Exhibit 10.6.3

 

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO:

    

Bank of America, N.A.

333 South Beaudry Avenue, 11th Floor

Los Angeles, California 90017

 

Attn: Freda Chislom

Loan No:                     

          THIS SPACE ABOVE FOR RECORDER’S USE

 

DEED OF TRUST WITH ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

(California)

 

The parties to this Deed of Trust With Assignment of Rents, Security Agreement
and Fixture Filing (this “Deed of Trust”), made as of February 1, 2005, are COST
PLUS, INC., a California corporation as trustor (“Trustor”), PRLAP, Inc., as
trustee (“Trustee”), and BANK OF AMERICA, N.A., as beneficiary and secured party
(“Beneficiary”). Trustee is an affiliate of Beneficiary.

 

Capitalized terms used in this Deed of Trust without definition have the
meanings given them in the Loan Agreement referred to in Section 1.2(c) hereof.

 

1. Grant in Trust and Secured Obligations.

 

1.1 Grant in Trust. For the purpose of securing payment and performance of the
Secured Obligations defined and described in Section 1.2, Trustor 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 which Trustor now
has or may later acquire in and to the following property (all or any part of
such property, or any interest in all or any part of it, together with the
Personalty (as hereinafter defined) being hereinafter collectively referred to
as the “Property”):

 

(a) the real property located in the County of San Joaquin, State of California,
as described in Exhibit A attached hereto (the “Land”), together with all
existing and future easements and rights affording access to the Land; and

 

(b) all buildings, structures and improvements now located or later to be
constructed on the Land (the “Improvements”); and

 

(c) all existing and future appurtenances, privileges, rights, easements, and
tenements of the Land, including all minerals, oil, gas, other hydrocarbons and
any other commercially valuable substances which may be in, under or produced
from any part of the Land, all development rights and credits, air rights,
water, water rights (whether riparian, appropriative or otherwise, and whether
or not appurtenant), and any land lying in the streets, roads or avenues, open
or proposed, in front of or adjoining the Land and Improvements; and

 

(d) all rents, issues and profits of or from the sale or lease of the Land or
the Improvements; and

 

(e) all Fixtures (as that term is hereinafter defined); and

 

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(f) all proceeds, including all claims to and demands for them, of the voluntary
or involuntary conversion of any of the Land, the Improvements or the other
property described above into cash or liquidated claims, including proceeds of
any insurance policies, present and future, payable because of loss sustained to
all or any part of any Property, whether or not such insurance policies are
required by Beneficiary and all condemnation awards or payments now or later to
be made by any public body or decree by any court of competent jurisdiction for
any taking or in connection with any condemnation or eminent domain proceeding,
and all causes of action and their proceeds for any damage or injury to the
Land, the Improvements or the other property described above or any part of
them, or breach of warranty in connection with the construction of the
Improvements, including causes of action arising in tort, contract, fraud or
concealment of a material fact; and

 

(g) all additions and accretions to, substitutions and replacements for, and
changes in, any of the property described above.

 

1.2 Secured Obligations. Trustor makes the grant, conveyance, transfer and
assignment set forth in Section 1.1, makes the irrevocable and absolute
assignment set forth in Section 2 and grants the security interest set forth in
Section 3, all for the purpose of securing the following obligations in any
order of priority that Beneficiary may choose (collectively, the “Secured
Obligations;” individually, a “Secured Obligation”):

 

(a) payment of all obligations at any time owing under a promissory note (the
“Note”) dated as of even date herewith, payable by Trustor as maker in the
stated principal amount of Twenty Million and No/100ths Dollars ($20,000,000.00)
to the order of Beneficiary; and

 

(b) payment and performance of all obligations of Trustor under this Deed of
Trust; and

 

(c) payment and performance of all obligations of Trustor under that certain
Standing Loan Agreement and Swap Commitment executed as of even date herewith,
by Trustor as “Borrower” and Beneficiary as “Bank” (the “Loan Agreement”) and
under any “Loan Documents” as defined in the Loan Agreement; provided that this
Deed of Trust does not secure any provision in any Loan Document that is
expressly stated to be unsecured; and

 

(d) payment and performance of all obligations of Trustor under any Swap
Contract (as defined in Section 3.1 below). Notwithstanding the foregoing, no
Swap Contract shall be secured by this Deed of Trust unless an ISDA Master
Agreement (as defined in the Loan Agreement), confirmation or other writing
evidences the parties’ agreement that it shall be so secured.

 

(e) payment and performance of all future advances and other obligations that
Trustor 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; and

 

(f) payment and performance of all modifications, amendments, extensions, and
renewals, however evidenced, of any of the Secured Obligations.

 

All persons who may have or acquire an interest in all or any part of the
Property will be considered to have notice of, and will take title subject to,
the terms of the Secured Obligations and each other agreement or instrument made
or entered into in connection with each of the Secured Obligations. These terms
include any provisions in the Note, the Loan Agreement or any Swap Contract
which permit borrowing, repayment and reborrowing, or which provide that the
interest rate on one or more of the Secured Obligations may vary from time to
time.

 

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2. Assignment of Lessor’s Interest in Leases and Assignment of Rents.

 

2.1 Absolute Assignment. Trustor hereby irrevocably, absolutely, presently and
unconditionally assigns to Beneficiary:

 

(a) all of Trustor’s right, title and interest in, to and under any and all
leases, licenses and other agreements of any kind relating to the use or
occupancy of all or any portion of the Land or Improvements, whether now in
effect or entered into in the future (collectively, the “Leases,” individually,
a “Lease”), including (i) all guarantees of and security for lessees’
performance under any and all Leases, and (ii) all amendments, extensions,
renewals or modifications to any Leases; and

 

(b) all rents (and payments in lieu of rents), income, profit, payments and
revenue at any time payable under any and all Leases, any and all security
deposits received or to be received by Trustor pursuant to any and all Leases,
and all rights and benefits accrued or to accrue to Trustor under any and all
Leases (collectively “Rents”).

 

THIS IS AN ABSOLUTE ASSIGNMENT, NOT AN ASSIGNMENT FOR SECURITY ONLY.

 

2.2 Grant of License. Beneficiary hereby confers upon Trustor a license (the
“License”) to collect and retain the Rents as they become due and payable, so
long as no Event of Default, as defined in Section 7.1, shall exist and be
continuing. If an Event of Default has occurred and is continuing, Beneficiary
shall have the right, which it may choose to exercise in its sole discretion, to
terminate the License without notice to or demand upon Trustor, and without
regard to the adequacy of Beneficiary’s security under this Deed of Trust.

 

2.3 Collection and Application of Rents. Subject to the License granted to
Trustor under Section 2.2, Beneficiary has the right, power and authority to
collect any and all Rents. Trustor hereby appoints Beneficiary its
attorney-in-fact to perform any and all of the following acts, if and at the
times when Beneficiary in its sole discretion may so choose, but only during the
continuance of an Event of Default:

 

(a) demand, receive and enforce payment of any and all Rents; or

 

(b) give receipts, releases and satisfactions for any and all Rents; or

 

(c) sue either in the name of Trustor or in the name of Beneficiary for any and
all Rents.

 

Beneficiary’s right to the Rents does not depend on whether or not Beneficiary
takes possession of the Property as permitted under Section 7.2(c). In
Beneficiary’s sole discretion, it may choose to collect Rents either with or
without taking possession of the Property. If an Event of Default occurs while
Beneficiary is in possession of all or part of the Property and is collecting
and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee
and any receiver shall nevertheless be entitled to exercise and invoke every
right and remedy afforded any of them under this Deed of Trust and at law or in
equity, including the right to exercise the power of sale granted under Section
1.1 and Section 7.2(g).

 

2.4 Notice. All lessees under any and all Leases are hereby irrevocably
authorized and notified by Trustor to rely upon and to comply with (and are
fully protected in so doing) any notice or demand by Beneficiary for the payment
to Beneficiary of any rental or other sums which may at any time become due
under the Leases, or for the performance of any of lessees’ undertakings under
the Leases, and lessees shall have no right or duty to inquire as to whether any
Event of Default has actually occurred or is then existing hereunder.

 

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2.5 Proceeds. Beneficiary has the right to apply all amounts received by it
pursuant to this assignment to pay any of the following in such amounts and in
such order as Beneficiary deems appropriate: (a) any and all Secured
Obligations, together with all costs and attorneys’ fees; (b) all expenses of
leasing, operating, maintaining and managing the Property, including without
limitation, the reasonable salaries, fees, commissions and wages of a managing
agent and such other employees, agents or independent contractors as Beneficiary
reasonably deems necessary or desirable; (c) all taxes, charges, claims,
assessments, any other liens, and premiums for all insurance Beneficiary
reasonably deems necessary or desirable; (d) the cost of all repairs or
replacements, and all expenses incident to taking and retaining possession of
the Property.

 

2.6 Beneficiary Not Responsible. Unless and until Beneficiary, in person or by
agent, takes effective possession or control of the Land and Improvements,
Beneficiary is not and will not be deemed to be:

 

(a) a “mortgagee in possession” for any purpose; or

 

(b) responsible for performing any of the obligations of Trustor under any
lease; or

 

(c) responsible for any waste committed by lessees or any other parties, any
dangerous or defective condition of the Property, or any negligence in the
management, upkeep, repair or control of the Property; or

 

(d) liable in any manner for the Property or the use, occupancy, enjoyment or
operation of all or any part of it.

 

3. Grant of Security Interest.

 

3.1 Grant of Security Interest. Trustor grants to Beneficiary a security
interest in all of Trustor’s right, title and interest now or hereafter acquired
in and to all of the following described personal property (collectively, the
“Personalty”):

 

(a) All fixtures, equipment, systems, machinery and building and construction
supplies and materials, of every kind and character, tangible and intangible
(including software embedded therein), now owned or hereafter acquired by
Trustor, which are now or hereafter affixed to the Land or the Improvements, or
are acquired (whether delivered to the Land or stored elsewhere) for
installation in or on the Land or the Improvements, and in either case are
necessary to the complete and proper development or operation thereof (but not
to the conduct of Trustor’s business at the Land and Improvements), and all
renewals and replacements of, substitutions for and additions to the foregoing
(the properties referred to in this clause (a) being herein sometimes
collectively called the “Accessories,” all of which are hereby declared to be
permanent accessions to the Land);and

 

(b) all rights to the payment of money, accounts, reserves, deferred payments,
refunds, and deposits, whether now or later to be received from third parties
(including all earnest money sales deposits) or deposited by Trustor with third
parties (including all utility deposits) (provided, however, this Deed of Trust
does not create a lien on accounts receivable (other than accounts receivable
constituting Rents) arising in the ordinary course of the business conducted by
Trustor on the Property), contract rights, money, instruments, documents,
chattel paper, architectural and engineering plans, specifications and drawings,
and as-built drawings, which arise from or relate to the ownership or operation
of the Land and the Improvements but not to any business now or later to be
conducted thereon by Trustor; and

 

(c) all general intangibles and rights relating to the Property (but not to any
business now or later to be conducted thereon by Trustor), including, without
limitation, all

 

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permits, licenses and claims to or demands for the voluntary or involuntary
conversion of any of the Land, the Improvements or the other property described
above into cash or liquidated claims, proceeds of any insurance policies,
present and future, payable because of loss sustained to all or any part of any
Property, whether or not such insurance policies are required by Beneficiary and
all condemnation awards or payments now or later to be made by any public body
or decree by any court of competent jurisdiction for any taking or in connection
with any condemnation or eminent domain proceeding, and all causes of action and
their proceeds for any damage or injury to the Land, the Improvements or the
other property described above or any part of them, or breach of warranty in
connection with the construction of the Improvements, including causes of action
arising in tort, contract, fraud or concealment of a material fact; and

 

(d) all of Trustor’s interest in and to rights to payment of money from
Beneficiary under any swap transaction (as defined in the 2000 ISDA Definitions
published by the International Swaps and Derivatives Association) (each a “Swap
Contract”); and

 

(e) all substitutions, replacements, additions, accessions and proceeds for or
to any of the foregoing, and all books, records and files relating to any of the
foregoing, including, without limitation, computer readable memory and data and
any computer software or hardware reasonably necessary to access and process
such memory and data.

 

3.2 Financing Statements. Trustor hereby authorizes the filing of one or more
financing statements and such other documents as Beneficiary may from time to
time require to perfect or continue the perfection of Beneficiary’s security
interest in any Personalty. Trustor must pay all fees and costs that Beneficiary
may incur in filing such documents in public offices and in obtaining such
record searches as Beneficiary may reasonably require.

 

If any financing statement or other document is filed in the records normally
pertaining to personal property, that filing must never be construed as in any
way derogating from or impairing this Deed of Trust or the rights or obligations
of the parties under it.

 

3.3 Possession and Use of Collateral. Except as otherwise provided in this Deed
of Trust or the Loan Documents and Swap Contracts, so long as no Event of
Default exists hereunder, Trustor may possess, use, transfer and dispose of any
of the Personalty in the ordinary course of Trustor’s business.

 

3.4 Security Agreement. This Deed of Trust constitutes a security agreement
under the California Uniform Commercial Code covering all Personalty.

 

4. Fixture Filing.

 

4.1 Fixture Filing; Description of Fixtures. This Deed of Trust constitutes a
fixture filing under Sections 9334 and 9502 of the California Uniform Commercial
Code, as amended or recodified from time to time, and covers property which
includes goods which are or are to become fixtures on the Land and Improvements.
“Fixtures” include all articles of personal property now or hereafter attached
to, and used in connection with said real property, appurtenances and
improvements, which are or at any time become so affixed to the Land and
Improvements that an interest in them arises under real estate law.

 

5. Rights and Duties of the Parties.

 

5.1 Representations and Warranties. Trustor warrants that, except as previously
disclosed to Beneficiary in writing:

 

(a) Trustor lawfully possesses and holds fee simple title to all of the Land and
the Improvements subject to the Permitted Encumbrances;

 

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(b) Trustor has the full and unlimited power, right and authority to encumber
the Property;

 

(c) To Trustor’s current, actual knowledge, this Deed of Trust creates a first
and prior lien on the Property, subject to the Permitted Encumbrances;

 

(d) the Property includes all property and rights which may be reasonably
necessary or desirable to enable Trustor to use, enjoy and operate the Land and
the Improvements for the present uses thereof;

 

(e) Trustor owns any Property which is personal property free and clear of any
security agreements, reservations of title or conditional sales contracts,
(other than the Permitted Encumbrances), and there is no presently effective
financing statement affecting such personal property on file in any public
office except as relates to the Permitted Encumbrances; and

 

(f) Trustor’s place of business, or its chief executive office, if it has more
than one place of business, is located at the address specified below.

 

5.2 Performance of Secured Obligations. Trustor must promptly pay and perform
each Secured Obligation in accordance with its terms.

 

5.3 Taxes and Assessments. Trustor must pay prior to delinquency all taxes,
levies, charges and assessments (individually and collectively, an
“Imposition”), imposed by any public or quasi-public authority or utility
company which are (or if not paid, may become) a lien on all or part of the
Property or any interest in it, the non-payment of which could reasonably be
expected to have a Material Adverse Effect. If any such Imposition becomes
delinquent, Beneficiary may require Trustor to present evidence that they have
been paid in full, on ten (10) days’ written notice by Beneficiary to Trustor.
Notwithstanding the foregoing provisions of this Section 5.3, Trustor may, at
its expense, contest the validity or application of any Imposition by
appropriate legal proceedings promptly initiated and conducted in good faith and
with due diligence, provided that (i) Beneficiary is reasonably satisfied that
neither the Property nor any material part thereof or interest therein is then
in danger of being sold, forfeited, or lost as a result of such contest, and
(ii) Trustor shall have posted a bond or furnished such other security as may be
required by law.

 

5.4 Liens, Charges and Encumbrances. Trustor must immediately discharge any lien
on the Property, which Beneficiary has not consented to in writing (it being
understood that Permitted Encumbrances have been consented to in writing.
Trustor must pay when due each obligation secured by a lien, charge or
encumbrance, which could reasonably be expected to have a Material Adverse
Effect and which now does or later may encumber all or part of the Property or
any interest in it, whether the lien, charge or encumbrance is or would be
senior or subordinate to this Deed of Trust. This Section 5.4 is subject to the
right of Trustor to contest in good faith claims, liens, charges and
encumbrances so long as appropriate reserves are maintained in accordance with
GAAP and such claim, lien, charge or encumbrance does not represent a risk of
loss or forfeiture of any material portion of the Property. .

 

5.5 Damages and Insurance and Condemnation Proceeds.

 

(a) Trustor hereby absolutely and irrevocably assigns to Beneficiary, and
authorizes the payor to pay to Beneficiary, the following claims, causes of
action, awards, payments and rights to payment:

 

(i) all awards of damages and all other compensation payable directly or
indirectly because of a condemnation, proposed condemnation or taking for public
or private use which affects all or part of the Property or any interest in it;
and

 

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(ii) all proceeds of any insurance policies payable because of loss sustained to
all or part of the Property; and

 

(iii) all interest which may accrue on any of the foregoing.

 

(b) Trustor must immediately notify Beneficiary in writing if:

 

(i) any damage occurs or any injury or loss is sustained in the amount of
$100,000 or more to all or part of the Property, or any action or proceeding
relating to any such damage, injury or loss is commenced; or

 

(ii) any offer is made, or any action or proceeding is commenced, which relates
to any actual or proposed condemnation or taking of all or part of the Property.

 

If Beneficiary chooses to do so, it may in its own name appear in or prosecute
any action or proceeding to enforce any cause of action for damage, injury or
loss to all or part of the Property, and may join Trustor in making any
compromise or settlement of the action or proceeding. Beneficiary, if it so
chooses, may participate in any action or proceeding relating to condemnation or
taking of all or part of the Property, and may join Trustor in adjusting any
loss covered by insurance.

 

(c) All proceeds of these assigned claims, other property and rights which
Trustor may receive or be entitled to must be paid to Beneficiary. In each
instance, Beneficiary must apply those proceeds first toward reimbursement of
all of Beneficiary’s costs and expenses of recovering the proceeds, including
attorneys’ fees.

 

If, in any instance, each and all of the following conditions are satisfied in
Beneficiary’s reasonable judgment, Beneficiary must permit Trustor to use the
balance of the proceeds (“Net Claims Proceeds”) to pay costs of repairing or
reconstructing the Property in the manner described below:

 

(i) the plans and specifications, cost breakdown, construction contract,
construction schedule, contractor and payment and performance bond for the work
of repair or reconstruction must all be reasonably acceptable to Beneficiary;
and

 

(ii) Beneficiary must receive evidence reasonably satisfactory to it that after
repair or reconstruction, the Property would be at least as valuable as it was
immediately before the damage or condemnation occurred; and

 

(iii) the Net Claims Proceeds must be sufficient in Beneficiary’s reasonable
determination to pay for the total cost of repair or reconstruction, including
all associated development costs and interest projected to be payable on the
Secured Obligations until the repair or reconstruction is complete; or Trustor
must provide its own funds in an amount equal to the difference between the Net
Claims Proceeds and a reasonable estimate, made by Trustor and reasonably found
acceptable by Beneficiary, of the total cost of repair or reconstruction; and

 

(iv) Beneficiary must receive evidence reasonably satisfactory to it that all
leases which it may find acceptable will continue after the repair or
reconstruction is complete; and

 

(v) no Event of Default shall have occurred and be continuing.

 

(d) If Beneficiary finds that the foregoing conditions are met, Beneficiary must
hold the Net Claims Proceeds in a non-interest bearing account and must disburse
them to Trustor in monthly progress payments to pay costs of repair or
reconstruction upon presentation

 

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of evidence reasonably satisfactory to Beneficiary that repair or reconstruction
is progressing in accordance with the approved plans and specifications and
lien-free. However, if Beneficiary finds that one or more of the conditions are
not satisfied, it may apply the Net Claims Proceeds to pay or prepay (without
premium) some or all of the Secured Obligations in such order and proportions as
it in its sole discretion may choose.

 

(e) Trustor hereby specifically, unconditionally and irrevocably waives all
rights of a property owner granted under California Code of Civil Procedure
Section 1265.225(a), which provides for allocation of condemnation proceeds
between a property owner and a lienholder, and any other law or successor
statute of similar import.

 

(f) Notwithstanding the foregoing, Beneficiary shall in any event immediately
pay and turn over to Trustor all Net Claims Proceeds resulting from any single
damage, injury, loss, condemnation or casualty affecting the Property if the
amount thereof does not exceed $100,000.00; provided, however, the Trustor must
use the Net Claims Proceeds for the repair and reconstruction of the Property,
unless Trustor reasonably determines that the repair and reconstruction of the
Property is not necessary to the proper maintenance and operation of the
Property.

 

5.6 Maintenance and Preservation of Property.

 

(a) Trustor must insure the Property as required by the Loan Documents and Swap
Contracts and keep the Property in good condition and repair.

 

(b) Trustor must not remove or demolish the Improvements, or any material part
thereof, or initiate or allow any change in any zoning or other land use
classification which affects the Property or any material part of it, except as
permitted or required by the Loan Documents and Swap Contracts or with
Beneficiary’s express prior written consent in each instance. Notwithstanding
the foregoing, Trustor will not, without the prior written consent of
Beneficiary, (i) remove from the Property any Accessories that reduce the value
of the Property by more than $100,000.00 except such as is replaced by Trustor
by an article of equal suitability and value, owned by Trustor, free and clear
of any lien or security interest (except that created by this Deed of Trust and
the Permitted Encumbrances), or (ii) make any alteration to the Improvements
which reduces the value thereof by more than $100,000.00.

 

(c) If all or any material part of the Property becomes damaged or destroyed,
Trustor must promptly and completely repair and/or restore the Property in a
good and workmanlike manner in accordance with sound building practices,
provided that (i) Beneficiary disburses insurance proceeds or other sums to pay
costs of the work of repair or reconstruction under Section 5.5; and (ii) such
damage or destruction could reasonably be expected to have a Material Adverse
Effect.

 

(d) Trustor must not commit or allow any waste of the Property.

 

(e) Trustor must perform all other acts which from the character or use of the
Property may be reasonably necessary to maintain and preserve its value and
utility in all material respects.

 

5.7 Releases, Extensions, Modifications and Additional Security.

 

(a) From time to time, Beneficiary may perform any of the following acts without
incurring any liability or giving notice to any person:

 

(i) release any person liable for payment of any Secured Obligation;

 

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(ii) extend the time for payment, or otherwise alter the terms of payment, of
any Secured Obligation;

 

(iii) accept additional real or personal property of any kind as security for
any Secured Obligation, whether evidenced by deeds of trust, mortgages, security
agreements or any other instruments of security; or

 

(iv) alter, substitute or release any property securing the Secured Obligations.

 

(b) From time to time when requested to do so by Beneficiary in writing, Trustee
may perform any of the following acts without incurring any liability or giving
notice to any person:

 

(i) consent to the making of any plat or map of the Property or any part of it;

 

(ii) join in granting any easement or creating any restriction affecting the
Property;

 

(iii) join in any subordination or other agreement affecting this Deed of Trust
or the lien of it; or

 

(iv) reconvey the Property or any part of it without any warranty.

 

5.8 Reconveyance. When all of the Secured Obligations have been paid and
performed in full and all the Loan Documents and Swap Contracts terminated,
Beneficiary shall request Trustee in writing to reconvey the Property, and must
surrender this Deed of Trust and all notes and instruments evidencing the
Secured Obligations to Trustee. When Trustee receives Beneficiary’s written
request for reconveyance and all fees and other sums owing to it by Trustor
under Section 5.9, Trustee must reconvey the Property, or so much of it as is
then held under this Deed of Trust, without warranty to the person or persons
legally entitled to it. That person or those persons must pay any costs of
recordation. In the reconveyance, the grantee may be described as “the person or
persons legally entitled thereto,” and the recitals of any matters or facts are
conclusive proof of their truthfulness. Neither Beneficiary nor Trustee have any
duty to determine the rights of persons claiming to be rightful grantees of any
reconveyance.

 

5.9 Compensation, Exculpation, Indemnification.

 

(a) Trustor agrees to pay (but not exceeding the maximum amounts legally
permitted) reasonable fees as may be charged by Beneficiary and Trustee, for any
services that Beneficiary or Trustee may render in connection with this Deed of
Trust, including Beneficiary’s providing a statement of the Secured Obligations
or Trustee’s rendering of services in connection with a reconveyance. Trustor
must also pay or reimburse all of Beneficiary’s and Trustee’s reasonable costs
and expenses actually incurred in rendering any such services. Trustor further
agrees to pay or reimburse Beneficiary for all reasonable costs, expenses and
other advances which may be incurred or made by Beneficiary or Trustee in any
efforts to enforce any terms of this Deed of Trust, including any rights or
remedies afforded to Beneficiary or Trustee or both of them under Section 7.2,
whether any lawsuit is filed or not, including any bankruptcy or other voluntary
or involuntary proceeding, in or out of court, for the adjustment of
debtor-creditor relationships, or in defending any action or proceeding arising
under or relating to this Deed of Trust, including reasonable attorneys’ fees
and other legal costs, costs of any Foreclosure Sale (as defined in Section
7.2(h)) and any cost of evidence of title. If Beneficiary chooses to dispose of
Property through more than one Foreclosure Sale, Trustor must pay all reasonable
costs, expenses or other advances actually incurred or made by Trustee or
Beneficiary in each of those Foreclosure Sales.

 

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(b) Beneficiary is not directly or indirectly liable to Trustor or any other
person as a consequence of any of the following:

 

(i) Beneficiary’s exercise of or failure to exercise any rights, remedies or
powers granted to it in this Deed of Trust;

 

(ii) Beneficiary’s failure or refusal to perform or discharge any obligation or
liability of Trustor under any agreement related to the Property or under this
Deed of Trust; or

 

(iii) any loss sustained by Trustor or any third party resulting from
Beneficiary’s failure to lease the Property, or from any other act or omission
of Beneficiary in managing the Property, after an Event of Default, unless the
loss is caused by the gross negligence, willful misconduct or bad faith of
Beneficiary.

 

Trustor hereby expressly waives and releases all liability of the types
described above, and agrees that no such liability be asserted against or
imposed upon Beneficiary.

 

(c) Trustor agrees to indemnify Trustee and Beneficiary against and hold them
harmless from all losses, damages, liabilities, claims, causes of action,
judgments, court costs, attorneys’ fees and other legal expenses, cost of
evidence of title, cost of evidence of value, and other costs and expenses which
either may suffer or incur:

 

(i) in performing any act required or permitted by this Deed of Trust or any of
the other Loan Documents or by law;

 

(ii) because of any failure of Trustor to perform any of the Secured
Obligations; or

 

(iii) because of any alleged obligation of or undertaking by Beneficiary to
perform or discharge any of the representations, warranties, conditions,
covenants or other obligations prior to a Foreclosure Sale in any document
relating to the Property other than the Loan Documents.

 

This agreement by Trustor to indemnify Trustee and Beneficiary survives the
release and cancellation of any or all of the Secured Obligations and the full
or partial release and/or reconveyance of this Deed of Trust.

 

(d) Trustor must pay all obligations to pay money arising under this Section 5.9
within thirty (30) days after demand by Trustee or Beneficiary. If the loan
evidenced by the Note has not been paid in full, each such obligation shall bear
interest from the date the obligation arises at the rate then being applied to
the principal balance of the Note. If the loan evidenced by the Note has been
paid in full, each such obligation shall bear interest at the Non-default Rate
as defined in the Master Agreement included in the Swap Contracts.

 

5.10 Defense and Notice of Claims and Actions. At Trustor’s sole expense,
Trustor must protect, preserve and defend the Property and title to and right of
possession of the Property, and the security of this Deed of Trust and the
rights and powers of Beneficiary and Trustee created under it, against all
adverse claims. Trustor must give Beneficiary and Trustee prompt notice in
writing if any claim is asserted which does or could affect any of these
matters, or if any action or proceeding is commenced which alleges or relates to
any such claim.

 

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5.11 Substitution of Trustee. From time to time, Beneficiary may substitute a
successor to any Trustee named in or acting under this Deed of Trust in any
manner now or later to be provided at law, or by a written instrument executed
and acknowledged by Beneficiary and recorded in the office(s) of the recorder(s)
of the county or counties where the Land and Improvements are situated. Any such
instrument is conclusive proof of the proper substitution of the successor
Trustee, who will automatically upon recordation of the instrument succeed to
all estate, title, rights, powers and duties of the predecessor Trustee, without
conveyance from it.

 

5.12 Subrogation. Beneficiary is subrogated to the liens of all encumbrances,
whether released of record or not, which are discharged in whole or in part by
Beneficiary in accordance with this Deed of Trust or with the proceeds of any
loan secured by this Deed of Trust.

 

5.13 Site Visits, Observation and Testing. Beneficiary and its agents and
representatives have the right to enter and visit the Property, as provided in
the Loan Agreement.

 

5.14 Separate Obligations. Trustor agrees that, unless otherwise mutually
agreed:

 

(a) the obligations of Trustor on the Loan Agreement will be separate and
independent from the obligations of Trustor on Swap Contracts;

 

(b) the Loan Agreement is separate and independent from the Swap Contracts;

 

(c) the Loan Agreement and the Swap Contracts will not constitute a unified
transaction;

 

(d) payments by Trustor on Swap Contracts will not constitute payment of
interest or other amount due to Beneficiary on account of Loan Agreement.

 

6. Accelerating Transfers.

 

6.1 Acceleration Upon Sale or Encumbrance. Trustor agrees that Trustor shall
not, without the prior written consent of Beneficiary (which consent may be
withheld in Beneficiary’s sole discretion), make or permit, whether voluntarily
or involuntarily by operation of law or otherwise, any Accelerating Transfer.
Trustor acknowledges that Beneficiary is making one or more advances under the
Loan Agreement or entering in to one or more Swap Contracts in reliance on the
expertise, skill and experience of Trustor; thus, the Secured Obligations
include material elements similar in nature to a personal service contract.
Trustor acknowledges the materiality of the provisions of this Section 6.1 as a
covenant of Trustor, given individual weight and consideration by Beneficiary in
extending the Secured Obligations, including, without limitation, under any Swap
Contracts, and that any Accelerating Transfer in violation of the permitted
transfer provisions hereinabove provided shall result in a material impairment
of Beneficiary’s interest in the Property and be deemed a breach of the
foregoing covenant. If any Accelerating Transfer occurs, Beneficiary in its sole
discretion may declare all of the Secured Obligations to be immediately due and
payable and invoke any rights and remedies provided in Section 7 of this Deed of
Trust

 

6.2 Accelerating Transfers. “Accelerating Transfer” means any sale, conveyance,
encumbrance, pledge, mortgage, or other transfer or lease not expressly
permitted under this Deed of Trust or the Loan Agreement, including any transfer
or exercise of any right to drill for or to extract any water (other than for
Trustor’s own use), oil, gas, or other hydrocarbon substances or any mineral of
any kind under the surface of the Property, whether voluntary, involuntary, by
operation of law or otherwise. “Accelerating Transfer” also means any transfer
or transfers of shares possessing, in the aggregate, more than fifty percent
(50%) of the voting power or more than fifty percent (50%) of the direct or
indirect beneficial ownership of Trustor.

 

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7. Events of Default; Remedies.

 

7.1 Events of Default. Upon the occurrence of any one or more of the following
events, Beneficiary may, by written notice delivered to Trustor, declare Trustor
to be in default, and thereupon the same shall constitute an “Event of Default”
under this Deed of Trust:

 

(a) An Event of Default exists under the Loan Agreement or any other Loan
Document or an Early Termination Event occurs under any Swap Contract; or

 

(b) Trustor fails to perform any obligation to pay money to Beneficiary which
arises under this Deed of Trust and does not cure that failure within three (3)
days after the same becomes due; or

 

(c) Trustor causes the occurrence of an Accelerating Transfer in violation of
Section 6.1; or

 

(d) Trustor fails to perform any obligation arising under this Deed of Trust
other than as provided in clauses (b) and (c) of Section 7.1, and does not cure
that failure within thirty (30) days after written notice from Beneficiary or
Trustee, or, if the Default cannot be cured in thirty (30) days, within a
reasonable time after written notice.

 

7.2 Remedies. At any time after and during the continuance of an Event of
Default, Beneficiary and Trustee shall be entitled to invoke any and all of the
rights and remedies described below. All of such rights and remedies are
cumulative, and the exercise of any one or more of them does not constitute an
election of remedies.

 

(a) Acceleration. Beneficiary may declare any or all of the Secured Obligations
to be due and payable immediately and may terminate any Swap Contract or any
other Loan Document in accordance with its terms.

 

(b) Receiver. Beneficiary may apply to any court of competent jurisdiction for
the appointment of a receiver for the Property.

 

(c) Entry. Beneficiary, in person, by agent or by court- appointed receiver, may
enter, take possession of, manage and operate all or any part of the Property,
and may also do any and all other things in connection with those actions that
Beneficiary may in its sole discretion consider necessary and appropriate to
protect the security of this Deed of Trust. Such other things may include:
taking and possessing all of Trustor’s or the then owner’s books and records;
entering into, enforcing, modifying, or canceling leases on such terms and
conditions as Beneficiary may consider proper; obtaining and evicting tenants;
fixing or modifying rents; collecting and receiving any payment of money owing
to Trustor; completing any unfinished construction; and/or contracting for and
making repairs and alterations. If Beneficiary so requests, Trustor will
assemble all of the Property that has been removed from the Land and make all of
it available to Beneficiary at the site of the Land. Trustor hereby irrevocably
constitutes and appoints Beneficiary as Trustor’s attorney-in-fact to perform
such acts and execute such documents as Beneficiary in its sole discretion may
consider to be appropriate in connection with taking these measures, including
endorsement of Trustor’s name on any instruments. Regardless of any provision of
this Deed of Trust, any Swap Contract or any other Loan Document, Beneficiary
shall not be considered to have accepted any property other than cash or
immediately available funds in satisfaction of any obligation of Trustor to
Beneficiary, unless Beneficiary has given express written notice of its election
of that remedy in accordance with California Uniform Commercial Code Section
9620, as it may be amended or recodified from time to time.

 

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(d) Cure; Protection of Security. Either Beneficiary or Trustee may cure any
Event of Default of Trustor, and if it chooses to do so in connection with any
such cure, Beneficiary or Trustee may also enter the Property and/or do any and
all other things which it may in its reasonable discretion consider necessary
and appropriate to protect the security of this Deed of Trust. Such other things
may include: appearing in and/or defending any action or proceeding which
purports to affect the security of, or the rights or powers of Beneficiary or
Trustee under, this Deed of Trust; paying, purchasing, contesting or
compromising any encumbrance, charge, lien or claim of lien which in
Beneficiary’s or Trustee’s reasonable judgment is or may be senior in priority
to this Deed of Trust, such judgment of Beneficiary or Trustee to be conclusive
as among the parties to this Deed of Trust; obtaining insurance and/or paying
any premiums or charges for insurance required to be carried under the Loan
Agreement; otherwise caring for and protecting any and all of the Property;
and/or employing counsel, accountants, contractors and other appropriate persons
to assist Beneficiary or Trustee. Beneficiary and Trustee may take any of the
actions permitted under this Section 7.2 either with or without giving notice to
any person.

 

(e) Uniform Commercial Code Remedies. Beneficiary may exercise any or all of the
remedies granted to a secured party under the California Uniform Commercial
Code.

 

(f) Judicial Action. Beneficiary may bring an action in any court of competent
jurisdiction to foreclose this instrument or to obtain specific enforcement of
any of the covenants or agreements of this Deed of Trust.

 

(g) Power of Sale. Under this power of sale, Beneficiary has the discretionary
right to cause some or all of the Property, including any Property which
constitutes personal property, to be sold or otherwise disposed of in any
combination and in any manner permitted by applicable law.

 

(i) Sales of Personal Property

 

For purposes of this power of sale, Beneficiary may elect to treat as personal
property any Property which is intangible or which can be severed from the Land
or Improvements without causing structural damage. If it chooses to do so,
Beneficiary may dispose of any personal property separately from the sale of
real property, in any manner permitted by Division 9 of the California Uniform
Commercial Code, including any public or private sale, or in any manner
permitted by any other applicable law. Any proceeds of any such disposition
shall not cure any Event of Default or reinstate any Secured Obligation for
purposes of Section 2924c of the California Civil Code.

 

In connection with any sale or other disposition of such Property, Trustor
agrees that the following procedures constitute a commercially reasonable sale:

 

Beneficiary must mail written notice of the sale to Trustor not later than
forty-five (45) days prior to such sale. Once per week during the four weeks
immediately preceding such sale, Beneficiary must publish notice of the sale in
a local daily newspaper of general circulation. Upon receipt of any written
request, Beneficiary must make the Property available to any bona fide
prospective purchaser for inspection during reasonable business hours.
Notwithstanding anything herein to the contrary, Beneficiary is under no
obligation to consummate a sale if, in its judgment, none of the offers received
by it equals the fair value of the Property offered for sale. The foregoing
procedures do not constitute the only procedures that may be commercially
reasonable.

 

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(ii) Trustee’s Sales of Real Property or Mixed Collateral

 

Beneficiary may choose to dispose of some or all of the Property which consists
solely of real property in any manner then permitted by applicable law. In its
discretion, Beneficiary may also or alternatively choose to dispose of some or
all of the Property, in any combination consisting of both real and personal
property, together in one sale to be held in accordance with the law and
procedures applicable to real property, as permitted by Section 9604 of the
California Uniform Commercial Code. Trustor agrees that such a sale of personal
property together with real property constitutes a commercially reasonable sale
of the personal property. For purposes of this power of sale, either a sale of
real property alone, or a sale of both real and personal property together in
accordance with California Uniform Commercial Code Section 9604, will sometimes
be referred to as a “Trustee’s Sale.”

 

Before any Trustee’s Sale, Beneficiary or Trustee must give such notice of
default and election to sell as may then be required by law. When all time
periods then legally mandated have expired, and after such notice of sale as may
then be legally required has been given, Trustee must sell the property being
sold at a public auction to be held at the time and place specified in the
notice of sale. Neither Trustee nor Beneficiary has any obligation to make
demand on Trustor before any Trustee’s Sale. From time to time in accordance
with then applicable law, Trustee may, and in any event at Beneficiary’s request
must, postpone any Trustee’s Sale by public announcement at the time and place
noticed for that sale.

 

At any Trustee’s Sale, Trustee must sell to the highest bidder at public auction
for cash in lawful money of the United States. Trustee must execute and deliver
to the purchaser(s) a deed or deeds conveying the property being sold without
any covenant or warranty whatsoever, express or implied. The recitals in any
such deed of any matters or facts, including any facts bearing upon the
regularity or validity of any Trustee’s Sale, are conclusive proof of their
truthfulness. Any such deed shall be conclusive against all persons as to the
facts recited in it.

 

(h) Single or Multiple Foreclosure Sales. If the Property consists of more than
one lot, parcel or item of property, Beneficiary may:

 

(i) designate the order in which the lots, parcels and/or items shall be sold or
disposed of or offered for sale or disposition; and

 

(ii) elect to dispose of the lots, parcels and/or items through a single
consolidated sale or disposition to be held or made under the power of sale
granted in Section 7.2(g), or in connection with judicial proceedings, or by
virtue of a judgment and decree of foreclosure and sale; or through two or more
such sales or dispositions; or in any other manner Beneficiary may deem to be in
its best interests (any such sale or disposition, a “Foreclosure Sale;” any two
or more, “Foreclosure Sales”).

 

If it chooses to have more than one Foreclosure Sale, Beneficiary at its option
may cause the Foreclosure Sales to be held simultaneously or successively, on
the same day, or on such different days and at such different times and in such
order as it may deem to be in its best interests. No Foreclosure Sale will
terminate or affect the liens of this Deed of Trust on any part of the Property
which has not been sold, until all of the Secured Obligations have been paid in
full.

 

7.3 Credit Bids. At any Foreclosure Sale, any person, including Trustor, Trustee
or Beneficiary, may bid for and acquire the Property or any part of it to the
extent permitted by then applicable law. Instead of paying cash for that
property, Beneficiary may settle for the purchase price by crediting the sales
price of the property against the following obligations:

 

(a) first, the portion of the Secured Obligations attributable to the expenses
of sale, costs of any action and any other sums for which Trustor is obligated
to pay or reimburse Beneficiary or Trustee under Section 5.9; and

 

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(b) second, all other Secured Obligations in any order and proportions as
Beneficiary in its sole discretion may choose.

 

7.4 Application of Foreclosure Sale Proceeds. Beneficiary and Trustee shall
apply the proceeds of any Foreclosure Sale in the following manner:

 

(a) first, to pay the portion of the Secured Obligations attributable to the
expenses of sale, costs of any action and any other sums for which Trustor is
obligated to reimburse Beneficiary or Trustee under Section 5.9;

 

(b) second, to pay the portion of the Secured Obligations attributable to any
sums expended or advanced by Beneficiary or Trustee under the terms of this Deed
of Trust which then remain unpaid;

 

(c) third, to pay all other Secured Obligations in any order and proportions as
Beneficiary in its sole discretion may choose; and

 

(d) fourth, to remit the remainder, if any, to the person or persons entitled to
it.

 

7.5 Application of Rents and Other Sums. Beneficiary must apply any and all
Rents collected by it pursuant to the assignment provided in Section 2 of this
Deed of Trust, and any and all other sums, other than the proceeds of a
Foreclosure Sale, received or collected by Beneficiary, in the following manner:

 

(a) first, to pay the portion of the Secured Obligations attributable to the
costs and expenses of collection of such sums, including reasonable attorneys’
fees, that may be incurred by Beneficiary, Trustee and/or any receiver appointed
in accordance with this Deed of Trust;

 

(b) second, to pay any and all Secured Obligations in any order and proportions
as Beneficiary in its sole discretion may choose, and any and all expenses of
leasing, operating, maintaining and managing the Property and all other costs
and charges incident to the Property as provided in Section 2.5 above, and in
such order and proportions as Beneficiary in its sole discretion may choose; and

 

(c) third, to remit the remainder, if any, to the person or persons entitled
thereto.

 

Beneficiary has no liability for any funds which it does not actually receive.

 

8. Miscellaneous Provisions.

 

8.1 Additional Provisions. The Loan Documents and Swap Contracts fully state all
of the terms and conditions of the parties’ agreement regarding the matters
mentioned in or incidental to this Deed of Trust. The Loan Documents and Swap
Contracts also grant further rights to Beneficiary and contain further
agreements and affirmative and negative covenants by Trustor which apply to this
Deed of Trust and to the Property.

 

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8.2 No Waiver or Cure.

 

(a) Each waiver by Beneficiary or Trustee must be in writing, and no waiver is
to be construed as a continuing waiver. No waiver is to be implied from any
delay or failure by Beneficiary or Trustee to take action on account of any
default of Trustor. Consent by Beneficiary or Trustee to any act or omission by
Trustor must not be construed as a consent to any other or subsequent act or
omission or to waive the requirement for Beneficiary’s or Trustee’s consent to
be obtained in any future or other instance.

 

(b) If any of the events described below occurs, that event alone shall not:
cure or waive any breach, Event of Default or notice of default under this Deed
of Trust or invalidate any act performed pursuant to any such default or notice;
or nullify the effect of any notice of default or sale (unless all Secured
Obligations then due have been paid and performed and all other defaults under
the Loan Documents, including any Swap Contracts, have been cured); or impair
the security of this Deed of Trust; or prejudice Beneficiary, Trustee or any
receiver in the exercise of any right or remedy afforded any of them under this
Deed of Trust; or be construed as an affirmation by Beneficiary of any tenancy,
lease or option, or a subordination of the lien of this Deed of Trust.

 

(i) Beneficiary, its agent or a receiver takes possession of all or any part of
the Property in the manner provided in subsection 7.2(c).

 

(ii) Beneficiary collects and applies Rents as permitted under Sections 2.3 and
7.5, either with or without taking possession of all or any part of the
Property.

 

(iii) Beneficiary receives and applies to any Secured Obligation any proceeds of
any Property, including any proceeds of insurance policies, condemnation awards,
or other claims, property or rights assigned to Beneficiary under Section 5.5.

 

(iv) Beneficiary makes a site visit, observes the Property and/or conducts tests
as permitted under Section 5.13.

 

(v) Beneficiary receives any sums under this Deed of Trust or any proceeds of
any collateral held for any of the Secured Obligations, and applies them to one
or more Secured Obligations.

 

(vi) Beneficiary, Trustee or any receiver invokes any right or remedy provided
under this Deed of Trust.

 

8.3 Powers of Beneficiary and Trustee.

 

(a) Trustee has no obligation to perform any act which it is empowered to
perform under this Deed of Trust unless it is requested to do so in writing and
is reasonably indemnified against loss, cost, liability and expense.

 

(b) If either Beneficiary or Trustee performs any act which it is empowered or
authorized to perform under this Deed of Trust, including any act permitted by
Section 5.7 or Section 7.2(d), that act alone does not release or change the
personal liability of any person for the payment and performance of the Secured
Obligations then outstanding, or the lien of this Deed of Trust on all or the
remainder of the Property for full payment and performance of all outstanding
Secured Obligations.

 

(c) Beneficiary may take any of the actions permitted under Sections 7.2(b)
and/or 7.2(c) whenever an Event of Default exists regardless of the adequacy of
the security for

 

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the Secured Obligations, or whether any or all of the Secured Obligations have
been declared to be immediately due and payable, or whether notice of default
and election to sell has been given under this Deed of Trust.

 

8.4 Merger. No merger occurs as a result of Beneficiary’s acquiring any other
estate in or any other lien on the Property unless Beneficiary consents to a
merger in writing.

 

8.5 Joint and Several Liability. If Trustor consists of more than one person,
each is jointly and severally liable for the faithful performance of all of
Trustor’s obligations under this Deed of Trust.

 

8.6 Applicable Law. This Deed of Trust is governed by California law. This Deed
of Trust may be executed in one or more counterparts, each of which is, for all
purposes deemed an original and all such counterparts taken together, constitute
one and the same instrument.

 

8.7 Successors in Interest. The terms, covenants and conditions of this Deed of
Trust are binding upon and inure to the benefit of the heirs, successors and
assigns of the parties. However, this Section 8.7 does not waive the provisions
of Section 6.1.

 

8.8 Interpretation. Whenever the context requires, all words used in the
singular will be construed to have been used in the plural, and vice versa, and
each gender will include any other gender. The captions of the sections of this
Deed of Trust are for convenience only and do not define or limit any terms or
provisions. The word “include(s)” means “include(s), without limitation,” and
the word “including” means “including, but not limited to.” The word
“obligations” is used in its broadest and most comprehensive sense, and includes
all primary, secondary, direct, indirect, fixed and contingent obligations. It
further includes all principal, interest, prepayment charges, late charges, loan
fees and any other fees and charges accruing or assessed at any time, as well as
all obligations to perform acts or satisfy conditions. No listing of specific
instances, items or matters in any way limits the scope or generality of any
language of this Deed of Trust. The Exhibits to this Deed of Trust are hereby
incorporated in this Deed of Trust. Any capitalized words which are defined in
the Loan Agreement are used in this Deed of Trust as so defined.

 

8.9 In-House Counsel Fees. Whenever Trustor is obligated to pay or reimburse
Beneficiary or Trustee for any attorneys’ fees, those fees shall include the
allocated costs for services of in-house counsel.

 

8.10 Waiver of Marshalling. Trustor waives all rights, legal and equitable, it
may now or hereafter have to require marshalling of assets or to require upon
foreclosure sales of assets in a particular order, including any rights provided
by California Civil Code Sections 2899 and 3433, as such Sections may be amended
from time to time. Each successor and assign of Trustor, including any holder of
a lien subordinate to this Deed of Trust, by acceptance of its interest or lien
agrees that it shall be bound by the above waiver, as if it had given the waiver
itself.

 

8.11 Severability. If any provision of this Deed of Trust should be held
unenforceable or void, that provision shall be deemed severable from the
remaining provisions and in no way affect the validity of this Deed of Trust
except that if such provision relates to the payment of any monetary sum, then
Beneficiary may, at its option, declare all Secured Obligations immediately due
and payable.

 

8.12 Notices. Any Trustor whose address is set forth below hereby requests that
a copy of notice of default and notice of sale be mailed to it at that address.
If any Trustor fails to insert an address, that failure shall constitute a
designation of Trustor’s last known address as the address for such notice.

 

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Address Where Notices to Trustor

Are to be Sent:

 

200 4th Street

Oakland, California 94607

Attention: John Lutrell

 

Address Where Notices to Beneficiary

Are to be Sent:

 

Address Where Notices to Trustee

Are to be Sent:

Bank of America, N.A.

333 South Beaudry Avenue, 11th Floor

Los Angeles, California 90017

 

PRLAP, Inc.,

10850 White Rock Road, Suite 101

Rancho Cordova, California 95670

 

8.13 Consents. Whenever this Deed of Trust requires an approval, consent,
designation, determination, selection or judgment by Beneficiary or Trustee,
such approval, consent, designation, determination, selection or judgment and
any conditions imposed thereby shall be reasonable and shall not be unreasonably
withheld or delayed, and, in exercising any right or remedy under this Deed of
Trust, Beneficiary and Trustee shall at all times act reasonably and in good
faith.

 

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IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first
above written.

 

TRUSTOR:

 

Cost Plus, Inc.,

a California corporation

 

By:

 

/s/    John Luttrell

--------------------------------------------------------------------------------

Name:

 

John Luttrell

--------------------------------------------------------------------------------

Title:

 

CFO

--------------------------------------------------------------------------------

 

[All Signatures Must Be Acknowledged]

 

 

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Exhibit A to DEED OF TRUST executed as February 1, 2005, by COST PLUS, INC., a
California corporation as “Trustor” to PRLAP, Inc. as “Trustee” for the benefit
of Bank of America, N.A., a national banking association as “Beneficiary.”

 

Description of Property

 

A portion of the South half of Section 35, and the North half of Section 36 of
C.M. WEBER GRANT, EL Rancho del Campo de los Franceses described as follows:

 

Parcel 1, as shown upon that certain PARCEL MAP filed for record April 8, 2003,
in Book 22 of Parcel Maps, at page 145, San Joaquin County Records.

 

 

Assessor’s Parcel No.: a portion of 177-140-08

 

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STATE OF CALIFORNIA

   )           )    ss.

COUNTY OF ALAMEDA

   )     

 

On 2/4/05, before me, Christine Petit, a Notary Public in and for said County
and State, personally appeared John Luttrell, personally known to me (or 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 capacit(-y/-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.

 

WITNESS my hand and official seal.

 

/s/    Christine Petit

--------------------------------------------------------------------------------

Signature of Notary Public

 

[SEAL]

 

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