Exhibit 10.2

DEED OF TRUST,
ASSIGNMENT OF RENTS AND LEASES,
SECURITY AGREEMENT AND FIXTURE FILING

FSP PHOENIX TOWER LIMITED PARTNERSHIP

GRANTOR,

AND

FRANKLIN STREET PROPERTIES CORP.

BENEFICIARY

December 4, 2008

 
 

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DEED OF TRUST, ASSIGNMENT OF RENTS AND
LEASES, SECURITY AGREEMENT AND FIXTURE FILING

THIS DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES, SECURITY AGREEMENT AND
FIXTURE FILING (“Deed of Trust”), made this 4th day of December, 2008, by FSP
PHOENIX TOWER LIMITED PARTNERSHIP, a Texas limited partnership (“Grantor”),
whose address is 401 Edgewater Place, Suite 200, Wakefield, Massachusetts
01880-6210 to the RALPH G. SANTOS, ESQUIRE (“Trustee”), whose address is c/o
Greenberg Traurig LLP, 2200 Ross Avenue, Suite 5200, Dallas, Texas 75201, for
the use and benefit of FRANKLIN STREET PROPERTIES CORP., a Maryland corporation
(“Beneficiary”), whose address is 401 Edgewater Place, Suite 200, Wakefield,
Massachusetts 01880-6210.

RECITALS

A.           The Grantor is indebted to Beneficiary in the amount of Fifteen
Million and 00/100 Dollars ($15,000,000.00), as evidenced by that certain
Secured Promissory Note (Revolving) of even date herewith (the “Note”) executed
by Grantor which is payable with interest thereon at the rate and on the terms
as provided in the Note.  The Note evidences a revolving credit arrangement and
amounts borrowed may be repaid and reborrowed.  If not sooner paid, the final
payment of interest and principal on the Note shall be due November 30, 2011;

B.           The Grantor is the owner of the real property situated in the
County of Harris, State of Texas, described in Exhibit A attached hereto, and by
this reference incorporated herein (the “Land”), which, together with all
easements, appurtenances, and hereditaments thereto and the real property
interests referred to in (a), (b), and (c) below, is referred to as the “Real
Property.”

C.           The Grantor desires to secure the payment of the principal and
interest of the Note to the holder thereof and the performance of all of the
covenants of the Loan Documents (as hereinafter defined).

NOW, THEREFORE, the Grantor, in consideration of the premises, and for the
purposes aforesaid, does hereby grant, bargain, sell, convey, transfer, assign
and set over to the Trustee, with general warranty unto Trustee, in trust
forever, the Real Property.

TOGETHER WITH and INCLUDING:

(a)           All buildings and improvements now or hereafter located on the
Land (“Improvements”);

(b)           All oil, gas, minerals and appurtenances now or hereafter
belonging or in any manner appurtenant to the Land, and all the reversions,
remainders, rents, issues and profits thereof;

 
 

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(c)           All easements, rights-of-way, gores of land, streets, ways,
alleys, passages and all estates, rights, titles, interests and privilege and
appurtenances in any way pertaining to the Land, and all land lying in the bed
of any street, road or avenue adjoining the Land to the centerline thereof;

(d)           All water, water rights, shares of stock evidencing water rights,
claims to water, and agreements relating to the supply of water to the Real
Property, whether real or personal, now or hereafter (i) appurtenant thereto,
(ii) made or used in connection therewith, or (iii) arising from the ownership
thereof, and all the reversions, remainders, rents, issues and profits thereof;

(e)           All of Grantor’s right, title and interest in and to all chattels
(“Chattels”), including all fixtures, fittings, furniture, furnishings,
appliances, apparatus, equipment and machinery now or hereafter delivered to and
located on the Real Property and intended to be installed or used therein;

(f)           All of Grantor’s right, title and interest in and to all contract
rights, and intangible personal property pertaining to the Real Property
(“Personalty”), including:  all judgments, awards of damages and settlements
made as a result of or in lieu of any taking of the Real Property or any part
thereof or interest therein under the power of eminent domain, or for any damage
(whether caused by such taking or otherwise) to the Real Property or the
improvements on the Real Property or any part thereof or interest therein, and
trademarks, logos, good will, and books and records relating to the Real
Property.

The property described in subparagraphs (d), (e) and (f) above is sometimes
hereinafter collectively referred to as the “Personal Property Collateral.”  The
Real Property and Personal Property Collateral are collectively referred to
herein as the “Property.”

TO HAVE AND TO HOLD the Property unto Trustee, and his or their successors or
substitutes in this trust, and to his or their successors and assigns, in trust,
in fee simple forever, subject to the terms, provisions and conditions herein
set forth, to secure the obligations of Grantor under the Note and Loan
Documents (as hereinafter defined) and all other indebtedness (collectively
referred to as the “Indebtedness”), including without limitation the following:

(i)           payment of the principal and interest and prepayment premium, if
any, set forth in the Note;

(ii)           payment of the Advance Fee (as defined in the Note);

(iii)           the performance and observance of all terms, covenants,
conditions, and provisions to be performed or observed by the Grantor pursuant
to the terms of the Note and this Deed of Trust.  The Note, this Deed of Trust,
and any and all other documents or instruments executed in connection with the
foregoing to evidence or secure the Note shall hereinafter be collectively
referred to as the “Loan Documents”;

 
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(iv)           the payment of all sums expended or advanced by Beneficiary
pursuant to the terms of the Loan Documents; and

(v)           all other loans and future advances made by Beneficiary to Grantor
and all other debts, obligations and liabilities of Grantor of every kind and
character now or hereafter existing in favor of Beneficiary, whether direct or
indirect, primary or secondary, joint or several, fixed or contingent, secured
or unsecured, and whether originally payable to Beneficiary or to a third party
and subsequently acquired by Beneficiary, it being contemplated that Grantor may
hereafter become indebted to Beneficiary for such further debts, obligations and
liabilities.

ARTICLE 1
Grantor’s Covenants, Representations and Warranties

Grantor covenants and agrees with, and represents and warrants to, Trustee and
Beneficiary that:

1.1           Title.
 
(a)           Grantor covenants, represents and warrants that (a) it has good
and marketable title to the Real Property, subject to any recorded liens,
charges or encumbrances; (b) it has full power and authority to grant, bargain,
sell and convey the Property in the manner and form herein done or intended
hereafter to be done; and (c) Grantor and its successors and assigns shall
warrant and defend the same forever against the claims and demands of all
persons.
 
(b)           Grantor shall, at the cost of Grantor, and without expense to
Beneficiary, execute, acknowledge and deliver such further conveyances and
assurances as Beneficiary shall from time to time require, for better assuring,
conveying, assigning, transferring and confirming unto Trustee or Beneficiary
the property rights hereby conveyed or assigned.  Grantor shall pay all filing,
recording and title fees and any other expenses in connection therewith during
the term of the Loan, including without limitation filing and recording fees for
Uniform Commercial Code continuation statements.
 
1.2           Payment of Note.  Grantor shall promptly and punctually pay all
principal and interest, prepayment premium, if any, and all other sums due or to
become due in respect of the Note, including the Advance Fee (as defined in the
Note), according to the provisions thereof.
 
1.3           Waste.  Grantor shall not commit or suffer any physical waste on
the Property.  Beneficiary shall have the right to inspect the Property from
time to time upon reasonable advance notice to Grantor, subject to the rights of
parties in possession.
 
1.4           Compliance with Laws.  Grantor shall comply with all laws,
statutes, codes, rules, regulations, orders, decrees, ordinances, covenants,
conditions and restrictions now or hereafter affecting the Property or the
operation thereof, and shall pay all fees or charges of any kind in connection
therewith.
 
1.5           Insurance.
 

 
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(a)           Grantor shall maintain the following insurance:
 
(i)           Insurance against loss or damage by “all risk” coverage perils
(including the cost of debris removal) in an amount equal to the greater of (A)
the outstanding principal balance of the Loan, or (B) the full replacement cost
of the improvements situated on the Real Property less a deductible not to
exceed Twenty-Five Thousand Dollars ($25,000).
 
(ii)           Comprehensive general public liability insurance against claims
for bodily injury, death or property damage occurring on, in or about the Real
Property, such insurance to afford protection of not less than Two Million
Dollars ($2,000,000) per occurrence less a deductible not to exceed Twenty-Five
Thousand Dollars ($25,000) and a deductible not to exceed Five Hundred Thousand
Dollars ($500,000) for windstorm.  Beneficiary shall be named as an additional
insured on such policies.
 
(b)           The coverage and deductible amounts described above in Section
1.5(a) may be adjusted annually upon written request from Grantor to Beneficiary
to reasonably reflect changes in the insurance industry.
 
(c)           All policies of insurance to be furnished hereunder shall be
issued by companies and be in forms and amounts with Standard Mortgagee clauses
attached, with endorsements and including a provision requiring that the
coverage evidenced thereby shall not be canceled, terminated, reduced or
materially modified by the insurer or any insured without thirty (30) days’
prior written notice to Beneficiary.
 
(d)           In the event of a foreclosure or other transfer of title to the
Property in lieu of foreclosure, or by purchase at the foreclosure sale, or by
the exercise of power of sale, all interest in any insurance policies in force
and any unearned premiums thereon shall pass to Beneficiary, transferee or
purchaser as the case may be.
 
1.6           Casualty.  Grantor shall promptly notify Beneficiary of any loss
or damage by fire or other casualty, whether covered by insurance or not.  In
case of loss or damage by fire or other casualty, Grantor shall be entitled to
the proceeds of any insurance for the purpose of reconstruction of any
improvements on the Real Property; but if Grantor elects not to reconstruct,
then Beneficiary may apply the proceeds to the Indebtedness without premium or
penalty.
 
1.7           Condemnation.  Immediately upon obtaining knowledge of the
institution of any proceeding for the condemnation of the Real Property or any
portion thereof, Grantor shall notify Beneficiary of the pendency
thereof.  Grantor, as security for the Indebtedness, hereby assigns, transfers
and sets over unto Beneficiary all compensation, rights of action, the entire
proceeds of any award and any claim for damages to the Real Property or any
portion thereof taken or damaged under the power of eminent domain or by
condemnation or by transfer in lieu thereof.  Beneficiary, at its option, may
commence, appear in and prosecute, in its own name, any action or proceeding, or
make any compromise or settlement, in connection with such condemnation or
taking under the power of eminent domain or sale in lieu thereof; provided,
however, that so long as no Event of Default then exists hereunder, Beneficiary
shall not make any compromise or settlement without the prior written consent of
Grantor, which consent shall not be unreasonably withheld or delayed.  After
deducting therefrom all of its expenses, including attorneys’ fees, such
proceeds shall be applied to the Indebtedness, whether due or not, without
payment of any prepayment premium.
 

 
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1.8           Priority of Lien of Deed of Trust.  This Deed of Trust shall be
subject and subordinate to any and all leases, easements, covenants, conditions
or similar documents now or hereafter covering all or any part of the Property
or any improvements now or hereafter located thereon.  This subordination is
self-effecting, however Beneficiary shall from time to time upon the request of
Grantor, execute such other instruments and documents as may be reasonably
required to further evidence the subordination of this Deed of Trust as set
forth herein.
 
1.9           Taxes and Assessments.  Grantor shall pay in full, at least ten
(10) days prior to delinquency, all taxes and assessments against the Real
Property, and shall promptly furnish to Beneficiary official receipts evidencing
the payment thereof if requested by Beneficiary in writing.
 
1.10           Indemnification.  Grantor shall appear in and defend any suit,
action or proceeding that might in any way and in the sole judgment of
Beneficiary affect the title to the Property, the validity, enforceability or
priority of this Deed of Trust or any other Loan Document or the rights and
powers of Trustee or Beneficiary.  Grantor shall, and does hereby agree to, at
all times, indemnify, hold harmless and, on demand, reimburse Beneficiary for
any and all loss, damage, expense or cost, including without limitation cost of
evidence of title and attorneys’ fees, arising out of or incurred in connection
with any such suit, action or proceeding, or any claim (whether or not any suit,
action or proceeding with respect thereto is commenced) pertaining to any of the
matters specified in this Section 1.10, and the sum of any expenditures made by
Beneficiary in connection with such loss, damage, expense or cost shall be
secured by this Deed of Trust, shall bear interest at the Default Rate from the
date of expenditure until repaid to Beneficiary, and shall be due and payable on
demand.
 
1.11           Sale of Property; Encumbrances.  If the Real Property or any part
thereof or interest therein is sold, assigned, transferred, conveyed, leased,
exchanged, encumbered, hypothecated, mortgaged or otherwise alienated by
Grantor, whether voluntarily, involuntarily or by operation of law, without the
prior written consent of Beneficiary, excluding (i) occupancy leases entered
into by Grantor; (ii) easements for utility purposes; and (iii) transfers of
shares of stock in Grantor by the holders thereof, the occurrence of any such
event shall constitute an Event of Default under this Deed of Trust.
 
1.12           Advances.  If Grantor shall fail to perform any of the covenants
contained herein or in any other Loan Document, other than the covenants to pay
interest and principal pursuant to the Note, within fifteen (15) days after
receipt of written notice of such failure by Grantor from Beneficiary (except
that if, in Beneficiary’s sole opinion, such failure constitutes an emergency
situation which could jeopardize or impair Beneficiary’s security, no such
notice and grace period shall be applicable), Beneficiary may, but without
obligation to do so, make advances to perform the same on behalf of
Grantor.  All sums so advanced shall be secured by this Deed of Trust, shall
bear interest at the Default Rate from the date of advance until repaid to
Beneficiary, and shall be due and payable within five (5) days following
demand.  No such substitute performance shall excuse or cure an Event of Default
hereunder.
 

 
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1.13           Assignment of Rents and Leases.  As additional security for the
Indebtedness secured hereby, Grantor does hereby bargain, sell, transfer,
assign, convey, set over and deliver unto Beneficiary all right, title and
interest of Grantor in, to and under all leases now or hereafter affecting the
Property or any part thereof, and all amendments, extensions and renewals of
such leases and any of them (which are hereinafter individually referred to as a
“Lease” and collectively referred to as the “Leases”), any and all security for
the performance of the lessee’s obligations under a Lease, including without
limitation any and all guaranties of lessee’s performance under any Lease, the
immediate and continuing right to collect and receive all rents, issues, income,
profits and all other amounts which may now or hereafter be or become due or
owing under the Leases, and any of them, or on account of the use of the
Property, all security deposits, damage deposits and other funds paid to Grantor
by any lessee, and any and all amounts received by Grantor in payment of damages
(a) as a result of the breach of any Lease by the lessee thereunder, or (b) for
termination or rejection of any Lease as a result of any proceeding under the
Federal Bankruptcy Code or any other federal, state or local statute which
provides for the possible termination or rejection of a Lease (all such items
referred to in this sentence are sometimes herein collectively referred to as
the “Rents”).  Grantor will execute and deliver to Beneficiary such other
specific assignments of rents and leases applicable to the Property as
Beneficiary may from time to time request while this Deed of Trust and the
Indebtedness are outstanding.
 
The assignment provided for herein is absolute and is effective
immediately.  Notwithstanding the foregoing, until an Event of Default has
occurred hereunder, Grantor shall have a license to receive, collect and enjoy
the Rents.  Upon the occurrence of an Event of Default hereunder, such license
shall automatically terminate, Grantor shall immediately turn over to
Beneficiary all such Rents which may then be in its possession or under its
control, and Beneficiary may, at its option, receive and collect all Rents, as
they become due.  Beneficiary shall thereafter continue to receive and collect
all such Rents as long as such Event of Default shall exist, and during the
pendency of any foreclosure proceedings, and during any redemption
period.  Grantor hereby irrevocably appoints Beneficiary its true and lawful
attorney or agent in fact, at the option of Beneficiary and from time to time,
to demand, receive and enforce payment, to give receipts, releases and
satisfactions and to sue in the name of Grantor or Beneficiary for or otherwise
collect all Rents and apply the same as provided herein.  Such appointment shall
be deemed to be coupled with an interest and shall not be revocable by
Grantor.  Grantor hereby expressly authorizes and directs lessees of any part of
the Real Property to pay to Beneficiary or such nominee as Beneficiary may
designate in writing delivered to and received by such lessees any and all Rents
due Grantor pursuant to the Leases.  The lessees are expressly relieved of any
and all duty, liability or obligation to Grantor in respect of all payments so
made.  Grantor hereby further authorizes and directs any property manager of the
Real Property to deliver to Beneficiary or such nominee as Beneficiary may
designate in writing delivered to and received by such property manager any and
all Rents in the possession or control of such property manager, who is
expressly relieved of any and all duty, liability or obligation to Grantor in
respect of all amounts so delivered.

 
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1.14           Security Agreement.  Grantor hereby grants to Beneficiary a
security interest in the Personal Property Collateral pursuant to the Texas
Business and Commerce Code (the “Code”) for the purpose of further securing the
Indebtedness.  Grantor shall give advance notice in writing to Beneficiary of
any proposed change in Grantor’s name, identity, structure or principal place of
business, and will execute and deliver to Beneficiary, prior to or concurrently
with the occurrence of any such change, all financing statements or amendments
to financing statements that Beneficiary may require to establish and maintain
the validity and priority of Beneficiary’s security interest with respect to any
Personal Property Collateral described or referred to herein.  This Deed of
Trust shall constitute a security agreement with respect to, and Grantor hereby
grants to Beneficiary a security interest in, (a) any portion of the Personal
Property Collateral which may not be deemed to form part of the Real Property or
may not constitute a fixture within the meaning of the Code, (b) all property
described on any financing statement recorded or filed with respect to the
security interest created hereunder, whether or not described herein, and (c)
all replacements of, substitutions for and additions to such property and the
proceeds thereof.  In addition to any other rights and remedies available to
Beneficiary hereunder, Beneficiary shall have all the rights and remedies of a
secured party under the Code.  To the extent permitted by law, Grantor hereby
authorizes Beneficiary to sign and file financing statements at any time in
respect of any of the Personal Property Collateral, without such financing
statements being executed by or on behalf of Grantor, but Grantor will however,
at any time upon request of Beneficiary, execute, or cause to be executed,
financing statements in respect of any Collateral.  Grantor agrees to pay all
filing and recording fees, including fees for filing and recording continuation
statements in connection with such financing statements, and to reimburse
Beneficiary for all costs and expenses of any kind incurred in connection
therewith, including, without limitation, attorneys’ fees.
 
This Deed of Trust constitutes a financing statement (fixture filing).  Grantor
is the record owner of the Property.  Information concerning the security
interest created by this Deed of Trust may be obtained from Beneficiary, as
secured party, at the address set forth on page 1 of this Deed of Trust.  The
address of Grantor, as debtor, is set forth on page 1 of this Deed of Trust.

1.15           Representations and Warranties of Grantor.  Grantor hereby
represents and warrants to Beneficiary as follows:
 
(a)           Grantor has the requisite power and authority to (i) incur the
Indebtedness; (ii) grant this Deed of Trust; and (iii) enter into the Note, this
Deed of Trust and all other Loan Documents.
 
(b)           This Deed of Trust, the Note, and all other Loan Documents were
executed and delivered in accordance with the requirements of law and in
accordance with any requirements of the “Organizational Documents” (as
hereinafter defined) of Grantor.  The term “Organizational Documents,” as used
herein, shall mean (i) with respect to a corporation, the articles of
incorporation and bylaws, and any amendments thereto, of such corporation, (ii)
with respect to a limited liability company, the articles of organization and
the operating agreement, and any amendments thereto, of such limited liability
company, (iii) with respect to a partnership, the partnership agreement, and any
amendments thereto, of such partnership, and (iv) with respect to a trust, the
trust agreement, and any amendments thereto, of such trust.
 

 
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(c)           The execution and delivery of this Deed of Trust, the Note, and
all other instruments executed and delivered to Beneficiary concurrently
herewith, and the full and complete performance of the provisions hereof and
thereof (i) is authorized by the Organizational Documents of Grantor, (ii) will
not violate the Organizational Documents of Grantor, and (iii) will not result
in any breach of, or constitute a default under, or result in the creation of
any lien, charge or encumbrance (other than those contained herein or in any
instrument delivered to Beneficiary concurrently herewith) upon any property or
assets of Grantor or under its Organizational Documents or any indenture,
mortgage, deed of trust, bank loan or credit agreement or other instrument to
which Grantor is a party or by which Grantor or its property or assets is bound.
 
ARTICLE 2
Default

2.1           Events of Default.  In addition to the occurrence of any other
event designated to be an Event of Default hereunder or under any other Loan
Document, any of the following events shall be an “Event of Default” hereunder:
 
(a)           Failure to make any payment of interest under the Note when the
same is due and payable in accordance with the terms of the Note and following
the expiration of any grace period provided in the Note, or failure to pay the
unpaid principal balance on the Note when the same becomes due and payable in
accordance with the terms of the Note, whether at maturity or by acceleration,
or should Grantor default in any monetary performance required hereunder or in
the Deed of Trust;
 
(b)           Failure to make any payment of the Advance Fee (as defined in the
Note);
 
(c)           Failure to perform any term, covenant, condition or agreement in
the Note, this Deed of Trust or any other Loan Documents (except those set forth
in 2.1(a) above), and the failure to cure such breach within the period of time
required for cure pursuant to the applicable Loan Document.
 
(d)           Breach by Grantor of any of the covenants, conditions or
agreements contained in Section 1.11 hereof.
 
(e)           If any representations or warranties given by or on behalf of
Grantor to Beneficiary in any Loan Document, including without limitation those
representations and warranties contained in this Deed of Trust shall prove to be
false or misleading in any material respect.
 
(f)           The issuance or levy of a writ of execution or attachment or any
similar process against all or any part of, or interest in, the Property if such
execution, attachment or similar process is not released, bonded, satisfied,
vacated or stayed within thirty (30) days after its issuance or levy.
 
2.2           Rights and Remedies.  If an Event of Default shall occur
hereunder, under the Note, or any other Loan Document, Beneficiary shall have
all of the following rights and remedies in addition to any other right, power
or remedy provided in the Loan Documents or at law or in equity:
 

 
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(a)           Acceleration.  With or without further notice to declare all
Indebtedness immediately due and payable;
 
(b)           Cure.  With or without further notice and without releasing
Grantor from any obligation hereunder, to cure any default of Grantor and in
connection therewith to enter upon the Property and to do such acts and things
Beneficiary deems necessary or appropriate, including without limitation:  to
appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary hereunder; to pay, purchase,
contest or compromise any encumbrance, charge, lien or claim of lien which, in
the judgment of Beneficiary, is or may be prior or superior hereto, the judgment
of Beneficiary being conclusive as between the parties hereto; to pay any
premiums or charges with respect to insurance required to be carried hereunder;
to complete construction of any improvements being constructed upon the
Property; and to employ legal counsel, accountants, contractors and other
appropriate persons to assist them.  No action taken by Beneficiary under this
subparagraph shall cure or waive any default or notice of default;
 
(c)           Judicial Foreclosures.  To commence and maintain an action or
actions in any court of competent jurisdiction to foreclose this instrument as a
mortgage or for specific enforcement of the covenants of Grantor hereunder, and
Grantor agrees that such covenants shall be specifically enforceable by
injunction or any other appropriate equitable remedy;
 
(d)           Entry and Receiver.  Whether or not proceedings to foreclose this
Deed of Trust have been commenced, Beneficiary shall be entitled ex parte
without notice, to the appointment of a receiver of the Property and all of the
earnings, revenues, rents, issues, profits and incomes thereof, with or without
further notice to Grantor and without regard to the adequacy of the security for
any indebtedness secured hereby.  Beneficiary may, if permitted by law, enter
upon, possess, manage and operate the Property or any part thereof; make,
terminate, enforce or modify leases of the Property upon such terms and
conditions as Beneficiary deems proper; make repairs, alterations and
improvements to the Property and complete construction of any Improvements to be
constructed on the Property, for the purpose of protecting or enhancing the
security hereof.  Grantor agrees to pay all expenses of action taken under this
subparagraph with interest thereon from the date of expenditure at the Default
Rate set forth in the Note, and payment thereof shall be secured hereby.  All
sums realized by Beneficiary under this subparagraph, less all costs and
expenses incurred by it under this subparagraph, including reasonable attorneys’
fees, and less such sum as Beneficiary deems appropriate as a reserve to meet
future expenses under this subparagraph, shall be applied on any indebtedness
secured hereby in such order as Beneficiary shall determine.  Neither the
application of said sums to said indebtedness nor any other action taken by
Beneficiary under this subparagraph shall cure or waive any default or notice of
default hereunder or nullify the effect of any such notice of default.  Any
action taken under this subparagraph may be taken by Beneficiary or any employee
or agent of Beneficiary, with or without bringing any action or proceeding, or
may be taken by a receiver appointed by a court, and any such action may be
taken without regard to the adequacy of the security for the Indebtedness and
whether or not the Indebtedness has been declared immediately due and payable
and whether or not notice of election and demand has been filed;
 

 
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(e)           Enforcement of Assignment of Rents.  In addition to the rights of
Beneficiary under Section 1.3 hereof, prior or subsequent to taking possession
of any portion of the Property or taking any action with respect to such
possession, Beneficiary may: (1) collect and/or sue for the Rents in
Beneficiary's own name, give receipts and releases therefor, and after deducting
all expenses of collection, including attorneys' fees and expenses, apply the
net proceeds thereof to the Indebtedness in such manner and order as Beneficiary
may elect and/or to the operation and management of the Property, including the
payment of management, brokerage and attorney's fees and expenses; and  (2)
require Grantor to transfer all security deposits and records thereof to
Beneficiary together with original counterparts of the Leases.
 
(f)           Power of Sale.  Upon the occurrence of a default, Trustee, or his
successor or substitute, is authorized and empowered and it shall be his special
duty at the request of Beneficiary to sell the Property or any part thereof
situated in the State of Texas, at the courthouse of any county (whether or not
the counties in which the Property is located are contiguous, if the Property is
located in more than one county) in the State of Texas in which any part of the
Property is situated, at public vendue to the highest bidder for cash between
the hours of ten o'clock a.m. and four o'clock p.m. on the first Tuesday in any
month or at such other place, time and date as provided by the statutes of the
State of Texas then in force governing sales of real estate under powers of sale
conferred by deed of trust, after having given notice of such sale in accordance
with such statutes.  Any sale made by Trustee hereunder may be as an entirety or
in such parcels as Beneficiary may request.  To the extent permitted by
applicable law, any sale may be adjourned by announcement at the time and place
appointed for such sale without further notice except as may be required by
law.  The sale by Trustee of less than the whole of the Property shall not
exhaust the power of sale herein granted, and Trustee is specifically empowered
to make successive sale or sales under such power until the whole of the
Property shall be sold; and, if the proceeds of such sale of less than the whole
of the Property shall be less than the aggregate of the Indebtedness and the
expense of executing this trust as provided herein, this Deed of Trust and the
lien hereof shall remain in full force and effect as to the unsold portion of
the Property just as though no sale had been made; provided, however, that
Grantor shall never have any right to require the sale of less than the whole of
the Property but Beneficiary shall have the right, at its sole election, to
request Trustee to sell less than the whole of the Property.  Trustee may, after
any request or direction by Beneficiary, sell not only the Real Property but
also the Personal Property Collateral and other interests which are a part of
the Property, or any part thereof, as a unit and as a part of a single sale, or
may sell any part of the Property separately from the remainder of the
Property.  It shall not be necessary for Trustee to have taken possession of any
part of the Property or to have present or to exhibit at any sale any of the
Personal Property Collateral.  After each sale, Trustee shall make to the
purchaser or purchasers at such sale good and sufficient conveyances in the name
of Grantor, conveying the Property so sold to the purchaser or purchasers with
general warranty of title of Grantor, subject to any recorded liens, charges or
encumbrances (and to such leases and other matters, if any, as Trustee may elect
upon request of Beneficiary), and shall receive the proceeds of said sale or
sales and apply the same as herein provided.  Payment of the purchase price to
the Trustee shall satisfy the obligation of purchaser at such sale therefor, and
such purchaser shall not be responsible for the application thereof.  The power
of sale granted herein shall not be exhausted by any sale held hereunder by
Trustee or his substitute or successor, and such power of sale may be exercised
from time to time and as many times as Beneficiary may deem necessary until all
of the Property has been duly sold and all Indebtedness has been fully paid.  In
the event any sale hereunder is not completed or is defective in the opinion of
Beneficiary, such sale shall not
 

 
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exhaust the power of sale hereunder and Beneficiary shall have the right to
cause a subsequent sale or sales to be made hereunder.  Any and all statements
of fact or other recitals made in any deed or deeds or other conveyances given
by Trustee or any successor or substitute appointed hereunder as to nonpayment
of the Indebtedness or as to the occurrence of any default, or as to
Beneficiary's having declared all of said indebtedness to be due and payable, or
as to the request to sell, or as to notice of time, place and terms of sale and
the properties to be sold having been duly given, or as to the refusal, failure
or inability to act of Trustee or any substitute or successor trustee, or as to
the appointment of any substitute or successor trustee, or as to any other act
or thing having been duly done by Beneficiary or by such Trustee, substitute or
successor, shall be taken as prima facie evidence of the truth of the facts so
stated and recited.  The Trustee or his successor or substitute may appoint or
delegate any one or more persons as agent to perform any act or acts necessary
or incident to any sale held by Trustee, including the posting of notices and
the conduct of sale, but in the name and on behalf of Trustee, his successor or
substitute.  If Trustee or his successor or substitute shall have given notice
of sale hereunder, any successor or substitute Trustee thereafter appointed may
complete the sale and the conveyance of the Property pursuant thereto as if such
notice had been given by the successor or substitute Trustee conducting the
sale.
 
(g)           Uniform Commercial Code.  Without limitation of Beneficiary's
rights of enforcement with respect to the Personal Property Collateral or any
part thereof in accordance with the procedures for foreclosure of real estate,
Beneficiary may exercise its rights of enforcement with respect to the Personal
Property Collateral or any part thereof under the Texas Business and Commerce
Code as amended (or under the Uniform Commercial Code in force in any other
state to the extent the same is applicable law) and in conjunction with, in
addition to or in substitution for those rights and remedies: (1)  Beneficiary
may enter upon Grantor's premises to take possession of, assemble and collect
the Personal Property Collateral or, to the extent and for those items of the
Personal Property Collateral permitted under applicable law, to render it
unusable; (2) Beneficiary may require Grantor to assemble the Personal Property
Collateral and make it available at a place Beneficiary designates which is
mutually convenient to allow Beneficiary to take possession or dispose of the
Personal Property Collateral; (3) written notice mailed to Grantor as provided
herein at least five (5) days prior to the date of public sale of the Personal
Property Collateral or prior to the date after which private sale of the
Personal Property Collateral will be made shall constitute reasonable notice;
(4) any sale made pursuant to the provisions of this paragraph shall be deemed
to have been a public sale conducted in a commercially reasonable manner if held
contemporaneously with and upon the same notice as required for the sale of the
Property under power of sale as provided in paragraph (f) above in this Section
2.2; (5) in the event of a foreclosure sale, whether made by Trustee under the
terms hereof, or under judgment of a court, the Personal Property Collateral and
the other Property may, at the option of Beneficiary, be sold as a whole; (6) it
shall not be necessary that Beneficiary take possession of the Personal Property
Collateral or any part thereof prior to the time that any sale pursuant to the
provisions of this Section is conducted and it shall not be necessary that the
Personal Property Collateral or any part thereof be present at the location of
such sale; (7) with respect to application of proceeds from disposition of the
Personal Property Collateral under Section 5.2 hereof, the costs and expenses
incident to disposition shall include the reasonable expenses of retaking,
holding, preparing for sale or lease, selling, leasing and the like and the
reasonable attorneys' fees and legal expenses incurred by Beneficiary; (8) any
and all statements of fact or other recitals made in any bill of sale or
assignment or other instrument evidencing any foreclosure sale hereunder as to
nonpayment of the Indebtedness or as to the occurrence of any default, or as to
Beneficiary having declared all of such indebtedness to be due and payable, or
as to notice of time, place and terms of sale and of the properties to be sold
having been duly given, or as to any other act or thing having been duly done by
Beneficiary, shall be taken as prima facie evidence of the truth of the facts so
stated and recited; and (9) Beneficiary may appoint or delegate any one or more
persons as agent to perform any act or acts necessary or incident to any sale
held by Beneficiary, including the sending of notices and the conduct of the
sale, but in the name and on behalf of Beneficiary.
 

 
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(h)           Other Security.  To resort to and realize upon the security
hereunder and any other security now or hereafter held by Beneficiary to secure
performance of the Loan Documents in such order and manner as Beneficiary may,
in its sole discretion, determine; resort to any or all such security may be
taken concurrently or successively and in one or several consolidated or
independent judicial actions or lawfully taken non-judicial proceedings, or
both.
 

 
ARTICLE 3
Miscellaneous Terms and Conditions

3.1           Marshaling of Assets; Waiver.  Grantor on its own behalf and on
behalf of its successors and assigns hereby expressly waives all rights to
require a marshaling of assets by Beneficiary.
 
3.2           Non Waiver.  Failure to accelerate the maturity of the
Indebtedness upon the occurrence of an Event of Default hereunder or acceptance
of any sum or performance of any obligation after the same is due or acceptance
of any sum less than the amount then due or failure to demand strict performance
by Grantor of the provisions of the Note, this Deed of Trust or any other Loan
Document or any forbearance by Beneficiary in exercising any right or remedy
provided in this Deed of Trust or in any other Loan Document or which
Beneficiary may have at law or in equity shall not constitute a waiver by
Beneficiary of any provision of the Note, this Deed of Trust or any other Loan
Document nor nullify the effect of any previous exercise of any such option to
accelerate or other right or remedy.  No exercise of any right or remedy by
Trustee or Beneficiary hereunder shall constitute a waiver of any other right or
remedy contained herein or in any other Loan Document or provided at law or in
equity.
 
No delay or omission of Trustee or Beneficiary in the exercise of any right,
power or remedy accruing hereunder or otherwise arising shall impair any such
right, power or remedy, or be construed to be a waiver of any Event of Default
or acquiescence therein.

3.3           Severability.  If any term of this Deed of Trust, or the
application thereof to any person or circumstances, shall, to any extent, be
invalid or unenforceable, the remainder of this Deed of Trust, or the
application of such term to persons or circumstances other than those as to
which it is invalid or unenforceable, shall not be affected thereby, and each
term of this Deed of Trust shall be valid and enforceable to the fullest extent
permitted by law.
 
3.4           Successors in Interest and Assigns.  This Deed of Trust applies
to, inures to the benefit of, and is binding not only on the parties hereto, but
on their heirs, executors, administrators, successors and assigns.  The term
“Beneficiary,” as used in this Deed of Trust, shall mean the holder and owner,
including pledgees, of the Note, whether or not named as Beneficiary
herein.  The term “Grantor,” as used in this Deed of Trust, shall mean and
include all successors in interest and assigns of the original Grantor
herein.  If Grantor consists of more than one party, all such parties shall be
jointly and severally liable for any and all obligations, covenants and
agreements of Grantor contained in the Note and the Loan Documents.
 

 
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3.5           Notices.  All notices to be given pursuant to this Deed of Trust
shall be sufficient if (a) personally delivered, (b) sent by facsimile, or (c)
mailed postage prepaid, by (i) United States certified or registered mail,
return receipt requested, or (ii) an overnight express mail service providing
for the equivalent of a return receipt to the sender, to the above described
addresses of the parties hereto, or to such other address as a party may request
in a writing complying with the provisions of this Section.  Any time period
provided in the giving of any notice hereunder shall commence (x) upon receipt
of such notice (if personally delivered or sent by facsimile), (y) the next
business day after the date such notice is deposited in the mail (if mailed), or
(z) the next business day after the date such notice is given to the overnight
express mail service (if sent by overnight express mail service).
 
3.6           Governing Law.  This Deed of Trust shall be governed by and
construed in accordance with the laws of the State of Texas.
 
3.7           Nonrecourse.  Notwithstanding anything to the contrary contained
in this Deed of Trust, the Note or any other Loan Document, the directors,
officers and shareholders of Grantor shall have no personal liability for
payment of the Indebtedness or for the payment of sums or the performance of
obligations required in this Deed of Trust, the Note or any other Loan Document.
 
3.8           Usury.  The loan evidenced by the Note is being made solely for
the purpose of carrying on or acquiring a business or commercial enterprise.  It
is the intent of Grantor and Beneficiary and all other parties to the Loan
Documents to conform to and contract in strict compliance with applicable usury
law from time to time in effect.  All agreements between Beneficiary and Grantor
(or any other party liable with respect to any indebtedness under the Loan
Documents) are hereby limited by the provisions of this Section which shall
override and control all such agreements, whether now existing or hereafter
arising.  In no way, nor in any event or contingency (including but not limited
to prepayment, default, demand for payment, or acceleration of the maturity of
any obligation), shall the interest taken, reserved, contracted for, charged,
chargeable, or received under this Deed of Trust, the Note or any other Loan
Document or otherwise, exceed the maximum nonusurious amount permitted by
applicable law (the "Maximum Amount").  If, from any possible construction of
any document, interest would otherwise be payable in excess of the Maximum
Amount, any such construction shall be subject to the provisions of this Section
and such document shall ipso facto be automatically reformed and the interest
payable shall be automatically reduced to the Maximum Amount, without the
necessity of execution of any amendment or new document.  If Beneficiary shall
ever receive anything of value which is characterized as interest under
applicable law and which would apart from this provision be in excess of the
Maximum Amount, an amount equal to the amount which would have been excessive
interest shall, without penalty, be applied to the reduction of the principal
amount owing on the Indebtedness in the inverse order of its maturity and not to
the payment of interest, or refunded to Grantor or the other payer thereof if
and to the extent such amount which would have been excessive exceeds such
unpaid principal.  The right to accelerate maturity of the Note or any other
Indebtedness does not include the right to accelerate any interest which has not
otherwise accrued on the date of such acceleration, and Beneficiary does not
intend to charge or receive any unearned interest in the event of
acceleration.  All interest paid or agreed to be paid to Beneficiary shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full stated term (including any renewal or extension) of
such indebtedness so that the amount of interest on account of such indebtedness
does not exceed the Maximum Amount.  As used in this Section, the term
"applicable law" shall mean the laws of the State of Texas or the federal laws
of the United States applicable to this transaction, whichever laws allow the
greater interest, as such laws now exist or may be changed or amended or come
into effect in the future.
 

 
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3.9           Substitute Trustee.  The Trustee may resign by an instrument in
writing addressed to Beneficiary, or Trustee may be removed at any time with or
without cause by an instrument in writing executed by Beneficiary.  In case of
the death, resignation, removal, or disqualification of Trustee, or if for any
reason Beneficiary shall deem it desirable to appoint a substitute or successor
trustee to act instead of the herein named trustee or any substitute or
successor trustee, then Beneficiary shall have the right and is hereby
authorized and empowered to appoint a successor trustee(s), or a substitute
trustee(s), without other formality than appointment and designation in writing
executed by Beneficiary and the authority hereby conferred shall extend to the
appointment of other successor and substitute trustees successively until the
Indebtedness has been paid in full, or until the Property is fully and finally
sold hereunder.  If Beneficiary is a corporation or association and such
appointment is executed on its behalf by an officer of such corporation or
association, such appointment shall be conclusively presumed to be executed with
authority and shall be valid and sufficient without proof of any action by the
board of directors or any superior officer of the corporation or
association.  Upon the making of any such appointment and designation, all of
the estate and title of Trustee in the Property shall vest in the named
successor or substitute Trustee(s) and he shall thereupon succeed to, and shall
hold, possess and execute, all the rights, powers, privileges, immunities and
duties herein conferred upon Trustee.  All references herein to "Trustee" shall
be deemed to refer to Trustee (including any successor(s) or substitute(s)
appointed and designated as herein provided) from time to time acting hereunder.
 
3.10           No Liability of Trustee.  The Trustee shall not be liable for any
error of judgment or act done by Trustee in good faith, or be otherwise
responsible or accountable under any circumstances whatsoever (including
Trustee's negligence), except for Trustee's gross negligence or willful
misconduct.  The Trustee shall have the right to rely on any instrument,
document or signature authorizing or supporting any action taken or proposed to
be taken by him hereunder, believed by him in good faith to be genuine.  All
moneys received by Trustee shall, until used or applied as herein provided, be
held in trust for the purposes for which they were received, but need not be
segregated in any manner from any other moneys (except to the extent required by
law), and Trustee shall be under no liability for interest on any moneys
received by him hereunder.  Grantor hereby ratifies and confirms any and all
acts which the herein named Trustee or his successor or successors, substitute
or substitutes, in this trust, shall do lawfully by virtue hereof.  Grantor will
reimburse Trustee for, and save him harmless against, any and all liability and
expenses which may be incurred by him in the performance of his duties.  The
foregoing indemnity shall not terminate upon discharge of the Indebtedness or
foreclosure, or release or other termination, of this Deed of Trust.
 
3.11           Releases.  If all of the Indebtedness be paid as the same becomes
due and payable and all of the covenants, warranties, undertakings and
agreements made in this Deed of Trust are kept and performed, and all
obligations, if any, of Beneficiary for further advances have been terminated,
then, and in that event only, all rights under this Deed of Trust shall
terminate (except to the extent expressly provided herein with respect to
indemnifications, representations and warranties and other rights which are to
continue following the release hereof) and the Property shall become wholly
clear of the liens, security interests, conveyances and assignments evidenced
hereby, and such liens and security interests shall be released by Beneficiary
in due form at Grantor's cost.  Without limitation, all provisions herein for
indemnity of Beneficiary or Trustee shall survive discharge of the Indebtedness
and any foreclosure, release or termination of this Deed of Trust.
 

 
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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.
 

 

 
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IN WITNESS WHEREOF, Grantor has executed this Deed of Trust, Assignment of Rents
and Leases, Security Agreement and Fixture Filing as of the date first above
written.

 
GRANTOR:
       
FSP PHOENIX TOWER LIMITED PARTNERSHIP
       
By:
FSP Phoenix Tower LLC, its general partner
             
By:
/s/ George J. Carter    
   
George J. Carter
   
President

COMMONWEALTH OF MASSACHUSETTS
:
 
: ss
COUNTY OF MIDDLESEX
:

 
On this 3rd day of December, 2008, before me, the undersigned notary public,
personally appeared George J. Carter, President of FSP Phoenix Tower LLC, a
Delaware limited liability company, which is the general partner of FSP Phoenix
Tower Limited Partnership, a Texas limited partnership, proved to me through
satisfactory evidence of identification, which was personal knowledge of
identity, to be the person whose name is signed on the preceding or attached
document, and acknowledged to me that he signed it voluntarily, as the act and
deed of said entity for its stated purpose.

 
/s/ Judy E. McIsaac                
 
Official Signature and Seal of Notary Public

 
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EXHIBIT A

TRACT  I:

Description of a 2.1840 acre (95,134 square feet) tract of land being the same
2.1840 acre tract described in a deed to Phoenix Tower, L.P., a Texas limited
partnership as recorded under Harris County Clerk’s File No. V029748, situated
in the A. C. Reynolds Survey, Abstract No. 61, in the City of Houston, Harris
County, Texas, said 2.1840 acre tract of land being more particularly described
by metes and bounds as follows (with bearings being referenced to the
aforementioned 2.1840 acre tract recorded under Harris County clerk’s File No.
V029748);
 
BEGINNING at a 60d nail found in the northerly right-of-way line of U. S.
Highway 59 (Southwest Freeway, 360 feet wide)  at the southeast corner of Block
1, Reserve “A” of GREENWAY PLAZA as recorded in Film Code No. 421110 of the
Harris County Map Records, said point also being in the Southwest corner of the
herein described tract, from which a found 60d nail bears South 45º 00’ East, a
distance of 0.05 foot;
 
THENCE, North 12º 18’ 43” West, along the easterly line of said GREENWAY PLAZA,
a distance of 370.00 feet to an “X” cut in concrete found in a southerly line of
said GREENWAY PLAZA, for the northwest corner of this herein described tract,
from which a found brass disk bears North 45º 00’ West, a distance of 0.12 foot;
 
THENCE, North 77º 41’ 17” East, along a southerly line of said GREENWAY PLAZA, a
distance of 256.35 feet to a brass disk found for the northeast corner of this
herein described tract in the westerly right-of-way line of Buffalo Speedway
(107 feet wide) said point also being the arc of a curve to the right;
 
THENCE, Southeasterly, along the westerly right-of-way line of said Buffalo
Speedway and along the arc of said curve to the right having a radius of
5,672.65 feet, a central angle of 03º 18’ 11”, a chord bearing South 12º 55’ 12”
East, a distance of 326.99 feet) an arc distance of  327.04 feet to an “X” cut
in concrete found marking the most northerly northwest cut back corner at the
intersection of the westerly right-of-way line of said Buffalo Speedway and the
northerly right-of-way line of the aforesaid U. S. Highway 59;
 
THENCE, South 33º 17’ 52” West, along said cut back line, a distance of 61.50
feet to a 5/8-inch iron rod found for the most southerly southwest corner of
this herein described tract in the northerly right-of-way line of said U.S.
Highway 59;
 
THENCE, South 77º 41’ 10” West, along the northerly right-of-way line of said U.
S. Highway 59, a distance of 215.87 feet to the POINT OF BEGINNING and
containing a computed area of 2.1840 acres (95,134 square feet) of land.
 

 
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TRACT II  (LEASEHOLD TRACT):

Leasehold Estate created by that certain Ground Lease dated May 1, 1984 by and
between Greenway Plaza, Ltd. as Lessor and Greenway Building Joint Venture, as
Lessee, as disclosed by instruments filed under H.C.C.F. Nos. K347663, R724673,
R906155 and V029750 covering the following tract of land:
 
Description of 1,995 square feet (0.0458 acres) of land located in the A. C.
Reynolds Survey, Abstract 61, Harris County, Texas being more fully described by
metes and bounds as follows with bearings referenced to the Texas State Plane
Coordinate System, South Central Zone;
 
BEGINNING at a found 60d nail in the northerly right-of-way line of U. S.
Highway 59 (Southwest Freeway, 360 foot wide) said point being the southwest
corner of a 66,983 square foot tract, as described in Volume 6327, Page 156, of
the Harris County Deed Records and the Southeast corner of the herein described
tract, from which a found 60d nail bears South 45º 00’ East, a distance of 0.05
foot;
 
THENCE, South 77º 41’ 17” West, along the northerly right-of-way line of said U.
S. Highway 59, a distance of 13.30 feet to a 5/8-inch iron rod set for the
southwest corner of this herein described tract;
 
THENCE, North 12º 18’43” West, a distance of 150.00 feet to a pk nail set in a
expansion joint for the northwest corner of this herein described tract;
 
THENCE, North 77º 41’ 17” East, a distance of 13.30 feet to an “X” set in
concrete for the northeast corner of this herein described tract in the West
line of the aforesaid 66,983 square foot tract;
 
THENCE, South 12º 18’ 43” East, along the easterly line of this tract and the
westerly line of said 66,983 square foot tract, a distance of 150.00 feet to the
POINT OF BEGINNING and containing a computed area of 0.0458Acre tract (1,995
square feet) of land.
 
TRACT  III (EASEMENT ESTATE):
 
Being a non-exclusive access easement as shown and depicted on the Subdivision
Map of the “Partial Replat of Greenway Plaza Section One” a subdivision of
record in Volume 180, Page 1 of the Harris County Map Records, and also
referenced under County Clerk’s File No’s. C289523, H767557, H767558, H767559,
H767560, H767561 and J759802 of Harris County, Texas
 

 
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