULT INTEREST. Borrower will pay, from the date of an Event of Default through the earlier of the date upon which the Event of Default is cured or the date upon which the Debt is paid in full, interest on the unpaid principal balance of the Note at a per annum rate equal to the lesser of(a) four percent (4%) plus the Applicable Interest Rate (as defined in the Note), and (b) the maximum interest rate which Borrower may by law pay or Lender may charge and collect(the`Default Rate"). ARTICLE 11 RIGHTS AND REMEDIES Section 11.1 REMEDIES. (a) Generally. Upon the occurrence of any Event of Default, Borrower agrees that Trustee or Lender may take such action, without notice or demand, as it deems advisable to protect and enforce its rights against Borrower and in and to the Property, including, but not limited to, the following actions, each of which may be pursued concurrently or otherwise, at such time and in such order as Trustee or Lender may determine, in its sole discretion, without impairing or otherwise affecting the other rights and remedies of Trustee or Lender: (a) declare the entire unpaid Debt to be immediately due and payable; (b) institute proceedings,judicial or otherwise, for the complete foreclosure of this Security Instrument under any applicable provision of law in which case the Property or any interest therein may be sold for cash or upon credit in one or more parcels or in several interests or portions and in any order or manner; (c) with or without entry, to the extent permitted and pursuant to the procedures provided by applicable law, institute proceedings for the partial foreclosure of this Security Instrument for the portion of the Debt then due and payable, subject to the continuing lien and security interest of this Security Instrument for the balance of the Debt not then due, unimpaired, and without loss of priority; (d) sell for cash or upon credit the Property or any part thereof and all estate, claim, demand, right, title and interest of Borrower therein and rights of redemption thereof, pursuant to power of sale or otherwise, at one or more sales, as an entity or in parcels, at such time and place, upon such terms and after such notice thereof as may be required or permitted by law; (e) institute an action, suit or proceeding in equity for the specific performance of any covenant, condition or agreement contained herein, in the Note or in the Other Security Documents; (f) recover judgment on the Note either before, during or after any proceedings for the enforcement of this Security Instrument or the Other Security Documents; (g) apply for the appointment of a receiver, trustee, liquidator or conservator of the Property, without notice and without regard for the adequacy of the security for the Debt and without regard for the solvency of Borrower or of any person, firm or other entity liable for the payment of the Debt; (h) subject to any applicable law, the license granted to Borrower under Section 1.2 shall automatically be revoked and, to the extent permitted by applicable law,Lender may enter into or upon the Property, either personally or by its agents, nominees or attorneys and dispossess Borrower and its agents and servants therefrom, without liability for trespass, damages or otherwise and exclude Borrower and its agents or servants wholly therefrom, and take possession of all books, records and accounts relating thereto and Borrower agrees to surrender possession of the Property and of such books, records and accounts to Lender upon demand, and thereupon Lender may (i) use, operate, manage,control, insure, maintain, repair, restore and otherwise deal with all and every part of the -40- Property and conduct the business thereat; (ii) complete any construction on the Property in such manner and form as Lender deems advisable; (iii) make alterations, additions, renewals, replacements and improvements to or on the Property; (iv) exercise all rights and powers of Borrower with respect to the Property, whether in the name of Borrower or otherwise, including, without limitation, the right to make, cancel, enforce or modify Leases, obtain and evict tenants, and demand, sue for, collect and receive all Rents of the Property and every part thereof; (v) require Borrower to pay monthly in advance to Lender, or any receiver appointed to collect the Rents, the fair and reasonable rental value for the use and occupation of such part of the Property as may be occupied by Borrower; (vi) require Borrower to vacate and surrender possession of the Property to Lender or to such receiver and, in default thereof, Borrower may be evicted by summary proceedings or otherwise; and(vii) apply the receipts from the Property to the payment of the Debt, in such order, priority and proportions as Lender shall deem appropriate in its sole discretion after deducting therefrom all expenses (including reasonable attorneys' fees) incurred in connection with the aforesaid operations and all amounts necessary to pay the Taxes, Other Charges, insurance and other expenses in connection with the Property, as well as just and reasonable compensation for the services of Lender, its counsel, agents and employees; (i) exercise any and all rights and remedies granted to a secured party upon default under the Uniform Commercial Code, including, without limiting the generality of the foregoing: (i) the right to take possession of the Personal Property or any part thereof, and to take such other measures as Lender may deem necessary for the care,protection and preservation of the Personal Property, and (ii) request Borrower at its expense to assemble the Personal Property and make it available to Lender at a convenient place acceptable to Lender. Any notice of sale, disposition or other intended action by Lender with respect to the Personal Property sent to Borrower in accordance with the provisions hereof at least ten (10) business days prior to such action, shall constitute commercially reasonable notice to Borrower; (j) apply any sums then deposited in the Escrow Fund and any other sums held in escrow or otherwise by Lender in accordance with the terms of this Security Instrument or any Other Security Document to the payment of the following items in any order in its discretion: (i) Taxes and Other Charges; (ii) Insurance Premiums; (iii) interest on the unpaid principal balance of the Note; (iv) amortization of the unpaid principal balance of the Note; (v) all other sums payable pursuant to the Note, this Security Instrument and the Other Security Documents, including without limitation advances made by Lender pursuant to the terms of this Security Instrument; (k) surrender the Policies maintained pursuant to Article 3 hereof, collect the unearned Insurance Premiums and apply such sums as a credit on the Debt in such priority and proportion as Lender in its discretion shall deem proper, and in connection therewith, Borrower hereby appoints Lender as agent and attorney in fact (which is coupled with an interest and is therefore irrevocable) for Borrower to collect such Insurance Premiums; (1) pursue such other remedies as Lender may have under applicable law; (m) apply the undisbursed balance of any Net Proceeds Deficiency deposit, together with interest thereon, to the payment of the Debt in such order, priority and proportions as Lender shall deem to be appropriate in its discretion; or (n) under the power of sale hereby granted, Lender shall have the discretionary right to, cause some or all of the Property, including any Personal Property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law. In the event of a sale, by foreclosure, power of sale, or otherwise, of less than all of the Property, this Security Instrument shall continue as a lien and security interest on the remaining portion of the Property unimpaired and without loss of priority. In the event of a sale, -41- by foreclosure, power of sale, or otherwise, Lender may bid for and acquire the Property and, in lieu of paying cash therefor, may make settlement for the purchase price by crediting against the Obligations the amount of the bid made therefor, after deducting therefrom the expenses of the sale, the cost of any enforcement proceeding hereunder and any other sums which Lender is authorized to deduct under the terms hereof, to the extent necessary to satisfy such bid. Notwithstanding the provisions of this Section 11.1 to the contrary, if any Event of Default as described in clause (i) or (ii) of Subsection 10.1(g) shall occur, the entire unpaid Debt shall be automatically due and payable, without any further notice,demand or other action by Lender. Section 11.2 APPLICATION OF PROCEEDS. The purchase money, proceeds and avails of any disposition of the Property, or any part thereof, or any other sums collected by Lender pursuant to the Note, this Security Instrument or the Other Security Documents, may be applied by Lender to the payment of the Debt in such priority and proportions as Lender in its discretion shall deem proper. Upon any foreclosure sale or sales of all or any portion of the Property under the power of sale herein granted (if any), Lender may bid for and purchase the Property and shall be entitled to apply all or any part of the Debt as a credit to the purchase price. Section 11.3 RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event of Default or if Borrower fails to make any payment or to do any act as herein provided, Lender may, but without any obligation to do so and without notice to or demand on Borrower and without releasing Borrower from any obligation hereunder, make or do the same in such manner and to such extent as Lender may deem necessary to protect the security hereof Lender is authorized to enter upon the Property for such purposes, or appear in, defend, or bring any action or proceeding to protect its interest in the Property or to foreclose this Security Instrument or collect the Debt, and the cost and expense thereof (including reasonable attorneys' fees to the extent permitted by law), with interest as provided in this Section 11.3, shall constitute a portion of the Debt and shall be due and payable to Lender upon demand. •All such costs and expenses incurred by Lender in remedying such Event of Default or such failed payment or act or in appearing in, defending, or bringing any such action or proceeding shall bear interest at the Default Rate, for the period after notice from Lender that such cost or expense was incurred to the date of payment to Lender. All such costs and expenses incurred by Lender together with interest thereon calculated at the Default Rate shall be deemed to constitute a portion of the Debt and be secured by this Security Instrument and the Other Security Documents and shall be immediately due and payable upon demand by Lender therefor. Section 11.4 ACTIONS AND PROCEEDINGS. Lender has the right to appear in and defend any action or proceeding brought with respect to the Property and to bring any action or proceeding, in the name and on behalf of Borrower, which Lender, in its discretion, decides should be brought to protect its interest in the Property. Section 11.5 RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall have the right from time to time to take action to recover any sum or sums which constitute a part of the Debt as the same become due, without regard to whether or not the balance of the Debt shall be due, and without prejudice to the right of Lender thereafter to bring an action of foreclosure, or any other action, for a default or defaults by Borrower existing at the time such earlier action was commenced. -42- Section 11.6 EXAMINATION OF BOOKS AND RECORDS. At reasonable - times and on reasonable notice, Lender, its agents, accountants and attorneys shall have the right to examine the records,books,management and other papers of Borrower and its affiliates which reflect upon their financial condition, at the Property or at any office regularly maintained by Borrower or its affiliates or where the books and records are located. Lender and its agents shall have the right to make copies and extracts from the foregoing records and other papers. In addition, Lender, its agents, accountants and attorneys shall have the right to examine and audit the books and records of Borrower and its affiliates pertaining to the income, expenses and operation of the Property upon prior written notice during reasonable business hours at any office of Borrower and its affiliates, where the books and records are located. Section 11.7 OTHER RIGHTS,ETC. (a) The failure of Lender to insist upon strict performance of any term hereof shall not be deemed to be a waiver of any term of this Security Instrument. Borrower shall not be relieved of Borrower's Obligations hereunder by reason of(i) the failure of Lender to comply with any request of Borrower to take any action to foreclose this Security Instrument or otherwise enforce any of the provisions hereof or of the Note or the Other Security Documents, (ii) the release, regardless of consideration, of the whole or any part of the Property, or of any person liable for the Debt or any portion thereof, or(iii) any agreement or stipulation by Lender extending the time of payment or otherwise modifying or supplementing the terms of the Note, this Security Instrument or the Other Security Documents. (b) It is agreed that the risk of loss or damage to the Property is on Borrower, and Lender shall have no liability whatsoever for decline in value of the Property, for failure to maintain the Policies, or for failure to determine whether insurance in force is adequate as to the amount of risks insured. Possession by Lender shall not be deemed an election of judicial relief, if any such possession is requested or obtained, with respect to any Property or collateral not in Lender's possession. (c) Trustee or Lender may resort for the payment of the Debt to any other security held by Trustee or Lender in such order and manner as Lender, in its discretion, may elect. Trustee or Lender may take action to recover the Debt, or any portion thereof, or to enforce any covenant hereof without prejudice to the right of Trustee or Lender thereafter to foreclose this Security Instrument. The rights of Lender under this Security Instrument shall be separate, distinct and cumulative and none shall be given effect to the exclusion of the others. No act of Trustee or Lender shall be construed as an election to proceed under any one provision herein to the exclusion of any other provision. Trustee and Lender shall not be limited exclusively to the rights and remedies herein stated but shall be entitled to every right and remedy now or hereafter afforded at law or in equity. Section 11.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY. Lender may release any portion of the Property for such consideration as Lender may require without, as to the remainder of the Property,in any way impairing or affecting the lien or priority of this Security Instrument, or improving the position of any subordinate lienholder with respect thereto, except to the extent that the obligations hereunder shall have been reduced by the actual monetary consideration, if any, received by Lender for such release, and may accept by -43- assignment, pledge or otherwise any other property in place thereof as Lender may require without being accountable for so doing to any other lienholder. This Security Instrument shall continue as a lien and security interest in the remaining portion of the Property. Section 11.9 VIOLATION OF LAWS. If the Property is not in compliance with Applicable Laws, Lender may impose additional requirements upon Borrower in connection herewith including, without limitation,monetary reserves or financial equivalents. Section 11.10 RIGHT OF ENTRY. Lender and its agents shall have the right to enter and inspect the Property at all reasonable times. ARTICLE 12 ENVIRONMENTAL HAZARDS Section 12.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants, based upon the Phase I environmental assessment of the Property delivered to Lender (the "Environmental Report") and information that Borrower actually knows that: (a) there are no Hazardous Substances (defined below) or underground storage tanks in, on, or under the Property, except those that are both (i) in compliance with Environmental Laws (defined below) in effect on the date hereof, and with permits issued pursuant thereto and (ii) fully disclosed to Lender in writing pursuant to the Environmental Report; (b) there are no past, present or, threatened Releases (defined below) of Hazardous Substances in, on, under or from the Property except as described in the Environmental Report; (c) to the Borrower's knowledge, there is no threat of any Release of Hazardous Substances migrating to the Property.except as described in the Environmental Report; (d) there is no past or present non compliance with Environmental Laws in effect on the date hereof, or with permits issued pursuant thereto, in connection with the Property except as described in the Environmental Report; (e) Borrower does not know of, and has not received, any written or oral notice or other communication from any person or entity (including but not limited to a governmental entity) relating to Hazardous Substances or Remediation (defined below) thereof, of possible liability of any person or entity pursuant to any Environmental Law in effect on the date hereof, other environmental conditions in connection with the Property, or any actual or potential administrative or judicial proceedings in connection with any of the foregoing; and (f) Borrower has truthfully and fully provided to Lender, in writing, any and all information relating to conditions in, on, under or from the Property that is known to Borrower and that is contained in Borrower's files and records, including but not limited to any reports relating to Hazardous Substances in, on, under or from the Property and/or to the environmental condition of the Property. "Environmental Law" means any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well, as common law, relating to protection of human health or the environment, relating to Hazardous Substances, relating to liability for or costs of Remediation or prevention of Releases of Hazardous Substances or relating to liability for or costs of other actual or threatened danger to human health or the environment. "Environmental Law" includes, but is not limited to, the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state -44- or local statutes, ordinances, rules, regulations and the like addressing similar issues: the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right to Know Act; the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including but not limited to Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; and the River and Harbors Appropriation Act. "Environmental Law" also includes,but is not limited to, any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law; conditioning transfer of property upon a negative declaration or other approval of a governmental authority of the environmental condition of the property; requiring notification or disclosure of Releases of Hazardous Substances or other environmental condition of the Property to any governmental authority or other person or entity, whether or not in connection with transfer of title to or interest in property; imposing conditions or requirements in connection with permits or other authorization for lawful activity; relating to nuisance, trespass or other causes of action related to the Property; and relating to wrongful death, personal injury, or property or other damage in connection with any physical condition or use of the Property. "Hazardous Substances" include but are not limited to any and all substances (whether solid, liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, or words of similar meaning or regulatory effect under any present or future Environmental Laws or that may have a negative impact on human health or the environment, including but not limited to petroleum and petroleum products, asbestos and asbestos containing materials, polychiorinated biphenyls, lead, radon, radioactive materials, flammables and explosives provided, however, that "Hazardous Substances" shall not include cleaning materials customarily used at properties similar to the Property, to the extent such materials are used, stored and disposed of in accordance with Environmental Laws. "Release" of any Hazardous Substance includes but is not limited to any release, deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying,escaping,dumping, disposing or other movement of Hazardous Substances. "Remediation" includes but is not limited to any response, remedial, removal, or corrective action, any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate any Hazardous Substance, any actions to prevent, cure or mitigate any Release of any Hazardous Substance, any action to comply with any Environmental Laws or with any permits issued pursuant thereto, any inspection, investigation, study, monitoring, assessment, audit, sampling and testing, laboratory or other analysis, or evaluation relating to any Hazardous Substances or to anything referred to in Article 12. Section 12.2 ENVIRONMENTAL COVENANTS. Borrower covenants and agrees to use its best efforts to ensure that so long as the Borrower owns, manages, is in possession of, or otherwise controls the operation of the Property: (a) all uses and operations on or of the Property, shall be in compliance with all Environmental Laws and permits issued pursuant thereto; (b) there shall be no Releases of Hazardous Substances by Borrower, its agents or employees in, on, under or from the Property; (c) there shall be no Hazardous Substances in, -45- on, or under the Property, except those that are in compliance with all Environmental Laws and with permits issued pursuant thereto, if and to the extent required; (d) the Property shall be kept free and clear of all liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any act or omission of Borrower or any other person or entity (the "Environmental Liens"); (e) Borrower shall, at its sole cost and expense, fully and expeditiously cooperate in all activities pursuant to Section 12.3 below, including but not limited to providing all relevant information and making knowledgeable persons available for interviews; (f) Borrower shall, at its sole cost and expense, perform any environmental site assessment or other investigation of environmental conditions in connection with the Property, pursuant to any written request of Lender (including but not limited to sampling, testing and analysis of soil, water, air, building materials and other materials and substances whether solid, liquid or gas), and share with Lender the reports and other results thereof, and Lender and other Indemnified Parties (as defined herein) shall be entitled to rely on such reports and other results thereof provided, however, that no such request shall be made by Lender unless Lender has reasonable grounds to believe that a Release of Hazardous Substances or a violation of Environmental Law has occurred; (g) Borrower shall, at its sole cost and expense, comply with all reasonable written requests of Lender to (i) reasonably effectuate Remediation of any condition (including but not limited to a Release of a Hazardous Substance) in, on, under or from the Property; (ii) comply with any Environmental Law; (iii) comply with any directive from any governmental authority; • and (iv) take any other reasonable action necessary or appropriate for protection of human health or the environment; (h) Borrower shall not do or allow any tenant or other user of the Property to do any act that materially increases the dangers to human health or the environment, poses an unreasonable risk of harm to any person or entity (whether on or off the Property), impairs or may impair the value of the Property, is contrary to any requirement of any insurer, constitutes a public or private nuisance, constitutes waste, or violates any covenant, condition, agreement or easement applicable to the Property; and (i) Borrower shall immediately notify Lender in writing of (A) any presence of Releases or threatened Releases of Hazardous Substances in, on, under, from or migrating towards the Property; (B) any material non compliance with any Environmental Laws related in any way to the Property; (C) any actual or potential Environmental Lien; (D) any required or proposed Remediation of environmental conditions relating to the Property; and (E) any written or oral notice or other communication which Borrower becomes aware from any source whatsoever (including but not limited to a governmental entity) relating in any way to Hazardous Substances or Remediation thereof, possible liability of any person or entity pursuant to any Environmental Law, other environmental conditions in connection with the. Property, or any actual or potential administrative or judicial proceedings in connection with anything referred to in this Article 12. Any failure of Borrower to perform its obligations pursuant to this Section 12.2 shall constitute bad faith waste with respect to the Property. Section 12.3 LENDER'S RIGHTS. Lender and any other person or entity designated by Lender, including but not limited to any receiver, any representative of a governmental entity, and any environmental consultant, shall have the right, but not the obligation, to enter upon the Property at all reasonable times to assess any and all aspects of the environmental condition of the Property and its use, including but not limited to conducting any environmental assessment or audit (the scope of which shall be determined in Lender's sole and absolute discretion) and taking samples of soil, groundwater or other water, air, or building materials, and conducting other invasive testing. Borrower shall cooperate with and provide -46- access to Lender and any such person or entity designated by Lender. The costs and expenses of such assessments shall be borne by Lender except in instances where such report or assessment is performed due to Borrower's failure to comply with its obligations under Section 12.2(f) or following an Event of Default, in which cases the costs and expenses of such assessments shall be paid for by Borrower. ARTICLE 13 INDEMNIFICATION Section 13.1 GENERAL INDEMNIFICATION. Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations, debts, damages, losses, costs, expenses, diminutions in value, fines, penalties, charges, fees, expenses,judgments, awards, amounts paid in settlement, punitive damages, foreseeable and unforeseeable consequential damages, of whatever kind or nature (including but not limited to attorneys' fees and other costs of defense) (the "Losses") imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of the following, except to the extent any of the following are attributable to the gross negligence or willful misconduct of an Indemnified Party: (a) ownership of this Security Instrument, the Property or any interest therein or receipt of any Rents; (b) any amendment to, or restructuring of, the Debt, and the Note, this Security Instrument, or any Other Security Documents; (c) any and all lawful action that may be taken by Lender in connection with the enforcement of the provisions of this Security Instrument or the Note or any of the Other Security Documents, whether or not suit is filed in connection with same, or in connection with Borrower and/or any partner,joint venturer or shareholder thereof becoming a party to a voluntary or involuntary federal or state bankruptcy, insolvency or similar proceeding; (d) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (e) any use, nonuse or condition in, on or about the Property or any part thereof, or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (f) any failure on the part of Borrower to perform or be in compliance with any of the terms of this Security Instrument; (g) performance of any labor or services or the furnishing of any materials or other property in respect of the Property or any part thereof; (h) the failure of any person to file timely with the Internal Revenue Service an accurate Form 1099 B, Statement for Recipients of Proceeds from Real Estate, Broker and Barter Exchange Transactions, which may be required in connection with this Security Instrument, or to supply a copy thereof in a timely fashion to the recipient of the proceeds of the transaction in connection with which this Security Instrument is made; (i) any failure of the Property to be in compliance with any Applicable Laws; (j) the enforcement by any Indemnified Party of the provisions of this Article 13; (k) any and all claims and demands whatsoever which may be asserted against Lender by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants, or agreements contained in any Lease; (1) the payment of any commission, charge or brokerage fee to anyone which may be payable in connection with the funding of the Joan evidenced by the Note and secured by this Security Instrument; or (m) any misrepresentation made by Borrower in this Security Instrument or any -47- Other Security Document.' Any amounts payable to Lender by reason of the application of this Section 13.1 shall become immediately due and payable and shall bear interest at the Default Rate from the date loss or damage is sustained by Lender until paid. For purposes of this Article 13, the term"Indemnified Parties"means Lender, Trustee and any person or entity who is or will have been involved in the origination of the loan evidenced by the Note, any person or entity who is or will have been involved in the servicing of the loan evidenced by the Note, any person or entity in whose name the encumbrance created by this Security Instrument is or will have been recorded, persons and entities who may hold or acquire or will have held a full or partial interest in the loan evidenced by the Note (including, but not limited to, Investors (as defined herein) or prospective Investors in the Securities (as defined herein), as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the loan evidenced by the Note) as well as the respective directors, officers, shareholders, partners, employees, agents, servants, representatives, contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns of any and all of the foregoing (including but not limited to any other person or entity who holds or acquires or will have held a participation or other full or partial interest in the loan evidenced by the Note or the Property, whether during the term of the loan evidenced by the Note or as a part of or following a foreclosure of the loan evidenced by the Note and including, but not limited to, any successors by merger, consolidation or acquisition of all or a substantial portion of Lender's assets and business). Section 13.2 MORTGAGE AND/OR INTANGIBLE TAX. Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any tax on the making and/or recording of this Security Instrument, the Note or any of the Other Security Document, except for net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed upon an Indemnified Party as a result of a present or former connection between the jurisdiction of the government or taxing authority imposing such tax and the Indemnified Party (excluding a connection arising solely from the Indemnified Party having executed, delivered, or performed its obligations or received a payment under, or enforced, this Security Instrument, the Note and the Other Security Documents) or any political subdivision or taxing authority thereof or therein. Section 13.3 ERISA INDEMNIFICATION. Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses (including, without limitation, attorneys' fees and costs incurred in the investigation, defense, and settlement of Losses incurred in correcting any prohibited transaction or in the sale of a prohibited loan, and in obtaining any individual prohibited transaction exemption under ERISA that may be required, in Lender's sole discretion) that Lender may incur, directly or indirectly, as a result of a default under Sections 4.2 or 5_9 or Subsection 4.3(pl. Section 13.4 ENVIRONMENTAL INDEMNIFICATION. Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses and costs of Remediation (whether or not performed voluntarily), engineers' fees, environmental consultants' fees, and costs of investigation (including but not limited to sampling, testing, and analysis of soil, water, air, building materials and other materials and substances whether solid, liquid or gas) imposed upon or incurred by or -48- asserted against any Indemnified Parties, and directly or indirectly arising out of or in any way relating to any one or more of the following (except to the extent the same relate solely to Hazardous Substances first introduced to the Property by anyone other than Borrower, its agents or employees following the foreclosure of this Security Instrument (or the delivery and acceptance of a deed in lieu of such foreclosure), the expiration of any right of redemption with respect thereto and the obtaining by the purchaser, at such foreclosure sale or grantee under such deed of possession of the Property and except to the extent caused by the gross negligence or willful misconduct of the Indemnified Parties): (a) any presence of any Hazardous Substances in, on, above, or under the Property; (b) any past, present or threatened Release of Hazardous Substances in,on, above, under or from the Property; (c) any activity by Borrower, any person or entity affiliated with Borrower or any tenant or other user of the Property in connection with any actual, proposed or threatened use, treatment, storage, holding, existence, disposition or other Release, generation, production, manufacturing, processing, refining, control, management, abatement, removal, handling, transfer or transportation to or from the Property of any Hazardous Substances at any time located in,under, on or above the Property; (d) any activity by Borrower, any person or entity affiliated with Borrower or any tenant or other user of the Property in connection with any actual or proposed Remediation of any Hazardous Substances at any time located in, under, on or above the Property, whether or not such Remediation is voluntary or pursuant to court or administrative order, including but not limited to any removal, remedial or corrective action; (e) any past, present or threatened non compliance or violations of any Environmental Laws (or permits issued pursuant to any Environmental Law) in connection with the Property or operations thereon, including but not limited to any failure by Borrower, any person or entity affiliated with Borrower or any tenant or other user of the Property to comply with any order of any governmental authority in connection with any Environmental Laws; (f) the imposition, recording or filing or the threatened imposition, recording or filing of any Environmental Lien encumbering the Property; (g) any administrative processes or proceedings or judicial proceedings in any way connected with any matter addressed in Article 12 and this Section 13.4; (h) any past, present or threatened injury to, destruction of or loss of natural resources in any way connected with the Property, including but not limited to costs to investigate and assess such injury, destruction or loss; (i) any acts of Borrower or other users of the Property in arranging for disposal or treatment, or arranging with a transporter for transport for disposal or treatment, of Hazardous Substances owned or possessed by such Borrower or other users, at any facility or incineration vessel owned or operated by another person or entity and containing such or similar Hazardous Substances; (j) any acts of Borrower or other users of the Property, in accepting any Hazardous Substances for transport to disposal or treatment facilities, incineration vessels or sites selected by Borrower or such other users, from which there is a Release, or a threatened Release of any Hazardous Substance which causes the incurrence of costs for Remediation; (k) any personal injury, wrongful death, or property damage arising under any statutory or common law or tort law theory, including but not limited to damages assessed for the maintenance of a private or public nuisance or for the conducting of an abnormally dangerous activity on or near the Property; and (1) any misrepresentation or inaccuracy in any representation or warranty or material breach or failure to perform any covenants or other obligations pursuant to Article 12. Section 13.5 DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND EXPENSES. Upon written request by any Indemnified Party, Borrower shall defend such Indemnified Party (if requested by any Indemnified Party, in the name of the Indemnified Party) -49- by attorneys and other professionals approved by the Indemnified Parties, which approval shall not be unreasonably withheld. Notwithstanding the foregoing, if any Indemnified Party determines in its reasonable discretion, that a conflict of interest or potential conflict of interest exists with respect to any attorney or professional selected by Borrower, such Indemnified Party may, in its reasonable discretion, engage its own attorneys and other professionals to defend or assist it, and, at the option of Indemnified Party, their attorneys shall control the resolution of claim or proceeding. Upon demand,Borrower shall pay or, in the sole and absolute discretion of the Indemnified Parties, reimburse, the Indemnified Parties for the payment of reasonable fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith. ARTICLE 14 WAIVERS Section 14.1 WAIVER OF COUNTERCLAIM. To the extent permitted by law, Borrower hereby waives the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought against it by Lender arising out of or in any way connected with this Security Instrument the Note, any of the Other Security Documents,or the Obligations. Section 14.2 MARSHALLING AND OTHER MATTERS. Borrower hereby waives, to the extent permitted by law, the benefit of all appraisement, valuation, stay, extension, reinstatement and redemption laws now or hereafter in force and all rights of marshalling in the event of any sale hereunder of the Property or any part thereof or any interest therein. Further, Borrower hereby expressly waives any and all rights of redemption from sale under any order or decree of foreclosure of this Security Instrument on behalf of Borrower, and on behalf of each and every person acquiring any interest in or title to the Property subsequent to the date of this Security Instrument and on behalf of all persons to the extent permitted by applicable law. Section 14.3 WAIVER OF NOTICE. Borrower shall not be entitled to any notices of any nature whatsoever from Trustee or Lender except with respect to matters for which this Security Instrument specifically and expressly provides for the giving of notice by Trustee or Lender to Borrower and except with respect to matters for which Trustee or Lender is required by applicable law to give notice, and Borrower hereby expressly waives the right to receive any notice from Trustee or Lender with respect to any matter for which this Security Instrument or applicable law does not specifically and expressly provide for the giving of notice by Trustee or Lender to Borrower. Section 14.4 SOLE DISCRETION OF LENDER. Wherever pursuant to this Security Instrument (a) Lender exercises any right given to it to approve or disapprove, (b) any arrangement or term is to be satisfactory to Lender, or(c) any other decision or determination is to be made by Lender, the decision of Lender to approve or disapprove all decisions that arrangements or terms are satisfactory or not satisfactory and all other decisions and determinations made by Lender, shall be in the sole and absolute discretion of Lender and shall be final and conclusive, except as may be otherwise expressly and specifically provided herein. -50- Section 14.5 SURVIVAL. The indemnifications made pursuant to Sections 13.3 and 13.4 and the representations and warranties, covenants,. and other obligations arising under Article 12, shall continue indefinitely in full force and effect and shall survive and shall in no way be impaired by: any satisfaction or other termination of this Security Instrument, any assignment or other transfer of all or any portion of this Security Instrument or Lender's interest in the Property (but, in such case, shall benefit both Indemnified Parties and any assignee or transferee), any exercise of Lender's rights and remedies pursuant hereto including but not limited to foreclosure or acceptance of a deed in lieu of foreclosure, any exercise of any rights and remedies pursuant to the Note or any of the Other Security Documents, any transfer of all or any portion of the Property (whether by Borrower or by Lender following foreclosure or acceptance of a deed in lieu of foreclosure or at,any other time), any amendment to this Security Instrument, the Note or the Other Security Documents, and any act or omission that might otherwise be construed as a release or discharge of Borrower from the obligations pursuant hereto. Section 14.6 WAIVER OF TRIAL BY JURY. BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERM1TI.D BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR THE LOAN EVIDENCED BY THE NOTE,THE NOTE,THIS SECURITY INSTRUMENT OR THE OTHER SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES,DIRECTORS OR AGENTS IN CONNECTION THEREWITH. ARTICLE 15 EXCULPATION Section 15.1 EXCULPATION. Lender shall not enforce the liability and obligation of Borrower, to perform and observe the obligations contained in this Security Instrument, the Note, or the Other Security Documents by any action or proceeding wherein a money judgment shall be sought against Borrower or any member of Borrower, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon this Security Instrument, the Note, the Other Security Documents, and the interests in the Property; and any other collateral given to Lender pursuant to this Security Instrument and the Other Security Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower's interest in the Property and in any other collateral given to Lender, and Lender, by accepting this Security Instrument, the Note and the Other Security Documents, agrees that it shall not sue for, seek or demand any deficiency judgment against Borrower or any member of Borrower, in any such action or proceeding, under or by reason of or in connection with this Security Instrument, the Note, or the Other Security Documents. The provisions of this paragraph shall not, however, (i) constitute a waiver, release or impairment of any obligation evidenced or secured by this Security Instrument or the Other Security Documents, (ii) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under this Security -51- Instrument, (iii) affect the validity or enforceability of any guaranty made in connection with this Security Instrument or the Other Security Documents, (iv) impair the right of Lender to obtain the appointment of a receiver, (v) impair the enforcement of any assignment, or, (vi) constitute a waiver of the right of Lender to enforce the liability and obligation of Borrower or any managing member of Borrower,by money judgment or otherwise, to the extent of any Losses arising out of or in connection with the following: (a) fraud or intentional misrepresentation by Borrower in connection with this Security Instrument, the Note or the Other Security Documents; (b)damage to or waste of the Property and damage to or loss in value to the Property resulting from Borrower's gross negligence; (c) the removal or disposal of any portion of the Property after default under the Note, this Security Instrument or the Other Security Documents; (d) the misapplication or misappropriation by Borrower of(w) any insurance proceeds paid by reason of any loss, damage or destruction to the Property, (x) any awards or other amounts received in connection with the condemnation of all or a portion of the Property, (y) any Rents, or (z) any security deposits collected with respect to the Property which are not delivered to Lender upon a foreclosure of the Property or action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof, following default under this Security Instrument, the Note or the Other Security Documents; (e) the failure of Borrower to obtain Lender's prior written consent to any subordinate financing or other voluntary lien encumbering the Property as required by this Security Instrument or the Other Security Documents; (f) the failure of Borrower to obtain Lender's prior written consent to any assignment,transfer, or conveyance of the Property or any interest therein as required by this Security Instrument; and (g) any matters set forth in Sections 4.3 and 13.4 of this Security Instrument. As used herein, the term "Losses" includes any and all claims, suits, liabilities, actions, proceedings, obligations, debts, damages, losses, costs, expenses, diminutions in value, fines, penalties, charges, fees, expenses,judgments, awards, amounts paid in settlement, punitive damages, and foreseeable consequential damages, of whatever kind or nature (including but not limited to attorneys' fees and other costs of defense). In addition, in the event (i) (A) Borrower files a voluntary petition under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code (the "Bankruptcy Code") or any other Federal or state bankruptcy or insolvency law, or (B) an involuntary case is commenced against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law with the collusion of Borrower or any of its Affiliates or (ii) Borrower or any Affiliate of Borrower contests or in any material way interferes with, directly or indirectly (collectively, a"Contest"), any foreclosure action, UCC sale or other material remedy exercised by Lender upon the occurrence of any Event of Default under the Loan Documents whether by making any motion, bringing any counterclaim, claiming any defense, seeking any injunction or other restraint, commencing any action, or otherwise (provided that if any such Person obtains a non-appealable order successfully asserting a Contest, Borrower shall have no liability under this clause (ii)), then the Borrower's obligation to pay the Debt shall be fully recourse. -52- ARTICLE 16 NOTICES Section 16.1 NOTICES. All notices or other written communications hereunder shall be deemed to have been properly given (i)upon delivery, if delivered in person with receipt acknowledged by the recipient thereof, (ii) one (1) Business Day (defined below) after having been deposited for overnight delivery with any reputable overnight courier service, or (iii) three (3) Business Days after having been deposited in any post office or mail depository regularly maintained by the U.S. Postal Service and sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: •If to Borrower: c/o Regency Centers, L.P. 121 West Forsyth Street, Suite 200 Jacksonville, Florida 32202 With a copy to: Foley&Lardner LLP One Independent Drive, Suite 1300 Jacksonville, Florida 32201 Attention: Charles V. Hedrick,Esq. If to Lender: Wachovia Bank,National Association Commercial Real Estate Services 8739 Research Drive URP—4, NC 1075 Charlotte,North Carolina 28262 or addressed as such party may from time to time designate by written notice to the other parties. Either party by notice to the other may designate additional or different addresses for subsequent notices or communications. For purposes of this Security Instrument, "Business Day" shall mean any day other than Saturday, Sunday or any other day on which banks are authorized or required to close in New York, New York. ARTICLE 17 SERVICE OF PROCESS Section 17.1 CONSENT TO SERVICE. (a) Borrower will maintain a place of business or an agent for service of process in the State of Oregon and give prompt notice to Lender of the address of such place of business and of the name and address of any new agent appointed by it, as appropriate. Borrower further agrees that the failure of its agent for service of process to give it notice of any service of process will not impair or affect the validity of such service or of any judgment based thereon. If, despite the foregoing, there is for any reason no agent for service of process of -53- Borrower available to be served, and if it at that time has no place of business in the State of Oregon, then Borrower irrevocably consents to service of process by registered, or certified mail, postage prepaid,to it at its address given in or pursuant to the first paragraph hereof. (b) Borrower initially and irrevocably designates Corporation Service Company with offices on the date hereof at 285 Liberty Street, NE, Salem, OR 97301 to receive for and on behalf of Borrower service of process in the State of Oregon with respect to this Security Instrument. ARTICLE 18 APPLICABLE LAW Section 18.1 CHOICE OF LAW. THIS SECURITY INSTRUMENT SHALL BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE STATE OF OREGON AND SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OREGON. Section 18.2 USURY LAWS. This Security Instrument and the Note are subject to the express condition that at no time shall Borrower be obligated or required to pay interest on the Debt at a rate which could subject the holder of the Note to either civil or criminal liability as a result of being in excess of the maximum interest rate which Borrower is permitted by applicable law to contract or agree to pay. If by the terms of this Security Instrument or the Note, Borrower is at any time required or obligated to pay interest on the Debt at a rate in excess of such maximum rate, the rate of interest under the Security Instrument and the Note shall be deemed to be immediately reduced to such maximum rate and the interest payable shall be computed at such maximum rate and all prior interest payments in excess of such maximum rate shall be applied and shall be deemed to have been payments in reduction of the principal balance of the Note. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the Debt shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Note until payment in full so that the rate or amount of interest on account of the Debt does not exceed the maximum lawful rate of interest from time to time in effect and applicable to the Debt for so long as the Debt is outstanding. Section 18.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers and remedies provided in this Security Instrument may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of law and are intended to be limited to the extent necessary so that they will not render this Security Instrument invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any applicable law. If any term of this Security Instrument or any application thereof shall be invalid or unenforceable, the remainder of this Security Instrument and any other application of the term shall not be affected thereby. -54- ARTICLE 19 SECONDARY MARKET Section 19.1 TRANSFER OF LOAN. Lender may, at any time, sell, transfer or assign the Note, this Security Instrument and the Other Security Documents, and any or all servicing rights with respect thereto, or grant participations therein or issue mortgage passthrough certificates or other securities evidencing a beneficial interest in a rated or unrated public offering or private placement (the "Securities"). Lender may forward to each purchaser, transferee, assignee, servicer, participant or investor in such. Securities or any Rating Agency rating such Securities (collectively, the "Investor"), and each prospective Investor, all documents and information which Lender now has or may hereafter acquire relating to the Debt and to Borrower, and the Property, whether furnished by Borrower, or otherwise, as Lender determines necessary or desirable. Borrower agrees to cooperate with Lender in connection with any transfer made or any Securities created pursuant to this Security Instrument, including, without limitation, the delivery of an estoppel certificate in accordance therewith, and such other documents as may be reasonably requested by Lender. Borrower shall also furnish and Borrower consents to Lender furnishing to such Investors or such prospective Investors or Rating Agency any and all information concerning the Property, the Leases, the financial condition of Borrower as may be requested by Lender, any Investor or any prospective Investor or Rating Agency in connection with any sale, transfer or participation interest. Lender may retain or assign responsibility for servicing the Note, this Security Instrument, and the Other Security Documents, or may delegate some or all of such responsibility and/or obligations to a servicer including, but not limited to, any subservicer or master servicer. Lender may make such assignment or delegation on behalf of the Investors if the Note is sold or this Security Instrument or the Other Security Documents are assigned. All references to Lender herein shall refer to and. include any such servicer to the extent applicable. Section 19.2 CONVERSION TO REGISTERED FORM. At the request and the expense of Lender, Borrower shall appoint, as its agent, a registrar and transfer agent (the "Registrar") acceptable to Lender which shall maintain, subject to such reasonable regulations as it shall provide, such books and records as are necessary for the registration and transfer of the Note in a manner that shall cause the Note to be considered to be in registered form for purposes of Section 163(1) of the Code. The option to convert the Note into registered form once exercised may not be revoked. Any agreement setting out the rights and obligation of the Registrar shall be subject to the reasonable approval of Lender. Borrower may revoke the appointment of any particular person as Registrar, effective upon the effectiveness of the appointment of a replacement Registrar. The Registrar shall not be entitled to any fee from Lender or any other lender in respect of transfers of the Note and Security Instrument (other than Taxes and governmental charges and fees). Section 19.3 COOPERATION. Borrower acknowledges that Lender and its successors and assigns may (a) sell this Security Instrument, the Note and Other Security Documents to one or more third parties as a whole loan, (b) participate the Loan secured by this Security Instrument to one or more third parties, (c) deposit, through one or a Series of transactions, this Security Instrument, the Note and Other Security Documents with a trust, which trust may sell certificates to third parties evidencing an ownership interest in the trust -55- assets or (d) otherwise sell the Loan or interest therein to third parties (the transactions referred to in clauses (a) through (d) are hereinafter referred to as "Secondary Market Transactions"). Borrower shall cooperate in good faith with Lender in effecting any such Secondary Market Transaction and shall cooperate in good faith to implement all requirements imposed by any rating agency issuing any statistical rating in any Secondary Market Transaction or the requirements of potential investors in any Secondary Market Transaction. Borrower agrees to make upon Lender's written request, without limitation, all structural or other changes to the Loan (including delivery of one or more new component notes to replace the original note or modify the original note to reflect multiple components of the Loan and such new notes or modified note may have different interest rates and amortization schedules), modifications to any documents evidencing or securing the Loan, and delivery of opinions, of counsel acceptable to the rating agency or potential investors and addressing such matters as the rating agency or potential investors may require; provided, however, that the Borrower shall not be required to modify (i) the initial weighted average interest rate payable under the Note, (ii) the stated maturity of the Note, (iii) the aggregate amortization of principal of the Note; (iv) any other material economic term of the Loan, or (v) decrease the time periods during which Borrower is permitted to perform its obligations under this Security Instrument or any of the Other Loan Documents. Borrower shall provide such information and documents relating to Borrower, Indemnitor, if any, the Property and any tenants of the Improvements as Lender may reasonably request in connection with a Secondary Market Transaction. Lender shall have the right to provide to prospective investors or rating agencies any information in its possession, including, without limitation, financial statements relating to Borrower, the Indemnitor, if any, the Property and any tenant of the Improvements. Borrower acknowledges that certain information regarding the Loan and the parties thereto and the Property may be included in a private placement memorandum,prospectus or other disclosure documents. Section 19.4 COSTS. Borrower shall not be responsible for any costs directly related to any transaction entered into pursuant to this Article 19, unless Borrower is otherwise required to pay for such costs pursuant to this Security Instrument. ARTICLE 20 COSTS Section 20.1 PERFORMANCE AT BORROWER'S EXPENSE. Borrower acknowledges and confirms that Lender shall impose certain administrative processing and/or commitment fees in connection with (a) the extension, renewal, modification, amendment and termination of its loan, (b) the release or substitution of collateral therefor, (c) obtaining certain consents, waivers and approvals with respect to the Property, (d) the review of any Lease or proposed Lease or the preparation or review of any subordination, non disturbance agreement or (e) if the servicer, in its reasonable determination, anticipates that there will occur an Event of Default and the Loan is transferred to a special servicer (the occurrence of any of the above shall be called an "Event"). Borrower further acknowledges and confirms that it shall be responsible for the payment of all costs of reappraisal of the Property or any part thereof required by law, regulation, any governmental or quasi governmental authority or, following an Event of Default, Lender. Borrower hereby acknowledges and agrees to pay, immediately, with or without -56- demand, all such fees (as the same may be increased or decreased from time to time), and any additional fees of a similar type or nature which may be imposed by Lender from time to time, upon the occurrence of any Event or otherwise. Wherever it is provided for herein that Borrower pay any costs and expenses, such costs and expenses shall include, but not be limited to, all reasonable legal fees and disbursements of Lender, whether retained firms, the reimbursement for the expenses of in house staff or otherwise. Section 20.2 ATTORNEY'S FEES FOR ENFORCEMENT. (a) Borrower shall pay all reasonable legal fees incurred by Lender in connection with the items set forth in Section 20.1 above, and (b) Borrower shall pay to Trustee or Lender on demand any and all expenses, including legal expenses and attorneys' fees, incurred or paid by trustee or Lender in protecting its interest in the Property or Personal Property or in collecting any amount payable hereunder or in enforcing its rights hereunder with respect to the Property or Personal Property, whether or not any legal proceeding is commenced hereunder or thereunder and whether or not any default or Event of Default shall have occurred, together with interest thereon at the Default Rate from the date paid or incurred by Trustee or Lender until such expenses are paid by Borrower. ARTICLE 21 DEFINITIONS Section 21.1 GENERAL DEFINITIONS. Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, words used in this Security Instrument may be used interchangeably in singular or plural form and the word "Borrower" shall mean "each Borrower, each party comprising Borrower (if Borrower consists of more than one person or entity) and any subsequent owner or owners of the Property or any part thereof or any interest therein"; the word "Lender" shall mean "Lender and any subsequent holder of the Note"; the word "Note" shall mean "the Note and any other evidence of indebtedness secured by this Security Instrument"; the word "person" shall include an individual, corporation, limited liability company, partnership, trust, unincorporated association, government, governmental authority, and any other entity, the word "Property" shall include any portion of the Property and any interest therein, and the phrases "attorneys' fees" and "counsel fees" shall include any and all reasonable attorneys, paralegal and law clerk fees and disbursements, including, but not limited to, fees and disbursements at the pre trial, trial and appellate levels an in any bankruptcy or other administrative or arbitration proceeding incurred or paid by Lender in protecting its interest in the Property, the Leases and the Rents and enforcing its rights hereunder. ARTICLE 22 MISCELLANEOUS PROVISIONS Section 22.1 NO ORAL CHANGE. This Security Instrument, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of Borrower or Lender, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver,extension, change, discharge or termination is sought. -57- it shall be construed to mean each individual appointed as Trustee for the time being, whether original or successors or successor in trust. All title, estate, rights, powers, trusts and duties hereunder given or appertaining to or devolving upon Trustee shall be in each of the individuals appointed as Trustee so that any action hereunder or purporting to be hereunder of any one of the individuals appointed as Trustee shall for all. purposes be considered to be, and as effective as, the action of Trustee. Section 22.9 THE TRUSTEES FEES. Borrower shall pay all reasonable costs, fees and expenses incurred by the Trustee and the Trustee's agents and counsel in connection with the performance by the Trustee of the Trustee's duties hereunder and all costs, fees and expenses shall be secured by this Security Instrument. Section 22.10 CERTAIN RIGHTS. With the approval of Lender, the Trustee shall have the right to take any and all of the following actions: (i) to select, employ, and advise with counsel (who may be, but need not be, counsel for Lender) upon any matters arising hereunder, including the interpretation of the Note,this Security Instrument or the Other Security Documents, and shall be fully protected in relying as to legal matters on the advice of counsel, (ii) to execute any of the trusts and powers hereof and to perform any duty hereunder either directly or through his agents or attorneys, (iii) to select and employ, in and about the execution of his duties hereunder, suitable accountants, engineers and other experts, agents and attorneys in fact, either corporate or individual, not regularly in the employ of the Trustee, and the Trustee shall not be answerable for any act, default, negligence, or misconduct of any such accountant, engineer or other expert, agent or attorney in fact, if selected with reasonable care, or for any error of judgment or act done by the Trustee in good faith, or be otherwise responsible or accountable under any circumstances whatsoever, except for the Trustee's gross negligence or bad faith, and (iv) any and all other lawful action as Lender may instruct the Trustee to take to protect or enforce Lender's rights hereunder. The Trustee shall not be personally liable in case of entry by the Trustee, or anyone entering by virtue of the powers herein granted to the Trustee, upon the Property for debts contracted for or liability or damages incurred in the management or operation of the Property The Trustee shall have the right to rely on any instrument, document, or signature authorizing or supporting an action taken or proposed to be taken by the Trustee hereunder, believed by the Trustee in good faith to be genuine. The Trustee shall be entitled to reimbursement for actual expenses incurred by the Trustee in the performance of the Trustees duties hereunder and to reasonable compensation for such of the Trustees services hereunder as shall be rendered. Section 22.11 RETENTION OF MONEY. All moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated in any manner from, any other moneys (except to the extent required by applicable law) and the Trustee shall be under no liability for interest on any moneys received by the Trustee hereunder. Section 22.12 PERFECTION OF APPOINTMENT. Should any deed, conveyance, or instrument of any nature be required from Borrower by any Trustee or substitute trustee to more fully and certainly vest in and confirm to the Trustee, or substitute trustee such estates rights, powers, and duties, then, upon request by the Trustee or substitute trustee, any and -59- all such deeds, conveyances and instruments shall be made, executed, acknowledged, and delivered and shall be caused to be recorded and/or filed by Borrower. Section 22.13 SUCCESSION INSTRUMENTS. Any substitute, trustee appointed pursuant to any of the provisions hereof shall, without any further act, deed, or conveyance, become vested with all the estates, properties, rights, powers, and trusts of its or his predecessor in the rights hereunder with like effect as if originally named as the Trustee herein; but nevertheless, upon the written request of Lender or of the substitute trustee, the Trustee ceasing to act shall execute and deliver any instrument transferring to such substitute trustee, upon the trust herein expressed, all the estates, properties, rights, powers and trusts of the Trustee so ceasing to act, and shall duly assign, transfer and deliver any of the property and moneys held by such Trustee to the substitute trustee so appointed in the Trustee's place. Section 22.14 RELIANCE OF TRUSTEE. As to all matters concerning the existence of defaults hereunder and the amount of indebtedness subject to the Note and secured hereby, as well as similar or related matters, the Trustee is hereby authorized by Borrower to rely conclusively upon, without further inquiry,the affidavit of any officer of Lender. ARTICLE 23 SPECIAL OREGON PROVISIONS SECTION 23.1 PRINCIPLES OF CONSTRUCTION. In the event of any inconsistencies between the terms and conditions of this Article 23 and the terms and conditions of this Security Instrument, the terms and conditions of this Article 23 shall control and be binding. Section 23.2 Forced Insurance Notice. WARNING: UNLESS BORROWER PROVIDES LENDER WITH EVIDENCE OF THE INSURANCE COVERAGE AS REQUIRED BY THE LOAN DOCUMENTS, THE LENDER MAY PURCHASE SUCH INSURANCE AT BORROWER'S EXPENSE TO PROTECT LENDER'S INTEREST. THIS INSURANCE MAY, BUT NEED NOT, ALSO PROTECT BORROWER'S INTEREST. IF THE COLLATERAL BECOMES DAMAGED, THE COVERAGE LENDER PURCHASES MAY NOT PAY ANY CLAIM BORROWER MAKES OR ANY CLAIM MADE AGAINST BORROWER. BORROWER MAY LATER CANCEL THIS COVERAGE BY PROVIDING EVIDENCE THAT BORROWER HAS OBTAINED PROPERTY COVERAGE ELSEWHERE. BORROWER IS RESPONSIBLE FOR THE REASONABLE COST OF ANY SUCH INSURANCE PURCHASED BY LENDER. THE COST OF THIS INSURANCE MAY BE ADDED TO THE LOAN BALANCE. IF THIS COST IS ADDED TO THE LOAN BALANCE, THE INTEREST RATE PAYABLE UNDER THE UNDERLYING LOAN WILL APPLY TO THE ADDED AMOUNT. THE EFFECTIVE DATE OF THE COVERAGE MAY BE THE DATE BORROWER'S PRIOR COVERAGE LAPSED OR THE DATE BORROWER FAILED TO PROVIDE PROOF OF COVERAGE. THE COVERAGE LENDER PURCHASES MAY BE CONSIDERABLY MORE EXPENSIVE THAN INSURANCE BORROWER CAN OBTAIN ON BORROWER'S -60- OWN AND MAY NOT SATISFY ANY NEED FOR PROPERTY DAMAGE COVERAGE OR ANY MANDATORY LIABILITY . INSURANCE REQUIREMENTS IMPOSED BY APPLICABLE LAW. Section 23.3 No Oral Commitments Notice. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY BENEFICIARY CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY GRANTOR'S/BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY AN AUTHORIZED REPRESENTATIVE OF BENEFICIARY TO BE ENFORCEABLE. Section 23.4 The first recital paragraph of this Security Instrument is hereby amended by inserting at the end thereof, the following: "and has an initial maturity date to occur on or before March 16, 2016." Section 23.5 The last sentence of Section 21.1 hereof is hereby amended by deleting the remainder of the sentence after the words"fees and disbursements" and inserting the words "whether or not such fees and disbursements are incurred in connection with litigation, and, if incurred in connection with litigation, including such fees, expenses and costs as are incurred at the trial, pretrial or appellate levels, and including such fees incurred or paid by Lender with respect to retained firms in protecting its interests in the Property, the Leases and the Rents and enforcing its rights hereunder." Section 23.6 Variable Interest Rate. The Note and the other loan documents secured by this Deed of Trust contain provisions allowing for changes in the interest rate from time to time during the term of the indebtedness. Section 23.7 O.R.S. 93.040 Warning. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE PERSON'S RIGHTS, IF ANY, UNDER CHAPTER 1, OREGON LAWS 2005 (BALLOT MEASURE 37 (2004)) THIS INSTRUMENT DOES NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENTS TO VERIFY APPROVED USES, TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FORESTRY PRACTICES AS DEFINED IN O.R.S. 30.930 AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER CHAPTER 1, OREGON LAWS 2005 (BALLOT MEASURE 37 (2004)). ARTICLE 24 CROSS DEFAULT; CROSS-COLLATERALIZATION Section 24.1 CROSS DEFAULT; CROSS-COLLATERALIZATION. Borrower acknowledges that Lender has made the Loan to Borrower upon the security of the -61- • collective interest in the Property and the property encumbered by the Other Security Instruments (defined below) (the "Additional Property") and in reliance upon the aggregate of the Property and the Additional Property taken together being of greater value as collateral security than the sum of the Property and the Additional Property taken separately. Borrower agrees that this Security Instrument and the other mortgages or deeds of trust executed simultaneously herewith, [as more particularly described below], for the benefit of Lender (the "Other Security Instruments") are and will be cross-collateralized and cross-defaulted with each other so that (i) an Event of Default under this Security Instrument shall constitute an Event of Default under the Other Security Instruments, (ii) an Event of Default under the Other Security Instruments shall constitute an Event of Default under this Security Instrument; (iii) an Event of Default under the Note shall constitute an Event of Default under this Security Instrument and the Other Security Instruments and (iv) this Security Instrument and the Other Security Instruments constitute security for the Note as if a single blanket lien were placed on all of the Property and the Additional Property as security for the Note. Section 24.2 ADDITIONAL LOANS CROSS-COLLATERALIZATION. In addition to all other indebtedness and obligations secured hereby, this Security Instrument shall also secure the following described additional loan (the "Additional Loan"), including without limitation,the indebtedness evidenced by the Promissory Note (the "Additional Note") described below, and the payment and performance of all other indebtedness and obligations (including any additional advances) under the Additional Note and all agreements, instruments and other documents evidencing, securing or relating to the Additional Loan (the "Additional Loan Documents"), including, without limitation, the Other Security Instruments, together with any and all amendments, renewals, replacements, extensions or other modifications to any of the foregoing: (a) Loan in the principal amount of$12,727,000.00 evidenced by that certain Promissory Note executed by FW VA-Brafferton Shopping Center, LLC, a Delaware limited liability company, and payable to the Lender dated of even date herewith, in such principal amount, governed by the Additional Loan Documents executed in connection therewith, and secured by property commonly known as Brafferton Shopping Center located in Stafford County,Virginia; (b) Loan in the principal amount of$27,050,000.00 evidenced by that certain Promissory Note executed by FW IL-Civic Center Plaza, LLC, a Delaware limited liability company, and payable to the Lender dated of even date herewith, in such principal amount, governed by the Additional Loan Documents executed in connection therewith, and secured by property commonly known as Civic Center Plaza located in Cook County, Illinois; (c) Loan in the principal amount of $9,410,000.00 evidenced by that certain Promissory Note executed by FW IL-McHenry Commons Shopping Center, LLC, a Delaware limited liability company, and payable to the Lender dated of even date herewith, in such principal amount, governed by the Additional Loan Documents executed in connection therewith, and secured by property commonly known as McHenry Commons Shopping Center located in McHenry County, Illinois; -62- (d) Loan in the principal amount of$10,500,000.00 evidenced by that certain Promissory Note executed by FW TX-First Colony Marketplace, L.P., a Delaware limited partnership, and payable to the Lender dated of even date herewith, in such principal amount, governed by the Additional Loan Documents executed in connection therewith, and secured by property commonly known as First Colony Marketplace located in Fort Bend County, Texas; (e) Loan in the principal amount of $9,540,000.00 evidenced by that certain Promissory Note executed by FW CA-Laguna Niguel Plaza, LLC, a Delaware limited liability company, and payable to the Lender dated of even date herewith, in such principal amount, governed by the Additional Loan Documents executed in connection therewith, and secured by property commonly known as Laguna Niguel Plaza located in Orange County, California; (f) Loan in the principal amount of$30,530,000.00 evidenced by that certain Promissory Note executed by FW CA-Pleasant Hill Shopping Center, LLC, a Delaware limited liability company, and payable to the Lender dated of even date herewith, in such principal amount, governed by the Additional Loan Documents executed in connection therewith, and secured by property commonly known as Pleasant Hill Shopping Center located in Contra Costa County,California; (g) Loan in the principal amount of$42,000,000.00 evidenced by that certain Promissory Note executed by FW CA-Granada Village, LLC, a Delaware limited liability company, and payable to the Lender dated of even date herewith, in such principal amount, governed by the Additional Loan Documents executed in connection therewith, and secured by property commonly known as Granada Village Shopping Center located in Los Angeles County, California; (h) Loan in the principal amount of $9,400,000.00 evidenced by that certain Promissory Note executed by FW WI-Racine Centre, LLC, a Delaware limited liability company, and payable to the Lender dated of even date herewith, in such principal amount, governed by the Additional Loan Documents executed in connection therewith, and secured by property commonly known as Racine Shopping Center located in Racine County,Wisconsin; (i) Loan in the principal amount of$19,126,000.00 evidenced by that certain Promissory Note executed by FW NC-Shoppes of Kildaire, LLC, a Delaware Iimited liability company, and payable to the Lender dated of even date herewith, in such principal amount, governed by the Additional Loan Documents executed in connection therewith, and secured by property commonly known as Shoppes of Kildaire located in Wake County, North Carolina; (j) Loan in the principal amount of $1,585,000.00 evidenced by that certain Promissory Note executed by FW NJ-Westmont Shopping Center, LLC, a Delaware limited liability company, and payable to the Lender dated of even date herewith, in such principal amount, governed by the Additional Loan Documents executed in connection therewith, and secured by property commonly known as Westmont Shopping Center located in Camden County,New Jersey; (k) Loan in the principal amount of$11,145,000.00 evidenced by that certain Promissory Note executed by FW-Newark, LLC, a Delaware limited liability company, and -63- payable to the Lender dated of even date herewith, in such principal amount, governed by the Additional Loan Documents executed in connection therewith, and secured by property commonly known as Newark Shopping Center located in New Castle County,Delaware; (1) Loan in the principal amount of$19,612,000.00 evidenced by that certain Promissory Note executed by USRP Towamencin, LLC, a Delaware limited liability company, and payable to the Lender dated of even date herewith, in such principal amount, governed by the Additional Loan Documents executed in connection therewith, and secured by property commonly known as Towamencin Shopping Center located in Montgomery County, Pennsylvania; The holder of each Additional Note shall be entitled to the benefits of this Security Instrument to the same extent as the holder of the Note. Accordingly, all references in this Security Instrument to the Loan, the Note or the Loan Documents shall be construed to include, respectively, each Additional Loan, each Additional Note, each Other Security Instrument and the Additional Loan Documents. Section 24.3 CROSS DEFAULT ADDITIONAL LOANS. Any Event of Default under any Additional Loan Document shall constitute an Event of Default under this Security Instrument and the other Loan Documents, including without limitation, the Note. Any Event of Default hereunder or under any of the other Loan Documents shall constitute an Event of Default under the Additional Loan Documents, including without limitation, the Additional Note. Section 24.4 RELEASE OF CROSS DEFAULT AND CROSS COLLATERALIZATION. To the extent that the Lender approves any assignment and assumption of the Note pursuant to Section 8.4 hereof, the Lender agrees: (a) to execute such documentation reasonably requested by Borrower in order to release the Loan from the provisions of this Article 24; and (b) to exclude, as of the date of release, the Note from any and all Pool Debt Service Coverage Ratio calculation. Borrower shall be obligated to reimburse Lender for its reasonable out of pocket costs and expenses, including, without limitation, attorney's fees in connection with the Lender complying with this Section 24.4. [SIGNATURE PAGE IMMEDIATELY FOLLOWS] • -64- IN WITNESS WHEREOF, this Security Instrument has been duly executed by Borrower as of the date first above written. BORROWER: FW OR-GREENWAY TOWN CENTER, LLC, a Delaware limited liability company By: FW MCW-Reg II Holding Company Two, LLC, a Delaware limited liability company, its sole member By: Macquarie CountryWide-Regency II, LLC, a Delaware limited liability company, its sole member By: Macquarie-Regency Management, LLC, a Delaware limited liability company, its managing member By: Regency Centers, L.P., a Delaware limited partnership, its managing member By: Regency Centers Corporation, a Florida corporation, its general partner By: Name. Title: L. D. Jinks, V.P. Controller Greenway Town Center\DOT ACKNOWLEDGMENT STATE OF Lexici ) ss.: COUNTY OF ) On this 22_ day of February, 2006, personally appeared the of Regency Centers Corporation, a Florida corporation, the eral partner of Regency Centers, L.P., a Delaware limited partnership, the managing member of Macquarie- Regency Management, LLC, a Delaware limited liability company, the managing member of Macquarie CountryWide-Regency II, LLC, a Delaware limited liability company, the sole member of FW MCW-Reg II Holding Company Two, LLC, a Delaware limited liability company, the sole member o f FW OR-GREENWAY TOWN CENTER, LLC, a Delaware limited liability company duly authorized, signer and sealer of the foregoing instrument, who acknowledged the same to be his free act and deed, and the free act and deed of said limited liability company,before me. OLA Not Public "42—i "'A - 6 >4, 42- Notary Pubic.Camden County,Georgia My commission expires M4 Co+a�."s+�e Fyyroc May 31.2W 8 OA 8 r/.:'`%• • Jif, ..cou }j- , Greenway Town Center\DOT Greenway Town Center, OR EXHIBIT"A" Part of the Northwest one-quarter of Section 34, Township 1 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 the point of intersection of the North right of way line of Springwood Drive, extended, and the East right of way line of S.W. 122nd Avenue (now vacated), said point lying North 89°54'50" East 1,077.94 feet and North 0°05'42" West 635.10 feet from the West one- quarter corner of said Section 34; thence North 89°52'27" East 4 feet; thence North 0°05'45" West parallel with the West right of way of said avenue, 150 feet to a point; thence South 89°52'27" West parallel to the center line of Springwood Drive, 44 feet to a point on the West right of way of said avenue(now vacated); thence North 0°05'45" West 180 feet along said right of way to a point; thence North 89°52'27" East 20 feet parallel to the center line of Springwood Drive to a point on the center line of said avenue (now vacated); thence North 0°05'45" West 276 feet on and along said center line to a point on the South right of way of Scholls Ferry Road, being 50 feet from center line thereof; thence South 84°22'18" West on and along said South right of way of Scholls Ferry Road, 577.71 feet to an iron rod; thence South 0°05'45" East 550.61 feet to an iron rod on the North right of way line of Springwood Drive, being 25 feet from center line thereof; thence North 89°52'27 East on and along said North right of way line 595.02 feet to the point of beginning. TOGETHER WITH those certain easement rights as set forth in the Declaration of Restrictions and Grant of Easements, dated May 11, 1979 and recorded June 22 1979, under Recorder's Fee No. 79 24332, Washington County Records, as modified by the Addendum thereto, recorded March 28, 1980,under Recorder's Fee No. 80010910 of said records. Washington County,Oregon 2010_035248 ' 05110/2010 11:03:40 AM 0-MMA Crtto2 Btnale 0 HOFFMAN (.3G) $55.00$5.00$5.00$11.00 515.00•Total a$01.00 PREPARED BY AND UPON I `` 1 ``�I �I ll``II �I I� I I �I� �II �I I ppI� I�I 1 TO: 01480145201000352480110118 ,• I,Richard 14obsmlcht,Director of mint and -�""rtY Taxation and Ex-ORI County Clerk for wee ro pion 4,'/.:-.....(•;.,, '''? gechtLL1P e Plaza, Suite 2300 bookWneordaornldeou� >, f_y San Francisco, CA 94111-3513 RkherdTazu�nrE=Delo County cla kant and `''V jti:c;iOl; Attention: Joseph B. Heil, Esq. After Recording Return To: T Vaillant C6 Loan#: 502852512 Commonwealth Land Title Insurance Co. 1015 15th Street,NW, Suite 300 CD Q Washington,DC 20005 09—001,78 V 1 SECOND AMENDMENT TO DEED OF TRUST AND SECURITY AGREEMENT a TI-IIS SECOND AMENDMENT TO DEED OF TRUST AND SECURITY AGREEMENT (this "Amendment") is entered into as of this 30th day of April 2010, by and among FW OR-GREENWAY TOWN CENTER, LLC, a Delaware limited liability company, 1.-1 having an address of c/o Regency Centers, One Independent Drive, Suite 114, Jacksonville, FL 32202, Ann: Mike Mas ("Borrower"), and BANK OF AMERICA, NATIONAL ASSOCIATION AS SUCCESSOR BY MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF WACHOVIA BANK COMMERCIAL MORTGAGE TRUST, COMMERCIAL MORTGAGE .PASS- THROUGH CERTIFICATES, SERIES 2006-C24 having an address of c/o Wells Fargo Bank, N.A., 201 South College Street, Charlotte, NC 28288, MAC DI100-090, Attn: Asset Manager (together with its successors and assigns, "Lender"). RECITALS WHEREAS, Borrower and Lender's predecessor in interest entered into that certain Deed of Trust and Security Agreement, dated as of March 1, 2006 (as amended, restated and/or modified from time to time, the "Security Instrument") encumbering certain real property described on Exhibit A attached hereto, (the "Property"), pursuant to which Borrower obtained a loan (the "Loan") from Lender's predecessor in interest. Lender's predecessor in interest subsequently assigned all of its interest in the Loan to Lender. Unless otherwise defined herein, capitalized terms used in this Amendment shall have the meanings set forth in the Security Instrument. WHEREAS, the Loan is evidenced by that certain Promissory Note dated March I, 2006, executed by Borrower in favor of Lender's predecessor in interest, (as may be assigned, amended, and/or restated from time to time, the "Note"), and Borrower's obligations under the Note are secured by, among other things, those recorded documents listed on Exhibit B, attached hereto, recorded in the Official Records as described on Exhibit B. WHEREAS, Borrower, Lender, and GRI-Regency, LLC, a Delaware limited liability company ("Principal"), have executed that certain Consent and Acknowledgment Greenway Town Center 15600901.2.BUSINESS Agreement dated as of the date hereof (the "Consent Agreement") pursuant to which Lender consented to the sale of fifteen percent (15%) of the equity interests in Principal (the "Acquisition") by MacQuarie CountryWide (US) No. 2 LLC to Global Retail Investors, LLC. WHEREAS, in connection with the Acquisition, and pursuant to the Consent Agreement, Borrower and Lender desire to make certain amendments to the Security Instrument. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and for other valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereto agree as follows: I. Incorporation. The foregoing recitals are incorporated herein by this reference. II. Amendments. The Security Instrument is hereby amended as set forth on Exhibit C, attached hereto. III. No Other Amendments. Except as expressly amended hereby, the Security Instrument shall remain in full force and effect in accordance with its terms, without any waiver, amendment or modification of any provision thereof. IV. Modifications. This Amendment may not be amended, modified or otherwise changed in any manner except by a writing executed by all of the parties hereto. V. Successors and Assigns. This Amendment is binding on, and shall inure to the benefit of the parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns; provided, however, that Borrower may only assign its rights hereunder to the extent permitted in the Security Instrument, the Note and the Other Security Documents. , VI. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the conflict of laws provisions of said state. VII. Entire Agreement. This Amendment constitutes all of the agreements among the parties relating to the matters set forth herein and supersedes all other prior or concurrent oral or written letters, agreements and understandings with respect to the matters set forth herein. VIII. Counterparts. This Amendment may be signed in any number of counterparts by the parties hereto, all of which taken together shall constitute one and the same instrument. [Remainder of this page intentionally left blank] Greenway Town Center 15600901.2.BUSINESS IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above. BORROWER: FW OR-GREENWAY TOWN CENTER, LLC, a Delaware limited liability company By: FW-Reg II Holding Company Two, LLC a Delaware limited liability company its sole member By: GRI-REGENCY, LLC, a Delaware limited liability company By: Regency Centers, L.P., a Delaware limited partnership Its managing member By: Regency Centers Corporation, a Florida corporation Its general partner By: , Name: Linda Jinks Title: Vice President [Signatures continued on following page] Greenway Town Center Amended Security Instrument ACKNOWLEDGMENT STATE OF GEORGIA ) COUNTY OF CAMDEN ) On //e/ 2( , 2010, before me, M h e 6% 11-h ,c__ personally appeared Linda D. Jinks proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies) as Vice President of Regency Centers Corporation, a Florida corporation, the general partner of Regency Centers, L.P., a Delaware limited partnership, the managing member of GRI-Regency, LLC, a Delaware limited liability company, the sole member of FW-Reg II Holding Company Two, LLC, a Delaware limited liability company, the sole member of FW OR-Greenway Town Center, LLC, a Delaware limited liability company, and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Si Notary Pub& (seal) Q��pe Ko• g2 OTARy''o2 en MY COMMISSION EXPIRES 2-18-2013 Greenway Town Center Amended Security Instrument LENDER: BANK OF AMERICA, NATIONAL ASSOCIATION, as successor by merger to LaSalle Bank National Association, as Trustee for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2006-C24 By: WELLS FARGO BANK, N.A., as successor by merger to Wachovia Bank, N.A., as Master Servicer under that certain Pooling and Servicing Agreement dated as of March I, 2006 By: 41111 Name: Tracy Mei—Smith Title: Vice = - ident Greenway Town Center Amended Security Instrument CALIFORNIA NOTARY ACKNOWLEDGEMENT State of California ) )ss County of Contra Costa ) On April 26, 2010 before me, Carol L Morris, Notary Public, personally appeared Tracy Mills-Smith, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. ,� CAROL L `'n -11°"" Commission# 18( ,C}80 :4' 0,-.' Notary Public-Cal.torniateltrrr--- %: ?' Contra Costa CoyZp.5.411 `"` ' My Comm.Expires Jut 2012 EXHIBIT A Legal Description Part of the Northwest one-quarter of Section 34, Township 1 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 the point of intersection of the North right of way line of Springwood Drive, extended, and the East right of way line of S.W. 122nd Avenue (now vacated), said point lying North 89°54'50" East 1,077.94 feet and North 0°05'42" West 635.10 feet from the West one-quarter corner of said Section 34; thence North 89°52'27" East 4 feet; thence North 0°05'45" West parallel with the West right of way of said avenue, 150 feet to a point; thence South 89°52'27" West parallel to the center line of Springwood Drive, 44 feet to a point on the West right of way of said avenue (now vacated); thence North 0°05'45" West 180 feet along said right of way to a point; thence North 89°52'27" East 20 feet parallel to the center line of Springwood Drive to a point on the center line of said avenue (now vacated); thence North 0°05'45" West 276 feet on and along said center line to a point on the South right of way of Scholls Ferry Road, being 50 feet from center line thereof; thence South 84°22'18" West on and along said South right of way of Scholls Ferry Road, 577.71 feet to an iron rod; thence South 0°05'45" East 550.61 feet to an iron rod on the North right of way line of Springwood Drive, being 25 feet from center line thereof; thence North 89°52'27" East on and along said North right of way line 595.02 feet to the point of beginning. TOGETHER WITH those certain easement rights as set forth in the Declaration of Restrictions and Grant of Easements, dated May 11, 1979 and recorded June 22, 1979, under Recorder's Fee No. 79 24332, Washington County Records, as modified by the Addendum thereto, recorded March 28, 1980, under Recorder's Fee No. 80010910 of said records. Greenway Town Center EXHIBIT B List of Recorded Documents The following documents recorded in the Official Records of Washington County, State of OR: 1. Deed of Trust and Security Agreement dated March 1, 2006, recorded on March 3, 2006, as Document 2006-025678; 2. Deed of Trust and Security Agreement Modification Agreement dated August 15, 2007, recorded on August 22, 2007, as Document 2007-092131; 3. Assignment of Deed of Trust and Security Agreement dated March 1, 2006, recorded on August 22, 2007, as Document 2007-092129; 4. Assignment of Leases and Rents dated March 1, 2006, recorded on March 3, 2006, as Document 2006-025679; 5. Assignment of Assignment of Leases and Rents dated March 1, 2006 recorded on August 22, 2007, as Document 2007-092130. Greenway Town Center EXHIBIT C Amendments to the Security Instrument Sections 8.2 and 8.3 of the Security Instrument are hereby deleted and the following is substituted therefor: Section 8.2. [Reserved.] Section 8.3. SALE/ENCUMBRANCE. Borrower shall not cause or permit, voluntarily or involuntarily, any Transfer of any direct or indirect interest in any Restricted Party or the Property. A "Restricted Party" shall mean each of(i) Borrower, (ii) any entity obligated under any guaranty or indemnity made in favor of Lender in connection with the Obligations and (iii) any shareholder, partner, member or non-member manager, or any direct or indirect legal or beneficial owner of Borrower or any entity obligated under a guaranty or indemnity made in favor of Lender in connection with the Obligations. A"Transfer" shall mean any sale, conveyance, mortgage, grant, bargain,encumbrance, pledge, hypothecation, assignment or transfer, and shall also include, without limitation: (a) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (b) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower's right, title and interest in and to any Leases or any Rents; (c) if a Restricted Party is a limited liability company, any merger or consolidation of such company or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member)or the voluntary or involuntary sale, conveyance, transfer, pledge, mortgage or other encumbrance of the membership interests of any member of such -. company or in the capital or profits of such company or the creation or issuance of new membership interests, other than a transfer(but not a pledge, mortgage, hypothecation or other encumbrance to secure one or more obligations) to one or more "Parent Entities" (as such term is defined below); (d) if a Restricted Party is a corporation, any merger or consolidation of such corporation, or the voluntary or involuntary sale, conveyance, transfer, pledge, mortgage or other encumbrance of such corporation's stock or the creation or issuance of new stock, other than a transfer (but not a pledge, mortgage, hypothecation or other encumbrance to secure one or more obligations) to one or more Parent Entities; (e) if a Restricted Party is a limited or general partnership or joint venture, (i) any merger or consolidation of such partnership or joint venture, (ii) the change, removal, resignation or addition of a general partner, managing partner or managing member (or the voluntary or involuntary sale, conveyance, transfer, pledge, mortgage, hypothecation or other encumbrance of any legal or beneficial ownership interests in any such partner or member or of any profits or proceeds relating to such interests) other than with respect to the addition of, or any sale, conveyance or transfer (but not a pledge, mortgage, hypothecation or other encumbrance to secure one or more obligations)to one or more Parent Entities, (iii)the voluntary or involuntary sale, conveyance, transfer, pledge, mortgage, hypothecation or other encumbrance of any legal or beneficial ownership interest in any general partner, managing partner or managing member or of any profits or proceeds relating to such interest, (iv) the voluntary or involuntary sale, conveyance, transfer, pledge, mortgage, hypothecation or other encumbrance of any general or limited partnership or membership interest or of the capital or Greenway Town Center profits of the partnership or joint venture other than a transfer(but not a pledge, mortgage, hypothecation or other encumbrance to secure one or more obligations) to one or more Parent Entities, or (v) the creation or issuance of new partnership interests or membership interests by such Restricted Party other than to one or more Parent Entities; and (f) if a Restricted Party is a trust or nominee trust, any merger or consolidation of such trust, or the voluntary or involuntary sale, conveyance, transfer, pledge, mortgage, hypothecation or other encumbrance of any legal or beneficial interests in such trust or the creation or issuance of new legal or beneficial interests in such trust. Notwithstanding the foregoing, but in each instance, subject to the proviso at the end of this sentence, Borrower shall be permitted to cause or permit the following Transfers, and no transfer fee or consent shall be required in connection therewith: (i) Transfers of the stock, limited partnership interests, general partnership interests, membership interests or beneficial interests(as the case may be) in a Restricted Party so long as (A) no Event of Default shall have occurred and be continuing at the time of such Transfer, (B) within 15 calendar days of such Transfer, Lender shall have received notice of such Transfer and copies of all documents evidencing such Transfer, (C) CaIPERS (as defined below) and/or Regency Centers Corporation shall, directly or indirectly, continue to control Borrower(and in the case of Ca1PERS, such control may be exercised pursuant to Ca1PERS Rights (as defined below)) and own, directly or indirectly, at least 51%of the ownership interests in Borrower, (D) if applicable, GRI-Regency, LLC shall remain the guarantor or indemnitor, as applicable, under any guaranties and/or indemnities that it entered into in connection with the Loan and to which it is then still a party (individually, the "Guaranty", and collectively, the"Guaranties"), and in such event, one or more Parent Entities shall, directly or indirectly, continue to control and own 100%of the ownership interests in GRI-Regency, LLC and (E) Borrower shall be responsible for the costs and expenses of documenting such Transfer and all reasonable costs and expenses incurred by Lender in connection with any review of such Transfer; (ii)a Transfer of interests in Borrower by and among the Parent Entities (or an entity wholly owned and controlled directly or indirectly by any of them) including, issuing new general partnership interests in Borrower to any Parent Entity or any such wholly-owned entity; (iii) Transfers of direct or indirect ownership interests in any entity whose shares are traded on the New York Stock Exchange or any other nationally recognized stock exchange in the United States; (iv) the Transfer, creation or issuance of partnership interests in Regency Centers, L.P. as long as Regency Centers Corporation, or a wholly-owned and controlled subsidiary of Regency Centers Corporation, continues to serve as the sole general partner of Regency Centers, L.P. and continues to own at least 51% of the partnership interests in Regency Centers, L.P.; or(v)the Transfer of the Property or 100%of the direct or indirect ownership interests in Borrower to one or more Parent Entities; provided that, for purposes of this clause (v) only, (A) either(x) GRI-Regency, LLC shall remain the guarantor or indemnitor, as applicable, under any Guaranty or Guaranties (and in such event one or more Parent Entities shall, directly or indirectly, continue to control and own 100% of the ownership interests in GRI-Regency, LLC) or(y) one or more Parent Entities shall become the guarantor or indemnitor, as applicable, pursuant to a guaranty and/or indemnity substantially similar to the Guaranty or Guaranties, as applicable, and reasonably satisfactory to Lender and (B) the closing of such Transfer shall be subject to the prior satisfaction of all terms and conditions that Lender may reasonably require, including, without limitation, receipt of an acceptable agreement pursuant to which the transferee assumes the obligations under the Loan Documents or such other agreement or agreements as Lender may reasonably require, receipt of acceptable borrower organizational documents (if such Transfer is an assumption of the Obligations), receipt of Greenway Town Center 15600901.2.BUSINESS customary legal opinions and payment of Lender's reasonable costs and expenses, including legal fees and any title insurance premium (if applicable); provided, that notwithstanding the foregoing, no direct or indirect interests in Borrower or the Property shall be pledged, mortgaged,hypothecated or otherwise encumbered to secure one or more obligations. Notwithstanding anything to the contrary set forth in this Section 8.3, no Transfer shall be permitted pursuant to this Section 8.3 unless, after giving effect to such Transfer, (i)there is no adverse effect on the single purpose entity nature of the Borrower and, if Borrower is a limited partnership,the Borrower's general partner and(ii) Ca1PERS and/or Regency Centers Corporation shall, directly or indirectly, continue to control the day to day operations of Borrower (and in the case of Ca1PERS, such control may be exercised pursuant to Ca1PERS Rights)and own,directly or indirectly, not less than fifty-one percent (51%) of the equity interests in the Borrower. For purposes of this Section 8.3, the term "Parent Entities" shall mean (A) Global Retail Investors, LLC, a Delaware limited liability company ("Global") (but only if at all times at least fifty one percent (51%)of the equity interests in Global are directly or indirectly owned by the California Public Employees' Retirement System ("Cal PERS") and CaIPERS has and retains "Ca1PERS Rights" (as such term is defined below)), (B) CaIPERS, (C) Regency Centers, L.P. (but only if at all times at least fifty one percent(51%) of the partnership interests in Regency Centers, L.P. are directly or indirectly owned by Regency Centers Corporation and Regency Centers Corporation controls and continues to control Regency Centers, L.P.), (D) an entity directly or indirectly wholly owned and controlled by any one or more of Regency Centers Corporation, Regency Centers, L.P. (but only if at all times at least fifty one percent (51%) of the partnership interests in Regency Centers, L.P. are directly or indirectly owned by Regency Centers Corporation and Regency Centers Corporation controls and continues to control Regency Centers, L.P.) or Global (but only if at all times at least fifty one percent (51%) of the equity interests in Global are directly or indirectly owned by CaIPERS and CaIPERS has and retains Ca1PERS Rights) or(E) an entity in which at least fifty one percent(51%) of the equity interests are directly or indirectly owned by CaIPERS and in which CaIPERS has and retains Ca1PERS Rights. For purposes of this Section 8.3, the term"CaIPERS Rights" shall mean, with respect to any entity, major decision rights customary for similarly situated institutional investors and the power to remove the manager or managing member of such entity. Greenway Town Center 15600901.2.BUSINESS City of Tigard • COMMUNITY DEVELOPMENT DEPARTMENT 0 1 944.....„. II itg Request for Permit Action /077-3//y TIG A R D 13125 SW Hall Blvd. • Tigard, Oregon 97223 • 503-718-2439 • www.tigard-or.gov TO: CITY OF TIGARD Building Division 13125 SW Hall Blvd.,Tigard,OR 97223 Phone: 503-718-2439 Fax: 503-598-1960 TigardBuildingPermits@tigard-or.gov FROM: ❑ Owner ❑ Applicant ❑ Contractor ® City Staff Check(✓)one REFUND OR Name: S & H Fitness,LLC INVOICE TO: (Business or Individual) Mailing Address: 248 NE 64th Pl. City/State/Zip: Hillsboro, OR 97124 Phone No.: 949-697-8935 PLEASE TAKE ACTION FOR THE ITEM(S) CHECKED (/): ® CANCEL/VOID PERMIT APPLICATION. ® REFUND PERMIT FEES (attach copy of original receipt and provide explanation below). ❑ INVOICE FOR FEES DUE (attach case fee schedule and provide explanation below). ❑ REMOVE/REPLACE CONTRACTOR ON PERMIT (do not cancel permit). Permit#: MMD2014-00033 Site Address or Parcel #: 12268 SW Scholls Ferry Rd. Project Name: S & H Fitness Subdivision Name: n/a Lot #: n/a EXPLANATION: A change of use in 2012 (MMD2012-00015) changed the use from restaurant to personal services. This small fitness studio is classified as personal services; therefore no MMD is needed. Ok to refund 100%per Tom McGuire,Asst. CD Director. Signature: Date: 12/17/14 Print Name: Cheryl Caines Refund Policy 1. The city's Community Development Director,Building Official or City Engineer may authorize the refund of: • Any fee which was erroneously paid or collected. • Not more than 80%of the application or plan review fee when an application is withdrawn or canceled before review effort has been expended. • Not more than 80%of the application or permit fee for issued permits prior to any inspection requests. 2. All refunds will be returned to the original payer in the form of a check via US postal service. 3. Please allow 3-4 weeks for processing refund requests. FOR OFFICE USE ONLY Route to Sys Admin: Date By Route to Records: Date At ,moi /y c 1;7. Refund Processed: Date 62/3/i y By 4( Invoice Processed: Date By Permit Canceled: Date /o1 3/J/y By,- Parcel Tag Added: Date By L\Building\Dorms\Rc PcrmitAction_095_314. oc Z • TIGARD City of Tigard December 31, 2015 S & H Fitness LLC Attn: Stefan Klemm 248 NE 64th P1 Hillsboro, OR 97124 Re: Permit No. MMD2014-00033 Dear Applicant: The City of Tigard has canceled the above referenced permit(s) and encloses a refund for the following: Site Address: 12268 SW Scholls Ferry Rd Project Name: S &H Fitness Job No.: N/A Refund Method: ® Check#216006 in the amount of$701.00. ❑ Credit card "return"receipt in the amount of$ Note: Please allow 2-5 days for this refund transaction to be credited to your account by the company that issued your card. ❑ Trust account"deposit" receipt in the amount of$ Comment(s): This minor modification is not required as a minor modification application in 2012 changed the use to accommodate this business. Refund 100% of application fees. If you have any questions please contact me at 503.718.2430. Sincerely, / Dianna Howse Building Division Services Supervisor Enc. 13125 SW Hall Blvd. • Tigard, Oregon 97223 • 503.639.4171 TTY Relay: 503.684.2772 • www.tigard-or.gov City of Tigard TIGARD Accela Refund Request This form is used for refund requests of land use, development engineering and building permit application fees. Receipts, documentation and the Requestfor Permit Action form (if applicable) must be attached to this request form. Refund requests are due to Accela System Administrator by each Wednesday at 5:00 PM. Please allow up to 3 weeks for processing of refunds. Accounts Payable will route refund checks to Accela System Administrator for distribution to applicant. PAYABLE TO: S & H Fitness LLC DATE: 12/22/2014 248 NE 64th P1 Hillsboro, OR 97124 REQUESTED BY: Dianna Howse CC TRANSACTION INFORMATION: Receipt#: 198680 Case #: Mei D2014-00033 Date: 12/09/2014 Address/Parcel: 12268 SW Scholls Ferry Rd Pay Method: Check Project Name: S &H Fitness EXPLANATION: Minor modification not required. Refund 100%o of application fees. REFUND INFORMATION: Fee Description From Receipt Revenue Account No. Refund Example: Building Permit Fee Example: 2300000-43104 $Amount Minor Modification Application Fee 100-0000-43116 $611.00 Minor Modification Application Fee- LRP 100-0000-43117 90.00 TOTAL REFUND: $701.00 APPROVALS: SIGNATURES/DATE: If under$5,000 Professional Staff -1 � i?-�_ If under$12,500 Division Manager If under$25,500 Department Manager If under$50,000 City Manager If over$50,000 Local Contract Review Board FOR TIDEMARK SYSTEM ADMINISTRATION USE ONLY Case Refund Processed: Date: 42/3/7/V By: I:\Building\Refunds\RefundRequest.doc x 09/01/2010 v 0 I ..s..„ 1 iF CE1 V E n . ....,, 4 2/3 Vir #410( ' DEC 0 9 2014 CITY OF TIGARD lig City of Tigard :-ANNING/ENGINEERING Minor Modification -- I I Application TIGARD GENERAL IINF RMATI N Property Address/Location(s): 1? c,al tPvl schuf>'S In addition, the Director must fund that the proposed e`' R e I I 5 a.r/ pR ??2.2.3 change is in compliance with all applicable requirements of 'lax Map&Tax Lot#(s): .tee R�f c.-`f`.e-et Title 18 of the Tigard Development Code. To complete L74.P /eseo p I,. ' .sh.ap ., c...,?Lea this review, the Applicant's proposal must include a Sue Size: ctf-%p<-.x .3wwe .r 9 discussion indicating how the site expansion/change will ______________ __ continue to comply with the maximum setback, building Applicant*: atifittgAikkiik S e I`f ti/mess !1- , height, parking, and landscaping standards. Other Address: el)'t wt fo'it- P/ace requirements of this title such as dear vision, solid waste City/State: f-4 afs4s0,P 04 Zip: 97129' storage, non-conforming situations, signs, and tree Primary Contact ,Pier a..-, kle:..iwt removal may also be applicable depending on the type and Phone: c.v9-i,f7- 7JS Fax; location of the proposed modifications. 1.-Mail: S/(femme G r nt menamh EJs.Cow, Property Owner/Deed Holder(s)*: (Attach list if more than one) ----a-- 4 C kr.5 Fs,J t"L o/rc'., 'ey Tq,,,. C'en Li RI; 1REll SUBMITTAL,ELEMENTS Ad ress: 5-336 5.J itleadeld,5 Sz,,k Z96 Phone: _44, "y7•c, (Applications will not be accepted without the City/State:L.e/e, c24.y, OA Zip: x/7•''55 following required submittal elements) *When the owner and the applicant are different people,the FA' Application Form applicant must be the purchaser of record or a lessee in 3' Owner's Signature/Aritten Authorization possession with written authorization from the owner or an Er agent of the owner. The owner(s) must sign this application Title Transfer Instrument or Deed in the space provided on the back of this form or submit a SiteEl Plan(4 Large Plans&One—Reduced to 8';:"x 11") written authorization with this application. 2 Applicant's Statement/Narrative(4 copies) [3' Filing Fee Minor\'loddications: Minor Modifications are processed for permitted uses and conditional uses. To review a modification as a Minor Modification, the Director must first find that the expansion or change does not invoke one or more of the criteria discussed within Section 18.360.050(B) -- Site Development FOR STAFF USE ONLY Review or Section 18.330.020(B)(2)-Conditional Use. if these i modification exceeds the maximum allowed under any one or Case l�o.(s): v7 0 I`� - UCS 3 more of the criteria,a Major Modification review is required. Major Modifications are processed in the same manner as a tither Case No(sl new Site Development Review or Conditional Use Permit. j ty Fee: Applicant's Statement: Receipt No.. 7 0(� := k The applicant's statement must include a summary of the Date. s T proposed changes. Criteria in either 18.360.050(B) or 18.330.020(B)(2) must be addressed with a detailed response Application Accepted By: to each criterion. Failures to provide the information needed Date Determined Complete: to process the application would be reason to consider an Rcc,scd: 6:20;2013 application incomplete and delay review of the proposal. 1:..CURPl N•,t u'iss,d Use Appha uw,s..>L,ev Modn.aeon.docx City of Tigard i 13125 SW Hall Blvd.,Tigard,OR 97223 i 503-718-2421 I ww v.tig*ard-nr.gov 1 Page 1 of 2 Cheryl Caines From: Tom McGuire Sent: Thursday, December 18, 2014 4:40 PM To: Cheryl Caines Subject: RE: S & H Fitness - Greenway Town Center I'm okay with 100% TM From: Cheryl Caines Sent: Thursday, December 18, 2014 4:22 PM To: Tom McGuire Subject: FW: S & H Fitness - Greenway Town Center Tom, Are you okay to issue a 100% refund for this MMD? I found the other MMD pretty quickly after beginning my review. Otherwise I will issue only an 80% refund, which is what is stated on our fee sheet for withdrawn applications. Thanks, Cheryl From: Cheryl Caines Sent: Thursday, December 18, 2014 3:16 PM To: #Building Permit Technicians; #CD PoD Subject: S & H Fitness - Greenway Town Center FYI—Stefan Klemm with S& H Fitness will be applying for a TI permit in the next week or so. He is looking to open a personal fitness business in the Greenway Town Center(12268 SW Scholls Ferry Rd). He applied for a Minor Mod (MMD2014-00033), but it is not needed. I discovered a MMD in 2012 (MMD2012-00015)that changed the use from restaurant to personal service. It is okay to take in that TI permit, and I am processing the paperwork to void the 2014 MMD. Please let me know if you have questions. Cheryl Caines Associate Planner City of Tigard (503)718-2437 cherylc(a�tigard-or.gov DISCLAIMER: E-mails sent or received by City of Tigard employees are subject to public record laws. If requested, e-mail may be disclosed to another party unless exempt from disclosure under Oregon Public Records Law. E-mails are retained by the City of Tigard in compliance with the Oregon Administrative Rules "City General Records Retention Schedule." 1