Exhibit 10.3

20130209262
 
05/01/2013
ER $152.00

Prepared By/Return To:

Snell & Wilmer L.L.P.
600 Anton Boulevard, Suite 1400
Costa Mesa, California 92626
Attn: Katie Otte

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

by

KBS SOR 1800 WEST LOOP SOUTH, LLC
a Delaware limited liability company,
as Grantor,

to and in favor of

PRLAP, INC., a Texas corporation,
as Trustee,

and

BANK OF AMERICA, N.A.,
a national banking association,
as Beneficiary

(This document serves as a Fixture Filing under Section 9.502 of the Texas
Business and Commerce Code)
    
Grantor's Organizational Identification Number is: DE 5241898

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DEED OF TRUST, ASSIGNMENT,
SECURITY AGREEMENT AND FIXTURE FILING
This Deed of Trust, Assignment, Security Agreement and Fixture Filing is made as
of the 1st day of May, 2013, by KBS SOR 1800 West Loop South, LLC, a Delaware
limited liability company (herein referred to as “Grantor”), whose address is
c/o KBS Capital Advisors LLC, 620 Newport Center Drive, Suite 1300, Newport
Beach, California 92660, to PRLAP, Inc., a Texas corporation (“Trustee”), whose
address is P.O. Box 2240, Brea, California 92822, for the benefit of Bank of
America, N.A., a national banking association (“Lender”), whose address is 5
Park Plaza, Suite 500, Irvine, California, 92614, as beneficiary.
Recitals
Grantor has requested that Lender make the Loan (as hereinafter defined) to
Borrower (as hereinafter defined). As a condition precedent to making the Loan,
Lender has required that Grantor execute and deliver this Deed of Trust,
Assignment, Security Agreement and Fixture Filing to Trustee and Lender.
Grants and Agreements
Now, therefore, in order to induce Lender to make the Loan to Borrower, Grantor
agrees as follows:
Article I
Definitions.
As used in this Deed of Trust, the terms defined in the Preamble hereto shall
have the respective meanings specified therein, and the following additional
terms shall have the meanings specified:
“Accessories” means all fixtures, equipment, systems, machinery, furniture,
furnishings, appliances, inventory, goods, building and construction materials,
supplies and other articles of personal property, of every kind and character,
tangible and intangible (including software embedded therein), now owned or
hereafter acquired by Grantor, which are now or hereafter attached to or
situated in, on or about the Land or Improvements, or used in or necessary to
the complete and proper planning, development, use, occupancy or operation
thereof, or acquired (whether delivered to the Land or stored elsewhere) for use
or installation in or on the Land or Improvements, and all Additions to the
foregoing, all of which are hereby declared to be permanent accessions to the
Land.
“Accounts” means all accounts of Grantor, within the meaning of the Uniform
Commercial Code of the State, derived from or arising out of the use, occupancy
or enjoyment of the Property or for services rendered therein or thereon.
“Additions” means any and all alterations, additions, accessions and
improvements to property, substitutions therefor, and renewals and replacements
thereof.
“Beneficiary” means Lender and its successors and assigns.

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“Borrower” means individually and collectively, Grantor and KBS SOR Iron Point,
LLC, a Delaware limited liability company.
“Claim” means any liability, suit, action, claim, demand, loss, expense,
penalty, fine, judgment or other cost of any kind or nature whatsoever,
including fees, costs and expenses of attorneys, consultants, contractors and
experts.
“Condemnation” means any taking of title to, use of, or any other interest in
the Property under the exercise of the power of condemnation or eminent domain,
whether temporarily or permanently, by any Governmental Authority or by any
other Person acting under or for the benefit of a Governmental Authority.
“Condemnation Awards” means any and all judgments, awards of damages (including
severance and consequential damages), payments, proceeds, settlements, amounts
paid for a taking in lieu of Condemnation, or other compensation heretofore or
hereafter made, including interest thereon, and the right to receive the same,
as a result of, or in connection with, any Condemnation or threatened
Condemnation.
“Contract of Sale” means any contract for the sale of all or any part of the
Property or any interest therein, hereafter executed by Grantor.
“Deed of Trust” means this Deed of Trust, Assignment, Security Agreement and
Fixture Filing, as the same may from time to time be extended, amended,
restated, supplemented or otherwise modified.
“Default” means an event or circumstance which, with the giving of Notice or
lapse of time, or both, would constitute an Event of Default under the
provisions of this Deed of Trust.
“Design and Construction Documents” means, collectively, (a) all contracts for
services to be rendered, work to be performed or materials to be supplied in the
development of the Land or the construction or repair of Improvements, including
all agreements with architects, engineers or contractors for such services, work
or materials; (b) all plans, drawings and specifications for the development of
the Land or the construction or repair of Improvements; (c) all permits,
licenses, variances and other rights or approvals issued by or obtained from any
Governmental Authority or other Person in connection with the development of the
Land or the construction or repair of Improvements; and (d) all amendments of or
supplements to any of the foregoing.
“Encumbrance” means any Lien, easement, right of way, roadway (public or
private), condominium regime, cooperative housing regime, condition, covenant or
restriction (including any covenants, conditions or restrictions in connection
with any condominium development or cooperative housing development), Lease or
other matter of any nature that would affect title to the Property.
“Environmental Agreement” means the Environmental Indemnification and Release
Agreement of even date herewith by and between Grantor and Lender pertaining to
the Property, as the same may from time to time be extended, amended, restated
or otherwise modified. The Environmental Agreement is one of the Loan Documents,
but this Deed of Trust does not secure the obligations of Grantor under the
Environmental Agreement.

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“Event of Default” means an event or circumstance specified in Article VI and
the continuance of such event or circumstance beyond the applicable grace and/or
cure periods therefor, if any, set forth in Article VI.
“Expenses” means all fees, charges, costs and expenses of any nature whatsoever
incurred at any time and from time to time (whether before or after an Event of
Default) by Beneficiary or Trustee in making, funding, administering or
modifying the Loan, in negotiating or entering into any “workout” of the Loan,
or in exercising or enforcing any rights, powers and remedies provided in this
Deed of Trust or any of the other Loan Documents, including attorneys’ fees,
court costs, receiver’s fees, management fees and costs incurred in the repair,
maintenance and operation of, or taking possession of, or selling, the Property.
“Governmental Authority” means any governmental or quasi-governmental entity,
including any court, department, commission, board, bureau, agency,
administration, service, district or other instrumentality of any governmental
entity.
“Guarantor” means KBS SOR Properties, LLC, a Delaware limited liability company,
and its personal representatives, successors and assigns.
“Guaranty” means the Guaranty Agreement of even date herewith executed by
Guarantor for the benefit of Lender, as the same may from time to time be
extended, amended, restated, supplemented or otherwise modified.
“Improvements” means all buildings, structures and other improvements now or
hereafter existing, erected or placed on the Land, together with any on-site
improvements and off-site improvements in any way used or to be used in
connection with the use, enjoyment, occupancy or operation of the Land.
“Insurance Proceeds” means the insurance claims under and the proceeds of any
and all policies of insurance covering the Property or any part thereof,
including all returned and unearned premiums with respect to any insurance
relating to such Property, in each case whether now or hereafter existing or
arising.
“Land” means the real property described in Exhibit A attached hereto and made a
part hereof.
“Law” or “Laws” mean all federal, state and local laws, statutes, rules,
ordinances, regulations, codes, licenses, authorizations, decisions,
injunctions, interpretations, orders or decrees of any court or other
Governmental Authority having jurisdiction as may be in effect from time to
time.
“Leases” means all leases, license agreements and other occupancy or use
agreements (whether oral or written), now or hereafter existing, which cover or
relate to the Property or any part thereof, together with all options therefor,
amendments thereto and renewals, modifications and guaranties thereof, including
any cash or security deposited under the Leases to secure performance by the
tenants of their obligations under the Leases, whether such cash or security is
to be held until the expiration of the terms of the Leases or applied to one or
more of the installments of rent coming due thereunder.

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“Letter of Credit” means any letter of credit issued by Beneficiary for the
account of Grantor or its nominee in connection with the development of the Land
or the construction of the Improvements, together with any and all extensions,
renewals or modifications thereof, substitutions therefor or replacements
thereof.
“Lien” means any mortgage, deed of trust, pledge, security interest, assignment,
judgment, lien or charge of any kind, including any conditional sale or other
title retention agreement, any lease in the nature thereof, and the filing of,
or agreement to give, any financing statement under the Uniform Commercial Code
of any jurisdiction.
“Loan” means the loan from Beneficiary to Borrower, the repayment obligations in
connection with which are evidenced by the Note.
“Loan Agreement” means the Term Loan Agreement of even date herewith between
Borrower and Lender which sets forth, among other things, the terms and
conditions upon which the proceeds of the Loan will be disbursed, as the same
may from time to time be extended, amended, restated, supplemented or otherwise
modified.
“Loan Documents” means this Deed of Trust, the Note, the Guaranty, the
Environmental Agreement, the Loan Agreement, any Swap Contract, any application
or reimbursement agreement executed in connection with any Letter of Credit, and
any and all other documents which Borrower, Guarantor or any other party or
parties have executed and delivered, or may hereafter execute and deliver, to
evidence, secure or guarantee the Obligations, or any part thereof, as the same
may from time to time be extended, amended, restated, supplemented or otherwise
modified.
“Note” means the Promissory Note of even date herewith in the original principal
amount of Seventy-Two Million Four Hundred Fifty Thousand and No/100 Dollars
($72,450,000.00) made by Borrower to the order of Lender, as the same may from
time to time be extended, amended, restated, supplemented or otherwise modified.
Additionally, the Promissory Note provides that the principal balance evidenced
thereby shall bear interest at a floating rate of interest subject to change
from time to time.
“Notice” means a notice, request, consent, demand or other communication given
in accordance with the provisions of Section 9.8 of this Deed of Trust.
“Obligations” means all present and future debts, obligations and liabilities of
Borrower to Beneficiary and/or Trustee arising pursuant to, and/or on account
of, the provisions of this Deed of Trust, the Note or any of the other Loan
Documents, including the obligations: (a) to pay all principal, interest, late
charges, prepayment premiums (if any) and other amounts due at any time under
the Note; (b) to pay all Expenses, indemnification payments, fees and other
amounts due at any time under this Deed of Trust or any of the other Loan
Documents, together with interest thereon as herein or therein provided; (c) to
pay and perform all obligations of Borrower under any Swap Contract; (d) to
perform, observe and comply with all of the other terms, covenants and
conditions, expressed or implied, which Grantor is required to perform, observe
or comply with pursuant to this Deed of Trust or any of the other Loan
Documents; and (e) to pay and perform all future advances and other obligations
that Grantor or any successor in ownership of all or part of the Property may
agree to pay and/or perform (whether as principal, surety or guarantor) for the
benefit of Beneficiary, when a writing evidences the parties’

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agreement that the advance or obligation be secured by this Deed of Trust.
Additionally, "Obligations" means such additional amounts as Lender may from
time to time advance pursuant to the terms and conditions of this Deed of Trust
and not met by Grantor, with respect to an obligation secured by a lien or
encumbrance prior to the lien of this Deed of Trust or for the protection of the
lien of this Deed of Trust, together with interest thereon
“Permitted Encumbrances” means (a) any matters set forth in any policy of title
insurance issued to Beneficiary and insuring Beneficiary’s interest in the
Property which are acceptable to Beneficiary as of the date hereof, (b) the
Liens and interests of this Deed of Trust, and (c) any other Encumbrance
disclosed to Beneficiary in any commitment for title insurance delivered to
Beneficiary or otherwise disclosed in writing to Beneficiary that Beneficiary
shall expressly approve in writing in its sole and absolute discretion.
“Person” means an individual, a corporation, a partnership, a joint venture, a
limited liability company, a trust, an unincorporated association, any
Governmental Authority or any other entity.
“Personalty” means all personal property of any kind or nature whatsoever,
whether tangible or intangible and whether now owned or hereafter acquired, in
which Grantor now has or hereafter acquires an interest and which is used in the
construction of, or is placed upon, or is derived from or used in connection
with the maintenance, use, occupancy or enjoyment of, the Property, including
(a) the Accessories; (b) the Accounts; (c) all franchise, license, management or
other agreements with respect to the operation of the Real Property or the
business conducted therein (provided all of such agreements shall be subordinate
to this Deed of Trust, and Beneficiary shall have no responsibility for the
performance of Grantor’s obligations thereunder) and all general intangibles
(including payment intangibles, trademarks, trade names, goodwill, software and
symbols) related to the Real Property or the operation thereof; (d) all sewer
and water taps, appurtenant water stock or water rights, allocations and
agreements for utilities, bonds, letters of credit, permits, certificates,
licenses, guaranties, warranties, causes of action, judgments, Claims, profits,
security deposits, utility deposits, and all rebates or refunds of fees, Taxes,
assessments, charges or deposits paid to any Governmental Authority related to
the Real Property or the operation thereof; (e) all of Grantor’s rights and
interests under all Swap Contracts, including all rights to the payment of money
from Beneficiary under any Swap Contract and all accounts, deposit accounts and
general intangibles, including payment intangibles, described in any Swap
Contract; (f) all insurance policies held by Grantor with respect to the
Property or Grantor’s operation thereof; and (g) all money, instruments and
documents (whether tangible or electronic) arising from or by virtue of any
transactions related to the Property, and all deposits and deposit accounts of
Grantor with Beneficiary related to the Property, including any such deposit
account from which Grantor may from time to time authorize Beneficiary to debit
and/or credit payments due with respect to the Loan; together with all Additions
to and Proceeds of all of the foregoing.
“Proceeds,” when used with respect to any of the Property, means all proceeds of
such Property, including all Insurance Proceeds and all other proceeds within
the meaning of that term as defined in the Uniform Commercial Code of the State.
“Property” means the Real Property and the Personalty and all other rights,
interests and benefits of every kind and character which Grantor now has or
hereafter acquires in, to or for the

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benefit of the Real Property and/or the Personalty and all other property and
rights used or useful in connection therewith, including all Leases, all Rents,
all Condemnation Awards, all Proceeds, and all of Grantor’s right, title and
interest in and to all Design and Construction Documents, all Contracts of Sale
and all Refinancing Commitments.
“Property Assessments” means all Taxes, payments in lieu of taxes, water rents,
sewer rents, assessments, condominium and owner’s association assessments and
charges, maintenance charges and other governmental or municipal or public or
private dues, charges and levies and any Liens (including federal tax liens)
which are or may be levied, imposed or assessed upon the Property or any part
thereof, or upon any Leases or any Rents, whether levied directly or indirectly
or as excise taxes, as income taxes, or otherwise.
“Real Property” means the Land and Improvements, together with (a) all estates,
title interests, title reversion rights, remainders, increases, issues, profits,
rights-of-way or uses, additions, accretions, servitudes, strips, gaps, gores,
liberties, privileges, water rights, water courses, alleys, passages, ways,
vaults, licenses, tenements, franchises, hereditaments, appurtenances,
easements, rights of way, rights of ingress or egress, parking rights, timber,
crops, mineral interests and other rights, now or hereafter owned by Grantor and
belonging or appertaining to the Land or Improvements; (b) all Claims whatsoever
of Grantor with respect to the Land or Improvements, either in law or in equity,
in possession or in expectancy; (c) all estate, right, title and interest of
Grantor in and to all streets, roads and public places, opened or proposed, now
or hereafter adjoining or appertaining to the Land or Improvements; and (d) all
options to purchase the Land or Improvements, or any portion thereof or interest
therein, and any greater estate in the Land or Improvements, and all Additions
to and Proceeds of the foregoing.
“Refinancing Commitment” means any commitment from or other agreement with any
Person providing for the financing of the Property, some or all of the proceeds
of which are intended to be used for the repayment of all or a portion of the
Loan.
“Rents” means all of the rents, royalties, issues, profits, revenues, earnings,
income and other benefits of the Property, or arising from the use or enjoyment
of the Property, including all such amounts paid under or arising from any of
the Leases and all fees, charges, accounts or other payments for the use or
occupancy of rooms or other public facilities within the Real Property.
“State” means the state in which the Land is located.
“Swap Contract” means any agreement, whether or not in writing, relating to any
Swap Transaction, including, unless the context otherwise clearly requires, any
form of master agreement (the “Master Agreement”) published by the International
Swaps and Derivatives Association, Inc., or any other master agreement, entered
into on or any time after the date hereof, between Swap Counterparty and
Borrower, together with any related schedule and confirmation, as amended,
supplemented, superseded or replaced from time to time.
“Swap Counterparty” means Lender or an Affiliate of Lender, in its capacity as
counterparty under any Swap Contract.
“Swap Transaction” means any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap or option, bond

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option, note or bill option, interest rate option, forward foreign exchange
transaction, cap transaction, collar transaction, floor transaction, currency
swap transaction, cross-currency rate swap transaction, swap option, currency
option, credit swap or default transaction, T-lock, or any other similar
transaction (including any option to enter into the foregoing) or any
combination of the foregoing, entered into prior to, on or anytime after the
date hereof between Swap Counterparty and Borrower so long as a writing, such as
a Swap Contract, evidences the parties’ intent that such obligations shall be
secured by this Deed of Trust in connection with the Loan.
“Taxes” means all taxes and assessments, whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, which at any time may be assessed,
levied, confirmed or imposed by any Governmental Authority or any community
facilities or other private district on Grantor or on any of its properties or
assets or any part thereof or in respect of any of its franchises, businesses,
income or profits.
“Transfer” means any direct or indirect sale, assignment, conveyance or
transfer, including any Contract of Sale and any other contract or agreement to
sell, assign, convey or transfer, whether made voluntarily or by operation of
Law or otherwise, and whether made with or without consideration.
“Trustee” means the Trustee identified in the introductory paragraph of this
Deed of Trust or its successor in trust who may be acting under and pursuant to
this Deed of Trust from time to time.
Article II
Granting Clauses; Condition of Grant.
Section 2.1    Conveyances and Security Interests.
In order to secure the prompt payment and performance of the Obligations,
Grantor (a) hereby irrevocably and unconditionally grants, bargains, sells and
conveys the Real Property unto Trustee, with power of sale and right of entry
and possession, all estate, right, title and interest that Grantor now has or
may later acquire in and to the Real Property, to have and to hold the Real
Property unto Trustee in fee simple forever; provided that Grantor may retain
possession of the Real Property until the occurrence of an Event of Default; (b)
grants to Beneficiary a security interest in the Personalty; (c) assigns to
Beneficiary, and grants to Beneficiary a security interest in, all Condemnation
Awards and all Insurance Proceeds; and (d) assigns to Beneficiary, and grants to
Beneficiary a security interest in, all of Grantor’s right, title and interest
in, but not any of Grantor’s obligations or liabilities under, all Design and
Construction Documents, all Contracts of Sale and all Refinancing Commitments.
All Persons who may have or acquire an interest in all or any part of the
Property will be deemed to have notice of, and will be bound by, the terms of
the Obligations and each other agreement or instrument made or entered into in
connection with each of the Obligations. Such terms include any provisions in
the Note, the Loan Agreement or any Swap Contract which provide that the
interest rate on one or more of the Obligations may vary from time to time.
Section 2.2    Assignment of Leases and Rents.
As additional security for the making of the Loan by Beneficiary to Borrower and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged,

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Grantor assigns the Leases and Rents to Beneficiary. Upon the occurrence, and
during the continuance, of a Default hereunder, Beneficiary shall have the
right, power and privilege (but shall be under no duty) to demand possession of
the Rents, which demand shall to the fullest extent permitted by applicable Law
be sufficient action by Beneficiary to entitle Beneficiary to immediate and
direct payment of the Rents (including delivery to Beneficiary of Rents
collected for the period in which the demand occurs and for any subsequent
period), for application as provided in this Deed of Trust. Provided no Event of
Default has occurred and is continuing, Grantor agrees to collect all Rents and
to use the Rents for the payment of the cost of operating and maintaining the
Property and for the payment of the other Obligations before using the Rents for
any other purpose. The powers, rights and remedies granted in this paragraph
shall be in addition to (i) the other remedies herein provided for upon the
occurrence, and during the continuance, of an Event of Default and may be
exercised independently of or concurrently with any of said remedies, and (ii)
the powers, rights and remedies afforded an “Assignee” under and as defined in
Chapter 64 of the Texas Property Code.
Section 2.3    Security Agreement, Fixture Filing and Financing Statement.
This Deed of Trust creates a security interest in the Personalty, and, to the
extent the Personalty is not real property, this Deed of Trust constitutes a
security agreement from Grantor to Beneficiary under the Uniform Commercial Code
of the State. In addition to all of its other rights under this Deed of Trust
and otherwise, Beneficiary shall have all of the rights of a secured party under
the Uniform Commercial Code of the State, as in effect from time to time, or
under the Uniform Commercial Code in force from time to time in any other state
to the extent the same is applicable Law. This Deed of Trust shall be effective
as a financing statement filed as a fixture filing with respect to all fixtures
included within the Property and is to be filed for record in the real estate
records of each county where any part of the Property (including such fixtures)
is situated. This Deed of Trust shall also be effective as a financing statement
with respect to any other Property as to which a security interest may be
perfected by the filing of a financing statement and may be filed as such in any
appropriate filing or recording office. The respective mailing addresses of
Grantor and Beneficiary are set forth in the opening paragraph of this Deed of
Trust. A carbon, photographic or other reproduction of this Deed of Trust or any
other financing statement relating to this Deed of Trust shall be sufficient as
a financing statement for any of the purposes referred to in this Section.
Grantor hereby irrevocably authorizes Beneficiary at any time and from time to
time to file any initial financing statements, amendments thereto and
continuation statements as authorized by applicable Law, reasonably required by
Beneficiary to establish or maintain the validity, perfection and priority of
the security interests granted in this Deed of Trust. The foregoing
authorization includes Grantor’s irrevocable authorization for Beneficiary at
any time and from time to time to file any initial financing statements and
amendments thereto that indicate the Personalty (a) as “all assets” of Grantor
or words of similar effect, regardless of whether any particular asset comprised
in the Personalty falls within the scope of the Uniform Commercial Code of the
State or the jurisdiction where the initial financing statement or amendment is
filed, or (b) as being of an equal or lesser scope or with greater detail.

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Section 2.4    Release of Deed of Trust and Termination of Assignments and
Financing Statements.
If and when Borrower has paid and performed all of the Obligations, and no
further advances are to be made under the Loan Agreement, Beneficiary, without
the joinder of Trustee will promptly provide a release of the Property from the
lien of this Deed of Trust and termination statements for filed financing
statements, if any, to Grantor. Grantor shall be responsible for the recordation
of such release and the payment of any recording and filing costs. Upon the
recording of such release and the filing of such termination statements, the
absolute assignments set forth in Section 2.2 shall automatically terminate and
become null and void.
Article III
Representations and Warranties.
Grantor makes the following representations and warranties to Beneficiary:
Section 3.1    Title to Real Property.
To Grantor’s knowledge and belief, Grantor (a) owns fee simple title to the Real
Property, (b) owns all of the beneficial and equitable interest in and to the
Real Property, and (c) is lawfully seized and possessed of the Real Property. To
Grantor’s knowledge and belief, Grantor has the right and authority to convey
the Real Property and does hereby convey the Real Property in accordance with
the terms of this Deed of Trust with general warranty. To Grantor’s knowledge
and belief, the Real Property is subject to no Encumbrances other than the
Permitted Encumbrances and Taxes, not yet delinquent.
Section 3.2    Title to Other Property.
To Grantor’s knowledge and belief, Grantor has good title to the Personalty, and
the Personalty is not subject to any Encumbrance other than the Permitted
Encumbrances. To Grantor’s knowledge and belief, none of the Leases, Rents,
Design and Construction Documents, Contracts of Sale or Refinancing Commitments
are subject to any Encumbrance other than the Permitted Encumbrances.
Section 3.3    Property Assessments.
The fee portion of the Real Property is assessed for purposes of Property
Assessments as a separate and distinct parcel from any other property, such that
such fee portion of the Real Property is not subject to the Lien of any Property
Assessments levied or assessed against any property other than the Real
Property.
Section 3.4    Independence of the Real Property.
Except as disclosed in the underlying documents referenced in the title
commitment relating to the Property delivered to Lender in connection with the
making of the Loan, no buildings or other improvements on property not covered
by this Deed of Trust rely on the Real Property or any interest therein to
fulfill any requirement of any Governmental Authority for the existence of such
property, building or improvements; and, to Grantor’s knowledge and belief, none
of the Real Property relies, or will rely, on any property not covered by this
Deed of Trust

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or any interest therein to fulfill any requirement of any Governmental
Authority. To Grantor’s knowledge and belief, the Real Property has been
properly subdivided from all other property in accordance with the requirements
of any applicable Governmental Authorities.
Section 3.5    Existing Improvements.
To Grantor’s knowledge and belief, the existing Improvements, if any, were
constructed, and are being used and maintained, in accordance with all
applicable Laws, including zoning Laws.
Section 3.6    Leases and Tenants.
To Grantor’s knowledge and belief, and except as expressly disclosed to Lender
in writing, the Leases are valid and are in full force and effect, and Grantor
is not in default under any of the terms thereof. Except as expressly permitted
in the Loan Agreement, and except as expressly disclosed to Lender in writing,
Grantor has not accepted any Rents more than thirty (30) days in advance of the
time the same became due under the Leases and has not forgiven, compromised or
discounted any of the Rents. Grantor has title to and the right to assign the
Leases and Rents to Beneficiary, and no other assignment of the Leases or Rents
has been granted. To the best of Grantor’s knowledge and belief and except as
disclosed to Lender in writing, no tenant or tenants occupying, individually or
in the aggregate, more than five percent (5%) of the net rentable area of the
Improvements are in default under their Lease(s) or are the subject of any
bankruptcy, insolvency or similar proceeding.
Article IV
Affirmative Covenants.
Section 4.1    Obligations.
Grantor agrees to promptly pay and perform all of the Obligations in accordance
with the terms of the Loan Documents, time being of the essence in each case.
Section 4.2    Property Assessments; Documentary Taxes.
Grantor (a) will promptly pay in full and discharge all Property Assessments,
and (b) will furnish to Beneficiary, upon written demand, the receipted bills
for such Property Assessments prior to the day upon which the same shall become
delinquent. Property Assessments shall be considered delinquent as of the first
day any interest or penalty commences to accrue thereon. Except as may be
permitted pursuant to the provisions of Section 4.3 below, Grantor will promptly
pay all stamp, documentary, recordation, transfer and intangible taxes and all
other taxes that may from time to time be required to be paid with respect to
the Loan, the Note, this Deed of Trust or any of the other Loan Documents.
Section 4.3    Permitted Contests.
Grantor shall not be required to pay any of the Property Assessments, or to
comply with any Law, so long as Grantor shall in good faith, and at its cost and
expense, contest the amount or validity thereof, or take other appropriate
action with respect thereto, in good faith and in an appropriate manner or by
appropriate proceedings; provided that (a) such proceedings operate to

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prevent the collection of, or other realization upon, such Property Assessments
or enforcement of the Law so contested, (b) there will be no sale, forfeiture or
loss of the Property during the contest, (c) neither Beneficiary nor Trustee is
subjected to any Claim as a result of such contest, and (d) Grantor provides
assurances satisfactory to Beneficiary (including the establishment of an
appropriate reserve account with Beneficiary) of its ability to pay such
Property Assessments or comply with such Law in the event Grantor is
unsuccessful in its contest. Each such contest shall be promptly prosecuted to
final conclusion or settlement, and Grantor shall indemnify and save Beneficiary
and Trustee harmless against all Claims in connection therewith. WITHOUT
LIMITATION, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PERSON
WITH RESPECT TO MATTERS WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF,
OR ARE CLAIMED TO BE CAUSED BY OR ARISE OUT OF, THE NEGLIGENCE (WHETHER SOLE,
COMPARATIVE OR CONTRIBUTORY) OR STRICT LIABILITY OF SUCH (AND/OR ANY OTHER)
INDEMNIFIED PERSON. HOWEVER, SUCH INDEMNITIES SHALL NOT APPLY TO A PARTICULAR
INDEMNIFIED PERSON TO THE EXTENT THAT THE SUBJECT OF THE INDEMNIFICATION IS
CAUSED BY OR ARISES OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THAT
INDEMNIFIED PERSON. Promptly after the settlement or conclusion of such contest
or action, Grantor shall comply with such Law and/or pay and discharge the
amounts which shall be levied, assessed or imposed or determined to be payable,
together with all penalties, fines, interests, costs and expenses in connection
therewith.
Section 4.4    Compliance with Laws.
Grantor will comply with and not knowingly violate, and cause to be complied
with and not violated, all present and future Laws applicable to the Property
and its use and operation.
Section 4.5    Maintenance and Repair of the Property.
Grantor, at Grantor’s sole expense, will (a) keep and maintain Improvements and
Accessories in good condition, working order and repair, and (b) make all
necessary or appropriate repairs and Additions to Improvements and Accessories,
so that each part of the Improvements and all of the Accessories shall at all
times be in good condition and fit and proper for the respective purposes for
which they were originally intended, erected, or installed.
Section 4.6    Additions to Security.
All right, title and interest of Grantor in and to all Improvements and
Additions hereafter constructed or placed on the Property and in and to any
Accessories hereafter acquired shall, without any further deed of trust,
conveyance, assignment or other act by Grantor, become subject to the Lien of
this Deed of Trust as fully and completely, and with the same effect, as though
now owned by Grantor and specifically described in the granting clauses hereof.
Grantor agrees, however, to execute and deliver to Trustee and/or Beneficiary
such further documents as may be required by the terms of the Loan Agreement and
the other Loan Documents.
Section 4.7    Subrogation; Vendor's/Purchase Money Lien.
To the extent permitted by Law, Beneficiary shall be subrogated, notwithstanding
its release of record, to any Lien now or hereafter existing on the Property to
the extent that such

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Lien is paid or discharged by Beneficiary whether or not from the proceeds of
the Loan. This Section shall not be deemed or construed, however, to obligate
Beneficiary to pay or discharge any Lien. If all or any portion of the proceeds
of the loan evidenced by the Note or of any other secured indebtedness has been
advanced for the purpose of paying the purchase price for all or a part of the
Property, no vendor's or purchase money lien is waived; and Beneficiary shall
have, and is hereby granted, a vendor's or purchase money lien on the Property
as cumulative additional security for the secured indebtedness. Beneficiary may
foreclose under this Deed of Trust or under the vendor's or purchase money lien
without waiving the other or may foreclose under both.
Section 4.8    Leases.
(a)    Except as expressly permitted in the Loan Agreement, Grantor shall not
enter into any Lease with respect to all or any portion of the Property without
the prior written consent of Beneficiary as provided under the terms of the Loan
Agreement.
(b)    Neither Trustee nor Beneficiary shall be obligated to perform or
discharge any obligation of Grantor under any Lease. The assignment of Leases
provided for in this Deed of Trust in no manner places on Beneficiary or Trustee
any responsibility for (i) the control, care, management or repair of the
Property, (ii) the carrying out of any of the terms and conditions of the
Leases, (iii) any waste committed on the Property, or (iv) any dangerous or
defective condition on the Property (whether known or unknown).
(c)    No approval of any Lease by Beneficiary shall be for any purpose other
than to protect Beneficiary’s security and to preserve Beneficiary’s rights
under the Loan Documents, and no such approval shall result in a waiver of a
Default or Event of Default.
Article V
Negative Covenants.
Section 5.1    Encumbrances.
Except as expressly permitted in this Deed of Trust, Grantor will not permit any
of the Property to become subject to any Encumbrance other than the Permitted
Encumbrances. Within thirty (30) days after the filing of any mechanic’s lien or
other Lien or Encumbrance against the Property, Grantor will promptly discharge
the same by payment or filing a bond or otherwise as permitted by Law. So long
as Beneficiary’s security has been protected by the filing of a bond or
otherwise in a manner satisfactory to Beneficiary in its sole and absolute
discretion, Grantor shall have the right to contest in good faith any Claim,
Lien or Encumbrance (and shall not be deemed in default hereunder), provided
that Grantor does so diligently and without prejudice to Beneficiary or delay in
completing construction of the Improvements. Grantor shall give Beneficiary
Notice of any default under any Lien and Notice of any foreclosure or threat of
foreclosure with respect to any of the Property.
Section 5.2    Transfer of the Property.
Grantor will not Transfer, or contract to Transfer, all or any part of the
Property or any legal or beneficial interest therein (except for certain
Transfers of the Accessories and other Transfers expressly permitted in this
Deed of Trust). The Transfer of any of the general

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partnership interest in Grantor, if Grantor is a general partnership, or the
Transfer of more than 50% of the membership interests in Grantor (whether in one
or more transactions during the term of the Loan) shall be deemed to be a
prohibited Transfer of the Property.
Notwithstanding anything stated to the contrary herein, any transfers (or the
pledge or encumbrance) of equity interests or other interests in KBS SOR
Properties, LLC, or in any of the direct or indirect owners of KBS SOR
Properties, LLC (including, without limitation, KBS Strategic Opportunity
Limited Partnership, KBS Strategic Opportunity Holdings, LLC, or KBS Strategic
Opportunity REIT, Inc.) shall not be prohibited (and shall be expressly
permitted) provided that KBS Strategic Opportunity REIT, Inc., continues to own,
either directly or indirectly, not less than a fifty-one percent (51%) of the
ownership interests in Grantor.
Notwithstanding the foregoing or anything stated to the contrary in this Deed of
Trust or in any of the other Loan Documents, the following transactions will not
be prohibited and shall be expressly permitted:
(a)    KBS SOR Properties, LLC, KBS Strategic Opportunity Limited Partnership,
KBS Strategic Opportunity REIT, Inc., and KBS Strategic Opportunity Holdings,
LLC, shall each be permitted to execute guaranties and/or indemnity agreements
for their respective subsidiaries; and
(b)    KBS Strategic Opportunity Limited Partnership, KBS Strategic Opportunity
REIT, Inc., and any of the other parties owning interests in KBS Strategic
Opportunity Limited Partnership, direct or indirect, shall be permitted to
obtain loans from, or incur indebtedness to any third-party lender (each a
“Secondary Loan”) and pledge their respective interests (direct or indirect) in
KBS Strategic Opportunity Limited Partnership and KBS SOR Properties, LLC, as
security for any such Secondary Loan so long as (A) neither Grantor nor
Grantor’s sole member’s membership interest are pledged to secure such Secondary
Loan, and (B) any default under a Secondary Loan resulting in a foreclosure of
the pledged interests and a transfer of such interest to the lender of the
Secondary Loan shall be deemed an Event of Default under the Loan Documents.
Section 5.3    Removal, Demolition or Alteration of Accessories and
Improvements.
Except to the extent permitted by the following sentence, no Improvements or
Accessories shall be removed, demolished or materially altered without the prior
written consent of Beneficiary, which consent shall not be unreasonably
withheld, conditioned or delayed. Grantor may remove and dispose of, free from
the Lien of this Deed of Trust, such Accessories as from time to time become
worn out or obsolete, provided that, either (a) at the time of, or prior to,
such removal, any such Accessories are replaced with other Accessories which are
free from Liens other than Permitted Encumbrances and have a value at least
equal to that of the replaced Accessories (and by such removal and replacement
Grantor shall be deemed to have subjected such Accessories to the Lien of this
Deed of Trust), or (b) so long as a prepayment may be made without the
imposition of any premium pursuant to the Note, such Accessories are sold at
fair market value for cash and the net cash proceeds received from such
disposition are paid over promptly to Beneficiary to be applied to the
prepayment of the principal of the Loan. Notwithstanding the foregoing, nothing
herein shall limit Grantor’s right to undertake any tenant improvements for
tenants under their Leases (approved or deemed approved by Beneficiary or

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

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

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any tax, assessment, insurance premium, lien, encumbrance or other charge
against the Property, to obtain a title report and/or Trustee’s sale guaranty,
all such expenditures to be paid by Grantor on demand and added to the
Obligations.
Section 7.3    Foreclosure; Power of Sale.
Upon the occurrence, and during the continuance, of an Event of Default, Trustee
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 venue 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 Obligations 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 Personalty 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 Personalty. 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 the Permitted 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 Obligations has been fully paid. In the
event any sale hereunder is not completed or is defective in the opinion of
holder, such sale shall not 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 Obligations or as to the occurrence of any
default, or as to Beneficiary's having declared all of said indebtedness to be
due and payable,

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

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pay all Expenses and next in reduction of the other Obligations. Grantor shall
pay, on demand, to Beneficiary, the amount of any deficiency between (i) the
Rents received by Beneficiary, and (ii) all Expenses incurred together with
interest thereon as provided in the Loan Agreement and the other Loan Documents.
Section 7.6    Taking Possession or Control of the Property.
Upon the occurrence, and during the continuance, of an Event of Default, as a
matter of right without bond and without regard to the adequacy of the security,
and to the extent permitted by Law without notice to Grantor, Beneficiary shall
be entitled, upon application to a court of competent jurisdiction, to the
immediate appointment of a receiver for all or any part of the Property and the
Rents, whether such receivership may be incidental to a proposed sale of the
Property or otherwise, and Grantor hereby consents to the appointment of such a
receiver and agrees that such receiver shall have all of the rights and powers
granted to Beneficiary pursuant to Section 7.4. In addition, upon the
occurrence, and during the continuance, of an Event of Default to the extent
permitted by Law, and with or without the appointment of a receiver, or an
application therefor, Beneficiary may (a) enter upon, and take possession of
(and Grantor shall surrender actual possession of), the Property or any part
thereof, without notice to Grantor and without bringing any legal action or
proceeding, or, if necessary by force, legal proceedings, ejectment or
otherwise, and (b) remove and exclude Grantor and its agents and employees
therefrom.
Section 7.7    Management of the Property.
Upon obtaining possession of the Property or upon the appointment of a receiver
as described in Section 7.5, Beneficiary, Trustee or the receiver, as the case
may be, may, at its sole option, (a) make all necessary or proper repairs and
Additions to or upon the Property, (b) operate, maintain, control, make secure
and preserve the Property, and (c) complete the construction of any unfinished
Improvements on the Property and, in connection therewith, continue any and all
outstanding contracts for the erection and completion of such Improvements and
make and enter into any further contracts which may be necessary, either in
their or its own name or in the name of Grantor (the costs of completing such
Improvements shall be Expenses secured by this Deed of Trust and shall accrue
interest as provided in the Loan Agreement and the other Loan Documents).
Beneficiary, Trustee or such receiver shall be under no liability for, or by
reason of, any such taking of possession, entry, holding, removal, maintaining,
operation or management, except for gross negligence or willful misconduct. The
exercise of the remedies provided in this Section shall not cure or waive any
Event of Default, and the enforcement of such remedies, once commenced, shall
continue for so long as Beneficiary shall elect, notwithstanding the fact that
the exercise of such remedies may have, for a time, cured the original Event of
Default.
Section 7.8    Uniform Commercial Code.
Beneficiary may proceed under the Uniform Commercial Code as to all or any part
of the Personalty, and in conjunction therewith may exercise all of the rights,
remedies and powers of a secured creditor under the Uniform Commercial Code.
Upon the occurrence of any Event of Default, Grantor shall assemble all of the
Accessories and make the same available within the Improvements. Any
notification required by the Uniform Commercial Code shall be deemed reasonably
and properly given if sent in accordance with the Notice provisions of this Deed
of

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Trust at least ten (10) days before any sale or other disposition of the
Personalty. Disposition of the Personalty shall be deemed commercially
reasonable if made pursuant to a public sale advertised at least twice in a
newspaper of general circulation in the community where the Property is located.
It shall be deemed commercially reasonable for the Trustee and/or Beneficiary to
dispose of the Personalty without giving any warranties as to the Personalty and
specifically disclaiming all disposition warranties.
Section 7.9    Application of Proceeds.
Unless otherwise required by applicable Law, all proceeds from the sale of the
Property or any part thereof pursuant to the rights and remedies set forth in
this Article VII and any other proceeds received by Beneficiary from the
exercise of any of its other rights and remedies hereunder or under the other
Loan Documents shall be applied first to pay all Expenses and next in reduction
of the other Obligations, in such manner and order as Beneficiary may elect.
Section 7.10    Other Remedies.
Beneficiary shall have the right from time to time to protect, exercise and
enforce any legal or equitable remedy against Grantor provided under the Loan
Documents or by applicable Laws.
Article VIII
Trustee.
Section 8.1    Liability of Trustee.
Trustee shall have no liability or responsibility for, and make no warranties in
connection with, the validity or enforceability of any of the Loan Documents or
the description, value or status of title to the Property. Trustee shall be
protected in acting upon any notice, request, consent, demand, statement, note
or other paper or document believed by Trustee to be genuine and to have been
signed by the party or parties purporting to sign the same. Trustee shall not be
liable for any error of judgment, nor for any act done or step taken or omitted,
nor for any mistakes of Law or fact, nor for anything which Trustee may do or
refrain from doing in good faith, nor generally shall Trustee have any
accountability hereunder except for willful misconduct or gross negligence.
WITHOUT LIMITATION, THE FOREGOING LIMITATIONS OF LIABILITY SHALL APPLY TO
TRUSTEE WITH RESPECT TO MATTERS WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE
OUT OF, OR ARE CLAIMED TO BE CAUSED BY OR ARISE OUT OF, THE NEGLIGENCE (WHETHER
SOLE, COMPARATIVE OR CONTRIBUTORY) OR STRICT LIABILITY OF TRUSTEE. HOWEVER, SUCH
INDEMNITIES SHALL NOT APPLY TO TRUSTEE TO THE EXTENT THAT THE SUBJECT OF THE
INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF TRUSTEE. The powers and duties of Trustee hereunder may be
exercised through such attorneys, agents or servants as Trustee may in good
faith and reasonably appoint, and Trustee shall have no liability or
responsibility for any act, failure to act, negligence or willful conduct of
such attorney, agent or servant, so long as the selection was made with
reasonable care. In addition, Trustee may consult with legal counsel selected by
Trustee, and Trustee shall have no liability or responsibility by reason of any
act or failure to act in accordance with the opinions of such counsel. To the
extent permitted by applicable Laws,

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Trustee may act hereunder and may sell or otherwise dispose of the Property or
any part thereof as herein provided, although Trustee has been, may now be or
may hereafter be, an attorney, officer, agent or employee of Beneficiary, in
respect of any matter or business whatsoever. Trustee, however, shall have no
obligation to sell all or any part of the Property following an Event of Default
or to take any other action authorized to be taken by Trustee hereunder except
upon the demand of Beneficiary.
Section 8.2    Indemnification of Trustee.
Grantor agrees to indemnify Trustee and to hold Trustee harmless from and
against any and all Claims and Expenses directly or indirectly arising out of or
resulting from any transaction, act, omission, event or circumstance in any way
connected with the Property or the Loan, including but not limited to any Claim
arising out of or resulting from any assertion or allegation that Trustee is
liable for any act or omission of Grantor or any other Person in connection with
the ownership, development, financing, operation or sale of the Property;
provided, however, that Grantor shall not be obligated to indemnify Trustee with
respect to any Claim arising solely from the gross negligence or willful
misconduct of Trustee or Beneficiary. WITHOUT LIMITATION, THE FOREGOING
INDEMNITIES SHALL APPLY TO TRUSTEE WITH RESPECT TO MATTERS WHICH IN WHOLE OR IN
PART ARE CAUSED BY OR ARISE OUT OF, OR ARE CLAIMED TO BE CAUSED BY OR ARISE OUT
OF, THE NEGLIGENCE (WHETHER SOLE, COMPARATIVE OR CONTRIBUTORY) OR STRICT
LIABILITY OF TRUSTEE. HOWEVER, SUCH INDEMNITIES SHALL NOT APPLY TO TRUSTEE TO
THE EXTENT THAT THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF TRUSTEE. The agreements and
indemnifications contained in this Section shall apply to Claims arising both
before and after the repayment of the Loan and shall survive the repayment of
the Loan, any foreclosure or deed, conveyance or assignment in lieu thereof and
any other action by Trustee to enforce the rights and remedies of Beneficiary or
Trustee hereunder or under the other Loan Documents.
Section 8.3    Substitution of Trustee; Multiple Trustees.
The Trustee may resign by an instrument in writing addressed to Beneficiary. In
case of the death, resignation, removal, or disqualification of Trustee, or if
for any reason Beneficiary shall deem it desirable to appoint a substitute or
successor trustee Beneficiary shall have, and is hereby granted with warranty of
further assurances, the irrevocable power to appoint a new or replacement or
substitute Trustee. Such power may be exercised at any time without notice,
without cause and without specifying any reason therefor, without any other
formality than appointment and designation in writing by Beneficiary. The power
of appointment of a successor Trustee may be exercised as often as and whenever
Beneficiary may choose, and the exercise of the power of appointment, no matter
how often, shall not be an exhaustion thereof. The Trustee so appointed shall
thereupon, without any further act or deed of conveyance, become fully vested
with identically the same title and estate in and to the Property and with all
the rights, powers, trusts and duties of its predecessor in the trust hereunder
with like effect as if originally named as Trustee hereunder. Whenever in this
Deed of Trust reference is made to Trustee, it shall be construed to mean each
Person appointed as Trustee for the time being, whether original or successor in
trust. All title, estate, rights, powers, trusts and duties granted to Trustee
shall be in each Person appointed as Trustee so that any action hereunder by any
Person

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appointed as Trustee shall for all purposes be deemed to be, and as effective
as, the action of all Trustees.
Article IX
Miscellaneous.
Section 9.1    Rights, Powers and Remedies Cumulative.
This Deed of Trust is a deed of trust and mortgage, and each right, power and
remedy of Beneficiary or Trustee as provided for in this Deed of Trust, or in
any of the other Loan Documents or now or hereafter existing by Law, shall be
cumulative and concurrent and shall be in addition to every other right, power
or remedy provided for in this Deed of Trust, or in any of the other Loan
Documents or now or hereafter existing by Law, and the exercise or beginning of
the exercise by Beneficiary or Trustee of any one or more of such rights, powers
or remedies shall not preclude the simultaneous or later exercise by Beneficiary
or Trustee of any or all such other rights, powers or remedies. In the event a
foreclosure hereunder shall be commenced by Trustee, Beneficiary may at any time
before the sale of the Property direct Trustee to abandon the sale, and may then
institute suit for the collection of the Note and/or any other secured
indebtedness, and for the foreclosure of this Deed of Trust. It is agreed that
if Beneficiary should institute a suit for the collection of the Note or any
other secured indebtedness and for the foreclosure of this Deed of Trust,
Beneficiary may at any time before the entry of a final judgment in said suit
dismiss the same, and require Trustee, to sell the Property in accordance with
the provisions of this Deed of Trust.
Section 9.2    No Waiver by Beneficiary or Trustee.
No course of dealing or conduct by or among Beneficiary, Trustee and Grantor
shall be effective to amend, modify or change any provisions of this Deed of
Trust or the other Loan Documents. No failure or delay by Beneficiary or Trustee
to insist upon the strict performance of any term, covenant or agreement of this
Deed of Trust or of any of the other Loan Documents, or to exercise any right,
power or remedy consequent upon a breach thereof, shall constitute a waiver of
any such term, covenant or agreement or of any such breach, or preclude
Beneficiary or Trustee from exercising any such right, power or remedy at any
later time or times. By accepting payment after the due date of any of the
Obligations, neither Beneficiary nor Trustee shall be deemed to waive the right
either to require prompt payment when due of all other Obligations, or to
declare an Event of Default for failure to make prompt payment of any such other
Obligations. Neither Grantor nor any other Person now or hereafter obligated for
the payment of the whole or any part of the Obligations shall be relieved of
such liability by reason of (a) the failure of Beneficiary to comply with any
request of Grantor or of any other Person to take action to foreclose this Deed
of Trust or otherwise enforce any of the provisions of this Deed of Trust, or
(b) any agreement or stipulation between any subsequent owner or owners of the
Property and Beneficiary, or (c) Beneficiary’s extending the time of payment or
modifying the terms of this Deed of Trust or any of the other Loan Documents
without first having obtained the consent of Grantor or such other Person.
Regardless of consideration, and without the necessity for any notice to or
consent by the holder of any subordinate Lien on the Property, Beneficiary may
release any Person at any time liable for any of the Obligations or any part of
the security for the Obligations and may extend the time of payment or otherwise
modify the terms of this Deed of Trust or any of the other Loan Documents
without in any way impairing or

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affecting the Lien of this Deed of Trust or the priority of this Deed of Trust
over any subordinate Lien. The holder of any subordinate Lien shall have no
right to terminate any Lease regardless of whether or not such Lease is
subordinate to this Deed of Trust. Beneficiary may resort to the security or
collateral described in this Deed of Trust or any of the other Loan Documents in
such order and manner as Beneficiary may elect in its sole discretion.
Section 9.3    Waivers and Agreements Regarding Remedies.
To the fullest extent Grantor may do so, Grantor hereby:
(a)    to the full extent permitted by Law, hereby voluntarily and knowingly
waives its rights to reinstatement and redemption, and to the full extent
permitted by Law, waives the benefits of all present and future valuation,
appraisement, homestead, exemption, stay, extension or redemption, right to
notice of election to accelerate the Obligations, and moratorium laws under any
state or federal law;
(b)    waives all rights to a marshalling of the assets of Grantor, including
the Property, or to a sale in the inverse order of alienation in the event of a
foreclosure of the Property, and agrees not to assert any right under any Law
pertaining to the marshalling of assets, the sale in inverse order of
alienation, the exemption of homestead, the administration of estates of
decedents, or other matters whatsoever to defeat, reduce or affect the right of
Beneficiary under the terms of this Deed of Trust to a sale of the Property
without any prior or different resort for collection, or the right of
Beneficiary to the payment of the Obligations out of the proceeds of sale of the
Property in preference to every other claimant whatsoever;
(c)    waives any right to bring or utilize any defense, counterclaim or setoff,
other than one which denies the existence or sufficiency of the facts upon which
any foreclosure action is grounded. If any defense, counterclaim or setoff,
other than one permitted by the preceding clause, is timely raised in a
foreclosure action, such defense, counterclaim or setoff shall be dismissed. If
such defense, counterclaim or setoff is based on a Claim which could be tried in
an action for money damages, such Claim may be brought in a separate action
which shall not thereafter be consolidated with the foreclosure action. The
bringing of such separate action for money damages shall not be deemed to afford
any grounds for staying the foreclosure action; and
(d)    waives and relinquishes any and all rights and remedies which Grantor may
have or be able to assert by reason of the provisions of any Laws pertaining to
the rights and remedies of sureties.
Section 9.4    Successors and Assigns.
All of the grants, covenants, terms, provisions and conditions of this Deed of
Trust shall run with the Land and shall apply to and bind the successors and
assigns of Grantor (including any permitted subsequent owner of the Property),
and inure to the benefit of Beneficiary, its successors and assigns and to the
successors in trust of Trustee.

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Section 9.5    No Warranty by Beneficiary or Trustee.
By inspecting the Property or by accepting or approving anything required to be
observed, performed or fulfilled by Grantor or to be given to Beneficiary or
Trustee pursuant to this Deed of Trust or any of the other Loan Documents,
Beneficiary and Trustee shall not be deemed to have warranted or represented the
condition, sufficiency, legality, effectiveness or legal effect of the same, and
such acceptance or approval shall not constitute any warranty or representation
with respect thereto by Beneficiary or Trustee.
Section 9.6    Amendments.
This Deed of Trust may not be modified or amended except by an agreement in
writing, signed by the party against whom enforcement of the change is sought.
Section 9.7    Severability.
In the event any one or more of the provisions of this Deed of Trust or any of
the other Loan Documents shall for any reason be held to be invalid, illegal or
unenforceable, in whole or in part or in any other respect, or in the event any
one or more of the provisions of the Loan Documents operates or would
prospectively operate to invalidate this Deed of Trust or any of the other Loan
Documents, then and in either of those events, at the option of Beneficiary,
such provision or provisions only shall be deemed null and void and shall not
affect the validity of the remaining Obligations, and the remaining provisions
of the Loan Documents shall remain operative and in full force and effect and
shall in no way be affected, prejudiced or disturbed thereby.
Section 9.8    Notices.
All Notices required or which any party desires to give hereunder or under any
other Loan Document shall be in writing and, unless otherwise specifically
provided in such other Loan Document, shall be deemed sufficiently given or
furnished if delivered by personal delivery, by nationally recognized overnight
courier service or by certified United States mail, postage prepaid, addressed
to the party to whom directed at the applicable address specified in the
Preamble to this Deed of Trust (unless changed by similar notice in writing
given by the particular party whose address is to be changed) or by facsimile.
Any Notice shall be deemed to have been given either at the time of personal
delivery or, in the case of courier or mail, as of the date of first attempted
delivery at the address and in the manner provided herein, or, in the case of
facsimile, upon receipt; provided that service of a Notice required by any
applicable statute shall be considered complete when the requirements of that
statute are met. Notwithstanding the foregoing, no notice of change of address
shall be effective except upon actual receipt. This Section shall not be
construed in any way to affect or impair any waiver of notice or demand provided
in this Deed of Trust or in any other Loan Document or to require giving of
notice or demand to or upon any Person in any situation or for any reason.
Section 9.9    Joint and Several Liability.
If Grantor consists of two (2) or more Persons, the term “Grantor” shall also
refer to all Persons signing this Deed of Trust as Grantor, and to each of them,
and all of them are jointly and severally bound, obligated and liable hereunder.
Trustee or Beneficiary may release,

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compromise, modify or settle with any of Grantor, in whole or in part, without
impairing, lessening or affecting the obligations and liabilities of the others
of Grantor hereunder or under the Note. Any of the acts mentioned aforesaid may
be done without the approval or consent of, or notice to, any of Grantor.
Section 9.10    Rules of Construction.
The words “hereof,” “herein,” “hereunder,” “hereto,” and other words of similar
import refer to this Deed of Trust in its entirety. The terms “agree” and
“agreements” mean and include “covenant” and “covenants.” The words “include”
and “including” shall be interpreted as if followed by the words “without
limitation.” The headings of this Deed of Trust are for convenience of reference
only and shall not be considered a part hereof and are not in any way intended
to define, limit or enlarge the terms hereof. All references (a) made in the
neuter, masculine or feminine gender shall be deemed to have been made in all
such genders, (b) made in the singular or plural number shall be deemed to have
been made, respectively, in the plural or singular number as well, (c) to the
Loan Documents are to the same as extended, amended, restated, supplemented or
otherwise modified from time to time unless expressly indicated otherwise,
(d) to the Land, Improvements, Personalty, Real Property or Property shall mean
all or any portion of each of the foregoing, respectively, and (e) to Articles
or Sections are to the respective Articles or Sections contained in this Deed of
Trust unless expressly indicated otherwise. Any term used or defined in the
Uniform Commercial Code of the State, as in effect from time to time, which is
not defined in this Deed of Trust shall have the meaning ascribed to that term
in the Uniform Commercial Code of the State. If a term is defined in Article 9
of the Uniform Commercial Code of the State differently than in another Article
of the Uniform Commercial Code of the State, the term shall have the meaning
specified in Article 9.
This Deed of Trust constitutes a "construction mortgage" as defined in Section
9.334 of the Uniform Commercial Code of the State - to the extent that it
secures an obligation incurred for the construction of the Improvements,
including the acquisition cost of the Land.
Section 9.11    Governing Law; Usury.
This Deed of Trust shall be construed, governed and enforced in accordance with
the Laws in effect from time to time in the State. 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. 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, 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 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. 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 Obligations in the inverse order of its maturity

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and not to the payment of interest, or refunded to Grantor or the other payor
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
Obligations does not include the right to accelerate any interest which has not
otherwise accrued on the date of such acceleration, and does not intend to
charge or receive any unearned interest in the event of acceleration. All
interest paid or agreed to be paid to 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 where the Property is located or where the Obligations are
payable, or the federal Laws of the United States applicable to this
transaction, whichever Laws allow the greatest interest, as such Laws now exist
or may be changed or amended or come into effect in the future.
Section 9.12    Entire Agreement.
The Loan Documents constitute the entire understanding and agreement between
Grantor and Beneficiary with respect to the transactions arising in connection
with the Loan, and supersede all prior written or oral understandings and
agreements between Grantor and Beneficiary with respect to the matters addressed
in the Loan Documents. In particular, and without limitation, the terms of any
commitment by Beneficiary to make the Loan are merged into the Loan Documents.
Except as incorporated in writing into the Loan Documents, there are no
representations, understandings, stipulations, agreements or promises, oral or
written, with respect to the matters addressed in the Loan Documents.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
Section 9.13    Limited Recourse Provision.
Beneficiary shall have no recourse against, nor shall there be any personal
liability to, the members of Grantor, or to any shareholders, members, partners,
beneficial interest holders or any other entity or person in the ownership
(directly or indirectly) of Grantor with respect to the obligations of Grantor
and Guarantor under the Loan. For purposes of clarification, in no event shall
the above language limit, reduce or otherwise affect Grantor’s liability or
obligations under the Loan Documents, Guarantor’s liability or obligations under
the Guaranty, or Beneficiary’s right to exercise any rights or remedies against
any collateral securing the Loan.

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Article X
Non-Borrower Grantor.
Section 10.1    Definition. As used in this Article X, “Third Party Secured
Obligation” means any obligation secured by this Deed of Trust which is required
to be performed by any Borrower under the Loan Agreement other than Grantor.
Section 10.2    Rights of Beneficiary. Grantor authorizes Beneficiary to perform
any or all of the following acts at any time in its sole discretion, all without
notice to Grantor and without affecting Beneficiary’s rights or Grantor’s
obligations under this Deed of Trust:
(a)    Beneficiary may alter any terms of the Third Party Secured Obligations or
any part of them, including renewing, compromising, modifying, extending or
accelerating, terminating early, or otherwise changing the time for payment of,
or increasing or decreasing the rate of interest on, the Third Party Secured
Obligations or any part of them.
(b)    Beneficiary may enforce or forbear from enforcing the Third Party Secured
Obligations on a net or gross basis.
(c)    Beneficiary may take and hold security for the Third Party Secured
Obligations, accept additional or substituted security for that obligation, and
subordinate, exchange, enforce, waive, release, reconvey, compromise, fail to
perfect and sell or otherwise dispose of any such security.
(d)    Beneficiary may direct the order and manner of any sale of all or any
part of any security now or later to be held for the Third Party Secured
Obligations, and Beneficiary may also bid at any such sale and may apply all or
any part of the Third Party Secured Obligations against the amount so bid.
(e)    Beneficiary may apply any payments or recoveries from Borrower (or any of
them), Grantor or any other source, and any proceeds of any security, to the
Third Party Secured Obligations in such manner, order and priority as
Beneficiary may elect, whether that obligation is secured by this Deed of Trust
or not at the time of the application.
(f)    Beneficiary may substitute, add or release any Borrower, guarantors or
endorsers.
(g)    In addition to the Third Party Secured Obligation, Beneficiary may extend
other credit to any Borrower, and may take and hold security for the credit so
extended, whether or not such security is also security for the Third Party
Secured Obligations, all without affecting Beneficiary’s rights or Grantor’s
liability under this Deed of Trust.
Section 10.3    Deed of Trust to be Absolute.
Grantor expressly agrees that until the earlier of (i) the release and
reconveyance of this Deed of Trust in accordance with Section 2.6 of the Loan
Agreement, or (ii) the date that the Third Party Secured Obligations are paid
and performed in full, and each and every term, covenant and condition of this
Deed of Trust is fully performed, Grantor shall not be released by or because
of:

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

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(f)    Any defense based on: (i) any legal disability of any Borrower, (ii) any
release, discharge, modification, impairment or limitation of the liability of
any Borrower to Beneficiary from any cause, whether consented to by Beneficiary
or arising by operation of law or from any Insolvency Proceeding, and (iii) any
rejection, disallowance or disaffirmance of any of the Third Party Secured
Obligations, or any part of them, or any security held for any of them, in any
such Insolvency Proceeding;
(g)    Any defense based on any action taken or omitted by Beneficiary in any
Insolvency Proceeding involving any Borrower, including. without limitation,
filing, defending, settling or obtaining a judgment or order on any proof of
claim or any adversary proceeding, making any election to have Beneficiary’s
claim allowed as being secured, partially secured or unsecured, including any
election under 11 U.S.C. Section 1111(b), seeking relief from the automatic stay
or adequate protection, including submitting an appraisal of any security,
voting to reject or accept or failing to vote on any reorganization plan, making
any extension of credit by Beneficiary to any Borrower in any Insolvency
Proceeding, and the taking and holding by Beneficiary of any security for any
such extension of credit, whether or not such security is also security for the
Third Party Secured Obligations;
(h)    All presentments, demands for performance, notices of nonperformance,
protests, notices of protest, notices of dishonor, notices of acceptance of this
Deed of Trust and of the existence, creation, or incurring of new or additional
indebtedness, and demands and notices of every kind; and
(i)    Any defense based on or arising out of any defense that any Borrower may
have to the payment or performance of the Third Party Secured Obligations or any
part of them other than payment and performance in full; and
(j)    Without limiting the generality of the foregoing, any rights, defenses or
remedies Grantor may have under (A) Section 17.001 of the Texas Civil Practice
and Remedies Code, Texas Rule of Civil Procedure 31, and Chapter 43 of the Texas
Civil Practice and Remedies Code, entitled Principal and Surety, including
notice, discharge, levy and subrogation, and (B) Sections 51.003 through 51.005
of the Texas Property Code, relating to deficiency judgments.
Section 10.5    Grantor’s Additional Waivers.
Grantor waives:
(a)    The obligations of Grantor hereunder are independent of the obligations
of any other Borrower, and a separate action or actions may be brought against
Grantor whether or not action or suit is brought against any other Borrower or
any other Borrower is joined in any such action or actions. At the option of
Beneficiary, Grantor may be joined in any action or proceeding commenced by
Beneficiary against any other Borrower in connection with or based on the Third
Party Secured Obligations or any security therefor, and recovery may be had
against Grantor in such action or proceeding without any requirement that
Beneficiary first assert, prosecute or exhaust any remedy or claim against any
other Borrower.
(b)    Upon the occurrence and during the continuance of any Event of Default
under any of the Loan Documents, Beneficiary in its sole discretion, without
prior notice to or consent of Grantor, may elect to: (i) foreclose either
judicially or nonjudicially against any real or

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personal property security that Beneficiary may hold for the Third Party Secured
Obligations other than the Property hereby encumbered, (ii) accept a transfer of
any such security in lieu of foreclosure, (iii) compromise or adjust any of the
Third Party Secured Obligations or any part of them or make any other
accommodation with any other Borrower or Grantor, or (iv) exercise any other
remedy against any Borrower or any security other than the Property hereby
encumbered. With respect to security other than the Property hereby encumbered,
no such action by Beneficiary shall release or limit the liability of Grantor,
who shall remain liable under this Deed of Trust after the action, even if the
effect of the action is to deprive Grantor of any subrogation rights, rights of
indemnity, rights of contribution, or other rights to collect reimbursement from
any Borrower for any recovery by Beneficiary against Grantor, whether
contractual or arising by operation of law or otherwise. After any foreclosure
or deed in lieu of foreclosure of any real or personal property pledged to
secure any of the Third Party Secured Obligations, Grantor shall under no
circumstances be deemed to have any right, title, interest or claim in or to
such property, whether it is held by Beneficiary or any third party.
(c)    Regardless of whether Beneficiary may have recovered against Grantor,
Grantor hereby waives, to the extent permitted by applicable law: (i) all rights
of subrogation, all rights of indemnity, and any other rights to collect
reimbursement or contribution from any other Borrower or any other party for any
recovery by Beneficiary against Grantor, whether contractual or arising by
operation of law (including the United States Bankruptcy Code or any successor
or similar statute) or otherwise (collectively, “Reimbursement Rights”), (ii)
all rights to enforce any remedy that Beneficiary may have against any other
Borrower, and (iii) all rights to participate in any security now or later to be
held by Beneficiary for the Third Party Secured Obligations. To the extent
Grantor’s waiver of Reimbursement Rights is found by a court of competent
jurisdiction to be void or voidable for any reason, any Reimbursement Rights
Grantor may have against any other Borrower or any collateral or security shall
be junior and subordinate to any rights Beneficiary may have against such
Borrower and to all right, title and interest Beneficiary may have in any such
collateral or security. If any amount should be paid to Grantor on account of
any Reimbursement Rights at any time when any the Third Party Secured
Obligations have not been paid in full, such amount shall be held in trust for
Beneficiary and shall immediately be paid over to Beneficiary to be credited and
applied against the Third Party Secured Obligations, whether matured or
unmatured, in accordance with the terms of the Loan Documents. The covenants and
waivers of Grantor set forth in this Section 10.5(c) shall be effective until
all of the Third Party Secured Obligations have been paid and performed in full
and are made solely for the benefit of Beneficiary.
(d)    No provision or waiver in this Deed of Trust shall be construed as
limiting the generality of any other provision or waiver contained in this Deed
of Trust.
Section 10.6    Revival and Reinstatement.
If Beneficiary is required to pay, return or restore to any Borrower or any
other person any amounts previously paid on any of the Third Party Secured
Obligations because of any Insolvency Proceeding of any Borrower, any stop
notice or any other reason, the obligations of Grantor shall be reinstated and
revived and the rights of Beneficiary shall continue with regard to such
amounts, all as though they had never been paid, and this Deed of Trust shall
continue to be effective or be reinstated, as the case may be.

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Section 10.7    Information Regarding Borrowers.
Grantor represents that: (a) Beneficiary has not made any representation to
Grantor as to the creditworthiness of any Borrower, and (b) no oral promises,
assurances, representations or warranties have been made by or on behalf of
Beneficiary to induce Grantor to execute and deliver this Deed of Trust. Grantor
has received and approved copies of all other requested Loan Documents. Before
signing this Deed of Trust, Grantor investigated the financial condition and
business operations of each other Borrower and such other matters as Grantor
deemed appropriate to assure itself of each such Borrower’s ability to discharge
its obligations in connection with the Third Party Secured Obligations. Grantor
assumes full responsibility for that due diligence and for keeping informed of
all matters which may affect any Borrower’s ability to pay and perform its
obligations to Beneficiary. Beneficiary has no any duty to disclose to Grantor
any information which Beneficiary may have or receive about any Borrower’s
financial condition or business operations or any other circumstances bearing on
any Borrower’s ability to perform.
Section 10.8    Counsel; Integration; Miscellaneous.
Grantor acknowledges that Grantor has had adequate opportunity to carefully read
this Deed of Trust and to consult with an attorney of Grantor’s choice prior to
signing it. No consent, approval or authorization of or notice to any person or
entity is required in connection with Grantor’s execution of and obligations
under this Deed of Trust, and Grantor acknowledges its execution and delivery of
this Deed of Trust is made voluntarily without any duress or undue influence of
any kind. No course of prior dealing, usage of trade, parol or extrinsic
evidence of any nature shall be used to supplement, modify or vary any of the
terms hereof. This Deed of Trust is intended by the parties to be a fully
integrated and final expression of their agreement. This Deed of Trust and the
other Loan Documents incorporate all negotiations of the parties and constitute
the parties’ entire agreement. Grantor acknowledges that is relying on no
written or oral agreement, representation, warranty or understanding of any kind
made by Beneficiary, or any employee, attorney or agent of Beneficiary, except
for the agreements of Beneficiary set forth herein and in the Loan Documents.

[Signatures appear on following page.]

-30-

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IN WITNESS WHEREOF, Grantor has caused this Deed of Trust to be executed as of
the day and year first written above.
GRANTOR
KBS SOR 1800 WEST LOOP SOUTH, LLC,
a Delaware limited liability company

By:    KBS SOR ACQUISITION XVI, LLC,
a Delaware limited liability company,
its sole member

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

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

By:    KBS STRATEGIC OPPORTUNITY REIT, INC.,
a Maryland corporation,
its sole general partner

By:     __/s/ David E. Snyder__________
David E. Snyder,
Chief Financial Officer

S-1

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ACKNOWLEDGEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sate of California
 
 
 
 
 
 
County of
Orange
)
 
 
 
 
 
 
 
 
 
 
 
 
 
On
April 25, 2013
before me,
K.Godin, Notary Public
 
 
 
 
 
 
 
 
 
 
 
personally appeared
David E. Snyder
 
 
 
 
 
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are
 
 
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in
 
 
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the
 
 
person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
 
 
 
 
 
 
 
 
 
 
 
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing
 
 
paragraph is true and correct.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[sorq22201310qex103pg33.jpg]
 
WITNESS my hand and official seal.
 
 
 
 
 
 
 
 
 
 
 
 

 
Signature
/s/ Krista Godin
(Seal)
 
 
 
 
 
 
 
 
 

        

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EXHIBIT A
Legal Description
All that certain 1.8846 acres of land in the William White Survey, A-836,
Houston, Harris County, Texas, and being the residue of that certain called
1.9121 acre tract of land described in a deed dated 01-27-2000 from Crescent
Real Estate Equities Limited Partnership to Crescent Real Estate Funding VIII,
L.P., filed in the Official Public Records of Real Property of Harris County,
Texas, at Clerk's File No. U212705, Film Code No. 530-54-2419, and being more
particularly described by metes and bounds as follows:
Commencing at a point being the intersection of the south right-of-way line of
Hallmark Street (60' wide) and the west right-of-way line of Interstate Highway
610 (West Loop South) (width varies) and being a point on a curve to the right
having a central angle of 01°38' 11", a radius of 5,554.58', the center being
located on a radial line bearing of N 79° 04' 14" W from said point; Thence in a
southerly direction with said curve and with said west right-of-way line for an
arc distance of 158.64' to a found 5/8" iron rod for the Point of Tangency;
Thence S 12° 33' 58" W - 188.93', continuing with said west right-of-way line to
a found 5/8" iron rod with cap for the POINT OF BEGINNING;
THENCE S 12° 33' 58" W- 386.24', continuing with said west right-of-way line to
a found 5/8" iron rod with cap for corner;
THENCE S 89° 08' 16" W - 64.45', with the south line of the subject tract being
a cutback line for said I.H. 610 to a found 5/8" iron rod with cap for corner on
the easterly right-of-way line of San Felipe Road (as widened);
THENCE N 35° 17' 22" W - 81.40', continuing with said easterly right-of-way line
to a found 5/8" iron rod with cap for corner;
THENCE S 81° 11' 20" W - 4.03', continuing with said easterly right-of-way line
to a found 5/8" iron rod with cap for corner;
THENCE N 31° 06' 19" W - 48.39', continuing with said easterly right-of-way line
to a found 5/8" iron rod with cap for corner;
THENCE S 80° 28' 59" W - 5.76', continuing with said easterly right-of-way line
to a found 5/8" iron rod with cap for corner;
THENCE N 30° 41' 38" W - 186.63', continuing with said easterly right-of-way
line to a found 1/2" iron rod for corner;
THENCE with that certain Boundary Line Agreement dated 08-06-1990 between The
Prudential Insurance Company of America, 1800 West Loop Tower Associates and
Aetna Insurance Company filed in the Official Public Records of Real Property of
Harris County, Texas, at Clerk File No. M-780636, Film Code No. 185-72-2130, the
following three (3) courses and distances:

A-1    

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N 59° 21' 04" E - 25.05' to a found 5/8" iron rod in concrete;
NORTH - 76.08' to a found 5/8" iron rod in concrete;
N 80° 57' 30" E - 238.44' to a found 5/8" iron rod in concrete;
THENCE S 77° 31' 09" E - 70.06', continuing with said Boundary Line Agreement to
the POINT OF BEGINNING and containing 1.8846 acres (82,095 square feet) of land,
more or less.

A-2