Exhibit 10.4
Prepared By/Return To:
Jones Day
3161 Michelson Drive, Suite 800
Irvine, CA 92612
Attn: Cori Capizzi
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND
FIXTURE FILING
(One Washingtonian)
by
KBSIII ONE WASHINGTONIAN, LLC,
a Delaware limited liability company,
as Grantor,
to
PRLAP, INC., a North Carolina corporation,
as Trustee,

for the benefit of

BANK OF AMERICA, N.A.,
a national banking association,
as Beneficiary, in its capacity as administrative agent for the Lenders
identified below

(This document serves as a Fixture Filing under the Maryland Uniform Commercial
Code)
    
Grantor’s Organizational Identification Number is: DE 5335559
Property Commonly Known As: 9801 Washingtonian Boulevard
City/County: Gaithersburg, County of Montgomery
State: Maryland
Tax Parcel ID No. 9-201-2867430

THIS DEED OF TRUST IS PARTIALLY EXEMPT FROM RECORDATION TAX PURSUANT TO SECTION
12-108(g) OF THE TAX-PROPERTY ARTICLE OF THE MARYLAND CODE. A REFINANCE
AFFIDAVIT AND A RECORDING TAX AFFIDAVIT ARE ATTACHED HERETO AS EXHIBIT B. FOR
PURPOSES OF CALCULATING RECORDING TAX ONLY, THE AMOUNT OF THE DEBT SECURED BY
THIS DEED OF TRUST AND ALLOCATED TO MARYLAND PROPERTY, PER THE RECORDING TAX
AFFIDAVIT ATTACHED HERETO AS EXHIBIT B, IS $59,186,000.00.
 

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DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
(One Washingtonian)
This Deed of Trust, Assignment of Leases and Rents, Security Agreement and
Fixture Filing is made as of the 3rd day of November, 2017, by KBSIII ONE
WASHINGTONIAN, LLC, a Delaware limited liability company (herein referred to as
“Grantor”), whose address is c/o KBS Capital Advisors LLC, 800 Newport Center
Drive, Suite 700, Newport Beach, California 92660, Attention: Todd Smith, and
c/o KBS Capital Advisors LLC, 3003 Washington Boulevard, Suite 950, Arlington,
VA 22201, Attention: Stephen Close, to PRLAP, INC., a North Carolina corporation
(“Trustee”), whose address is P.O. Box 2240, Brea, California 92822, for the
benefit of BANK OF AMERICA, N.A., a national banking association, whose address
is 520 Newport Center Drive, Suite 1100, Newport Beach, California 92660, as
beneficiary, in its capacity as administrative agent (“Administrative Agent”)
for the lenders (each, a “Lender” and collectively, “Lenders”) from time to time
party to that certain Loan Agreement of even date herewith, as amended (the
“Loan Agreement”) among Borrower (as defined below), Lenders and Administrative
Agent.
Recitals
Grantor has requested that Lenders make the Loan (as hereinafter defined) in the
original principal amount of One Billion Ten Million and No/100 Dollars
($1,010,000,000.00) to Borrower (as hereinafter defined). As a condition
precedent to making the Loan, Lenders have required that Grantor execute and
deliver this Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Fixture Filing to Trustee and Administrative Agent.
Grants and Agreements
Now, therefore, in order to induce Lenders to make the Loan to Borrower, Grantor
agrees as follows:
Article I
Definitions.
As used in this Deed of Trust, the terms defined in the Preamble hereto shall
have the respective meanings specified therein, and the following additional
terms shall have the meanings specified:
“Accessories” means all fixtures, equipment, systems, machinery, furniture,
furnishings, appliances, inventory, goods, building and construction materials,
supplies and other articles of personal property, of every kind and character,
tangible and intangible (including software embedded therein), now owned or
hereafter acquired by Grantor, which are now or hereafter attached to or
situated in, on or about the Land or Improvements, or used in or necessary to
the complete and proper planning, development, use, occupancy or operation
thereof, or acquired (whether delivered to the Land or stored elsewhere) for use
or installation in or on the Land or Improvements, and all Additions to the
foregoing, all of which are hereby declared to be permanent accessions to the
Land.

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“Accounts” means all accounts of Grantor, within the meaning of the Uniform
Commercial Code of the State, derived from or arising out of the use, occupancy
or enjoyment of the Property or for services rendered therein or thereon.
“Additions” means any and all alterations, additions, accessions and
improvements to property, substitutions therefor, and renewals and replacements
thereof.
“Administrative Agent” means Bank of America, N.A., a national banking
association, in its capacity as administrative agent for Lenders or any
successor administrative agent.
“Beneficiary” means Administrative Agent and its successors and assigns, in its
capacity as administrative agent for the Lenders.
“Borrower” means individually and collectively, Grantor, KBSIII 60 South Sixth
Street, LLC, a Delaware limited liability company, KBSIII Sterling Plaza, LLC, a
Delaware limited liability company, KBSIII Preston Commons, LLC, a Delaware
limited liability company, KBSIII Towers At Emeryville, LLC, a Delaware limited
liability company, KBSIII Ten Almaden, LLC, a Delaware limited liability
company, KBSIII Legacy Town Center, LLC, a Delaware limited liability company,
and KBSIII 500 West Madison, LLC, a Delaware limited liability company.
“Claim” means any liability, suit, action, claim, demand, loss, expense,
penalty, fine, judgment or other cost of any kind or nature whatsoever,
including fees, costs and expenses of attorneys, consultants, contractors and
experts.
“Condemnation” means any taking of title to, use of, or any other interest in
the Property under the exercise of the power of condemnation or eminent domain,
whether temporarily or permanently, by any Governmental Authority or by any
other Person acting under or for the benefit of a Governmental Authority.
“Condemnation Awards” means any and all judgments, awards of damages (including
severance and consequential damages), payments, proceeds, settlements, amounts
paid for a taking in lieu of Condemnation, or other compensation heretofore or
hereafter made, including interest thereon, and the right to receive the same,
as a result of, or in connection with, any Condemnation or threatened
Condemnation.
“Contract of Sale” means any contract for the sale of all or any part of the
Property or any interest therein, hereafter executed by Grantor.
“Deed of Trust” means this Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing, as the same may from time to time be
extended, amended, restated, supplemented or otherwise modified.
“Default” means an event or circumstance which, with the giving of Notice or
lapse of time, or both, would constitute an Event of Default under the
provisions of this Deed of Trust.
“Design and Construction Documents” means, collectively, (a) all contracts for
services to be rendered, work to be performed or materials to be supplied in the
development of the Land or the construction or repair of Improvements, including
all agreements with architects, engineers

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or contractors for such services, work or materials; (b) all plans, drawings and
specifications for the development of the Land or the construction or repair of
Improvements; (c) all permits, licenses, variances and other rights or approvals
issued by or obtained from any Governmental Authority or other Person in
connection with the development of the Land or the construction or repair of
Improvements; and (d) all amendments of or supplements to any of the foregoing.
“Encumbrance” means any Lien, easement, right of way, roadway (public or
private), condominium regime, cooperative housing regime, condition, covenant or
restriction (including any covenants, conditions or restrictions in connection
with any condominium development or cooperative housing development), Lease or
other matter of any nature that would affect title to the Property.
“Environmental Agreement” means the Environmental Indemnification and Release
Agreement of even date herewith executed by Grantor in favor of Administrative
Agent pertaining to the Property, as the same may from time to time be extended,
amended, restated or otherwise modified. The Environmental Agreement is one of
the Loan Documents, but this Deed of Trust does not secure the obligations of
Grantor under the Environmental Agreement.
“Event of Default” means an event or circumstance specified in ‎Article VI and
the continuance of such event or circumstance beyond the applicable grace and/or
cure periods therefor, if any, set forth in Article VI.
“Expenses” means all fees, charges, costs and expenses of any nature whatsoever
incurred at any time and from time to time (whether before or after an Event of
Default) by Beneficiary or Trustee in making, funding, administering or
modifying the Loan, in negotiating or entering into any “workout” of the Loan,
or in exercising or enforcing any rights, powers and remedies provided in this
Deed of Trust or any of the other Loan Documents, including reasonable
attorneys’ fees actually incurred, court costs, receiver’s fees, management fees
and costs incurred in the repair, maintenance and operation of, or taking
possession of, or selling, the Property.
“Governmental Authority” means any governmental or quasi-governmental entity,
including any court, department, commission, board, bureau, agency,
administration, service, district or other instrumentality of any governmental
entity.
“Guarantor” means KBS REIT Properties III, LLC, a Delaware limited liability
company, and its successors and assigns.
“Guaranty” means the Guaranty Agreement of even date herewith executed by
Guarantor for the benefit of Administrative Agent, as the same may from time to
time be extended, amended, restated, supplemented or otherwise modified.
“Improvements” means all buildings, structures and other improvements now or
hereafter existing, erected or placed on the Land, together with any on-site
improvements and off-site improvements in any way used or to be used in
connection with the use, enjoyment, occupancy or operation of the Land.

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“Insurance Proceeds” means the insurance claims under and the proceeds of any
and all policies of insurance covering the Property or any part thereof,
including all returned and unearned premiums with respect to any insurance
relating to such Property, in each case whether now or hereafter existing or
arising.
“Land” means the real property described in Exhibit A attached hereto and made a
part hereof.
“Law” or “Laws” mean all federal, state and local laws, statutes, rules,
ordinances, regulations, codes, licenses, authorizations, decisions,
injunctions, interpretations, orders or decrees of any court or other
Governmental Authority having jurisdiction as may be in effect from time to
time.
“Leases” means all leases, license agreements and other occupancy or use
agreements (whether oral or written), now or hereafter existing, which cover or
relate to the Property or any part thereof, together with all options therefor,
amendments thereto and renewals, modifications and guaranties thereof, including
any cash or security deposited under the Leases to secure performance by the
tenants of their obligations under the Leases, whether such cash or security is
to be held until the expiration of the terms of the Leases or applied to one or
more of the installments of rent coming due thereunder.
“Lender” means each Lender from time to time party to the Loan Agreement.
“Letter of Credit” means any letter of credit issued by Beneficiary for the
account of Grantor or its nominee in connection with the development of the Land
or the construction of the Improvements, together with any and all extensions,
renewals or modifications thereof, substitutions therefor or replacements
thereof.
“Lien” means any mortgage, deed of trust, pledge, security interest, assignment,
judgment, lien or charge of any kind, including any conditional sale or other
title retention agreement, any lease in the nature thereof, and the filing of,
or agreement to give, any financing statement under the Uniform Commercial Code
of any jurisdiction.
“Loan” means the loan from Lenders to Borrower, the repayment obligations in
connection with which are evidenced by the Notes.
“Loan Agreement” means the Loan Agreement of even date herewith among Borrower,
Administrative Agent and Lenders which sets forth, among other things, the terms
and conditions upon which the proceeds of the Loan will be disbursed, as the
same may from time to time be extended, amended, restated, supplemented or
otherwise modified.
“Loan Documents” means this Deed of Trust, the Notes, the Guaranty, the
Environmental Agreement, the Loan Agreement, any Swap Contract, any application
or reimbursement agreement executed in connection with any Letter of Credit, and
any and all other documents which Borrower, Guarantor or any other party or
parties have executed and delivered, or may hereafter execute and deliver, to
evidence, secure or guarantee the Obligations, or any part thereof, as the same
may from time to time be extended, amended, restated, supplemented or otherwise
modified.

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“Note” or “Notes” mean (i) one or more promissory notes made by Borrower and
payable to the order of each of the Lenders in the aggregate face principal
amount of One Billion Ten Million and No/100 Dollars ($1,010,000,000.00), and
each bearing interest as provided in the Loan Agreement, and (ii) all other
promissory notes given in substitution thereof or in modification, supplement,
increase, renewal or extension thereof, in whole or in part, whether one or
more, as any or all of such promissory notes may from time to time be renewed,
extended, supplemented, increased or modified. Additionally, the Notes provide
that the principal balance evidenced thereby shall bear interest at a floating
rate of interest subject to change from time to time.
“Notice” means a notice, request, consent, demand or other communication given
in accordance with the provisions of Section 9.8 of this Deed of Trust.
“Obligations” means all present and future debts, obligations and liabilities of
Borrower to Beneficiary and/or Lenders and/or Trustee arising pursuant to,
and/or on account of, the provisions of this Deed of Trust, the Notes or any of
the other Loan Documents, including the obligations: (a) to pay all principal,
interest, late charges, prepayment premiums (if any) and other amounts due at
any time under the Notes; (b) to pay all Expenses, indemnification payments,
fees and other amounts due at any time under this Deed of Trust or any of the
other Loan Documents, together with interest thereon as herein or therein
provided; (c) to pay and perform all obligations of Borrower under any Swap
Contract; (d) to perform, observe and comply with all of the other terms,
covenants and conditions, expressed or implied, which Grantor is required to
perform, observe or comply with pursuant to this Deed of Trust or any of the
other Loan Documents; and (e) to pay and perform all future advances and other
obligations that Grantor or any successor in ownership of all or part of the
Property may agree to pay and/or perform (whether as principal, surety or
guarantor) for the benefit of Beneficiary, when a writing evidences the parties’
agreement that the advance or obligation be secured by this Deed of Trust.
Additionally, “Obligations” means such additional amounts as Administrative
Agent or Lenders may from time to time advance pursuant to the terms and
conditions of this Deed of Trust and not met by Grantor, with respect to an
obligation secured by a lien or encumbrance prior to the lien of this Deed of
Trust or for the protection of the lien of this Deed of Trust, together with
interest thereon.
“Permitted Encumbrances” means (a) any matters set forth in any policy of title
insurance issued to Beneficiary and insuring Beneficiary’s interest in the
Property which are acceptable to Beneficiary as of the date hereof, (b) the
Liens and interests of this Deed of Trust, and (c) any other Encumbrance
disclosed to Beneficiary in any commitment for title insurance delivered to
Beneficiary or otherwise disclosed in writing to Beneficiary that Beneficiary
shall expressly approve in writing in its sole and absolute discretion.
“Person” means an individual, a corporation, a partnership, a joint venture, a
limited liability company, a trust, an unincorporated association, any
Governmental Authority or any other entity.
“Personalty” means all personal property of any kind or nature whatsoever,
whether tangible or intangible and whether now owned or hereafter acquired, in
which Grantor now has or hereafter acquires an interest and which is used in the
construction of, or is placed upon, or is derived from or used in connection
with the maintenance, use, occupancy or enjoyment of the Property, including
(a) the Accessories; (b) the Accounts; (c) all franchise, license, management or
other agreements with respect to the operation of the Real Property or the
business conducted therein (provided all

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of such agreements shall be subordinate to this Deed of Trust, and neither
Beneficiary nor Lenders shall have any responsibility for the performance of
Grantor’s obligations thereunder) and all general intangibles (including payment
intangibles, trademarks, trade names, goodwill, software and symbols) related to
the Real Property or the operation thereof; (d) all sewer and water taps,
appurtenant water stock or water rights, allocations and agreements for
utilities, bonds, letters of credit, permits, certificates, licenses,
guaranties, warranties, causes of action, judgments, Claims, profits, security
deposits, utility deposits, and all rebates or refunds of fees, Taxes,
assessments, charges or deposits paid to any Governmental Authority related to
the Real Property or the operation thereof; (e) all of Grantor’s rights and
interests under all Swap Contracts, including all rights to the payment of money
from Beneficiary under any Swap Contract and all accounts, deposit accounts and
general intangibles, including payment intangibles, described in any Swap
Contract; (f) all insurance policies held by Grantor with respect to the
Property or Grantor’s operation thereof; and (g) all money, instruments and
documents (whether tangible or electronic) arising from or by virtue of any
transactions related to the Property, and all deposits and deposit accounts of
Grantor with Beneficiary related to the Property, including any such deposit
account from which Grantor may from time to time authorize Beneficiary to debit
and/or credit payments due with respect to the Loan; together with all Additions
to and Proceeds of all of the foregoing.
“Proceeds,” when used with respect to any of the Property, means all proceeds of
such Property, including all Insurance Proceeds and all other proceeds within
the meaning of that term as defined in the Uniform Commercial Code of the State.
“Property” means the Real Property and the Personalty and all other rights,
interests and benefits of every kind and character which Grantor now has or
hereafter acquires in, to or for the benefit of the Real Property and/or the
Personalty and all other property and rights used or useful in connection
therewith, including all Leases, all Rents, all Condemnation Awards, all
Proceeds, and all of Grantor’s right, title and interest in and to all Design
and Construction Documents, all Contracts of Sale and all Refinancing
Commitments.
“Property Assessments” means all Taxes, payments in lieu of taxes, water rents,
sewer rents, assessments, condominium and owner’s association assessments and
charges, maintenance charges and other governmental or municipal or public or
private dues, charges and levies and any Liens (including federal tax liens)
which are or may be levied, imposed or assessed upon the Property or any part
thereof, or upon any Leases or any Rents, whether levied directly or indirectly
or as excise taxes, as income taxes, or otherwise.
“Real Property” means the Land and Improvements, together with (a) all estates,
title interests, title reversion rights, remainders, increases, issues, profits,
rights-of-way or uses, additions, accretions, servitudes, strips, gaps, gores,
liberties, privileges, water rights, water courses, alleys, passages, ways,
vaults, licenses, tenements, franchises, hereditaments, appurtenances,
easements, rights of way, rights of ingress or egress, parking rights, timber,
crops, mineral interests and other rights, now or hereafter owned by Grantor and
belonging or appertaining to the Land or Improvements; (b) all Claims whatsoever
of Grantor with respect to the Land or Improvements, either in law or in equity,
in possession or in expectancy; (c) all estate, right, title and interest of
Grantor in and to all streets, roads and public places, opened or proposed, now
or hereafter adjoining or appertaining to the Land or Improvements; and (d) all
options to purchase the Land or

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Improvements, or any portion thereof or interest therein, and any greater estate
in the Land or Improvements, and all Additions to and Proceeds of the foregoing.
“Refinancing Commitment” means any commitment from or other agreement with any
Person providing for the financing of the Property, some or all of the proceeds
of which are intended to be used for the repayment of all or a portion of the
Loan.
“Rents” means all of the rents, royalties, issues, profits, revenues, earnings,
income and other benefits of the Property, or arising from the use or enjoyment
of the Property, including all such amounts paid under or arising from any of
the Leases and all fees, charges, accounts or other payments for the use or
occupancy of rooms or other public facilities within the Real Property.
“State” means the state in which the Land is located.
“Swap Contract” means any agreement, whether or not in writing, relating to any
Swap Transaction, including, unless the context otherwise clearly requires, any
form of master agreement (the “Master Agreement”) published by the International
Swaps and Derivatives Association, Inc., or any other master agreement, entered
into on or any time after the date hereof, between Swap Counterparty and
Borrower, together with any related schedule and confirmation, as amended,
supplemented, superseded or replaced from time to time.
“Swap Counterparty” means a Lender or an Affiliate of a Lender, in its capacity
as counterparty under any Swap Contract.
“Swap Transaction” means any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap or option, bond option, note or bill option, interest rate option,
forward foreign exchange transaction, cap transaction, collar transaction, floor
transaction, currency swap transaction, cross-currency rate swap transaction,
swap option, currency option, credit swap or default transaction, T-lock, or any
other similar transaction (including any option to enter into the foregoing) or
any combination of the foregoing, entered into prior to, on or anytime after the
date hereof between Swap Counterparty and Borrower so long as a writing, such as
a Swap Contract, evidences the parties’ intent that such obligations shall be
secured by this Deed of Trust in connection with the Loan.
“Taxes” means all taxes and assessments, whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, which at any time may be assessed,
levied, confirmed or imposed by any Governmental Authority or any community
facilities or other private district on Grantor or on any of its properties or
assets or any part thereof or in respect of any of its franchises, businesses,
income or profits.
“Transfer” means any direct or indirect sale, assignment, conveyance or
transfer, including any Contract of Sale and any other contract or agreement to
sell, assign, convey or transfer, whether made voluntarily or by operation of
Law or otherwise, and whether made with or without consideration.
“Trustee” means the Trustee identified in the introductory paragraph of this
Deed of Trust or its successor in trust who may be acting under and pursuant to
this Deed of Trust from time to time.

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Article II
Granting Clauses; Condition of Grant.
Section 2.1    Conveyances and Security Interests.
In order to secure the prompt payment and performance of the Obligations,
Grantor (a) grants, bargains, sells and conveys the Real Property unto Trustee,
in trust for the benefit of Beneficiary, with power of sale, to have and to hold
the Real Property unto Trustee in fee simple forever; provided that Grantor may
retain possession of the Real Property until the occurrence of an Event of
Default; (b) hereby irrevocably and unconditionally grants, conveys, transfers
and assigns to Trustee, in trust, for the benefit of Beneficiary, with power of
sale and right of entry and possession, all estate, right, title and interest
that Grantor now has or may later acquire in and to the Real Property; (c)
grants to Beneficiary, for the ratable benefit of Lenders, a security interest
in the Personalty; (d) assigns to Beneficiary, and grants to Beneficiary, for
the ratable benefit of Lenders, a security interest in, all Condemnation Awards
and all Insurance Proceeds; and (e) assigns to Beneficiary, and grants to
Beneficiary, for the ratable benefit of Lenders, a security interest in, all of
Grantor’s right, title and interest in, but not any of Grantor’s obligations or
liabilities under, all Design and Construction Documents, all Contracts of Sale
and all Refinancing Commitments. All Persons who may have or acquire an interest
in all or any part of the Property will be deemed to have notice of, and will be
bound by, the terms of the Obligations and each other agreement or instrument
made or entered into in connection with each of the Obligations. Such terms
include any provisions in the Note, the Loan Agreement or any Swap Contract
which provide that the interest rate on one or more of the Obligations may vary
from time to time.
Section 2.2    Assignment of Leases and Rents.
In consideration of the making of the Loan by Beneficiary to Borrower, the sum
of Ten and No/100 Dollars ($10.00) and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Grantor absolutely
and unconditionally assigns the Leases and Rents to Beneficiary, for the ratable
benefit of Lenders. This assignment is, and is intended to be, an unconditional,
absolute and present assignment from Grantor to Beneficiary of all of Grantor’s
right, title and interest in and to the Leases and the Rents and not an
assignment in the nature of a pledge of the Leases and Rents or the mere grant
of a security interest therein. So long as no Event of Default shall exist,
however, Grantor shall have a license (which license shall terminate
automatically and without notice upon the occurrence, and during the
continuance, of an Event of Default) to collect, but not prior to accrual, all
Rents. Grantor agrees to collect and hold all Rents in trust for Beneficiary and
to use the Rents for the payment of the cost of operating and maintaining the
Property and for the payment of the other Obligations before using the Rents for
any other purpose.
Section 2.3    Security Agreement, Fixture Filing and Financing Statement.
This Deed of Trust creates a security interest in the Personalty, and, to the
extent the Personalty is not real property, this Deed of Trust constitutes a
security agreement from Grantor to Beneficiary, for the ratable benefit of
Lenders, under the Uniform Commercial Code of the State. In addition to all of
its other rights under this Deed of Trust and otherwise, Beneficiary shall have
all of the rights of a secured party under the Uniform Commercial Code of the
State, as in effect

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from time to time, or under the Uniform Commercial Code in force from time to
time in any other state to the extent the same is applicable Law. This Deed of
Trust shall be effective as a financing statement filed as a fixture filing with
respect to all fixtures included within the Property and is to be filed for
record in the real estate records of each county where any part of the Property
(including such fixtures) is situated. This Deed of Trust shall also be
effective as a financing statement with respect to any other Property as to
which a security interest may be perfected by the filing of a financing
statement and may be filed as such in any appropriate filing or recording
office. The respective mailing addresses of Grantor and Beneficiary are set
forth in the opening paragraph of this Deed of Trust. A carbon, photographic or
other reproduction of this Deed of Trust or any other financing statement
relating to this Deed of Trust shall be sufficient as a financing statement for
any of the purposes referred to in this Section. Grantor hereby irrevocably
authorizes Beneficiary at any time and from time to time to file any initial
financing statements, amendments thereto and continuation statements as
authorized by applicable Law, reasonably required by Beneficiary to establish or
maintain the validity, perfection and priority of the security interests granted
in this Deed of Trust. The foregoing authorization includes Grantor’s
irrevocable authorization for Beneficiary at any time and from time to time to
file any initial financing statements and amendments thereto that indicate the
Personalty (a) as “all assets” of Grantor or words of similar effect, regardless
of whether any particular asset comprised in the Personalty falls within the
scope of the Uniform Commercial Code of the State or the jurisdiction where the
initial financing statement or amendment is filed, or (b) as being of an equal
or lesser scope or with greater detail.
Section 2.4    Release of Deed of Trust and Termination of Assignments and
Financing Statements.
If and when Borrower has paid and performed all of the Obligations, and no
further advances are to be made under the Loan Agreement, Trustee, upon request
by Beneficiary (which request shall be promptly made by Beneficiary at Grantor’s
request), will promptly provide a release of the Property from the lien of this
Deed of Trust and termination statements for filed financing statements, if any,
to Grantor. Grantor shall be responsible for the recordation of such release and
the payment of any recording and filing costs. Upon the recording of such
release and the filing of such termination statements, the absolute assignments
set forth in Section 2.2 shall automatically terminate and become null and void.
Article III
Representations and Warranties.
Grantor makes the following representations and warranties to Beneficiary and
each of the Lenders:
Section 3.1    Title to Real Property.
To Grantor’s knowledge and belief, Grantor (a) owns fee simple title to the Real
Property, (b) owns all of the beneficial and equitable interest in and to the
Real Property, and (c) is lawfully seized and possessed of the Real Property. To
Grantor’s knowledge and belief, Grantor has the right and authority to convey
the Real Property and does hereby convey the Real Property in accordance with
the terms of this Deed of Trust with general warranty. To Grantor’s knowledge

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and belief, the Real Property is subject to no Encumbrances other than the
Permitted Encumbrances and Taxes, not yet delinquent.
Section 3.2    Title to Other Property.
To Grantor’s knowledge and belief, Grantor has good title to the Personalty, and
the Personalty is not subject to any Encumbrance other than the Permitted
Encumbrances. To Grantor’s knowledge and belief, none of the Leases, Rents,
Design and Construction Documents, Contracts of Sale or Refinancing Commitments
are subject to any Encumbrance other than the Permitted Encumbrances.
Section 3.3    Property Assessments.
The fee portion of the Real Property is assessed for purposes of Property
Assessments as a separate and distinct parcel from any other property, such that
such fee portion of the Real Property is not subject to the Lien of any Property
Assessments levied or assessed against any property other than the Real
Property.
Section 3.4    Independence of the Real Property.
Except as disclosed in the underlying documents referenced in the title
commitment relating to the Property delivered to Administrative Agent in
connection with the making of the Loan, no buildings or other improvements on
property not covered by this Deed of Trust rely on the Real Property or any
interest therein to fulfill any requirement of any Governmental Authority for
the existence of such property, building or improvements; and, to Grantor’s
knowledge and belief, none of the Real Property relies, or will rely, on any
property not covered by this Deed of Trust or any interest therein to fulfill
any requirement of any Governmental Authority. To Grantor’s knowledge and
belief, the Real Property has been properly subdivided from all other property
in accordance with the requirements of any applicable Governmental Authorities.
Section 3.5    Existing Improvements.
To Grantor’s knowledge and belief, the existing Improvements, if any, were
constructed, and are being used and maintained, in accordance with all
applicable Laws, including zoning Laws.
Section 3.6    Leases and Tenants.
To Grantor’s knowledge and belief, and except as expressly disclosed to
Administrative Agent in writing, the Leases are valid and are in full force and
effect, and Grantor is not in default under any of the terms thereof. Except as
expressly permitted in the Loan Agreement, and except as expressly disclosed to
Administrative Agent in writing, Grantor has not accepted any Rents more than
thirty (30) days in advance of the time the same became due under the Leases and
has not forgiven, compromised or discounted any of the Rents. Grantor has title
to and the right to assign the Leases and Rents to Beneficiary, and no other
assignment of the Leases or Rents has been granted. To the best of Grantor’s
knowledge and belief and except as disclosed to Administrative Agent in writing,
no tenant or tenants occupying, individually or in the aggregate, more than five
percent (5%) of the net rentable area of the Improvements are in default under
their Lease(s) or are the subject of any bankruptcy, insolvency or similar
proceeding.

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Article IV
Affirmative Covenants.
Section 4.1    Obligations.
Grantor agrees to promptly pay and perform all of the Obligations in accordance
with the terms of the Loan Documents, time being of the essence in each case.
Section 4.2    Property Assessments; Documentary Taxes.
Grantor (a) will promptly pay in full and discharge all Property Assessments,
and (b) will furnish to Beneficiary, upon written demand, the receipted bills
for such Property Assessments prior to the day upon which the same shall become
delinquent. Property Assessments shall be considered delinquent as of the first
day any interest or penalty commences to accrue thereon. Except as may be
permitted pursuant to the provisions of Section 4.3 below, Grantor will promptly
pay all stamp, documentary, recordation, transfer and intangible taxes and all
other taxes that may from time to time be required to be paid with respect to
the Loan, the Note, this Deed of Trust or any of the other Loan Documents.
Section 4.3    Permitted Contests.
Grantor shall not be required to pay any of the Property Assessments, or to
comply with any Law, so long as Grantor shall in good faith, and at its cost and
expense, contest the amount or validity thereof, or take other appropriate
action with respect thereto, in good faith and in an appropriate manner or by
appropriate proceedings; provided that (a) such proceedings operate to prevent
the collection of, or other realization upon, such Property Assessments or
enforcement of the Law so contested, (b) there will be no sale, forfeiture or
loss of the Property during the contest, (c) neither Beneficiary, any Lenders
nor Trustee is subjected to any Claim as a result of such contest, and
(d) Grantor provides assurances satisfactory to Beneficiary (including the
establishment of an appropriate reserve account with Beneficiary) of its ability
to pay such Property Assessments or comply with such Law in the event Grantor is
unsuccessful in its contest. Each such contest shall be promptly prosecuted to
final conclusion or settlement, and Grantor shall indemnify and save
Beneficiary, each Lender and Trustee harmless against all Claims in connection
therewith. WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH
INDEMNIFIED PERSON WITH RESPECT TO MATTERS WHICH IN WHOLE OR IN PART ARE CAUSED
BY OR ARISE OUT OF, OR ARE CLAIMED TO BE CAUSED BY OR ARISE OUT OF, THE
NEGLIGENCE (WHETHER SOLE, COMPARATIVE OR CONTRIBUTORY) OR STRICT LIABILITY OF
SUCH (AND/OR ANY OTHER) INDEMNIFIED PERSON. HOWEVER, SUCH INDEMNITIES SHALL NOT
APPLY TO A PARTICULAR INDEMNIFIED PERSON TO THE EXTENT THAT THE SUBJECT OF THE
INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THAT INDEMNIFIED PERSON. Promptly after the settlement or
conclusion of such contest or action, Grantor shall comply with such Law and/or
pay and discharge the amounts which shall be levied, assessed or imposed or
determined to be payable, together with all penalties, fines, interests, costs
and expenses in connection therewith.

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Section 4.4    Compliance with Laws.
Grantor will comply with and not knowingly violate, and cause to be complied
with and not violated, all present and future Laws applicable to the Property
and its use and operation.
Section 4.5    Maintenance and Repair of the Property.
Grantor, at Grantor’s sole expense, will (a) keep and maintain Improvements and
Accessories in good condition, working order and repair, and (b) make all
necessary or appropriate repairs and Additions to Improvements and Accessories,
so that each part of the Improvements and all of the Accessories shall at all
times be in good condition and fit and proper for the respective purposes for
which they were originally intended, erected, or installed.
Section 4.6    Additions to Security.
All right, title and interest of Grantor in and to all Improvements and
Additions hereafter constructed or placed on the Property and in and to any
Accessories hereafter acquired shall, without any further deed of trust,
conveyance, assignment or other act by Grantor, become subject to the Lien of
this Deed of Trust as fully and completely, and with the same effect, as though
now owned by Grantor and specifically described in the granting clauses hereof.
Grantor agrees, however, to execute and deliver to Trustee and/or Beneficiary
such further documents as may be reasonably required by the terms of the Loan
Agreement and the other Loan Documents.
Section 4.7    Subrogation.
To the extent permitted by Law, Beneficiary shall be subrogated, notwithstanding
its release of record, to any Lien now or hereafter existing on the Property to
the extent that such Lien is paid or discharged by Beneficiary or any Lender
whether or not from the proceeds of the Loan. This Section shall not be deemed
or construed, however, to obligate Beneficiary or any Lender to pay or discharge
any Lien.
Section 4.8    Leases.
(a)    Except as expressly permitted in the Loan Agreement, Grantor shall not
enter into any Lease with respect to all or any portion of the Property without
the prior written consent of Beneficiary as provided under the terms of the Loan
Agreement.
(b)    Neither Trustee, Beneficiary nor any Lender shall be obligated to perform
or discharge any obligation of Grantor under any Lease. The assignment of Leases
provided for in this Deed of Trust in no manner places on Beneficiary, any
Lender or Trustee any responsibility for (i) the control, care, management or
repair of the Property, (ii) the carrying out of any of the terms and conditions
of the Leases, (iii) any waste committed on the Property, or (iv) any dangerous
or defective condition on the Property (whether known or unknown).
(c)    No approval of any Lease by Beneficiary shall be for any purpose other
than to protect Beneficiary’s security and to preserve Beneficiary’s rights
under the Loan Documents, and no such approval shall result in a waiver of a
Default or Event of Default.

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Article V
Negative Covenants.
Section 5.1    Encumbrances.
Except as expressly permitted in this Deed of Trust, Grantor will not permit any
of the Property to become subject to any Encumbrance other than the Permitted
Encumbrances. Within thirty (30) days after the filing of any mechanic’s lien or
other Lien or Encumbrance against the Property, Grantor will promptly discharge
the same by payment or filing a bond or otherwise as permitted by Law. So long
as Beneficiary’s security has been protected by the filing of a bond or
otherwise in a manner satisfactory to Beneficiary in its sole and absolute
discretion, Grantor shall have the right to contest in good faith any Claim,
Lien or Encumbrance (and shall not be deemed in default hereunder), provided
that Grantor does so diligently and without prejudice to Beneficiary or delay in
completing construction of the Improvements. Grantor shall give Beneficiary
Notice of any default under any Lien and Notice of any foreclosure or threat of
foreclosure with respect to any of the Property.
Section 5.2    Transfer of the Property.
With the exception of Permitted Transfers (as defined in the Loan Agreement),
Grantor will not Transfer, or contract to Transfer, all or any part of the
Property or any legal or beneficial interest therein (except for certain
Transfers of the Accessories and other Transfers expressly permitted in this
Deed of Trust).
Section 5.3    Removal, Demolition or Alteration of Accessories and
Improvements.
Except to the extent permitted by the following sentence, no Improvements or
Accessories shall be removed, demolished or materially altered without the prior
written consent of Beneficiary and the Required Lenders, which consent shall not
be unreasonably withheld, conditioned or delayed. Grantor may remove and dispose
of, free from the Lien of this Deed of Trust, such Accessories as from time to
time become worn out or obsolete, provided that, either (a) at the time of, or
prior to, such removal, any such Accessories are replaced with other Accessories
which are free from Liens other than Permitted Encumbrances and have a value at
least equal to that of the replaced Accessories (and by such removal and
replacement Grantor shall be deemed to have subjected such Accessories to the
Lien of this Deed of Trust), or (b) so long as a prepayment may be made without
the imposition of any premium pursuant to the Note, such Accessories are sold at
fair market value for cash and the net cash proceeds received from such
disposition are paid over promptly to Beneficiary to be applied to the
prepayment of the principal of the Loan. Notwithstanding the foregoing, nothing
herein shall limit Grantor’s right to undertake any tenant improvements for
tenants under their Leases (approved or deemed approved by Beneficiary or
otherwise existing as of the date of this Deed of Trust), tenant improvements
ongoing as of the date hereof, or any capital improvements to the Property.

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Section 5.4    Additional Improvements.
Grantor will not construct any Improvements other than those presently on the
Land and those described in the Loan Agreement without the prior written consent
of Beneficiary and the Required Lenders, which consent shall not be unreasonably
withheld, conditioned or delayed. Grantor will complete and pay for, prior to
delinquency, any Improvements which Grantor is permitted to construct on the
Land. Grantor will construct and erect any permitted Improvements (a) strictly
in accordance with all applicable Laws and any private restrictive covenants,
(b) entirely on lots or parcels of the Land, (c) so as not to encroach upon any
easement or right-of-way or upon the land of others, and (d) wholly within any
building restriction and setback lines applicable to the Land. Notwithstanding
the foregoing, nothing herein shall limit Grantor’s right to undertake any
tenant improvements for tenants under their Leases (approved or deemed approved
by Beneficiary), or any capital improvements to the Property.
Section 5.5    Restrictive Covenants, Zoning, etc.
Without the prior written consent of Beneficiary and the Required Lenders, which
consent shall not be unreasonably withheld, conditioned or delayed, Grantor will
not initiate, join in, or consent to any change in, any restrictive covenant,
easement, zoning ordinance, or other public or private restrictions limiting or
defining the uses which may be made of the Property. Except as expressly
permitted in this Deed of Trust, Grantor (a) will promptly perform and observe,
and use commercially reasonable efforts to cause to be performed and observed,
all of the terms and conditions of all agreements affecting the Property, and
(b) will do or cause to be done all things reasonably necessary to preserve
intact and unimpaired any and all easements, appurtenances and other interests
and rights in favor of, or constituting any portion of, the Property.
Article VI
Events of Default.
The occurrence or happening, from time to time, of any one or more of the
following shall constitute an Event of Default under this Deed of Trust:
Section 6.1    Payment Obligations.
Borrower fails to pay any of the Obligations within five (5) business days after
same becomes due, whether on the scheduled due date or upon acceleration,
maturity or otherwise.
Section 6.2    Transfers.
Grantor fails to comply with the provisions of Section 5.2 above.
Section 6.3    Other Obligations.
Grantor fails to promptly perform or comply with any of the Obligations set
forth in this Deed of Trust (other than those expressly described in other
Sections of this Article VI), and such failure continues uncured for a period of
thirty (30) days after Notice from Beneficiary to Grantor, unless (a) such
failure, by its nature, is not capable of being cured within such period, and
(b) within such period, Grantor commences to cure such failure and thereafter
diligently prosecutes the cure

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thereof, and (c) Grantor causes such failure to be cured no later than ninety
(90) days after the date of such Notice from Beneficiary.
Section 6.4    Event of Default Under Other Loan Documents.
An Event of Default (as defined therein) occurs under the Notes or the Loan
Agreement, or Borrower or Guarantor fails to promptly pay, perform, observe or
comply with any obligation or agreement contained in any of the other Loan
Documents (within any applicable grace or cure period) and in accordance with
the terms of the applicable Loan Documents, or if no such grace or cure period
is specified, such failure continues uncured for a period of thirty (30) days
after Notice from Beneficiary to Grantor, unless (a) such failure, by its
nature, is not capable of being cured within such period, and (b) within such
period, Grantor commences to cure such failure and thereafter diligently
prosecutes the cure thereof, and (c) Grantor causes such failure to be cured no
later than ninety (90) days after the date of such Notice from Beneficiary.
Section 6.5    Default Under Other Lien Documents.
A default occurs (and is not cured within any applicable notice and/or cure
period) under any other mortgage, deed of trust or security agreement covering
the Property, including any Permitted Encumbrances.
Section 6.6    Execution; Attachment.
Any execution or attachment is levied against any of the Property, and such
execution or attachment is not set aside, discharged or stayed within thirty
(30) days after the same is levied.
Article VII
Rights and Remedies.
Upon the happening, and during the continuance of any Event of Default,
Beneficiary, or Trustee at the direction of Beneficiary, shall have the right,
in addition to any other rights or remedies available to Beneficiary under any
of the Loan Documents or applicable Law, to exercise any one or more of the
following rights, powers or remedies:
Section 7.1    Acceleration.
Beneficiary may accelerate all Obligations under the Loan Documents whereupon
such Obligations shall become immediately due and payable, without notice of
default, notice of acceleration or intention to accelerate, presentment or
demand for payment, protest, notice of protest, notice of nonpayment or
dishonor, or notices or demands of any kind or character (all of which are
hereby waived by Grantor).
Section 7.2    Appraisal; Inspection.
Following the occurrence, and during the continuance, of an Event of Default,
Beneficiary may pay such sums as may be necessary to obtain a current appraisal
of the Real Property and/or other Property, to inspect and test the Real
Property and/or other Property, to pay any tax, assessment, insurance premium,
lien, encumbrance or other charge against the Property, to obtain a title report

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and/or Trustee’s sale guaranty, all such expenditures to be paid by Grantor on
demand and added to the Obligations.
Section 7.3    Foreclosure; Power of Sale.
Trustee, if and as directed by Beneficiary, may take possession of and sell the
Property, or any part thereof requested by Beneficiary to be sold, and in
connection therewith Grantor hereby (a) assents to the passage of a decree for
the sale of the Property by the equity court having jurisdiction, and (b)
authorizes and empowers Trustee to take possession of and sell (or in case of
the default of any purchaser to resell) the Property, or any part thereof, all
in accordance with the Laws or rules of court relating to deeds of trust,
including any amendments thereof, or additions thereto. In connection with any
foreclosure, Beneficiary and/or Trustee may (a) procure such title reports,
surveys, tax histories and appraisals as they deem reasonably necessary, and (b)
make such repairs and additions to the Property as they deem advisable, all of
which shall constitute Expenses. In case of any sale under this Deed of Trust,
by virtue of judicial proceedings or otherwise, the Property may be sold as an
entirety or in parcels, by one sale or by several sales, as may be deemed by
Trustee to be appropriate and without regard to any right of Grantor or any
other Person to the marshalling of assets. Any sale hereunder may be made at
public auction, at such time or times, at such place or places, and upon such
terms and conditions and after such previous public notice as Trustee shall deem
appropriate and advantageous and as required by Law. Upon the terms of such sale
being complied with, Trustee shall convey to, and at the cost of, the purchaser
or purchasers the interest of Grantor in the Property so sold, free and
discharged of and from all estate, title or interest of Grantor, at law or in
equity, such purchaser or purchasers being hereby discharged from all liability
to see to the application of the purchase money. The proceeds of such sale or
sales under this Deed of Trust, whether under the assent to a decree, the power
of sale, or by equitable foreclosure, shall be held by Trustee and applied as
follows: First, to pay (a) all Expenses incurred in connection with such sale or
in preparing the Property for such sale including, among other things, a counsel
fee of $5,000 to the attorneys representing Beneficiary and Trustee for
conducting the proceedings if without contest, but if legal services be rendered
to Trustee and Beneficiary in connection with any contested matter in the
proceedings, then such other counsel fees shall be allowed and paid out of the
proceeds of such sale or sales as the court having jurisdiction may deem proper,
and (b) a trustees' commission equal to the commission allowed trustees for
making sales of property under decrees of the equity court having jurisdiction;
Second, to pay all of the Obligations and all interest then due and accrued
thereon, which shall include interest through the date of ratification of the
auditor's account; and Lastly, to pay the surplus, if any, to Grantor or any
Person entitled thereto upon surrender and delivery to the purchaser or
purchasers of the Property, and less the Expenses, if any, of obtaining
possession. Immediately upon the first delivery or publication of any
advertisement or notice of sale, there shall become due and owing by Grantor all
Expenses incident to any foreclosure proceedings under this Deed of Trust and a
commission on the total amount of the Obligations then due equal to one-half of
the percentage allowed as commission to trustees making sales under orders or
decrees of the equity court having jurisdiction, and no Person shall be required
to receive only the aggregate amount of the Obligations to the date of payment
unless the same is accompanied by a tender of such commission.

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Section 7.4    Judicial Action.
Beneficiary shall have the right from time to time to sue Grantor for any sums
(whether interest, damages for failure to pay principal or any installments
thereof, taxes, or any other sums required to be paid under the terms of this
Deed of Trust, as the same become due), without regard to whether or not any of
the other Obligations shall be due, and without prejudice to the right of
Beneficiary thereafter to enforce any appropriate remedy against Grantor,
including an action of foreclosure or an action for specific performance, for a
Default or Event of Default existing at the time such earlier action was
commenced.
Section 7.5    Collection of Rents.
Upon the occurrence, and during the continuance, of an Event of Default, the
license granted to Grantor to collect the Rents shall be automatically and
immediately revoked, without further notice to or demand upon Grantor.
Beneficiary may, but shall not be obligated to perform any or all obligations of
the landlord under any or all of the Leases, and Beneficiary may, but shall not
be obligated to, exercise and enforce any or all of Grantor’s rights under the
Leases. Without limitation to the generality of the foregoing, Beneficiary may,
upon the occurrence, and during the continuance, of an Event of Default, notify
the tenants under the Leases that all Rents are to be paid to Beneficiary, and
following such notice all Rents shall be paid directly to Beneficiary and not to
Grantor or any other Person other than as directed by Beneficiary, it being
understood that a demand by Beneficiary on any tenant under the Leases for the
payment of Rent shall be sufficient to warrant payment by such tenant of Rent to
Beneficiary without the necessity of further consent by Grantor. Grantor hereby
irrevocably authorizes and directs the tenants under the Leases to pay all Rents
to Beneficiary instead of to Grantor, upon receipt of written notice from
Beneficiary, without the necessity of any inquiry of Grantor and without the
necessity of determining the existence or non-existence of an Event of Default.
Grantor hereby appoints Beneficiary as Grantor’s attorney-in-fact with full
power of substitution, which appointment shall take effect upon the occurrence
of an Event of Default and is coupled with an interest and is irrevocable prior
to the full and final payment and performance of the Obligations, in Grantor’s
name or in Beneficiary’s name: (a) to endorse all checks and other instruments
received in payment of Rents and to deposit the same in any account selected by
Beneficiary; (b) to give receipts and releases in relation thereto; (c) to
institute, prosecute and/or settle actions for the recovery of Rents; (d) to
modify the terms of any Leases including terms relating to the Rents payable
thereunder; (e) to cancel any Leases; (f) to enter into new Leases; and (g) to
do all other acts and things with respect to the Leases and Rents which
Beneficiary may deem necessary or desirable to protect the security for the
Obligations. Any Rents received shall be applied first to pay all Expenses and
next in reduction of the other Obligations. Grantor shall pay, on demand, to
Beneficiary, the amount of any deficiency between (i) the Rents received by
Beneficiary, and (ii) all Expenses incurred together with interest thereon as
provided in the Loan Agreement and the other Loan Documents.
Section 7.6    Taking Possession or Control of the Property.
Upon the occurrence, and during the continuance, of an Event of Default, as a
matter of right without bond and without regard to the adequacy of the security,
and to the extent permitted by Law without notice to Grantor, Beneficiary shall
be entitled, upon application to a court of competent jurisdiction, to the
immediate appointment of a receiver for all or any part of the Property

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and the Rents, whether such receivership may be incidental to a proposed sale of
the Property or otherwise, and Grantor hereby consents to the appointment of
such a receiver and agrees that such receiver shall have all of the rights and
powers granted to Beneficiary pursuant to ‎Section 7.5. In addition, upon the
occurrence, and during the continuance, of an Event of Default to the extent
permitted by Law, and with or without the appointment of a receiver, or an
application therefor, Beneficiary may (a) enter upon, and take possession of
(and Grantor shall surrender actual possession of), the Property or any part
thereof, without notice to Grantor and without bringing any legal action or
proceeding, or, if necessary by force, legal proceedings, ejectment or
otherwise, and (b) remove and exclude Grantor and its agents and employees
therefrom.
Section 7.7    Management of the Property.
Upon obtaining possession of the Property or upon the appointment of a receiver
as described in ‎Section 7.6, Beneficiary, Trustee or the receiver, as the case
may be, may, at its sole option, (a) make all necessary or proper repairs and
Additions to or upon the Property, (b) operate, maintain, control, make secure
and preserve the Property, and (c) complete the construction of any unfinished
Improvements on the Property and, in connection therewith, continue any and all
outstanding contracts for the erection and completion of such Improvements and
make and enter into any further contracts which may be necessary, either in
their or its own name or in the name of Grantor (the costs of completing such
Improvements shall be Expenses secured by this Deed of Trust and shall accrue
interest as provided in the Loan Agreement and the other Loan Documents).
Beneficiary, Trustee or such receiver shall be under no liability for, or by
reason of, any such taking of possession, entry, holding, removal, maintaining,
operation or management, except for gross negligence or willful misconduct. The
exercise of the remedies provided in this Section shall not cure or waive any
Event of Default, and the enforcement of such remedies, once commenced, shall
continue for so long as Beneficiary shall elect, notwithstanding the fact that
the exercise of such remedies may have, for a time, cured the original Event of
Default.
Section 7.8    Uniform Commercial Code.
Beneficiary may proceed under the Uniform Commercial Code as to all or any part
of the Personalty, and in conjunction therewith may exercise all of the rights,
remedies and powers of a secured creditor under the Uniform Commercial Code.
Upon the occurrence of any Event of Default, Grantor shall assemble all of the
Accessories and make the same available within the Improvements. Any
notification required by the Uniform Commercial Code shall be deemed reasonably
and properly given if sent in accordance with the Notice provisions of this Deed
of Trust at least ten (10) days before any sale or other disposition of the
Personalty. Disposition of the Personalty shall be deemed commercially
reasonable if made pursuant to a public sale advertised at least twice in a
newspaper of general circulation in the community where the Property is located.
It shall be deemed commercially reasonable for the Trustee to dispose of the
Personalty without giving any warranties as to the Personalty and specifically
disclaiming all disposition warranties.
Section 7.9    Application of Proceeds.
Unless otherwise required by applicable Law, all proceeds from the sale of the
Property or any part thereof pursuant to the rights and remedies set forth in
this Article VII and any other proceeds received by Beneficiary from the
exercise of any of its other rights and remedies hereunder

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or under the other Loan Documents shall be applied first to pay all Expenses and
next in reduction of the other Obligations, in such manner and order as
Beneficiary may elect.
Section 7.10    Other Remedies.
Beneficiary shall have the right from time to time to protect, exercise and
enforce any legal or equitable remedy against Grantor provided under the Loan
Documents or by applicable Laws.
Article VIII
Trustee.
Section 8.1    Liability of Trustee.
Trustee shall have no liability or responsibility for, and make no warranties in
connection with, the validity or enforceability of any of the Loan Documents or
the description, value or status of title to the Property. Trustee shall be
protected in acting upon any notice, request, consent, demand, statement, note
or other paper or document believed by Trustee to be genuine and to have been
signed by the party or parties purporting to sign the same. Trustee shall not be
liable for any error of judgment, nor for any act done or step taken or omitted,
nor for any mistakes of Law or fact, nor for anything which Trustee may do or
refrain from doing in good faith, nor generally shall Trustee have any
accountability hereunder except for willful misconduct or gross negligence.
WITHOUT LIMITATION, THE FOREGOING LIMITATIONS OF LIABILITY SHALL APPLY TO
TRUSTEE WITH RESPECT TO MATTERS WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE
OUT OF, OR ARE CLAIMED TO BE CAUSED BY OR ARISE OUT OF, THE NEGLIGENCE (WHETHER
SOLE, COMPARATIVE OR CONTRIBUTORY) OR STRICT LIABILITY OF TRUSTEE. HOWEVER, SUCH
INDEMNITIES SHALL NOT APPLY TO TRUSTEE TO THE EXTENT THAT THE SUBJECT OF THE
INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF TRUSTEE. The powers and duties of Trustee hereunder may be
exercised through such attorneys, agents or servants as Trustee may in good
faith and reasonably appoint, and Trustee shall have no liability or
responsibility for any act, failure to act, negligence or willful conduct of
such attorney, agent or servant, so long as the selection was made with
reasonable care. In addition, Trustee may consult with legal counsel selected by
Trustee, and Trustee shall have no liability or responsibility by reason of any
act or failure to act in accordance with the opinions of such counsel. To the
extent permitted by applicable Laws, Trustee may act hereunder and may sell or
otherwise dispose of the Property or any part thereof as herein provided,
although Trustee has been, may now be or may hereafter be, an attorney, officer,
agent or employee of Beneficiary, in respect of any matter or business
whatsoever. Trustee, however, shall have no obligation to sell all or any part
of the Property following an Event of Default or to take any other action
authorized to be taken by Trustee hereunder except upon the demand of
Beneficiary.
Section 8.2    Indemnification of Trustee.
Grantor agrees to indemnify Trustee and to hold Trustee harmless from and
against any and all Claims and Expenses directly or indirectly arising out of or
resulting from any transaction, act, omission, event or circumstance in any way
connected with the Property or the Loan, including but

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not limited to any Claim arising out of or resulting from any assertion or
allegation that Trustee is liable for any act or omission of Grantor or any
other Person in connection with the ownership, development, financing, operation
or sale of the Property; provided, however, that Grantor shall not be obligated
to indemnify Trustee with respect to any Claim arising solely from the gross
negligence or willful misconduct of Trustee or Beneficiary. WITHOUT LIMITATION,
THE FOREGOING INDEMNITIES SHALL APPLY TO TRUSTEE WITH RESPECT TO MATTERS WHICH
IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF, OR ARE CLAIMED TO BE CAUSED
BY OR ARISE OUT OF, THE NEGLIGENCE (WHETHER SOLE, COMPARATIVE OR CONTRIBUTORY)
OR STRICT LIABILITY OF TRUSTEE. HOWEVER, SUCH INDEMNITIES SHALL NOT APPLY TO
TRUSTEE TO THE EXTENT THAT THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR
ARISES OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF TRUSTEE. The
agreements and indemnifications contained in this Section shall apply to Claims
arising both before and after the repayment of the Loan and shall survive the
repayment of the Loan, any foreclosure or deed, conveyance or assignment in lieu
thereof and any other action by Trustee to enforce the rights and remedies of
Beneficiary or Trustee hereunder or under the other Loan Documents.
Section 8.3    Substitution of Trustee; Multiple Trustees.
The Trustee may resign by an instrument in writing addressed to Beneficiary. In
case of the death, resignation, removal, or disqualification of Trustee, or if
for any reason Beneficiary shall deem it desirable to appoint a substitute or
successor trustee Beneficiary shall have, and is hereby granted with warranty of
further assurances, the irrevocable power to appoint a new or replacement or
substitute Trustee. Such power may be exercised at any time without notice,
without cause and without specifying any reason therefor, by filing for record
in the office where this Deed of Trust is recorded a Deed of Appointment. The
power of appointment of a successor Trustee may be exercised as often as and
whenever Beneficiary may choose, and the exercise of the power of appointment,
no matter how often, shall not be an exhaustion thereof. Upon the recordation of
such Deed or Deeds of Appointment, the Trustee so appointed shall thereupon,
without any further act or deed of conveyance, become fully vested with
identically the same title and estate in and to the Property and with all the
rights, powers, trusts and duties of its predecessor in the trust hereunder with
like effect as if originally named as Trustee hereunder. Whenever in this Deed
of Trust reference is made to Trustee, it shall be construed to mean each Person
appointed as Trustee for the time being, whether original or successor in trust.
All title, estate, rights, powers, trusts and duties granted to Trustee shall be
in each Person appointed as Trustee so that any action hereunder by any Person
appointed as Trustee shall for all purposes be deemed to be, and as effective
as, the action of all Trustees.
Article IX
Miscellaneous.
Section 9.1    Rights, Powers and Remedies Cumulative.
This Deed of Trust is a deed of trust, and each right, power and remedy of
Beneficiary or Trustee as provided for in this Deed of Trust, or in any of the
other Loan Documents or now or hereafter existing by Law, shall be cumulative
and concurrent and shall be in addition to every other

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right, power or remedy provided for in this Deed of Trust, or in any of the
other Loan Documents or now or hereafter existing by Law, and the exercise or
beginning of the exercise by Beneficiary or Trustee of any one or more of such
rights, powers or remedies shall not preclude the simultaneous or later exercise
by Beneficiary or Trustee of any or all such other rights, powers or remedies.
Section 9.2    No Waiver by Beneficiary or Trustee.
No course of dealing or conduct by or among Beneficiary, Trustee and Grantor
shall be effective to amend, modify or change any provisions of this Deed of
Trust or the other Loan Documents. No failure or delay by Beneficiary or Trustee
to insist upon the strict performance of any term, covenant or agreement of this
Deed of Trust or of any of the other Loan Documents, or to exercise any right,
power or remedy consequent upon a breach thereof, shall constitute a waiver of
any such term, covenant or agreement or of any such breach, or preclude
Beneficiary or Trustee from exercising any such right, power or remedy at any
later time or times. By accepting payment after the due date of any of the
Obligations, neither Beneficiary nor Trustee shall be deemed to waive the right
either to require prompt payment when due of all other Obligations, or to
declare an Event of Default for failure to make prompt payment of any such other
Obligations. Neither Grantor nor any other Person now or hereafter obligated for
the payment of the whole or any part of the Obligations shall be relieved of
such liability by reason of (a) the failure of Beneficiary to comply with any
request of Grantor or of any other Person to take action to foreclose this Deed
of Trust or otherwise enforce any of the provisions of this Deed of Trust, or
(b) any agreement or stipulation between any subsequent owner or owners of the
Property and Beneficiary, or (c) Beneficiary’s extending the time of payment or
modifying the terms of this Deed of Trust or any of the other Loan Documents
without first having obtained the consent of Grantor or such other Person.
Regardless of consideration, and without the necessity for any notice to or
consent by the holder of any subordinate Lien on the Property, Beneficiary may
release any Person at any time liable for any of the Obligations or any part of
the security for the Obligations and may extend the time of payment or otherwise
modify the terms of this Deed of Trust or any of the other Loan Documents
without in any way impairing or affecting the Lien of this Deed of Trust or the
priority of this Deed of Trust over any subordinate Lien. The holder of any
subordinate Lien shall have no right to terminate any Lease regardless of
whether or not such Lease is subordinate to this Deed of Trust. Beneficiary may
resort to the security or collateral described in this Deed of Trust or any of
the other Loan Documents in such order and manner as Beneficiary may elect in
its sole discretion.
Section 9.3    Waivers and Agreements Regarding Remedies.
To the fullest extent Grantor may do so, Grantor hereby:
(a)    agrees that it will not at any time plead, claim or take advantage of any
Laws now or hereafter in force providing for any appraisement, valuation, stay,
extension or redemption, and waives and releases all rights of redemption,
valuation, appraisement, stay of execution, extension and notice of election to
accelerate the Obligations;
(b)    waives all rights to a marshalling of the assets of Grantor, including
the Property, or to a sale in the inverse order of alienation in the event of a
foreclosure of the Property, and agrees not to assert any right under any Law
pertaining to the marshalling of assets, the sale in inverse order of
alienation, the exemption of homestead, the administration of estates of
decedents, or other

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matters whatsoever to defeat, reduce or affect the right of Beneficiary under
the terms of this Deed of Trust to a sale of the Property without any prior or
different resort for collection, or the right of Beneficiary to the payment of
the Obligations out of the proceeds of sale of the Property in preference to
every other claimant whatsoever;
(c)    waives any right to bring or utilize any defense, counterclaim or setoff,
other than one which denies the existence or sufficiency of the facts upon which
any foreclosure action is grounded. If any defense, counterclaim or setoff,
other than one permitted by the preceding clause, is timely raised in a
foreclosure action, such defense, counterclaim or setoff shall be dismissed. If
such defense, counterclaim or setoff is based on a Claim which could be tried in
an action for money damages, such Claim may be brought in a separate action
which shall not thereafter be consolidated with the foreclosure action. The
bringing of such separate action for money damages shall not be deemed to afford
any grounds for staying the foreclosure action; and
(d)    waives and relinquishes any and all rights and remedies which Grantor may
have or be able to assert by reason of the provisions of any Laws pertaining to
the rights and remedies of sureties.
Section 9.4    Successors and Assigns.
All of the grants, covenants, terms, provisions and conditions of this Deed of
Trust shall run with the Land and shall apply to and bind the successors and
assigns of Grantor (including any permitted subsequent owner of the Property),
and inure to the benefit of Beneficiary, its successors and assigns and to the
successors in trust of Trustee.
Section 9.5    No Warranty by Beneficiary or Trustee.
By inspecting the Property or by accepting or approving anything required to be
observed, performed or fulfilled by Grantor or to be given to Beneficiary or
Trustee pursuant to this Deed of Trust or any of the other Loan Documents,
Beneficiary and Trustee shall not be deemed to have warranted or represented the
condition, sufficiency, legality, effectiveness or legal effect of the same, and
such acceptance or approval shall not constitute any warranty or representation
with respect thereto by Beneficiary or Trustee.
Section 9.6    Amendments.
This Deed of Trust may not be modified or amended except by an agreement in
writing, signed by the party against whom enforcement of the change is sought.
Section 9.7    Severability.
In the event any one or more of the provisions of this Deed of Trust or any of
the other Loan Documents shall for any reason be held to be invalid, illegal or
unenforceable, in whole or in part or in any other respect, or in the event any
one or more of the provisions of the Loan Documents operates or would
prospectively operate to invalidate this Deed of Trust or any of the other Loan
Documents, then and in either of those events, at the option of Beneficiary,
such provision or provisions only shall be deemed null and void and shall not
affect the validity of the remaining

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Obligations, and the remaining provisions of the Loan Documents shall remain
operative and in full force and effect and shall in no way be affected,
prejudiced or disturbed thereby.
Section 9.8    Notices.
All Notices required or which any party desires to give hereunder or under any
other Loan Document shall be in writing and, unless otherwise specifically
provided in such other Loan Document, shall be deemed sufficiently given or
furnished if delivered by personal delivery, by nationally recognized overnight
courier service or by certified United States mail, postage prepaid, addressed
to the party to whom directed at the applicable address specified in the
Preamble to this Deed of Trust (unless changed by similar notice in writing
given by the particular party whose address is to be changed) or by facsimile.
Any Notice shall be deemed to have been given either at the time of personal
delivery or, in the case of courier or mail, as of the date of first attempted
delivery at the address and in the manner provided herein, or, in the case of
facsimile, upon receipt; provided that service of a Notice required by any
applicable statute shall be considered complete when the requirements of that
statute are met. Notwithstanding the foregoing, no notice of change of address
shall be effective except upon actual receipt. This Section shall not be
construed in any way to affect or impair any waiver of notice or demand provided
in this Deed of Trust or in any other Loan Document or to require giving of
notice or demand to or upon any Person in any situation or for any reason.
Section 9.9    Joint and Several Liability.
If Grantor consists of two (2) or more Persons, the term “Grantor” shall also
refer to all Persons signing this Deed of Trust as Grantor, and to each of them,
and all of them are jointly and severally bound, obligated and liable hereunder.
Trustee or Beneficiary may release, compromise, modify or settle with any of
Grantor, in whole or in part, without impairing, lessening or affecting the
obligations and liabilities of the others of Grantor hereunder or under the
Note. Any of the acts mentioned aforesaid may be done without the approval or
consent of, or notice to, any of Grantor.
Section 9.10    Rules of Construction.
The words “hereof,” “herein,” “hereunder,” “hereto,” and other words of similar
import refer to this Deed of Trust in its entirety. The terms “agree” and
“agreements” mean and include “covenant” and “covenants.” The words “include”
and “including” shall be interpreted as if followed by the words “without
limitation.” The headings of this Deed of Trust are for convenience of reference
only and shall not be considered a part hereof and are not in any way intended
to define, limit or enlarge the terms hereof. Any reference to a Property street
address(es) is for administrative and reference purposes only. In the event of
any conflict between a Property street address(es) listed herein and Exhibit A
attached hereto, the legal description set forth on Exhibit A shall control. All
references (a) made in the neuter, masculine or feminine gender shall be deemed
to have been made in all such genders, (b) made in the singular or plural number
shall be deemed to have been made, respectively, in the plural or singular
number as well, (c) to the Loan Documents are to the same as extended, amended,
restated, supplemented or otherwise modified from time to time unless expressly
indicated otherwise, (d) to the Land, Improvements, Personalty, Real Property or
Property shall mean all or any portion of each of the foregoing, respectively,
and (e) to Articles or Sections are to the respective Articles or Sections
contained in this Deed of Trust unless expressly indicated

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otherwise. Any term used or defined in the Uniform Commercial Code of the State,
as in effect from time to time, which is not defined in this Deed of Trust shall
have the meaning ascribed to that term in the Uniform Commercial Code of the
State. If a term is defined in Article 9 of the Uniform Commercial Code of the
State differently than in another Article of the Uniform Commercial Code of the
State, the term shall have the meaning specified in Article 9.
Section 9.11    Governing Law.
This Deed of Trust shall be construed, governed and enforced in accordance with
the Laws in effect from time to time in the State.
Section 9.12    Entire Agreement.
The Loan Documents constitute the entire understanding and agreement between
Grantor and Beneficiary with respect to the transactions arising in connection
with the Loan, and supersede all prior written or oral understandings and
agreements between Grantor and Beneficiary with respect to the matters addressed
in the Loan Documents. In particular, and without limitation, the terms of any
commitment by Beneficiary to make the Loan are merged into the Loan Documents.
Except as incorporated in writing into the Loan Documents, there are no
representations, understandings, stipulations, agreements or promises, oral or
written, with respect to the matters addressed in the Loan Documents.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
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 9.13    Limited Recourse Provision.
Beneficiary shall have no recourse against, nor shall there be any personal
liability to, the members of Grantor, or to any shareholders, members, partners,
beneficial interest holders or any other entity or person in the ownership
(directly or indirectly) of Grantor with respect to the obligations of Grantor
and Guarantor under the Loan. For purposes of clarification, in no event shall
the above language limit, reduce or otherwise affect Grantor’s liability or
obligations under the Loan Documents, Guarantor’s liability or obligations under
the Guaranty, or Beneficiary’s right to exercise any rights or remedies against
any collateral securing the Loan.

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Article X
Non-Borrower Grantor.
Section 10.1    Definition. As used in this Article X, “Third Party Secured
Obligation” means any obligation secured by this Deed of Trust which is required
to be performed by any Borrower under the Loan Agreement other than Grantor.
Section 10.2    Rights of Beneficiary. Grantor authorizes Beneficiary to perform
any or all of the following acts at any time in its sole discretion, all without
notice to Grantor and without affecting Beneficiary’s rights or Grantor’s
obligations under this Deed of Trust:
(a)    Beneficiary may alter any terms of the Third Party Secured Obligations or
any part of them, including renewing, compromising, modifying, extending or
accelerating, terminating early, or otherwise changing the time for payment of,
or increasing or decreasing the rate of interest on, the Third Party Secured
Obligations or any part of them.
(b)    Beneficiary may enforce or forbear from enforcing the Third Party Secured
Obligations on a net or gross basis.
(c)    Beneficiary may take and hold security for the Third Party Secured
Obligations, accept additional or substituted security for that obligation, and
subordinate, exchange, enforce, waive, release, reconvey, compromise, fail to
perfect and sell or otherwise dispose of any such security.
(d)    Beneficiary may direct the order and manner of any sale of all or any
part of any security now or later to be held for the Third Party Secured
Obligations, and Beneficiary may also bid at any such sale and may apply all or
any part of the Third Party Secured Obligations against the amount so bid.
(e)    Beneficiary may apply any payments or recoveries from Borrower (or any of
them), Grantor or any other source, and any proceeds of any security, to the
Third Party Secured Obligations in such manner, order and priority as
Beneficiary may elect, whether that obligation is secured by this Deed of Trust
or not at the time of the application.
(f)    Beneficiary may substitute, add or release any Borrower, guarantors or
endorsers.
(g)    In addition to the Third Party Secured Obligation, Beneficiary may extend
other credit to any Borrower, and may take and hold security for the credit so
extended, whether or not such security is also security for the Third Party
Secured Obligations, all without affecting Beneficiary’s rights or Grantor’s
liability under this Deed of Trust.
Section 10.3    Deed of Trust to be Absolute.
Grantor expressly agrees that until the earlier of (i) the release and
reconveyance of this Deed of Trust in accordance with Section 9.29 of the Loan
Agreement, or (ii) the date that the Third Party Secured Obligations are paid
and performed in full, and each and every term, covenant and condition of this
Deed of Trust is fully performed, Grantor shall not be released by or because
of:

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(a)    Any act or event which might otherwise discharge, reduce, limit or modify
Grantor’s obligations under this Deed of Trust;
(b)    Any waiver, extension, modification, forbearance, delay or other act or
omission of Beneficiary, or the failure by Beneficiary to proceed promptly or
otherwise against any Borrower, Grantor or any security;
(c)    Any action, omission or circumstance which might increase the likelihood
that Grantor may be called upon to perform under this Deed of Trust or which
might affect the rights or remedies of Grantor against any Borrower; or
(d)    Any Borrower becoming insolvent or subject to any bankruptcy or other
voluntary or involuntary proceeding, in or out of court, for the adjustment of
debtor-creditor relationships (an “Insolvency Proceeding”) and as a result
thereof some or all of the Third Party Secured Obligations being terminated,
rejected, discharged, modified or abrogated.
This Deed of Trust shall remain in full force and effect without regard to, and
shall not be affected or impaired, by any invalidity, irregularity or
unenforceability, in whole or in part (including with respect to any netting
provision) of any Loan Document or Swap Contract or any limitation on the
liability of any Borrower thereunder or any limitation on the method or terms of
payment thereunder which may now or in the future be caused or imposed in any
manner whatsoever. Grantor hereby acknowledges that absent this Section 10.3,
Grantor might have a defense to the enforcement of this Deed of Trust as a
result of one or more of the foregoing acts, omissions, agreements, waivers or
matters. Grantor hereby expressly waives and surrenders any defense to any
liability under this Deed of Trust based upon any of such acts, omissions,
agreements, waivers or matters. It is the express intent of Grantor that
Grantor’s obligations under this Deed of Trust are and shall be absolute,
unconditional and irrevocable.
Section 10.4    Grantor’s Waivers.
Grantor waives:
(a)    All statutes of limitations as a defense to any action or proceeding
brought against Grantor by Beneficiary, to the fullest extent permitted by law;
(b)    Any right it may have to require Beneficiary to proceed against any
Borrower or any other party, proceed against or exhaust any security held from
any Borrower or any other party, or pursue any other remedy in Beneficiary’s
power to pursue;
(c)    To the extent permitted by applicable law, the benefit of all laws now
existing or which may hereafter be enacted providing for any appraisement,
valuation, stay, extension, redemption or moratorium;
(d)    All rights of marshaling in the event of foreclosure;
(e)    Any defense based on any claim that Grantor’s obligations exceed or are
more burdensome than those of any other Borrower;

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(f)    Any defense based on: (i) any legal disability of any Borrower, (ii) any
release, discharge, modification, impairment or limitation of the liability of
any Borrower to Beneficiary from any cause, whether consented to by Beneficiary
or arising by operation of law or from any Insolvency Proceeding, and (iii) any
rejection, disallowance or disaffirmance of any of the Third Party Secured
Obligations, or any part of them, or any security held for any of them, in any
such Insolvency Proceeding;
(g)    Any defense based on any action taken or omitted by Beneficiary in any
Insolvency Proceeding involving any Borrower, including. without limitation,
filing, defending, settling or obtaining a judgment or order on any proof of
claim or any adversary proceeding, making any election to have Beneficiary’s
claim allowed as being secured, partially secured or unsecured, including any
election under 11 U.S.C. Section 1111(b), seeking relief from the automatic stay
or adequate protection, including submitting an appraisal of any security,
voting to reject or accept or failing to vote on any reorganization plan, making
any extension of credit by Beneficiary to any Borrower in any Insolvency
Proceeding, and the taking and holding by Beneficiary of any security for any
such extension of credit, whether or not such security is also security for the
Third Party Secured Obligations;
(h)    All presentments, demands for performance, notices of nonperformance,
protests, notices of protest, notices of dishonor, notices of acceptance of this
Deed of Trust and of the existence, creation, or incurring of new or additional
indebtedness, and demands and notices of every kind (other than notices
expressly provided for under this Deed of Trust or under the Loan Agreement);
and
(i)    Any defense based on or arising out of any defense that any Borrower may
have to the payment or performance of the Third Party Secured Obligations or any
part of them other than payment and performance in full.
Section 10.5    Grantor’s Additional Waivers.
Grantor waives:
(a)    The obligations of Grantor hereunder are independent of the obligations
of any other Borrower, and a separate action or actions may be brought against
Grantor whether or not action or suit is brought against any other Borrower or
any other Borrower is joined in any such action or actions. At the option of
Beneficiary, Grantor may be joined in any action or proceeding commenced by
Beneficiary against any other Borrower in connection with or based on the Third
Party Secured Obligations or any security therefor, and recovery may be had
against Grantor in such action or proceeding without any requirement that
Beneficiary first assert, prosecute or exhaust any remedy or claim against any
other Borrower.
(b)    Upon the occurrence and during the continuance of any Event of Default
under any of the Loan Documents, Beneficiary in its sole discretion, without
prior notice to or consent of Grantor, may elect to: (i) foreclose either
judicially or nonjudicially against any real or personal property security that
Beneficiary may hold for the Third Party Secured Obligations other than the
Property hereby encumbered, (ii) accept a transfer of any such security in lieu
of foreclosure, (iii) compromise or adjust any of the Third Party Secured
Obligations or any part of them or make

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any other accommodation with any other Borrower or Grantor, or (iv) exercise any
other remedy against any Borrower or any security other than the Property hereby
encumbered. With respect to security other than the Property hereby encumbered,
no such action by Beneficiary shall release or limit the liability of Grantor,
who shall remain liable under this Deed of Trust after the action, even if the
effect of the action is to deprive Grantor of any subrogation rights, rights of
indemnity, rights of contribution, or other rights to collect reimbursement from
any Borrower for any recovery by Beneficiary against Grantor, whether
contractual or arising by operation of law or otherwise. After any foreclosure
or deed in lieu of foreclosure of any real or personal property pledged to
secure any of the Third Party Secured Obligations, Grantor shall under no
circumstances be deemed to have any right, title, interest or claim in or to
such property, whether it is held by Beneficiary or any third party.
(c)    Regardless of whether Beneficiary may have recovered against Grantor,
Grantor hereby waives, to the extent permitted by applicable law: (i) all rights
of subrogation, all rights of indemnity, and any other rights to collect
reimbursement or contribution from any other Borrower or any other party for any
recovery by Beneficiary against Grantor, whether contractual or arising by
operation of law (including the United States Bankruptcy Code or any successor
or similar statute) or otherwise (collectively, “Reimbursement Rights”), (ii)
all rights to enforce any remedy that Beneficiary may have against any other
Borrower, and (iii) all rights to participate in any security now or later to be
held by Beneficiary for the Third Party Secured Obligations. To the extent
Grantor’s waiver of Reimbursement Rights is found by a court of competent
jurisdiction to be void or voidable for any reason, any Reimbursement Rights
Grantor may have against any other Borrower or any collateral or security shall
be junior and subordinate to any rights Beneficiary may have against such
Borrower and to all right, title and interest Beneficiary may have in any such
collateral or security. If any amount should be paid to Grantor on account of
any Reimbursement Rights at any time when any the Third Party Secured
Obligations have not been paid in full, such amount shall be held in trust for
Beneficiary and shall immediately be paid over to Beneficiary to be credited and
applied against the Third Party Secured Obligations, whether matured or
unmatured, in accordance with the terms of the Loan Documents. The covenants and
waivers of Grantor set forth in this Section 10.5(c) shall be effective until
all of the Third Party Secured Obligations have been paid and performed in full
and are made solely for the benefit of Beneficiary.
(d)    To the extent applicable, Grantor waives any rights and defenses
described in Section 2856(a) of the California Civil Code that are or may become
available to Grantor, including, without limitation, any rights and defenses by
reason of Sections 2787 to 2855, inclusive, of the California Civil Code.
(e)    To the extent applicable Grantor waives all rights and defenses that
Grantor may have because any of the Third Party Secured Obligations may be
secured by real property other than the Property hereby encumbered. This means,
among other things:
(i)    Beneficiary or any Lender may collect from Grantor (including enforcing
this Deed of Trust against Grantor) without first foreclosing on any real or
personal property collateral pledged by any Borrower;
(ii)    If Beneficiary forecloses on any real property collateral pledged by any
Borrower:

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(A)    The amount of the Third Party Secured Obligations may be reduced only by
the price for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price.
(B)    Beneficiary or any Lender may collect from Grantor (including enforcing
this Deed of Trust against Grantor) even if Beneficiary or any Lender, by
foreclosing on the real property collateral pledged by any Borrower, has
destroyed any right Grantor may have to collect from such Borrower.
This Section 10.5(e) is an unconditional and irrevocable waiver, to the extent
applicable, of any rights and defenses Grantor may have because any of the Third
Party Secured Obligations may be secured by real property other than the
Property hereby encumbered. These rights and defenses include, but are not
limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726
of the California Code of Civil Procedure.
(f)    Without limiting the generality of the foregoing Section 10.5(e), Grantor
understands and acknowledges that if Beneficiary or any Lender forecloses
judicially or nonjudicially against any real property securing any of the Third
Party Secured Obligations other than the Property hereby encumbered, that
foreclosure could impair or destroy any ability that Grantor may have to seek
reimbursement, contribution or indemnification from any Borrower or others based
on any Reimbursement Right Grantor may have for any recovery by Beneficiary
under this Deed of Trust. Grantor further understands and acknowledges that in
the absence of this Section 10.5, such potential impairment or destruction of
Grantor’s rights, if any, may, to the extent applicable, entitle Grantor to
assert a defense to this Deed of Trust based on Section 580d of the California
Code of Civil Procedure as interpreted in Union Bank v. Gradsky, 265 Cal.App.2d
40 (1968). By executing this Deed of Trust, Grantor freely, irrevocably and
unconditionally: (i) waives and relinquishes, to the extent applicable, that
defense and agrees that Grantor will be fully liable under this Deed of Trust
even though Beneficiary or any Lender may foreclose judicially or nonjudicially
against any real property security for the Third Party Secured Obligations other
than the Property; (ii) agrees that Grantor will not assert that defense in any
action or proceeding which Beneficiary or any Lender may commence to enforce
this Deed of Trust; (iii) acknowledges and agrees that the rights and defenses
waived by Grantor under this Deed of Trust include any right or defense that
Grantor may have or be entitled to assert based upon or arising out of any one
or more of Sections 580a, 580b, 580d or 726 of the California Code of Civil
Procedure or Section 2848 of the California Civil Code; and (iv) acknowledges
and agrees that Beneficiary and each Lender is relying on this waiver in
extending credit to Borrowers in the form of the Third Party Secured
Obligations, and that this waiver is a material part of the consideration which
Beneficiary and each Lender is receiving for extending such credit to Borrowers.
(g)    Grantor waives, to the extent applicable, any right or defense it may
have at law or equity, including California Code of Civil Procedure Section
580a, to a fair market value hearing or action to determine a deficiency
judgment after a foreclosure of any property other than the Property hereby
encumbered.
(h)    No provision or waiver in this Deed of Trust shall be construed as
limiting the generality of any other provision or waiver contained in this Deed
of Trust.

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Section 10.6    Revival and Reinstatement.
If Beneficiary is required to pay, return or restore to any Borrower or any
other person any amounts previously paid on any of the Third Party Secured
Obligations because of any Insolvency Proceeding of any Borrower, any stop
notice or any other reason, the obligations of Grantor shall be reinstated and
revived and the rights of Beneficiary shall continue with regard to such
amounts, all as though they had never been paid, and this Deed of Trust shall
continue to be effective or be reinstated, as the case may be.
Section 10.7    Information Regarding Borrowers.
Grantor represents that: (a) Beneficiary has not made any representation to
Grantor as to the creditworthiness of any Borrower, and (b) no oral promises,
assurances, representations or warranties have been made by or on behalf of
Beneficiary to induce Grantor to execute and deliver this Deed of Trust. Grantor
has received and approved copies of all other requested Loan Documents. Before
signing this Deed of Trust, Grantor investigated the financial condition and
business operations of each other Borrower and such other matters as Grantor
deemed appropriate to assure itself of each such Borrower’s ability to discharge
its obligations in connection with the Third Party Secured Obligations. Grantor
assumes full responsibility for that due diligence and for keeping informed of
all matters which may affect any Borrower’s ability to pay and perform its
obligations to Beneficiary. Beneficiary has no any duty to disclose to Grantor
any information which Beneficiary may have or receive about any Borrower’s
financial condition or business operations or any other circumstances bearing on
any Borrower’s ability to perform.
Section 10.8    Counsel; Integration; Miscellaneous.
Grantor acknowledges that Grantor has had adequate opportunity to carefully read
this Deed of Trust and to consult with an attorney of Grantor’s choice prior to
signing it. No consent, approval or authorization of or notice to any person or
entity is required in connection with Grantor’s execution of and obligations
under this Deed of Trust, and Grantor acknowledges its execution and delivery of
this Deed of Trust is made voluntarily without any duress or undue influence of
any kind. No course of prior dealing, usage of trade, parol or extrinsic
evidence of any nature shall be used to supplement, modify or vary any of the
terms hereof. This Deed of Trust is intended by the parties to be a fully
integrated and final expression of their agreement. This Deed of Trust and the
other Loan Documents incorporate all negotiations of the parties and constitute
the parties’ entire agreement. Grantor acknowledges that is relying on no
written or oral agreement, representation, warranty or understanding of any kind
made by Beneficiary, or any employee, attorney or agent of Beneficiary, except
for the agreements of Beneficiary set forth herein and in the Loan Documents.
[Signatures appear on following page.]

-30-    

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IN WITNESS WHEREOF, Grantor has caused this Deed of Trust to be executed under
seal as of the day and year first written above.
GRANTOR:

KBSIII ONE WASHINGTONIAN, LLC,                WITNESS OR ATTEST:
a Delaware limited liability company
    
By:    KBSIII REIT ACQUISITION X, LLC,              /s/ Cydnee Aleson        
a Delaware limited liability company,                Cydnee Aleson
its sole member

By:    KBS REIT PROPERTIES III, LLC,
a Delaware limited liability company,
its sole member

By:    KBS LIMITED PARTNERSHIP III,
a Delaware limited partnership,
its sole member

By:    KBS REAL ESTATE INVESTMENT TRUST III, INC.,
a Maryland corporation,
its general partner

By:     /s/ Charles J. Schreiber, Jr.        [SEAL]
Charles J. Schreiber, Jr.,
Chief Executive Officer

S-1    

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ATTORNEY'S CERTIFICATION

THE UNDERSIGNED, a member in good standing of the Bar of the Court of Appeals of
Maryland, hereby certifies that the within instrument was prepared by him or her
or under his or her supervision.
                    

_______________________________
_______________________________

Tax Account Number: ________________________

Title Insurer: Commonwealth Land Title Insurance Company

        

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ACKNOWLEDGMENT

A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.

State of California

County of Orange    

On September 13, 2017         before me, K.Godin                , Notary Public,
(here insert name of the officer)
personally appeared         Charles J. Schreiber, Jr.              who 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), 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.
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.

Signature     /s/ K. Godin             (Seal)

        

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EXHIBIT A
Legal Description

REAL PROPERTY IN THE CITY OF GAITHERSBURG, COUNTY OF MONTGOMERY, STATE OF
MARYLAND, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

PARCEL I:

ALL THAT PIECE OR PARCEL OF LAND, TOGETHER WITH THE IMPROVEMENTS THEREON AND
APPURTENANCES THEREUNTO BELONGING, LYING, SITUATE AND BEING IN MONTGOMERY
COUNTY, MARYLAND, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

PARCEL LETTERED “C”, IN BLOCK LETTERED “C” IN THE SUBDIVISION KNOWN AS
WASHINGTONIAN CENTER; AS PER PLAT THEREOF RECORDED IN PLAT BOOK 156 AT PLAT NO.
17750 AMONG THE LAND RECORDS OF MONTGOMERY COUNTY, MARYLAND.

NOTE FOR INFORMATIONAL PURPOSES ONLY:
TAX I.D. NO. 9-201-2867430

PARCEL II:

TOGETHER WITH ALL RIGHTS AS ESTABLISHED BY “DECLARATION OF COVENANTS,
CONDITIONS, RESTRICTIONS AND EASEMENTS” RECORDED IN LIBER 7144 AT FOLIO 287
AMONG THE AFORESAID LAND RECORDS, AND THE RESERVATION OF RIGHTS TO GRANT
EASEMENTS AS CONTAINED THEREIN; AMENDED BY FIRST SUPPLEMENT TO DECLARATION OF
COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS FOR WASHINGTONIAN CENTER DATED
DECEMBER 29, 1988 AND RECORDED DECEMBER 15, 1989 IN LIBER 9123 AT FOLIO 600; AND
FURTHER AMENDED BY SECOND SUPPLEMENTAL TO DECLARATION OF COVENANTS, CONDITIONS,
RESTRICTIONS AND EASEMENTS DATED APRIL 10, 1990 AND RECORDED APRIL 10, 1990 IN
LIBER 9268 AT FOLIO 504 AND FURTHER AMENDED BY THIRD SUPPLEMENT TO DECLARATION
OF COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS DATED MARCH 15, 1990 AND
RECORDED MARCH 19, 1990 IN LIBER 9237 AT FOLIO 4; FURTHER AMENDED BY FOURTH
SUPPLEMENT TO DECLARATION DATED MAY 2, 1997 RECORDED IN BOOK 14856 PAGE 256;
FURTHER AMENDED BY FIFTH SUPPLEMENT TO DECLARATION OF COVENANTS, CONDITIONS,
RESTRICTIONS AND EASEMENTS DATED MAY 23, 2008 AND RECORDED IN LIBER 35818 AT
FOLIO 391; FURTHER AMENDED BY SIXTH SUPPLEMENT TO DECLARATION OF COVENANTS,
CONDITIONS, RESTRICTIONS AND EASEMENTS DATED OCTOBER 1, 2008 AND RECORDED IN
LIBER 36055 AT FOLIO 006; FURTHER AMENDED BY SEVENTH SUPPLEMENT TO DECLARATION
OF COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS DATED JANUARY 12, 2009 AND
RECORDED IN LIBER 36421 AT FOLIO 217;

A-1    

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EIGHTH SUPPLEMENT TO DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND
EASEMENTS DATED OCTOBER 28, 2011 AND RECORDED IN LIBER 42601 AT FOLIO 95; NINTH
SUPPLEMENT TO DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS
DATED AUGUST 13, 2013 AND RECORDED IN LIBER 47544 AT FOLIO 460. AS AFFECTED BY
AGREEMENT REGARDING COVENANTS, CONDITIONS AND RESTRICTIONS DATED MAY 2, 1997 AND
RECORDED IN LIBER 14856 AT FOLIO 329. AS AFFECTED BY AGREEMENT REGARDING
COVENANTS, CONDITIONS AND RESTRICTIONS DATED JUNE 18, 1999 AND RECORDED IN LIBER
17219 AT FOLIO 125.

PARCEL III:

TOGETHER WITH ALL RIGHTS AS ESTABLISHED BY “DECLARATION OF COVENANTS AND
RECIPROCAL EASEMENT AGREEMENT PHASE I” DATED AUGUST 4, 1988 AND RECORDED AUGUST
22, 1988 IN LIBER 8429 AT FOLIO 135, AMONG THE LAND RECORDS OF MONTGOMERY
COUNTY, MARYLAND.

PARCEL IV:

TOGETHER WITH TEMPORARY PARKING EASEMENT AS ESTABLISHED BY “TEMPORARY PARKING
EASEMENT AGREEMENT PHASE I” DATED AUGUST 4, 1988 AND RECORDED AUGUST 22, 1988 IN
LIBER 8429 AT FOLIO 187, AMONG THE LAND RECORDS OF MONTGOMERY COUNTY, MARYLAND,
AND AS SUCH TEMPORARY PARKING EASEMENT AGREEMENT IS MODIFIED BY “DECLARATION OF
PARKING AGREEMENT AND MODIFICATION OF TEMPORARY PARKING EASEMENT AGREEMENT”
DATED MARCH 15, 1990 AND RECORDED MARCH 19, 1990 IN LIBER 9237 AT FOLIO 166,
AMONG THE AFORESAID LAND RECORDS.

PARCEL V:

TOGETHER WITH ALL RIGHTS AS ESTABLISHED BY “DECLARATION OF COVENANTS AND UTILITY
EASEMENT AGREEMENT PHASE I” DATED AUGUST 4, 1988 AND RECORDED AUGUST 22, 1988 IN
LIBER 8429 AT FOLIO 250, AMONG THE LAND RECORDS OF MONTGOMERY COUNTY, MARYLAND.

PARCEL VI:

TOGETHER WITH BOARDWALK EASEMENT AS ESTABLISHED BY “BOARDWALK EASEMENT AGREEMENT
PHASE I” DATED AUGUST 4, 1988 AND RECORDED AUGUST 22, 1988 IN LIBER 8429 AT
FOLIO 281, AS AFFECTED BY THE AMENDMENT TO EASEMENT AGREEMENTS DATED MARCH 15,
1990 AND RECORDED IN LIBER 9236 AT FOLIO 881, AMONG THE LAND RECORDS OF
MONTGOMERY COUNTY, MARYLAND.

A-2    

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PARCEL VII:

TOGETHER WITH RIGHT OF INGRESS AND EGRESS OVER “MARRIOTT DRIVE” AS ESTABLISHED
BY EASEMENT FOR INGRESS AND EGRESS DATED DECEMBER 12, 1989 AND RECORDED IN LIBER
9123 AT FOLIO 589 AND AS FURTHER SET FORTH IN INGRESS AND EGRESS EASEMENT
AGREEMENT FROM WILP AND WCD FOR MARRIOTT DRIVE AND SIDE ROAD ACCESS, DATED MARCH
15, 1990 AND RECORDED MARCH 19, 1990 IN LIBER 9236 AT FOLIO 821, AND RE-NUMBERED
AS LIBER 9254 AT FOLIO 408, AMONG THE LAND RECORDS OF MONTGOMERY COUNTY,
MARYLAND.

PARCEL VIII:

TOGETHER WITH THE BENEFICIAL RIGHTS SET FORTH IN THE RECIPROCAL EASEMENTS AND
COVENANTS AS ESTABLISHED BY “DECLARATION OF RECIPROCAL EASEMENTS AND COVENANTS”
DATED MARCH 15, 1990 AND RECORDED MARCH 19, 1990 IN LIBER 9237 AT FOLIO 12,
AMONG THE LAND RECORDS OF MONTGOMERY COUNTY, MARYLAND.

PARCEL IX:

TOGETHER WITH ALL RIGHTS AS ESTABLISHED BY “UTILITY EASEMENT AGREEMENT” DATED
DECEMBER 12, 1989 AND RECORDED DECEMBER 15, 1989 IN LIBER 9123 AT FOLIO 643,
AMONG THE LAND RECORDS OF MONTGOMERY COUNTY, MARYLAND.

PARCEL X:

TOGETHER WITH ALL RIGHTS AS ESTABLISHED BY “COVENANT AGREEMENT” DATED MARCH 15,
1990 AND RECORDED MARCH 19, 1990 IN LIBER 9237 AT FOLIO 297, AS MODIFIED BY
INSTRUMENTS RECORDED IN LIBER 9535 AT FOLIO 536, LIBER 9725 AT FOLIO 374 AND
LIBER 9771 AT FOLIO 16, AMONG THE LAND RECORDS OF MONTGOMERY COUNTY, MARYLAND.

PARCEL XI:

FURTHER TOGETHER WITH THE BENEFICIAL EASEMENTS CREATED BY THE EASEMENT BY AND
BETWEEN WASHINGTON LAKE L.L.C. AND 9800 WASHINGTONIAN OFFICE, INC., DATED APRIL
13, 2010 AND RECORDED APRIL 4, 2011 IN LIBER 41396 AT FOLIO 11.

A-3    

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EXHIBIT B
Refinance and Recording Tax Affidavits

B-1