Exhibit 10.7

 

           

THIS INSTRUMENT PREPARED BY

AND WHEN RECORDED, RETURN

TO:

 

Brian S. Short, Esq.

Winstead PC

5400 Renaissance Tower

1201 Elm Street

Dallas, Texas 75270-2199

         

TO BE RECORDED IN THE

DEED OF TRUST RECORDS OF

DALLAS COUNTY, TEXAS

NOTICE OF CONFIDENTIALITY RIGHTS. IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR
STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT
TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE
PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

COLLATERAL IS OR INCLUDES FIXTURES

DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES,

COLLATERAL ASSIGNMENT OF PROPERTY AGREEMENTS,

SECURITY AGREEMENT AND FIXTURE FILING

This Deed of Trust, Assignment of Rents and Leases, Collateral Assignment of
Property Agreements, Security Agreement and Fixture Filing (as amended from time
to time, this “Security Instrument”) is made, and is executed effective as of
July 14, 2011, by DC-3300 ESSEX, LLC, a Delaware limited liability company
(together with its permitted successors and permitted assigns, “Borrower”),
whose address for all purposes hereunder is 4211 West Boy Scout Boulevard, Suite
500, Tampa, Florida 33607, to BRIAN S. SHORT (together with his permitted
successors and permitted assigns, “Trustee”), whose address for all purposes
hereunder is 5400 Renaissance Center, 1201 Elm Street, Dallas, Texas 75270, for
the benefit of GOLDMAN SACHS COMMERCIAL MORTGAGE CAPITAL, L.P., a Delaware
limited partnership (together with all of its successors and assigns, “Lender”),
whose address for all purposes hereunder is 6011 Connection Drive, Suite 550,
Irving, Texas 75039. For all state law, statutory and other purposes hereunder,
(i) the term “Borrower” as used herein shall be deemed

 

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to mean a grantor of the Property as described herein the same as if the term
“grantor” were used in lieu of the term “Borrower” throughout this Security
Instrument, and (ii) the term “Lender” as used herein shall be deemed to mean a
beneficiary of this Security Instrument with respect to the Property with all of
the rights conferred hereby the same as if the term “beneficiary” were used in
lieu of the term “Lender” throughout this Security Instrument.

ARTICLE 1

DEFINITIONS

Section 1.1 Definitions. As used herein, the following terms shall have the
following meanings:

“Indebtedness”: The sum of all principal, interest and other amounts due from
Borrower under, or secured by, the Loan Documents.

“Loan Agreement”: The Loan Agreement, dated as of the date hereof, by and
between Lender, as lender, and Borrower, as borrower, as the same may be
replaced, amended, supplemented, extended or otherwise modified from time to
time.

“Loan Documents”: The (1) Loan Agreement, (2) that certain promissory note,
dated as of the date hereof, executed by Borrower pursuant to the Loan
Agreement, in the original principal amount of $16,000,000.00 (as the same may
be amended, restated, componentized, supplemented, modified, assigned in whole
or in part, replaced and/or divided into multiple notes from time to time, the
“Note” or “Notes”, as applicable), (3) this Security Instrument and the other
mortgages and deeds of trust executed by Borrower, or any other person or entity
to evidence or secure the payment of the Indebtedness, pursuant to the Loan
Agreement, (4) all other documents now or hereafter executed by Borrower, or any
other person or entity to evidence or secure the payment of the Indebtedness,
and (5) all modifications, restatements, extensions, renewals and replacements
of the foregoing.

“Obligations”: All of the agreements, covenants, conditions, warranties,
representations and other obligations (other than to repay the Indebtedness)
made or undertaken by Borrower (or the other obligors who are defined as
Borrower in the Notes) under the Loan Documents.

“Property”: All of the following, or any interest therein (whether now owned or
hereafter acquired):

(1) the real property described in Exhibit A attached hereto and made a part
hereof, together with any greater estate therein as hereafter may be acquired by
Borrower (the “Land”),

(2) all buildings, structures and other improvements, now or at any time
situated, placed or constructed upon the Land (the “Improvements”),

 

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(3) all right, title and interest of Borrower in and to all materials,
machinery, supplies, equipment, fixtures, apparatus and other items of personal
property now owned or hereafter acquired by Borrower and now or hereafter
attached to, installed in or used in connection with any of the Improvements or
the Land, including any and all partitions, dynamos, window screens and shades,
drapes, rugs and other floor coverings, awnings, motors, engines, boilers,
furnaces, pipes, plumbing, cleaning, call and sprinkler systems, fire
extinguishing apparatus and equipment, water tanks, swimming pools, heating,
ventilating, plumbing, lighting, communications and elevator fixtures, laundry,
incinerating, air conditioning and air cooling equipment and systems, gas and
electric machinery and equipment, disposals, dishwashers, furniture,
refrigerators and ranges, securities systems, art work, recreational and pool
equipment and facilities of all kinds, water, gas, electrical, storm and
sanitary sewer facilities of all kinds, and all other utilities whether or not
situated in easements together with all accessions, replacements, betterments
and substitutions for any of the foregoing (the “Fixtures”),

(4) all right, title and interest of Borrower in and to all goods, accounts,
general intangibles, instruments, documents, accounts receivable, chattel paper,
investment property, securities accounts and all other personal property of any
kind or character, including such items of personal property as defined in the
UCC, now owned or hereafter acquired by Borrower and now or hereafter affixed
to, placed upon, used in connection with, arising from or otherwise related to
the Land and/or the Improvements or that may be used in or relating to the
planning, development, financing or operation of the Land and/or the
Improvements, including furniture, furnishings, equipment, machinery, money,
insurance proceeds, condemnation awards, accounts, contract rights, trademarks,
goodwill, chattel paper, documents, trade names, licenses and/or franchise
agreements, rights of Borrower under leases of Fixtures or other personal
property or equipment, inventory, all refundable, returnable or reimbursable
fees, deposits or other funds or evidences of credit or indebtedness deposited
by or on behalf of Borrower with any governmental authorities, boards,
corporations, providers of utility services, public or private, including
specifically, but without limitation, all refundable, returnable or reimbursable
tap fees, utility deposits, commitment fees and development costs and all
refunds, rebates or credits in connection with a reduction in real estate taxes
and assessments against the Land and/or Improvements as a result of tax
certiorari or any applications or proceedings for reduction (the “Personalty”),

(5) all reserves, escrows or impounds required under the Loan Agreement and all
deposit accounts (including tenant’s security and cleaning deposits and deposits
with respect to utility services) maintained by or on behalf of Borrower with
respect to the Land and/or Improvements,

(6) all right, title and interest of Borrower in and to all plans,
specifications, shop drawings and other technical descriptions prepared for
construction, repair or alteration of the Improvements, and all amendments and
modifications thereof (together with any and all modifications, renewals,
extensions and substitutions of the foregoing, the “Plans”),

 

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(7) subject to the rights of Borrower hereunder and under the Loan Agreement,
all leasehold estates, leases, subleases, sub-subleases, licenses, concessions,
occupancy agreements or other agreements (written or oral, now or at any time in
effect and every modification, amendment or other agreement relating thereto,
including every guarantee of the performance and observance of the covenants,
conditions and agreements to be performed and observed by the other party
thereto) which grant a possessory interest in, or the right to use or occupy,
all or any part of the Land and/or Improvements, together with all related
security and other deposits (together with any and all modifications, renewals,
extensions and substitutions of the foregoing, the “Leases”),

(8) all right, title and interest of Borrower in and to all of the rents,
revenues, income, proceeds, issues, profits (including all oil or gas or other
mineral royalties and bonuses), security and other types of deposits, and other
benefits paid or payable and to become due or payable by parties to the Leases
other than Borrower for using, leasing, licensing, possessing, occupying,
operating from, residing in, selling or otherwise enjoying any portion or
portions of the Land and/or Improvements (the “Rents”),

(9) all right, title and interest of Borrower in and to all other contracts and
agreements in any way relating to, executed in connection with, or used in, the
development, construction, use, occupancy, operation, maintenance, enjoyment,
acquisition, management or ownership of the Land and/or Improvements or the sale
of goods or services produced in or relating to the Land and/or Improvements
(together with any and all modifications, renewals, extensions and substitutions
of the foregoing, the “Property Agreements”), including all right, title and
interest of Borrower in, to and under (a) all construction contracts,
architects’ agreements, engineers’ contracts, utility contracts, letters of
credit, escrow agreements, maintenance agreements, management, leasing and
related agreements, parking agreements, equipment leases, service contracts,
operating leases, catering and restaurant leases and agreements, agreements for
the sale, lease or exchange of goods or other property, agreements for the
performance of services, permits, variances, licenses, certificates and
entitlements, (b) all material agreements and instruments under which Borrower
or any of its affiliates or the seller of the Property have remaining rights or
obligations in respect of Borrower’s acquisition of the Property or equity
interests therein, (c) applicable business licenses, variances, entitlements,
certificates, state health department licenses, liquor licenses, food service
licenses, licenses to conduct business, certificates of need and all other
permits, licenses and rights obtained from any Governmental Authority or private
Person, (d) all rights of Borrower to receive monies due and to become due under
or pursuant to the Property Agreements, (e) all claims of Borrower for damages
arising out of or for breach of or default under the Property Agreements,
(f) all rights of Borrower to terminate, amend, supplement, modify or waive
performance under the Property Agreements, to compel performance and

 

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otherwise to exercise all remedies thereunder, and, with respect to Property
Agreements that are letters of credit, to make any draws thereon, and (g) to the
extent not included in the foregoing, all cash and non-cash proceeds, products,
offspring, rents, revenues, issues, profits, royalties, income, benefits,
additions, renewals, extensions, substitutions, replacements and accessions of
and to any and all of the foregoing,

(10) all right, title and interest of Borrower in and to all rights, privileges,
titles, interests, liberties, tenements, hereditaments, rights-of-way,
easements, sewer rights, water, water courses, water rights and powers, air
rights and development rights, licenses, permits and construction and equipment
warranties, appendages and appurtenances appertaining to the foregoing, and all
right, title and interest, if any, of Borrower in and to any streets, ways,
alleys, underground vaults, passages, strips or gores of land adjoining the Land
or any part thereof,

(11) all accessions, replacements, renewals, additions and substitutions for any
of the foregoing and all proceeds thereof,

(12) subject to the rights of Borrower hereunder or under the Loan Agreement,
all insurance policies, unearned premiums therefor and proceeds from such
policies, including the right to receive and apply the proceeds of any
insurance, judgments or settlements made in lieu thereof, covering any of the
above property now or hereafter acquired by Borrower,

(13) all right, title and interest of Borrower in and to all mineral, riparian,
littoral, water, oil and gas rights now or hereafter acquired and relating to
all or any part of the Land and/or Improvements,

(14) all of Borrower’s right, title and interest in and to any awards,
remunerations, reimbursements, settlements or compensation heretofore made or
hereafter to be made by any Governmental Authority pertaining to the Land,
Improvements, Fixtures or Personalty, and

(15) all after acquired title to or remainder or reversion in any of the
property (or any portion thereof) described herein.

“UCC”: The Uniform Commercial Code (or any similar or equivalent legislation) as
in effect in any applicable jurisdiction.

Capitalized terms used herein but not otherwise defined shall have the
respective meanings ascribed to such terms in the Loan Agreement.

 

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ARTICLE 2

HABENDUM

Section 2.1 Grant. To secure in part the full and timely payment of the
Indebtedness and the full and timely performance of the Obligations, and for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower HAS MORTGAGED, GIVEN, GRANTED, BARGAINED, SOLD,
TRANSFERRED, WARRANTED, PLEDGED, ASSIGNED and CONVEYED, and does hereby
MORTGAGE, GIVE, GRANT, BARGAIN, SELL, TRANSFER, WARRANT, PLEDGE, ASSIGN and
CONVEY to Trustee, IN TRUST, WITH POWER OF SALE, its heirs, successors and
assigns, the Property, TO HAVE AND TO HOLD all of the Property unto and to
Trustee, its heirs, successors and assigns, IN TRUST WITH POWER OF SALE, for the
use and benefit of Lender, its heirs, successors and assigns in fee simple
forever, and Borrower does hereby bind itself, its heirs, successors and assigns
to WARRANT AND FOREVER DEFEND (i) the title to the Property unto Lender and its
heirs, successors and assigns, subject only to Permitted Encumbrances and
(ii) the validity and priority of the Liens of this Security Instrument, subject
only to Permitted Encumbrances, in each case against the claims of all Persons
whomsoever.

THIS CONVEYANCE IS MADE IN TRUST, that if Borrower shall pay and perform or
cause to be paid and performed all of the Indebtedness and Obligations in
accordance with the terms of the Loan Documents, then this conveyance shall be
null and void and may be canceled of record at the request and cost of Borrower,
which cost Borrower hereby agrees to pay; provided, however, that if, at any
time, there shall be any Event of Default, then Lender and Trustee shall be
entitled to exercise the remedies set forth in Article 3 below.

ARTICLE 3

DEFAULT AND FORECLOSURE

Section 3.1 Remedies. If an Event of Default is continuing, Lender may, at
Lender’s election and by or through Trustee or otherwise, take such action
permitted at law or in equity, without notice or demand (except as explicitly
provided in the Loan Agreement), as it deems advisable to protect and enforce
its rights against Borrower and to the Property, including but not limited to,
any or all of the following rights, remedies and recourses each of which may be
pursued concurrently or otherwise, at such time and in such order as Lender may
determine, in its sole discretion, without impairing or otherwise affecting the
other rights and remedies of Lender:

(a) Acceleration. Declare the Indebtedness to be immediately due and payable,
without further notice, presentment, protest, notice of intent to accelerate,
notice of acceleration, demand or action of any nature whatsoever (each of which
hereby is expressly waived by Borrower (except as provided in the Loan
Agreement)), whereupon the same shall become immediately due and payable.

 

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(b) Entry on Property. Enter the Property and take exclusive possession thereof
and of all books, records and accounts relating thereto. If Borrower remains in
possession of the Property after the occurrence and during the continuation of
an Event of Default and without Lender’s prior written consent, Lender may
invoke any legal remedies to dispossess Borrower.

(c) Operation of Property. Whether or not a receiver has been appointed pursuant
to Section 3.1(e) hereof, hold, lease, develop, manage, operate, control and
otherwise use the Property upon such terms and conditions as Lender may deem
reasonable under the circumstances (making such repairs, alterations, additions
and improvements and taking other actions, from time to time, as Lender deems
reasonably necessary or desirable), exercise all rights and powers of Borrower
with respect to the Property, whether in the name of Borrower or otherwise,
including the right to make, cancel, enforce or modify leases, obtain and evict
tenants, and demand, sue for, collect and receive all Rents, and apply all Rents
and other amounts collected by Lender or Trustee in connection therewith in
accordance with the provisions of Section 3.7 hereof.

(d) Foreclosure and Sale.

(i) Institute proceedings for the complete foreclosure of this Security
Instrument, either by judicial action or by exercise of the STATUTORY POWER OF
SALE or otherwise, in which case the Property may be sold for cash or credit in
one or more parcels or in several interests or portions and in any order or
manner.

(ii) With respect to any notices required or permitted under the UCC, Borrower
agrees that ten (10) Business Days’ prior written notice shall be deemed
commercially reasonable. At any such sale by virtue of any judicial proceedings
or any other legal right, remedy or recourse including power of sale, the title
to and right of possession of any such property shall pass to the purchaser
thereof, and to the fullest extent permitted by law, Borrower shall be
completely and irrevocably divested of all of its right, title, interest, claim
and demand whatsoever, either at law or in equity, in and to the property sold
and such sale shall be a perpetual bar both at law and in equity against
Borrower, and against all other persons claiming or to claim the property sold
or any part thereof, by, through or under Borrower. Lender may be a purchaser at
such sale and if Lender is the highest bidder, may credit the portion of the
purchase price that would be distributed to Lender against the Indebtedness in
lieu of paying cash.

(iii) At any such sale (A) whether made under the power herein contained, the
UCC, any other legal requirement or by virtue of any judicial proceedings or any
other legal right, remedy or recourse, including power of sale, it shall not be
necessary for Trustee to be physically present at or to have constructive
possession of the Property (Borrower shall deliver to Trustee any portion of the
Property not actually or constructively possessed by Trustee immediately upon
demand by Trustee), and the title to and right of possession of any such
property shall pass to the purchaser thereof, as completely as if Trustee had
been actually present and delivered to purchaser at such sale,

 

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(B) each instrument of conveyance executed by Trustee shall contain a general
warranty of title, binding upon Borrower, (C) each recital contained in any
instrument of conveyance made by Trustee shall conclusively establish the truth
and accuracy of the matters recited therein, including, without limitation,
nonpayment of the Indebtedness, advertisement and conduct of such sale in the
manner provided herein and otherwise by law, and appointment of any successor
Trustee hereunder, (D) any prerequisites to the validity of such sale shall be
conclusively presumed to have been performed, and (E) the receipt of Trustee or
other party making the sale shall be a sufficient discharge to the purchaser or
purchasers for his/her/their purchase money and no such purchaser or purchasers,
or his/her/their assigns or personal representatives, shall thereafter be
obligated to see to the application of such purchase money or be in any way
answerable for any loss, misapplication or nonapplication thereof.

(e) Receiver. Prior to, concurrently with, or subsequent to the institution of
foreclosure proceedings, make application to a court of competent jurisdiction
for, and (to the extent permitted by applicable law) obtain from such court as a
matter of strict right and without notice to Borrower or anyone claiming under
Borrower or regard to the value of the Property or the solvency or insolvency of
Borrower or the adequacy of any collateral for the repayment of the Indebtedness
or the interest of Borrower therein, the appointment of a receiver or receivers
of the Property, and Borrower irrevocably consents to such appointment. Any such
receiver or receivers shall have all the usual powers and duties of receivers in
similar cases, including the full power to rent, maintain and otherwise operate
the Property upon such terms as may be approved by the court, and shall apply
such Rents in accordance with the provisions of Section 3.7 hereof.

(f) Other. Exercise all other rights, remedies and recourses granted under the
Loan Documents or otherwise available at law or in equity (including an action
for specific performance of any covenant contained in the Loan Documents, or a
judgment on the Notes either before, during or after any proceeding to enforce
this Security Instrument).

Section 3.2 Separate Sales. The Property may be sold in one or more parcels and
in such manner and order as Lender in its sole discretion, may elect, subject to
applicable law; the right of sale arising out of any Event of Default shall not
be exhausted by any one or more sales.

Section 3.3 Remedies Cumulative, Concurrent and Nonexclusive. Lender shall have
all rights, remedies and recourses granted in the Loan Documents and available
at law or equity (including the UCC), which rights (a) shall be cumulative and
concurrent and shall be in addition to every other remedy so provided or
permitted, (b) may be pursued separately, successively or concurrently against
Borrower, or against the Property, or against any one or more of them, at the
sole discretion of Lender, (c) may be exercised as often as occasion therefor
shall arise, and the exercise or failure to exercise any of them shall not be
construed as a waiver or release thereof or of any other right, remedy or
recourse, and (d) are intended to be, and shall be, nonexclusive. No action by
Lender or Trustee in the enforcement of any rights, remedies or recourses under
the Loan Documents or otherwise at law or equity shall be deemed to cure any
Event of Default.

 

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Section 3.4 Release of and Resort to Collateral. Lender may release, regardless
of consideration and without the necessity for any notice to or consent by the
holder of any subordinate lien on the Property, any part of the Property
without, as to the remainder, in any way impairing, affecting, subordinating or
releasing the lien or security interests created in or evidenced by the Loan
Documents or their stature as a first and prior lien and security interest in
and to the Property. For payment of the Indebtedness, Lender may resort to any
other security in such order and manner as Lender may elect.

Section 3.5 Waiver of Redemption, Notice and Marshaling of Assets. To the
fullest extent permitted by law, Borrower hereby irrevocably and unconditionally
waives and releases (a) all benefit that might accrue to Borrower by virtue of
any present or future statute of limitations or “moratorium law” or other law or
judicial decision exempting the Property or any part thereof, or any part of the
proceeds arising from any sale of any such property, from attachment, levy or
sale on execution or providing for any appraisement, valuation, stay of
execution, exemption from civil process, redemption reinstatement (to the extent
permitted by law) or extension of time for payment, (b) any right to a
marshaling of assets or a sale in inverse order of alienation, and (c) any and
all rights it may have to require that the Property be sold as separate tracts
or units in the event of foreclosure.

Section 3.6 Discontinuance of Proceedings. If Lender shall have proceeded to
invoke any right, remedy or recourse permitted under the Loan Documents and
shall thereafter elect to discontinue or abandon it for any reason, Lender shall
have the unqualified right to do so and, in such an event, Borrower and Lender
shall be restored to their former positions with respect to the Indebtedness,
the Obligations, the Loan Documents, the Property and otherwise, and the rights,
remedies, recourses and powers of Lender shall continue as if the right, remedy
or recourse had never been invoked, but no such discontinuance or abandonment
shall waive any Event of Default which may then exist or the right of Lender
thereafter to exercise any right, remedy or recourse under the Loan Documents
for such Event of Default.

Section 3.7 Application of Proceeds. Except as otherwise provided in the Loan
Documents and unless otherwise required by applicable law, the proceeds of any
sale of, and the Rents and other amounts generated by the holding, leasing,
management, operation or other use of the Property, shall be applied by Lender
or Trustee (or the receiver, if one is appointed) in the following order or in
such other order as Lender shall determine in its sole discretion:

(a) to the payment of the reasonable costs and expenses of taking possession of
the Property and of holding, using, leasing, repairing, improving and selling
the same, including (1) receiver’s fees and expenses, (2) court costs,
(3) reasonable attorneys’, accountants’, appraisers’, environmental
consultants’, engineers’ and other experts’ fees and expenses, (4) costs of
advertisement, (5) costs of procuring title searches, title policies and similar
data and assurance with respect to title, (6) the payment of all applicable
transfer taxes and mortgage recording taxes, and (7) the payment of all ground
rent, real estate taxes and assessments;

 

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(b) to the payment of all amounts, other than the unpaid principal balance of
the Notes and accrued but unpaid interest, which may be due under the Loan
Documents;

(c) to the payment of the Indebtedness and performance of the Obligations in
such manner and order of preference as Lender in its sole discretion may
determine; and

(d) the balance, if any, to the payment of the Persons legally entitled thereto.

If Lender shall be ordered, in connection with any bankruptcy, insolvency or
reorganization of Borrower, to restore or repay to or for the account of
Borrower or its creditors any amount theretofore received under this
Section 3.7, the amount of such restoration or repayment shall be deemed to be a
part of the Indebtedness so as to place Lender in the same position it would
have been in had such amount never been received by Lender.

Section 3.8 Occupancy After Foreclosure. The purchaser at any foreclosure sale
pursuant to Section 3.1(d) shall become the legal owner of the Property. All
occupants of the Property shall, at the option of such purchaser, become tenants
of the purchaser at the foreclosure sale and shall deliver possession thereof
immediately to the purchaser upon demand. It shall not be necessary for the
purchaser at said sale to bring any action for possession of the Property other
than the statutory action of forcible detainer in any justice court having
jurisdiction over the Property.

Section 3.9 Additional Advances and Disbursements; Costs of Enforcement. If any
Event of Default is continuing, Lender shall have the right, but not the
obligation, to cure such Event of Default in the name and on behalf of Borrower.
All sums advanced and expenses incurred at any time by Lender under this
Section 3.9, or otherwise under this Security Instrument or any of the other
Loan Documents or applicable law, shall bear interest from the date that such
sum is advanced or expense incurred, to and including the date of reimbursement,
computed at the Default Rate, and all such sums, together with interest thereon,
shall constitute additions to the Indebtedness and shall be secured by this
Security Instrument and Borrower covenants and agrees to pay them to the order
of Lender promptly upon demand.

Section 3.10 No Lender in Possession. Neither the enforcement of any of the
remedies under this Article 3, the assignment of the Rents and Leases under
Article 4, the collateral assignment of the Property Agreements under Article 5,
the security interests under Article 6, nor any other remedies afforded to
Lender under the Loan Documents, at law or in equity shall cause Lender or
Trustee to be deemed or construed to be a lender in possession of the Property,
to obligate Lender or Trustee to lease the Property or attempt to do so, or to
take any action, incur any expense, or perform or discharge any obligation, duty
or liability whatsoever under any of the Leases or otherwise. Borrower shall,
and hereby agrees to indemnify Lender for, and to hold Lender harmless from and
against, any and all claims, liability, expenses, losses or damages that may or
might be asserted against or incurred by Lender, as the case may be, solely by
reason of Lender’s status as an assignee pursuant to the assignment of Rents and
Leases contained herein, but excluding any claim to the extent of Lender’s gross
negligence or willful misconduct. Should Lender incur any such claim, liability,
expense, loss or damage, the amount thereof, including all actual expenses and
reasonable fees of attorneys, shall constitute Indebtedness secured hereby, and
Borrower shall reimburse Lender, as the case may be, therefor immediately upon
demand.

 

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ARTICLE 4

ASSIGNMENT OF RENTS AND LEASES

Section 4.1 Assignment. Borrower does hereby presently, absolutely and
unconditionally assign to Trustee for the benefit of Lender, Borrower’s right,
title and interest in all current and future Leases and the absolute,
unconditional and continuing right to receive and collect all Rents, it being
intended by Borrower that this assignment constitutes a present, outright,
immediate, continuing and absolute assignment and not an assignment for
additional security only. Such assignment to Trustee for the benefit of 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. Lender shall have no responsibility on
account of this assignment for the control, care, maintenance, management or
repair of the Property, for any dangerous or defective condition of the
Property, or for any negligence in the management, upkeep, repair or control of
the Property. Borrower agrees to execute and deliver to Lender such additional
instruments, in form and substance satisfactory to Lender, as may hereafter be
reasonably requested by Lender to further evidence and confirm such assignment.

Section 4.2 License. Notwithstanding that Borrower hereby presently grants to
Trustee for the benefit of Lender an outright, immediate, continuing and
absolute assignment of the Rents and Leases and not merely the collateral
assignment of, or the grant of a lien or security interest in, the Rents and
Leases, Trustee on behalf of Lender hereby grants to Borrower and its successors
and not to any tenant or any other person, a revocable license to collect and
receive the Rents and to retain, use and enjoy the same and otherwise exercise
all rights as landlord under any Lease, in each case subject to the terms hereof
and of the Loan Agreement. Upon the occurrence and during the continuance of any
Event of Default, (i) the license granted herein to Borrower shall immediately
and automatically cease and terminate and shall be void and of no further force
or effect, (ii) Lender shall immediately be entitled to possession of all Rents
(whether or not Lender enters upon or takes control of the Property) and
(iii) at the request of Lender, Borrower shall notify in writing all tenants and
subtenants under any of the Leases that all Rent due thereunder should be paid
to Lender at its address set forth in the Loan Agreement, or at such other place
as Lender shall notify Borrower in writing; provided that, if such Event of
Default ceases to exist, the license described in the foregoing clause (i) shall
automatically be reinstated. Notwithstanding said license, Borrower agrees that
Lender, and not Borrower, shall be deemed to be the creditor of each tenant or
subtenant under any Lease in respect to assignments for the benefit of creditors
and bankruptcy, reorganization, insolvency, dissolution or receivership
proceedings affecting such tenant or subtenant (without obligation on the part
of Lender, however, to file or make timely filings of claims in such proceedings
or otherwise to pursue creditors’ rights therein), with an option to apply in
accordance with the Loan Documents any money received from such tenant or
subtenant in reduction of any amounts due under the Loan Documents. Upon the
occurrence and during the continuance of an Event of Default, any portion of the
Rents held by Borrower shall be held in trust for the benefit of Lender for use
in the payment of the Indebtedness.

 

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Section 4.3 Certain Rights of Lender. Subject to the revocable license granted
above, upon the occurrence and during the continuance of an Event of Default,
Lender shall have the immediate and continuing right, power and authority,
either in person or by agent, without bringing any action or proceeding, or by a
receiver appointed by a court, without the necessity of taking possession of the
Property in its own name, and without the need for any other authorization or
action by Borrower or Lender, in addition to and without limiting any of
Lender’s rights and remedies hereunder, under the Loan Agreement and any other
Loan Documents and as otherwise available at law or in equity, (a) to notify any
tenant or other person that the Leases have been assigned to Lender and that all
Rents are to be paid directly to Lender, whether or not Lender has commenced or
completed foreclosure or taken possession of the Property; (b) to settle,
compromise, release, extend the time of payment of, and make allowances,
adjustments and discounts of any Rents or other obligations in, to and under the
Leases; (c) to demand, sue for, collect, receive, and enforce payment of Rents,
including those past-due and unpaid and other rights under the Leases, prosecute
any action or proceeding, and defend against any claim with respect to the Rents
and Leases; (d) to enter upon, take possession of and operate the Property
whether or not foreclosure under this Security Instrument has been instituted
and without applying for a receiver; (e) to lease all or any part of the
Property; and/or (f) to perform any and all obligations of Borrower under the
Leases and exercise any and all rights of Borrower therein contained to the full
extent of Borrower’s rights and obligations thereunder.

Section 4.4 Irrevocable Instructions to Tenants. At Lender’s request, Borrower
shall deliver a copy of this Security Instrument to each tenant under a Lease
and to each manager and managing agent or operator of the Property, and Lender
shall have the continuing right to do so. Borrower irrevocably directs any
tenant, manager, managing agent, or operator of the Property, without any
requirement for notice to or consent by Borrower, to comply with all demands of
Lender under this Article 4 and to turn over to Lender on demand all Rents which
it receives. Borrower hereby acknowledges and agrees that payment of any Rents
by a person to Lender as hereinabove provided shall constitute payment by such
person, as fully and with the same effect as if such Rents had been paid to
Borrower. Lender is hereby granted and assigned by Borrower the right, at its
option, upon revocation of the license granted herein, upon an Event of Default
that is continuing, to enter upon the Property in person or by agent, without
bringing any action or proceeding, or by court-appointed receiver to collect the
Rents. Any Rents collected after the revocation of the license shall be applied
in accordance with the provisions of the Loan Agreement. Neither the enforcement
of any of the remedies under this Article 4 nor any other remedies or security
interests afforded to Lender under the Loan Documents, at law or in equity shall
cause Lender to be deemed or construed to be a lender in possession of the
Property, to obligate Lender to lease the Property or attempt to do so, or to
take any action, incur any expense, or perform or discharge any obligation, duty
or liability whatsoever under any of the Leases or otherwise. Borrower shall,
and hereby agrees to indemnify Lender for, and to hold

 

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Lender harmless from and against, any and all claims, liability, expenses,
losses or damages that may or might be asserted against or incurred by Lender
solely by reason of Lender’s status as an assignee pursuant to the assignment of
Rents and Leases contained herein, but excluding any claim to the extent caused
by Lender’s gross negligence or willful misconduct. Should Lender incur any such
claim, liability, expense, loss or damage, the amount thereof, including all
actual expenses and reasonable fees of attorneys, shall constitute Indebtedness
secured hereby, and Borrower shall reimburse Lender therefor within ten
(10) Business Days after demand.

Section 4.5 Unilateral Subordination. Lender may, at any time and from time to
time by specific written instrument intended for the purpose, unilaterally
subordinate the lien of this Security Instrument to any Lease, without joinder
or consent of, or notice to, Borrower, any tenant or any other person, and
notice is hereby given to each tenant under a Lease of such right to
subordinate. No such subordination shall constitute a subordination to any lien
or other encumbrance, whenever arising, or improve the right of any junior
lienholder; and nothing herein shall be construed as subordinating this Security
Instrument to any Lease.

ARTICLE 5

COLLATERAL ASSIGNMENT OF PROPERTY AGREEMENTS

Section 5.1 Collateral Assignment. Borrower does hereby collaterally assign and
pledge to Lender, Borrower’s right, title and interest in, to and under all
current and future Property Agreements. Such collateral 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 Property Agreement 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 collateral assignment.

Section 5.2 Retained Rights of Borrower. Subject to the other provisions of this
Article 5 and the provisions of the other Loan Documents, for so long as no
Event of Default shall have occurred and be continuing, Borrower may exercise
all of its rights and privileges under the Property Agreements and shall have
the exclusive right and authority to deal with, enjoy the benefit under, grant
any consents and approvals under, and amend, modify or terminate, such Property
Agreements, collect, receive and retain for its own benefit all monies due or to
become due under such Property Agreements, sue and enforce all claims of
Borrower for damages arising under such Property Agreements, and retain for its
own benefit all items described in clause (d) of paragraph (9) of the definition
of “Property” above, if and to the extent not prohibited by the Loan Agreement
or the other Loan Documents. Upon the occurrence and during the continuance of
any Event of Default, the rights of Borrower described in this Section 5.2 shall
immediately and automatically cease and terminate and shall be void and of no
further force or effect. Upon the occurrence and during the continuance of an
Event of Default, any amounts held by Borrower as a party to the Property
Agreements shall be held in trust for the benefit of Lender for use in the
payment of the Indebtedness.

 

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Section 5.3 Exercise of Assigned Rights. Borrower hereby irrevocably directs the
grantor or licensor of, or the contracting party to, any Property Agreement,
upon demand from Lender, to recognize and accept Lender as the party to such
Property Agreement for any and all purposes as fully as it would recognize and
accept Borrower and the performance of Borrower thereunder; provided, that
Lender hereby covenants to Borrower that it will not make such demand except
upon the occurrence and during the continuance of an Event of Default. Upon the
occurrence, and during the continuance, of an Event of Default, without further
notice or demand and at Borrower’s sole cost and expense, Lender shall be
entitled to exercise all rights of Borrower arising under the Property
Agreements. Borrower hereby acknowledges and agrees that payment of any amounts
owing under any Property Agreement by a person to Lender as hereinabove provided
shall constitute payment by such person, as fully and with the same effect as if
such amounts had been paid to Borrower. Any amounts collected after the
occurrence and during the continuance of an Event of Default shall be applied in
accordance with the provisions of the Loan Agreement. At Lender’s request,
Borrower shall deliver a copy of this Security Instrument to each grantor or
licensor of or the contracting party to a Property Agreement, and Lender shall
have the continuing right to do so.

Section 5.4 Indemnity. Borrower shall, and hereby agrees to indemnify Lender
for, and to hold Lender harmless from and against, any and all claims,
liability, expenses, losses or damages which may or might be asserted against or
incurred by Lender solely by reason of Lender’s status as an assignee pursuant
to the collateral assignment of Property Agreements contained herein, but
excluding any claim to the extent caused by Lender’s gross negligence or willful
misconduct. Should Lender incur any such claim, liability, expense, loss or
damage, the amount thereof, including all actual expenses and reasonable fees of
attorneys, shall constitute Indebtedness secured hereby, and Borrower shall
reimburse Lender therefor within ten (10) Business Days after demand.

Section 5.5 Property Agreement Covenants.

(a) Borrower shall perform and observe, in a timely manner, all of the
covenants, conditions, obligations and agreements of Borrower under the Property
Agreements and shall suffer or permit no delinquency on its part to exist
thereunder if such action is prohibited by the Loan Agreement, or would have a
Material Adverse Effect.

(b) Borrower shall not (i) sell, assign, transfer, mortgage or pledge any
Property Agreement or any such right or interest under any Property Agreement,
or (ii) cancel, terminate, amend, supplement or modify any Property Agreement,
in either case, if such action is prohibited by the Loan Agreement or would have
a Material Adverse Effect.

(c) Borrower shall exercise all reasonable efforts to enforce or secure the
performance of each and every obligation, covenant, condition and agreement to
be performed by the franchisor, manager, licensor, grantor or other contracting
party under the Property Agreements, if the failure to take such action would
have a Material Adverse Effect.

 

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ARTICLE 6

SECURITY AGREEMENT

Section 6.1 Security Interest. This Security Instrument constitutes both a real
property mortgage and a “Security Agreement” on personal property within the
meaning of the UCC and other applicable law and with respect to the Personalty,
Fixtures, Plans, Leases, Rents and Property Agreements (said portion of the
Property subject to the UCC, the “Collateral”). 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. Borrower, by executing and
delivering this Security Instrument, hereby grants to Lender, a first and prior
security interest in the Personalty, Fixtures, Plans, Leases, Rents and Property
Agreements and all other Property which is personal property to secure the
payment of the Indebtedness and performance of the Obligations, and agrees that
Lender shall have all the rights and remedies of a secured party under the UCC
with respect to such property including, without limiting the generality of the
foregoing, the right to take possession of the Collateral or any part thereof,
and to take such other measures as Lender may deem necessary for the care,
protection and preservation of the Collateral. Upon request or demand of Lender,
Borrower shall at its expense assemble the Collateral and make it available to
Lender at the Property. Borrower shall pay to Lender on demand any and all
expenses, including actual reasonable legal expenses and attorneys’ fees,
incurred or paid by Lender in protecting the interest in the Collateral and in
enforcing the rights hereunder with respect to the Collateral. Any notice of
sale, disposition or other intended action by Lender with respect to the
Collateral 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. The proceeds of any disposition of the
Collateral, or any part thereof, shall, except as otherwise required by law, be
applied by Lender in accordance with Section 3.7 hereof.

Section 6.2 Further Assurances. Borrower shall execute and deliver to Lender
and/or file, in form and substance satisfactory to Lender, such further
statements, documents and agreements, financing statements, continuation
statements, and such further assurances and instruments, and do such further
acts, as Lender may, from time to time, reasonably consider necessary, desirable
or proper to create, perfect and preserve Lender’s security interest hereunder
and to carry out more effectively the purposes of this Security Instrument, and
Lender may cause such statements and assurances to be recorded and filed, at
such times and places as may be required or permitted by law to so create,
perfect and preserve such security interest; provided that such further
statements, documents, agreements, assurances, instruments and acts do not
increase the liability or obligations or decrease the rights of Borrower from
those provided for in the Loan Documents. Borrower hereby irrevocably authorizes
Lender at any time and from time to time to prepare, file of record in any
Uniform Commercial Code jurisdiction or otherwise effectuate new financing
statements or financing statement amendments which (a) indicate the Collateral
(i) as all assets of Borrower or words of similar effect, regardless of whether
any particular asset comprised in the Collateral falls within the scope of
Article 9 of any applicable Uniform Commercial Code, or (ii) by any other
description which reasonably approximates the

 

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description contained in this Security Instrument, and (b) provide any other
information required by part 5 of Article 9 of any applicable Uniform Commercial
Code, for the sufficiency or filing office acceptance of any financing statement
or amendment. As of the date hereof, Borrower’s chief executive office and
principal place of business is at the address set forth in the first paragraph
of this Security Instrument, and Borrower shall promptly notify Lender of any
change in such address.

Section 6.3 Fixture Filing. This Security Instrument shall also constitute a
“fixture filing” for the purposes of the UCC upon all of the Property that is or
is to become “fixtures” (as that term is defined in the UCC), upon being filed
for record in the real estate records of the City or County wherein such
fixtures are located. Information concerning the security interest herein
granted may be obtained at the addresses of Debtor (Borrower) and Secured Party
(Lender) as set forth in the first paragraph of this Security Instrument.

ARTICLE 7

MISCELLANEOUS

Section 7.1 Notices. Any notice required or permitted to be given under this
Security Instrument shall be given in the manner described in the Loan
Agreement.

Section 7.2 Covenant Running with the Land. All representations, warranties,
covenants and Obligations contained in the Loan Agreement are incorporated
herein by this reference and, to the extent relating to the Property, are
intended by the parties to be, and shall be construed as, covenants running with
the land. All persons or entities who may have or acquire an interest in the
Property shall be deemed to have notice of, and be bound by, the terms of the
Loan Agreement and the other Loan Documents; however, no such party shall be
entitled to any rights thereunder without the prior written consent of Lender.

Section 7.3 Attorney-in-Fact. Borrower hereby irrevocably appoints Lender and
its successors and assigns, as its attorney-in-fact, which appointment is
irrevocable and coupled with an interest, after the occurrence and during the
continuance of an Event of Default (a) to execute and/or record any notices of
completion, cessation of labor or any other notices that Lender deems
appropriate to protect Lender’s interest, if Borrower shall fail to do so within
ten (10) days after written request by Lender, (b) upon the issuance of a deed
or assignment of lease pursuant to the foreclosure of this Security Instrument
or the delivery of a deed or assignment of lease in lieu of foreclosure, to
execute all instruments of assignment, conveyance or further assurance with
respect to the Leases, Rents, Personalty, Fixtures, Plans and Property
Agreements in favor of the grantee of any such deed or the assignee of any such
assignment of lease and as may be necessary or desirable for such purpose,
(c) to prepare, execute and file or record financing statements, continuation
statements, applications for registration and like papers necessary to create,
perfect or preserve Lender’s security interests and rights in or to any of the
Collateral, and (d) while any Event of Default is continuing, to perform any
obligation of Borrower hereunder; however: (1) Lender shall not under any
circumstances be obligated to perform any obligation of Borrower; (2) any sums
advanced by Lender in such performance shall

 

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be included in the Indebtedness and shall bear interest at the Default Rate;
(3) Lender as such attorney-in-fact shall only be accountable for such funds as
are actually received by Lender; and (4) Lender shall not be liable to Borrower
or any other person or entity for any failure to take any action that it is
empowered to take under this Section 7.3.

Section 7.4 Successors and Assigns. This Security Instrument shall be binding
upon and inure to the benefit of Lender and Borrower and their respective
successors and assigns.

Section 7.5 No Waiver. Any failure by Lender or Trustee to insist upon strict
performance of any of the terms, provisions or conditions of the Loan Documents
shall not be deemed to be a waiver of same, and Lender and Trustee shall each
have the right at any time to insist upon strict performance of all of such
terms, provisions and conditions.

Section 7.6 Subrogation. To the extent proceeds of the Notes have been used to
extinguish, extend or renew any indebtedness against the Property, then Lender
shall be subrogated to all of the rights, liens and interests existing against
the Property and held by the holder of such indebtedness and shall have the
benefit of the priority of all of the same, and such former rights, liens and
interests, if any, are not waived, but are continued in full force and effect in
favor of Lender.

Section 7.7 Loan Agreement. If any conflict or inconsistency exists between this
Security Instrument and the Loan Agreement, the Loan Agreement shall govern.

Section 7.8 Release. Upon payment in full of the Indebtedness and performance in
full of all of the outstanding Obligations the estate hereby granted shall
cease, terminate and be void and Lender, at Borrower’s expense, shall release
the liens and security interests created by this Security Instrument.

Section 7.9 Waiver of Stay, Moratorium and Similar Rights. Borrower agrees, to
the full extent that it may lawfully do so, that it will not at any time insist
upon or plead or in any way take advantage of, and hereby waives, any
appraisement, valuation, stay, marshaling of assets, exemption, extension,
redemption or moratorium law now or hereafter in force and effect so as to
prevent or hinder the enforcement of the provisions of this Security Instrument
or the indebtedness secured hereby, or any agreement between Borrower and Lender
or any rights or remedies of Lender.

Section 7.10 Waiver of Jury Trial; Consent to Jurisdiction.

(a) TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE LAW, BORROWER AND LENDER
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS SECURITY INSTRUMENT, ANY OTHER LOAN DOCUMENT, OR ANY DEALINGS, CONDUCT,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS BY IT RELATING TO THE SUBJECT
MATTER OF THIS SECURITY INSTRUMENT. THE

 

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SCOPE OF THIS WAIVER IS INTENDED TO ENCOMPASS ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. BORROWER AND LENDER ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO THIS SECURITY INSTRUMENT. BORROWER
AND LENDER FURTHER WARRANT AND REPRESENT THAT THEY HAVE REVIEWED THIS WAIVER
WITH THEIR RESPECTIVE LEGAL COUNSEL, AND THAT THEY KNOWINGLY AND VOLUNTARILY
WAIVE THEIR JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS SECURITY INSTRUMENT, OR ANY OTHER LOAN
DOCUMENTS OR AGREEMENTS RELATING TO THIS SECURITY INSTRUMENT. IN THE EVENT OF
LITIGATION, THIS SECURITY INSTRUMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

(b) BORROWER AND LENDER HEREBY CONSENT FOR THEMSELVES AND BORROWER HEREBY
CONSENTS IN RESPECT OF ITS PROPERTIES, GENERALLY, UNCONDITIONALLY AND
IRREVOCABLY, TO THE NONEXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS IN
THE STATE OF NEW YORK WITH RESPECT TO ANY PROCEEDING RELATING TO ANY MATTER,
CLAIM OR DISPUTE ARISING UNDER THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY. BORROWER AND LENDER FURTHER CONSENT, GENERALLY,
UNCONDITIONALLY AND IRREVOCABLY, TO THE NONEXCLUSIVE JURISDICTION OF THE STATE
AND FEDERAL COURTS OF THE STATE IN WHICH ANY OF THE COLLATERAL IS LOCATED IN
RESPECT OF ANY PROCEEDING RELATING TO ANY MATTER, CLAIM OR DISPUTE ARISING WITH
RESPECT TO SUCH COLLATERAL. BORROWER AND LENDER FURTHER IRREVOCABLY CONSENT TO
THE SERVICE OF PROCESS BY MAIL, PERSONAL SERVICE OR IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW, GENERALLY, UNCONDITIONALLY AND IRREVOCABLY, AT THE
ADDRESSES SET FORTH IN SECTION 9.4 OF THE LOAN AGREEMENT IN CONNECTION WITH ANY
OF THE AFORESAID PROCEEDINGS IN ACCORDANCE WITH THE RULES APPLICABLE TO SUCH
PROCEEDINGS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND LENDER
HEREBY IRREVOCABLY WAIVE ANY OBJECTION THAT THEY MAY NOW HAVE OR HAVE IN THE
FUTURE TO THE LAYING OF VENUE IN RESPECT OF ANY OF THE AFORESAID PROCEEDINGS
BROUGHT IN THE COURTS REFERRED TO ABOVE AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
LENDER TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR TO COMMENCE
PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY JURISDICTION.

 

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Section 7.11 Headings. The Article, Section and Subsection titles hereof are
inserted for convenience of reference only and shall in no way alter, modify,
limit or define, or be used in construing, the scope, intent or text of such
Articles, Sections or Subsections.

Section 7.12 Governing Law. THE PROVISIONS OF THIS SECURITY INSTRUMENT REGARDING
THE CREATION, PERFECTION AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS
HEREIN GRANTED SHALL BE GOVERNED BY, AND BE CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED. ALL OTHER PROVISIONS OF THIS
SECURITY INSTRUMENT, ANY CLAIM OR CONTROVERSY ARISING OUT OF THE SUBJECT MATTER
HEREOF WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE, AND THE RIGHTS
AND OBLIGATIONS OF BORROWER, TRUSTEE AND LENDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF, WITHOUT REGARD TO
CHOICE OF LAW RULES, TO THE EXTENT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY, AND FURTHER, NOTWITHSTANDING THE
FOREGOING, WITH RESPECT TO ANY PERSONAL PROPERTY INCLUDED IN THE “PROPERTY”, THE
CREATION OF THE SECURITY INTEREST THEREIN SHALL BE GOVERNED BY THE UNIFORM
COMMERCIAL CODE IN EFFECT IN THE STATE OF NEW YORK FROM TIME TO TIME AND THE
PERFECTION, THE EFFECT OF PERFECTION OR NON-PERFECTION AND PRIORITY OF SUCH
SECURITY INTEREST SHALL BE GOVERNED IN ACCORDANCE WITH THE MANDATORY CHOICE OF
LAW RULES SET FORTH IN THE UNIFORM COMMERCIAL CODE IN EFFECT IN THE STATE OF NEW
YORK FROM TIME TO TIME.

Section 7.13 Hold Harmless. Borrower shall and does hereby agree to defend,
indemnify and hold harmless Lender from and against any and all claims, losses,
expenses, damages and liabilities (including, without limitation, all reasonable
fees and expenses of attorneys) which may arise or be incurred or accrue in
connection herewith or in connection with an obligation of Borrower hereunder
with respect to the Property, except, in each case, to the extent incurred as a
result of the gross negligence or willful misconduct of Lender. Should Lender
incur any such claim, loss, expense, damage or liability, the amount thereof,
including all reasonable expenses and reasonable fees of attorneys and
reasonable costs and expenses associated with actions taken by Lender in defense
thereof, or otherwise in protecting its interests hereunder, shall constitute
additions to the Indebtedness and shall be secured hereby, and Borrower
covenants and agrees to reimburse Lender promptly upon demand. Borrower shall
reimburse Lender for any actual losses, actual costs, actual damages and
reasonable expenses (including reasonable attorneys’ fees and court costs)
incurred by Lender if an interest in the Property, other than as permitted under
the Loan Documents, is claimed by another Person.

 

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Section 7.14 Entire Agreement. This Security Instrument and the other Loan
Documents embody the entire agreement and understanding between Lender and
Borrower pertaining to the subject matter hereof and thereof and supersede all
prior agreements, understandings, representations or other arrangements, whether
express or implied, written or oral, between such parties relating to the
subject matter hereof and thereof. This Security Instrument and the other Loan
Documents may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.

Section 7.15 Severability. If any provision of this Security Instrument is
invalid or unenforceable, then such provision shall be given full force and
effect to the fullest possible extent, and all of the remaining provisions of
this Security Instrument shall remain in full force and effect and shall be
binding on the parties hereto.

Section 7.16 Reserved.

Section 7.17 Lien Absolute. Borrower acknowledges that this Security Instrument
and a number of other Loan Documents and those documents required by the Loan
Documents together secure the Indebtedness. Borrower agrees that, to the extent
permitted by law, the lien of this Security Instrument and all obligations of
Borrower hereunder shall be absolute and unconditional and shall not in any
manner be affected or impaired by:

(a) any lack of validity or enforceability of the Loan Agreement or any other
Loan Document, any agreement with respect to any of the Indebtedness or
Obligations or any other agreement or instrument relating to any of the
foregoing;

(b) any acceptance by Lender of any security for or guarantees of any of the
Indebtedness;

(c) any failure, neglect or omission on the part of Lender to realize upon or
protect any of the Indebtedness or any of the collateral security therefor,
including the Loan Documents, or due to any other circumstance which might
otherwise constitute a defense available to, or a discharge of, Borrower in
respect of the Indebtedness and Obligations hereby secured or any collateral
security therefor, including the Loan Documents, or due to any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, Borrower in respect of the Indebtedness or Obligations or this
Security Instrument (other than the indefeasible payment in full in cash of all
the Indebtedness and Obligations hereby secured);

(d) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Indebtedness or Obligations;

(e) any release (except as to the property released), sale, pledge, surrender,
compromise, settlement, nonperfection, renewal, extension, indulgence,
alteration, exchange, modification or disposition of any of the Indebtedness or
Obligations hereby secured or of any of the collateral security therefor;

 

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(f) any amendment or waiver of or any consent to any departure from the Loan
Agreement or any other Loan Documents or of any guaranty thereof, if any, and
Lender may in its discretion foreclose, exercise any power of sale, or exercise
any other remedy available to it under any or all of the Loan Documents without
first exercising or enforcing any of its rights and remedies hereunder; and

(g) any exercise of the rights or remedies of Lender hereunder or under any or
all of the Loan Documents.

Section 7.18 Real Estate Taxes. Borrower shall not be entitled to any credit
upon the Indebtedness or deduction from the assessed value of the Property by
virtue of payment of real estate taxes on the Property. If any law is enacted or
adopted or amended after the date of this Security Instrument that deducts the
Indebtedness from the value of the Property for the purpose of taxation or that
imposes a tax, either directly or indirectly, on the Indebtedness or Lender’s
interest in the Property, Borrower will pay such tax, with interest and
penalties thereon, if any. In the event that the payment of such tax or interest
and penalties by Borrower would be unlawful or taxable to Lender or
unenforceable or provide the basis for a defense of usury, then in any such
event, Lender shall have the option, by written notice of not less than 90 days,
to declare the Indebtedness immediately due and payable.

Section 7.19 Incorporation by Reference.

(a) All obligations of Borrower under this Security Instrument shall be limited
by the provisions of Section 9.19 of the Loan Agreement, the provisions of which
are incorporated herein by this reference.

(b) The parties hereby acknowledge that the Loan Agreement, among other things,
contains restrictions on the prepayment of the Indebtedness, as well as
restrictions on the sale, transfer and encumbrance of the Property and the
ownership interests of Borrower.

Section 7.20 State Specific Provisions. The provisions of Exhibit B attached
hereto are hereby incorporated by reference as though set forth in full herein.

Section 7.21 Last Dollars Secured. The parties agree that any payments or
repayments of such Indebtedness by Borrower shall be and be deemed to be applied
first to the portion of the Indebtedness that is not secured hereby, if any, it
being the parties’ intent that the portion of the Indebtedness last remaining
unpaid shall be secured hereby.

Section 7.22 Mortgage Recording Taxes. Borrower hereby covenants to pay any and
all mortgage recording or other taxes or fees due in connection with this
Security Instrument.

Section 7.23 Multiple Exercise of Remedies. To the extent permitted by law,
Borrower specifically consents and agrees that Lender and Trustee may exercise
rights and remedies hereunder and under the other Loan Documents separately or
concurrently and in any order that Lender and Trustee may deem appropriate.

 

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Section 7.24 Rules of Construction. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the person or persons referred to may require. All references
to sections, schedules and exhibits are to sections, schedules and exhibits in
or to this Security Instrument unless otherwise specified. Unless otherwise
specified: (i) all meanings attributed to defined terms in this Security
Instrument shall be equally applicable to both the singular and plural forms of
the terms so defined, (ii) “including” means “including, but not limited to” and
“including, without limitation” and (iii) the words “hereof,” “herein,”
“hereby,” “hereunder” and words of similar import when used in this Security
Instrument shall refer to this Security Instrument as a whole and not to any
particular provision, article, section or other subdivision of this Security
Instrument.

Section 7.25 Counterparts; Facsimile Signatures. This Security Instrument may be
executed in any number of counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument. Any counterpart delivered by facsimile, pdf or other
electronic means shall have the same import and effect as original counterparts
and shall be valid, enforceable and binding for the purposes of this Security
Instrument.

ARTICLE 8

CONCERNING THE TRUSTEE

Section 8.1 Certain Rights. With the approval of Lender, Trustee shall have the
right to select, employ and consult with counsel. Trustee shall have the right
to rely on any instrument, document or signature authorizing or supporting any
action taken or proposed to be taken by Trustee hereunder, believed by Trustee
in good faith to be genuine. Trustee shall be entitled to reimbursement for
actual, reasonable expenses incurred by him in the performance of his duties
hereunder. Borrower shall, from time to time, pay the compensation due to
Trustee hereunder and reimburse Trustee for, and indemnify, defend and save
Trustee harmless against, all liability and reasonable expenses which may be
incurred by him in the performance of Trustee’s duties, except as a result of
Trustee’s gross negligence or willful misconduct, in the performance of
Trustee’s duties. Borrower’s obligations under this Section 8.1 shall not be
reduced or impaired by principles of comparative or contributory negligence
(except with respect to Trustee’s gross negligence or willful misconduct).

Section 8.2 Retention of Money. All moneys received by 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 law), and Trustee shall be under no liability
for interest on any moneys received by him hereunder.

Section 8.3 Successor Trustees. If Trustee or any successor Trustee shall die,
resign or become disqualified from acting in the execution of this trust, or
Lender shall desire to appoint a substitute Trustee, Lender shall have full
power to appoint one or more substitute or successor Trustees, without other
formality than appointment and designation in writing executed by Lender, and,
if preferred, several substitute or successor Trustees in succession who shall

 

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succeed to all the estates, rights, powers and duties of Trustee. Such
appointment may be executed by any authorized agent of Lender, and as so
executed, such appointment shall be conclusively presumed to be executed with
authority, valid and sufficient, without further proof of any action. Upon the
making of any such appointment and designation, all of the estate and title of
Trustee in the Property shall vest in the named successor or substitute Trustee
and he shall thereupon succeed to, and shall hold, possess and execute, all the
rights, powers, privileges, immunities and duties herein conferred upon Trustee.

Section 8.4 Perfection of Appointment. Should any deed, conveyance or instrument
of any nature be required from Borrower by any successor Trustee to more fully
and certainly vest in and confirm to such successor Trustee such estates,
rights, powers and duties, then, upon reasonable request by such Trustee, 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 8.5 Trustee Liability. In no event or circumstance shall Trustee or any
substitute Trustee hereunder be personally liable under or as a result of this
Security Instrument, either as a result of any action by Trustee (or any
substitute Trustee) in the exercise of the powers hereby granted or otherwise,
except for Trustee’s gross negligence or willful misconduct.

Borrower hereby acknowledges receipt of a true copy of the within Security
Instrument.

[Remainder of page intentionally left blank;

Signature page follows.]

 

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COLLATERAL ASSIGNMENT OF PROPERTY AGREEMENTS,

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EXECUTED as of the date first above written.

 

BORROWER:

 

DC-3300 ESSEX, LLC,

a Delaware limited liability company

By:

 

CARTER/VALIDUS OPERATING

PARTNERSHIP, LP,

a Delaware limited partnership,

its Member

 

By:

 

CARTER VALIDUS MISSION

CRITICAL REIT, INC.,

a Maryland corporation,

its General Partner

   

By:

 

/s/ Todd Sakow

     

Name: Todd Sakow

Title:   Chief Financial Officer

 

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ACKNOWLEDGMENT

 

STATE OF FLORIDA

  

§

     

§

  

COUNTY OF HILLSBOROUGH

  

§

  

This instrument was ACKNOWLEDGED before me on July 8, 2011 by TODD SAKOW, as
Chief Financial Officer of CARTER VALIDUS MISSION CRITICAL REIT, INC., a
Maryland corporation, as General Partner of CARTER/VALIDUS OPERATING
PARTNERSHIP, LP, a Delaware limited partnership, as a Member of DC-3300 ESSEX,
LLC, a Delaware limited liability company, on behalf of said limited liability
company.

 

[S E A L]

My Commission Expires:

October 29, 2013

/s/ Lisa Collado

 

Notary Public, State of Florida

      Lisa Collado

 

Printed Name of Notary Public

 

 

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EXHIBIT A

Legal Description

Being Lot 8C, Block B, TECHNOLOGY BUSINESS CAMPUS ADDITION, an addition to the
City of Richardson, Collin County, Texas, according to the plat thereof recorded
in Volume 2010, Page 326, Map Records, Collin County, Texas.

 

EXHIBIT A, Legal Description – Page 1

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EXHIBIT B

Special Provisions for the State of Texas

THIS EXHIBIT B is attached to and made a part of that certain Deed of Trust,
Assignment of Rents and Leases, Collateral Assignment of Property Agreements,
Security Agreement and Fixture Filing dated as of July 14, 2011 (the “Security
Instrument”), executed and delivered by DC-3300 ESSEX, LLC, a Delaware limited
liability company, grantor for all purposes hereunder (together with its
permitted successors and permitted assigns, “Borrower”), for the benefit of
GOLDMAN SACHS COMMERCIAL MORTGAGE CAPITAL, L.P., a Delaware limited partnership,
beneficiary for all purposes hereunder (together with all its successors and
assigns, “Lender”). This Exhibit B is hereby incorporated by reference into and
made a part of the Security Instrument as if fully set forth therein. All
provisions and terms of the Security Instrument not otherwise amended or
modified herein shall remain in full force and effect, and all definitions
contained in the Security Instrument shall have the same meanings for purposes
of this Exhibit B, except as otherwise specifically defined or modified hereby.

1. Principals of Construction. In the event of any inconsistencies between the
terms and provisions of this Exhibit B and the terms and provision of the other
Sections and Articles of the Security Instrument, the terms and provisions of
this Exhibit B shall govern and control.

2. Non-Judicial Foreclosure. Should Lender have elected to accelerate the
indebtedness secured hereby and initiate foreclosure of the Property by
requesting the Trustee to effectuate a non-judicial foreclosure sale, the
Trustee of this Security Instrument shall then sell, or offer for sale, the
Property at public sale to the highest bidder for cash during a three hour
period between the hours of ten o’clock a.m. and four o’clock p.m. whose
earliest point in time is specified, on the first Tuesday of any month, at the
area officially designated for holding such sales at the courthouse of any
county in the State of Texas in which any part of the Property is situated,
after having given notice of the date, the time period, place and terms of said
sale in accordance with the laws of the State of Texas then in force and
governing said sales of real property and improvements under powers conferred by
deeds of trust. The Property shall be sold by posting, or causing to be posted,
at least twenty-one (21) consecutive days prior to the date of said sale,
written or printed notice thereof at the courthouse door in each of the counties
in which the Property is situated, designating the county where the Property
will be sold and designating the date, the time period, the place and the terms
of sale. A copy of such notice shall also be filed in the office of the County
Clerk in each county of the State of Texas in which any part of the Property is
situated at least twenty-one (21) consecutive days before the date of said sale
of the Property. Lender shall have the right to become the purchaser at any sale
held by any Trustee or substitute or successor Trustee, or by any receiver or
public officer. Any Lender purchasing at any such sale shall have the right to
credit the Indebtedness owing to such Lender upon the amount of its bid entered
at such sale to the extent necessary to satisfy such bid. Said Trustee may
appoint an attorney-in-fact to act in its stead as Trustee to conduct sale as
hereinbefore provided. Borrower authorizes and empowers the Trustee to sell the
Property, in

 

EXHIBIT B – Special Provisions for the State of Texas – Page 1

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lots or parcels or as a whole, and to execute and deliver to the purchaser or
purchasers thereof good and sufficient deeds of conveyance thereto of the estate
of title then existing on the Property and bills of sale with covenants of
special warranty. Borrower binds itself to warrant and forever defend the title
of such purchaser or purchasers when so made by the Trustee, and agrees to
accept proceeds of said sale, if any, which are payable to Borrower as provided
herein. In addition to the posting and filing of notices hereinabove provided,
and for so long as required by law, no foreclosure under the power of sale
herein contained shall be held unless Lender, at least twenty-one (21) days
preceding the date of sale and in the manner prescribed by law, shall have
served written notice of the proposed sale which designates the County where the
Property will be sold and designates the date, time period, the place and the
terms of sale by certified mail on Borrower. Service of such a notice by
certified mail shall be completed upon deposit of such notice, postage prepaid
and properly addressed to each such person or entity at the address for Borrower
indicated on the first page of this Security Instrument, in a Post Office of the
United States Postal Service or in an official depository under the care and
custody of the United States Postal Service. The affidavit of a person
knowledgeable of the facts to the effect that such service was completed shall
be prima facie evidence of the fact of service.

3. Waiver of Deficiency Statute.

(a) Waiver. In the event an interest in any of the Property is foreclosed upon
pursuant to a judicial or nonjudicial foreclosure sale, Borrower agrees that,
notwithstanding the provisions of Sections 51.003, 51.004 and 51.005 of the
Texas Property Code (as the same may be amended from time to time), and to the
extent permitted by law, Lender shall be entitled to seek a deficiency judgment
from Borrower and any other party obligated on the Note equal to the difference
between the amount owing on the Note and the amount for which the Property was
sold pursuant to judicial or nonjudicial foreclosure sale, subject, however, to
Section 9.19 of the Loan Agreement regarding non-recourse liability which is
incorporated into this Exhibit B by reference. Borrower expressly recognizes
that this section constitutes a waiver of the above-cited provisions of the
Texas Property Code which would otherwise permit Borrower and other persons
against whom recovery of deficiencies is sought or any indemnitor or guarantor
independently (even absent the initiation of deficiency proceedings against
them) to present competent evidence of the fair market value of the Property as
of the date of the foreclosure sale and offset against any deficiency the amount
by which the foreclosure sale price is determined to be less than such fair
market value. Borrower further recognizes and agrees that this waiver creates an
irrebuttable presumption that the foreclosure sale price is equal to the fair
market value of the Property for purposes of calculating deficiencies owed by
Borrower, any indemnitor or guarantor, and others against whom recovery of a
deficiency is sought.

(b) Alternative to Waiver. Alternatively, in the event the waiver provided for
in subsection (a) above is determined by a court of competent jurisdiction to be
unenforceable, the provisions of this Section 3(b) shall be the basis for the
finder of fact’s determination of the fair market value of the Property as of
the date of the foreclosure

 

EXHIBIT B – Special Provisions for the State of Texas – Page 2

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sale in proceedings governed by Sections 51.003, 51.004 and 51.005 of the Texas
Property Code (as amended from time to time). In such event, (i) the Property
shall be valued in an “as is” condition as of the date of the foreclosure sale,
without any assumption or expectation that the Property will be repaired or
improved in any manner before a resale of the Property after foreclosure;
(ii) the valuation shall be based upon an assumption that the foreclosure
purchaser desires a resale of the Property for cash promptly (but no later than
12 months) following the foreclosure sale; (iii) all reasonable closing costs
customarily borne by the seller in commercial real estate transactions should be
deducted from the gross fair market value of the Property, including, without
limitation, brokerage commissions, title insurance, a survey of the Property,
tax prorations, attorneys’ fees, and marketing costs; (iv) the gross fair market
value of the Property shall be further discounted to account for any estimated
holding costs associated with maintaining the Property pending sale, including,
without limitation, utilities expenses, property management fees, taxes and
assessments (to the extent not accounted for in item (iii) above), and other
maintenance, operational and ownership expenses; and (v) any expert opinion
testimony given or considered in connection with a determination of the fair
market value of the Property must be given by persons having at least five
(5) years experience in appraising property similar to the Property and who have
conducted and prepared a complete written appraisal of the Property taking into
consideration the factors set forth above.

4. Financing Statement. This Security Instrument shall also be effective as a
financing statement covering as-extracted collateral subject to, and pursuant to
the provisions of, Section 9.301 of the Uniform Commercial Code - Secured
Transactions, as adopted in Texas and as the same may be later amended, and is
to be filed for record in the real estate records of the county where the
Property is situated.

5. SPECIFIC NOTICE REGARDING INDEMNITIES. IT IS EXPRESSLY AGREED AND UNDERSTOOD
THAT THIS SECURITY INSTRUMENT INCLUDES INDEMNIFICATION PROVISIONS WHICH, IN
CERTAIN CIRCUMSTANCES, COULD INCLUDE AN INDEMNIFICATION BY BORROWER OF LENDER
FROM CLAIMS OR LOSSES ARISING AS A RESULT OF LENDER’S OWN NEGLIGENCE.

 

EXHIBIT B – Special Provisions for the State of Texas – Page 3