Promissory note



 Exhibit 10.6 
 PROMISSORY NOTE 
  

			
	 U.S. $30,000,000.00
	 	April 4, 2006

 FOR VALUE RECEIVED, and at the times hereinafter specified, RANCON REALTY FUND V SUBSIDIARY TWO LLC, a Delaware
limited liability company (“Maker”), whose address is 400 South El Camino Real, 11th Floor,
San Mateo, California 94402, hereby promises to pay to the order of THE VARIABLE ANNUITY LIFE INSURANCE COMPANY, a Texas corporation (hereinafter referred to, together with each subsequent holder hereof, as “Holder”), at c/o AIG
Global Investment Corp., 1 SunAmerica Center, 38th Floor, Century City, Los Angeles,
California 90067-6022, or at such other address as may be designated from time to time hereafter by any Holder, the principal sum of THIRTY MILLION AND NO/100THS DOLLARS ($30,000,000.00), together with interest on the principal balance
outstanding from time to time, as hereinafter provided, in lawful money of the United States of America. 
 By its execution
and delivery of this promissory note (this “Note”), Maker covenants and agrees as follows: 
 1. Interest Rate and Payments.

 (a) The balance of principal outstanding from time to time under this Note shall bear interest at the rate of five and sixty–one
one-hundredths percent (5.61%) per annum (the “Original Interest Rate”), based on a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each; however, interest for partial months shall
be calculated by multiplying the principal balance of this Note by the applicable interest rate (i.e., the Original Interest Rate or the New Rate (hereinafter defined)), dividing the product by three hundred sixty (360), and multiplying that result
by the actual number of days elapsed. 
 (b) Interest only shall be payable on the date the loan evidenced by this Note (the
“Loan”) is funded by Holder, in advance, for the period from and including the date of funding through and including April 30, 2006. 
 (c) Commencing on June 1, 2006 and on the first day of each month thereafter through and including April 1, 2016 combined payments of principal and interest shall be payable, in arrears, in the amount of
$172,412.91 each (such amount representing an amount sufficient to fully amortize the original principal amount of this Note over a three hundred sixty (360) month period (the “Amortization Period”)). 
 (d) The entire outstanding principal balance of this Note, together with all accrued and unpaid interest and all other sums due hereunder, shall be due
and payable in full on May 1, 2016 (the “Original Maturity Date”). 
 2. Holder’s Extension Option; Net Operating
Income. 
 (a) If Maker shall fail to pay the outstanding principal balance of this Note and all accrued interest and other charges due
hereon at the Original Maturity Date, Holder shall have the right, at Holder’s sole option and discretion, to extend the term of the Loan for an additional period of five (5) years (the “Extension Term”). If Holder elects to
extend the term of the Loan, Maker shall pay all fees of Holder incurred in connection with such extension, including, but not limited to, attorneys’ fees and title insurance premiums. Maker shall execute all documents reasonably requested by
Holder to evidence and secure the Loan, as extended, and shall obtain and provide to Holder any title insurance policy or endorsement requested by Holder. 
 (b) Should Holder elect to extend the term of the Loan as provided above, Holder shall (i) reset the interest rate borne by the then-existing principal balance of the Loan to a rate per annum (the “New
Rate”) equal to the greater of (A) the Original Interest Rate, or (B) Holder’s (or comparable lenders’, if Holder is no 







 longer making such loans) then-prevailing interest rate for five (5) year loans secured by properties similar to the
Property (hereinafter defined), as determined by Holder in its sole discretion; (ii) re-amortize the then-existing principal balance of the Loan over the remaining portion of the Amortization Period (the “New Amortization Period”);
(iii) have the right to require Maker to enter into modifications of the non-economic terms of the Loan Documents as Holder may request (the “Non-Economic Modifications”); and (iv) notwithstanding any provision set forth in the
Loan Documents to the contrary, have the right to require Maker to make monthly payments into escrow for insurance premiums and real property taxes, assessments and similar governmental charges. Hence, monthly principal and interest payments during
the Extension Term shall be based upon the New Rate, and calculated to fully amortize the outstanding principal balance of the Loan over the New Amortization Period. 
 (c) If Holder elects to extend the term of the Loan, Holder shall advise Maker of the New Rate within fifteen (15) days following the Original Maturity Date. 
 (d) In addition to the required monthly payments of principal and interest set forth above, commencing on the first day of the second month following
the Original Maturity Date and continuing on the first day of each month thereafter during the Extension Term (each an “Additional Payment Date”), Maker shall make monthly payments to Holder in an amount equal to all Net Operating Income
(hereinafter defined) attributable to the Property for the calendar month ending on the last day of the month that is two months preceding each such Additional Payment Date. For example, assuming the Original Maturity Date is January 1, then
Net Operating Income for the period from January 1 through January 31 shall be payable to Holder on March 1; Net Operating Income for the period from February 1 through February 28 shall be payable to Holder on April 1,
and so on. 
 (e) Holder shall deposit all such Net Operating Income received from Maker into an account or accounts maintained at a
financial institution chosen by Holder or its servicer in its sole discretion (the “Deposit Account”) and all such funds shall be invested in a manner acceptable to Holder in its sole discretion. All interest, dividends and earnings
credited to the Deposit Account shall be held and applied in accordance with the terms hereof. 
 (f) On the third Additional Payment Date
and on each third Additional Payment Date thereafter, Holder shall apply all Excess Funds (hereinafter defined), if any, to prepayment of amounts due under this Note, without premium or penalty. 
 (g) As security for the repayment of the Loan and the performance of all other obligations of Maker under the Loan Documents, Maker hereby assigns,
pledges, conveys, delivers, transfers and grants to Holder a first priority security interest in and to: all Maker’s right, title and interest in and to the Deposit Account; all rights to payment from the Deposit Account and the money deposited
therein or credited thereto (whether then due or in the future due and whether then or in the future on deposit); all interest thereon; any certificates, instruments and securities, if any, representing the Deposit Account; all claims, demands,
general intangibles, choses in action and other rights or interests of Maker in respect of the Deposit Account; any monies then or at any time thereafter deposited therein; any increases, renewals, extensions, substitutions and replacements thereof;
and all proceeds of the foregoing. 
 (h) From time to time, but not more frequently than monthly, Maker may request a disbursement (a
“Disbursement”) from the Deposit Account for capital expenses, tenant improvement expenses, leasing commissions and special contingency expenses. Holder may consent to or deny any such Disbursement in its sole discretion. 
 (i) Upon the occurrence of any Event of Default (hereinafter defined) (i) Maker shall not be entitled to any further Disbursement from the Deposit
Account; and (ii) Holder shall be entitled to take immediate possession and control of the Deposit Account (and all funds contained therein) and to pursue all of its rights and remedies available to Holder under the Loan Documents, at law and
in equity. 
 (j) All of the terms and conditions of the Loan shall apply during the Extension Term, except as expressly set forth above,
and except that no further extensions of the Loan shall be permitted. 







 (k) For the purposes of the foregoing: 
 (i) “Excess Funds” shall mean, on any Additional Payment Date, the amount of funds then existing in the Deposit Account
(including any Net Operating Income due on the applicable Additional Payment Date), less an amount equal to the sum of three regularly scheduled payments of principal and interest due on this Note; 
 (ii) “Net Operating Income” shall mean, for any particular period of time, Gross Revenue for the relevant period, less
Operating Expenses for the relevant period; provided, however, that if such amount is equal to or less than zero (0), Net Operating Income shall equal zero (0); 
 (iii) “Gross Revenue” shall mean all payments and other revenues (exclusive, however, of any payments attributable to sales
taxes) received by or on behalf of Maker from all sources related to the ownership or operation of the Property, including, but not limited to, rents, room charges, parking fees, interest, security deposits (unless required to be held in a
segregated account), business interruption insurance proceeds, operating expense pass-through revenues and common area maintenance charges, for the relevant period for which the calculation of Gross Revenue is being made; and 
 (iv) “Operating Expenses” shall mean the sum of all ordinary and necessary operating expenses actually paid by Maker in
connection with the operation of the Property during the relevant period for which the calculation of Operating Expenses is being made, including, but not limited to, (a) payments made by Maker for taxes and insurance required under the Loan
Documents, and (b) monthly debt service payments as required under this Note. 
 3. Budgets During Extension Term. 
 (a) Within fifteen (15) days following the Original Maturity Date and on or before December 1 of each subsequent calendar year, Maker shall
deliver to Holder a proposed revenue and expense budget for the Property for the remainder of the calendar year in which the Original Maturity Date occurs or the immediately succeeding calendar year (as applicable). Such budget shall set forth
Maker’s projection of Gross Revenue and Operating Expenses for the applicable calendar year, which shall be subject to Holder’s reasonable approval. Once a proposed budget has been reviewed and approved by Holder, and Maker has made all
revisions requested by Holder, if any, the revised budget shall be delivered to Holder and shall thereafter become the budget for the Property hereunder (the “Budget”) for the applicable calendar year. If Maker and Holder are unable to
agree upon a Budget for any calendar year, the budgeted Operating Expenses (excluding extraordinary items) provided in the Budget for the Property for the preceding calendar year shall be considered the Budget for the Property for the subject
calendar year until Maker and Holder agree upon a new Budget for such calendar year. 
 (b) During the Extension Term, Maker shall operate
the Property in accordance with the Budget for the applicable calendar year, and the total of expenditures relating to the Property exceeding one hundred and five percent (105%) of the aggregate of such expenses set forth in the Budget for the
applicable time period shall not be treated as Operating Expenses for the purposes of calculating “Net Operating Income,” without the prior written consent of Holder except for emergency expenditures which, in the Maker’s good faith
judgment, are reasonably necessary to protect, or avoid immediate danger to, life or property. 
 4. Reports During Extension Term.

 (a) During the Extension Term, Maker shall deliver to Holder all financial statements reasonably required by Holder to calculate Net
Operating Income, including, without limitation, a monthly statement to be delivered to Holder concurrently with Maker’s payment of Net Operating Income that sets forth the amount of Net Operating Income accompanying such statement and
Maker’s calculation of Net Operating Income for the relevant calendar month. Such statements shall be certified by an executive officer of Maker or Maker’s manager, managing member or general partner (as applicable) as having been prepared
in accordance with the terms hereof and to be true, accurate and complete in all material respects. 







 (b) In addition, on or before February 1 of each calendar year during the Extension Term, Maker
shall submit to Holder an annual income and expense statement for the Property which shall include the calculation of Gross Revenue, Operating Expenses and Net Operating Income for the preceding calendar year and shall be accompanied by Maker’s
reconciliation of any difference between the actual aggregate amount of the Net Operating Income for such calendar year and the aggregate amount of Net Operating Income for such calendar year actually remitted to Holder. All such statements shall be
certified by an executive officer of Maker or Maker’s manager, managing member or general partner (as applicable) as having been prepared in accordance with the terms hereof and to be true, accurate and complete in all material respects. If any
such annual financial statement discloses any inconsistency between the calculation of Net Operating Income and the amount of Net Operating Income actually remitted to Holder, Maker shall immediately remit to Holder the amount of any underpayment of
Net Operating Income for such calendar year or, in the event of an overpayment by Maker, such amount may be withheld from any subsequent payment of Net Operating Income required hereunder. 
 (c) Holder may notify Maker within ninety (90) days after receipt of any statement or report required hereunder that Holder disputes any
computation or item contained in any portion of such statement or report. If Holder so notifies Maker, Holder and Maker shall meet in good faith within twenty (20) days after Holder’s notice to Maker to resolve such disputed items. If,
despite such good faith efforts, the parties are unable to resolve the dispute at such meeting or within ten (10) days thereafter, the items shall be resolved by an independent certified public accountant designated by Holder within fifteen
(15) days after such ten (10) day period. The determination of such accountant shall be final. All fees of such accountant shall be paid by Maker. Maker shall remit to Holder any additional amount of Net Operating Income found to be due
for such periods within ten (10) days after the resolution of such dispute by the parties or the accountant’s determination, as applicable. The amount of any overpayment found to have been made for such periods may be withheld from any
required future remittance of Net Operating Income. 
 (d) Maker shall at all times keep and maintain full and accurate books of account and
records adequate to reflect correctly all items required in order to calculate Net Operating Income. 
 5. Loan Prepayment.

 (a) During the first two (2) years after the date of this Note, Maker shall have no right to prepay all or any part of this Note.

 (b) At any time after the second (2nd) anniversary of the date of this Note, Maker shall have the right to prepay the full principal amount of this Note and all accrued but unpaid interest hereon as of the date of prepayment, and
Maker shall, subject to the terms and conditions set forth in that certain Loan and Partial Release Agreement of even date herewith by and between Maker and Holder (the “Loan Agreement”), be permitted to make one or more principal
reduction payments in the amount of the Allocated Release Price in connection with a Permitted Release (as such terms are defined in the Loan Agreement), provided, in each case, that (i) Maker gives not less than thirty (30) days’
prior written notice to Holder of Maker’s election to prepay this Note, and (ii) Maker pays a prepayment premium to Holder (A) in the case of prepayment in full, in an amount equal to the greater of one percent (1%) of the
outstanding principal balance of this Note or the Present Value of this Note (hereinafter defined), less the amount of principal being prepaid, calculated as of the prepayment date, and (B) in the case of a partial prepayment in connection with
a Permitted Release, in an amount equal to the percentage that such Allocated Release Price so applied to this Note bears to the entire then-existing principal balance of this Note, multiplied by the prepayment premium that would be due if this Note
were prepaid in full on such date. In connection with any Permitted Release, Holder shall re-amortize the then-outstanding principal balance of this Note over the remainder of the Amortization Period and give notice to Maker in accordance with the
terms of the Deed of Trust of such revised amortization schedule. 
 (c) Holder shall notify Maker of the amount and basis of determination
of the prepayment premium. Holder shall not be obligated to accept any prepayment of the principal balance of this Note unless such prepayment is accompanied by the applicable prepayment premium and all accrued interest and other sums due under this
Note. Maker may not prepay the Loan on a Friday or on any day preceding a public holiday, or the equivalent for banks generally under the laws of the State in which the Property is located (the “State”). 







 (d) Except for (i) making payments of Excess Funds as described above, (ii) the application of
insurance proceeds or condemnation awards to the principal balance of this Note, as provided in the Deed of Trust (hereinafter defined), and (iii) partial prepayments made in connection with a Permitted Release (as defined in the Loan
Agreement), in no event shall Maker be permitted to make any partial prepayments of this Note. 
 (e) If Holder accelerates this Note upon
an Event of Default, then in addition to Maker’s obligation to pay the then outstanding principal balance of this Note and all accrued but unpaid interest thereon, Maker shall pay an additional amount equal to the prepayment premium that would
be due to Holder if Maker were voluntarily prepaying this Note at the time that such acceleration occurred, or if under the terms hereof no voluntary prepayment would be permissible on the date of such acceleration, Maker shall pay a prepayment
premium calculated as set forth in the Deed of Trust. 
 (f) For the purposes of the foregoing: 
 (i) The “Present Value of this Note” with respect to any prepayment of this Note, as of any date, shall be determined by
discounting all scheduled payments of principal and interest remaining to maturity of this Note, attributed to the amount being prepaid, at the Discount Rate. If prepayment occurs on a date other than a regularly scheduled payment date, the actual
number of days remaining from the prepayment date to the next regularly scheduled payment date will be used to discount within such period. 
 (ii) The “Discount Rate” is the rate which, when compounded monthly, is equivalent to the Treasury Rate, when compounded semi-annually. 
 (iii) The “Treasury Rate” is the semi-annual yield on the Treasury Constant Maturity Series with maturity equal to the
remaining weighted average life of this Note, for the week prior to the prepayment date, as reported in Federal Reserve Statistical Release H.15–Selected Interest Rates, conclusively determined by Holder on the prepayment date. The rate will be
determined by linear interpolation between the yields reported in Release H.15, if necessary. In the event Release H.15 is no longer published, Holder shall select a comparable publication to determine the Treasury Rate. 
 (g) Holder shall not be obligated actually to reinvest the amount prepaid in any treasury obligations as a condition precedent to receiving any
prepayment premium. 
 (h) Notwithstanding the foregoing, (i) at any time during the ninety (90) day period immediately prior to
the Original Maturity Date and during the Extension Term, Maker shall have the right to prepay the full principal amount of this Note and all accrued but unpaid interest thereon as of the date of prepayment, without prepayment premium thereon, and
(ii) no prepayment premium shall be due in connection with the application of any insurance proceeds or condemnation awards to the principal balance of this Note, as provided in the Deed of Trust. 
 6. Payments. Whenever any payment to be made under this Note shall be stated to be due on a Saturday, Sunday or public holiday or the equivalent
for banks generally under the laws of the State (any other day being a “Business Day”), such payment may be made on the next succeeding Business Day. 
 7. Default Rate. 
 (a) The entire balance of principal, interest, and other sums due upon the
maturity hereof, by acceleration or otherwise, shall bear interest from the date due until paid at the greater of (i) eighteen percent (18%) per annum and (ii) a per annum rate equal to five percent (5%) over the prime
rate (for corporate loans at large United States money center commercial banks) published in The Wall Street Journal on the first 







 business day of each month (the “Default Rate”); provided, however, that such rate shall not exceed the maximum
permitted by applicable state or federal law. In the event The Wall Street Journal is no longer published or no longer publishes such prime rate, Holder shall select a comparable reference. 
 (b) If any payment under this Note is not made when due, interest shall accrue at the Default Rate from the date such payment was due until payment is
actually made. 
 8. Late Charges. In addition to interest as set forth herein, Maker shall pay to Holder a late charge equal to four
percent (4%) of any amounts due under this Note in the event any such amount is not paid when due. 
 9. Application of Payments. All
payments hereunder shall be applied first to the payment of late charges, if any, then to the payment of prepayment premiums, if any, then to the repayment of any sums advanced by Holder for the payment of any insurance premiums, taxes, assessments,
or other charges against the property securing this Note (together with interest thereon at the Default Rate from the date of advance until repaid), then to the payment of accrued and unpaid interest, and then to the reduction of principal.

 10. Immediately Available Funds. Payments under this Note shall be payable in immediately available funds without setoff,
counterclaim or deduction of any kind, and shall be made by electronic funds transfer from a bank account established and maintained by Maker for such purpose. 
 11. Security. This Note is secured by a Deed of Trust, Security Agreement, Fixture Filing, Financing Statement and Assignment of Leases and Rents of even date herewith granted by Maker for the benefit of the
named Holder hereof (the “Deed of Trust”) encumbering certain real property and improvements thereon comprising four office and retail buildings in the Tri-City Corporate Center, San Bernardino, California, as more particularly described
in such Deed of Trust (the “Property”). 
 12. Certain Definitions. Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Deed of Trust. 
 13. Event of Default. Each of the following events will constitute an event
of default (an “Event of Default”) under this Note and under the Deed of Trust and each other Loan Document, and any Event of Default under any Loan Document shall constitute an Event of Default hereunder and under each of the other Loan
Documents: 
 (a) any failure to pay when due any sum under Section 1 of this Note; 
 (b) any failure to pay when due any other sum hereunder, provided, however, that such failure shall not constitute an Event of Default unless such
failure continues for ten (10) days beyond the date that Holder delivers to Maker notice that such payment is due; 
 (c) any failure
of Maker to properly perform any obligation contained herein or in any of the other Loan Documents (other than the obligation to make payments under this Note or the other Loan Documents) and the continuance of such failure for a period of ten
(10) days following written notice thereof from Holder to Maker; provided, however, that if such failure is not curable within such ten (10) day period, then, so long as Maker commences to cure such failure within such ten (10) day
period and is continually and diligently attempting to cure to completion, such failure shall not be an Event of Default unless such failure remains uncured for ninety (90) days after such written notice to Maker; or 
 (d) if, at any time during the Extension Term, Gross Revenue for any calendar month shall be less than ninety-three percent (93%) of the amount of
projected Gross Revenue for such month set forth in the applicable Budget. 







 14. Acceleration. Upon the occurrence of any Event of Default, the entire balance of principal,
accrued interest, and other sums owing hereunder shall, at the option of Holder, become at once due and payable without notice or demand. Upon the occurrence of an Event of Default described in Section 13(d) hereof, Holder shall have the option, in
its sole discretion, to either (a) exercise any remedies available to it under the Loan Documents, at law or in equity, or (b) require Maker to submit a new proposed budget for Holder’s approval. If Holder agrees to accept such new proposed
budget, then such budget shall become the Budget for all purposes hereunder. 
 15. Conditions Precedent. Maker hereby certifies and
declares that all acts, conditions and things required to be done and performed and to have happened precedent to the creation and issuance of this Note, and to constitute this Note the legal, valid and binding obligation of Maker, enforceable in
accordance with the terms hereof, have been done and performed and happened in due and strict compliance with all applicable laws. 
 16.
Certain Waivers and Consents. Maker and all parties now or hereafter liable for the payment hereof, primarily or secondarily, directly or indirectly, and whether as endorser, guarantor, surety, or otherwise, hereby severally (a) waive
presentment, demand, protest, notice of protest and/or dishonor, and all other demands or notices of any sort whatever with respect to this Note, (b) consent to impairment or release of collateral, extensions of time for payment, and acceptance of
partial payments before, at, or after maturity, (c) waive any right to require Holder to proceed against any security for this Note before proceeding hereunder, (d) waive diligence in the collection of this Note or in filing suit on this Note, and
(e) agree to pay all costs and expenses, including reasonable attorneys’ fees, which may be incurred in the collection of this Note or any part thereof or in preserving, securing possession of, and realizing upon any security for this Note.

 17. Usury Savings Clause. The provisions of this Note and of all agreements between Maker and Holder are, whether now existing or
hereinafter made, hereby expressly limited so that in no contingency or event whatever, whether by reason of acceleration of the maturity hereof, prepayment, demand for payment or otherwise, shall the amount paid, or agreed to be paid, to Holder for
the use, forbearance, or detention of the principal hereof or interest hereon, which remains unpaid from time to time, exceed the maximum amount permissible under applicable law, it particularly being the intention of the parties hereto to conform
strictly to the laws of the State and Federal law, whichever is applicable. If from any circumstance whatever, the performance or fulfillment of any provision hereof or of any other agreement between Maker and Holder shall, at the time performance
or fulfillment of such provision is due, involve or purport to require any payment in excess of the limits prescribed by law, then the obligation to be performed or fulfilled is hereby reduced to the limit of such validity, and if from any
circumstance whatever Holder should ever receive as interest an amount which would exceed the highest lawful rate, the amount which would be excessive interest shall be applied to the reduction of the principal balance owing hereunder (or, at
Holder’s option, be paid over to Maker) and shall not be counted as interest. To the extent permitted by applicable law, determination of the legal maximum amount of interest shall at all times be made by amortizing, prorating, allocating and
spreading in equal parts during the period of the full stated term of this Note, all interest at any time contracted for, charged, or received from Maker in connection with this Note and all other agreements between Maker and Holder, so that the
actual rate of interest on account of the indebtedness represented by this Note is uniform throughout the term hereof. 
 18.
Non-Recourse; Exceptions to Non-Recourse. Nothing contained in this Note or any of the other Loan Documents shall be deemed to impair or limit Holder’s rights: in foreclosure proceedings or in any ancillary proceedings brought to
facilitate Holder’s foreclosure on the Property or any portion thereof or to exercise any specific rights or remedies afforded Holder under any other provisions of the Loan Documents or by law or in equity, subject to the non-recourse
provisions set forth below; to recover under any guarantee given in connection with the Loan; or to pursue any personal liability of Maker or any Guarantor under the Environmental Indemnity Agreement or Section 5.10 of the Deed of Trust. Except as
expressly set forth in this Section 18, the recourse of Holder with respect to the obligations evidenced by this Note shall be solely to the Property, Chattels and Intangible Personalty (as defined in the Deed of Trust) and any other collateral
given as security for the Loan: 
 (a) Notwithstanding anything to the contrary contained in this Note or in any Loan Document, nothing shall
be deemed in any way to impair, limit or prejudice the rights of Holder to collect or recover from Maker and Guarantor: (i) damages or costs (including without limitation reasonable attorneys’ fees) incurred 







 by Holder as a result of waste by Maker; (ii) any condemnation or insurance proceeds attributable to the Property
which were not paid to Holder or used to restore the Property in accordance with the terms of the Deed of Trust; (iii) any rents, profits, advances, rebates, prepaid rents or other similar sums attributable to the Property collected by or for
Maker following an Event of Default (as defined in the Deed of Trust) and not properly applied to the reasonable fixed and operating expenses of the Property, including payments of this Note and other sums due under the Loan Documents; (iv) any
security deposits collected by or for Borrower and not applied in accordance with applicable leases; (v) the amount of any accrued taxes, assessments, and/or utility charges affecting the Property (whether or not the same have been billed to
Maker) that are either unpaid by Maker or advanced by Holder under the Deed of Trust; (vi) any sums expended by Holder in fulfilling the obligations of Maker, as lessor, under any leases affecting the Property; (vii) the amount of any loss
suffered by Holder (that would otherwise be covered by insurance) as a result of Maker’s failure to maintain the insurance required under the terms of any Loan Document; (viii) the amount of any loss suffered by Holder as a result of any
amendment, modification or termination of the lease to Northrop Grumman Space & Mission Systems Corp., Chicago Title Company, or Arrowhead Central Credit Union (collectively, the “Major Tenants”) or execution or subsequent
amendment, modification or termination of any lease for any space currently occupied by the Major Tenants without the prior written consent of Holder, if such consent is required under Section 5.3 of the Deed of Trust; 
 (b) The agreement set forth in the introductory paragraph of this Section 18 to limit the personal liability of Maker shall become null and void
and be of no further force and effect, and Maker and each Guarantor shall be personally liable for the obligations evidenced by this Note, in the event (i) that the Property, or any part thereof or any interest therein, or any interest in
Maker, shall be further encumbered by a voluntary lien securing any obligation upon which Maker, any direct or indirect general partner, manager or managing member of Maker, any guarantor of the Loan, or any principal or affiliate of Maker shall be
personally liable for repayment, either as obligor or guarantor; (ii) of any breach or violation of Section 5.4, 5.5 or 5.7 of the Deed of Trust; (iii) of any fraud or material misrepresentation by Maker in connection with the
Property, the Loan Documents or the application made by Maker for the Loan; (iv) that Maker forfeits the Property or Chattels or any portion of the Property or Chattels due to criminal activity; and (v) of any attempt by Maker, any
Guarantor, or any other person directly or indirectly responsible for the management of Maker or liable for repayment of Maker’s obligations under the Loan (whether as maker, endorser, guarantor, surety, general partner or otherwise) to
materially delay any foreclosure against the Property, Chattels and/or Intangible Personalty or any other exercise by Holder of its remedies under the Loan Documents, which attempts shall include, without limitation, (A) any claim that any Loan
Document is invalid or unenforceable to an extent that would preclude any such foreclosure or other exercise of remedies, (B) Maker filing a petition in bankruptcy, Maker failing to oppose in good faith the entry of an order for relief pursuant
to any involuntary bankruptcy petition filed against it or Maker seeking any reorganization, liquidation, dissolution or similar relief under the bankruptcy laws of the United States or under any other similar federal, state or other statute
relating to relief from indebtedness, or (C) the appointment of a receiver, trustee or liquidator with respect to Maker or the Property or any part thereof. For purposes of the foregoing, “affiliate” shall mean any individual,
corporation, trust, partnership or any other person or entity controlled by, controlling or under common control with Maker. A person or entity of any nature shall be presumed to have control when it possesses the power, directly or indirectly, to
direct, or cause the direction of, the management or policies of another person or entity, whether through ownership of voting securities, by contract, or otherwise. 
 19. Severability. If any provision hereof or of any other document securing or related to the indebtedness evidenced hereby is, for any reason and to any extent, invalid or unenforceable, then neither the
remainder of the document in which such provision is contained, nor the application of the provision to other persons, entities, or circumstances, nor any other document referred to herein, shall be affected thereby, but instead shall be enforceable
to the maximum extent permitted by law. 
 20. Transfer of Note. Each provision of this Note shall be and remain in full force and
effect notwithstanding any negotiation or transfer hereof and any interest herein to any other Holder or participant. 
 21. Governing
Law. Regardless of the place of its execution, this Note shall be construed and enforced in accordance with the laws of the State. 







 22. Time of Essence. Time is of the essence with respect to all of Maker’s obligations under
this Note. 
 23. Remedies Cumulative. The remedies provided to Holder in this Note, the Deed of Trust, and the other Loan Documents
are cumulative and concurrent and may be exercised singly, successively or together against Maker, the Property, and other security, or any guarantor of this Note, at the sole and absolute discretion of the Holder. 
 24. No Waiver. Holder shall not by any act or omission be deemed to waive any of its rights or remedies hereunder unless such waiver is in writing
and signed by the Holder and then only to the extent specifically set forth therein. A waiver of one event shall not be construed as continuing or as a bar to or waiver of any right or remedy granted to Holder hereunder in connection with a
subsequent event. 
 25. Joint and Several Obligation. If Maker is more than one person or entity, then (a) all persons or entities
comprising Maker are jointly and severally liable for all of the Maker’s obligations hereunder; (b) all representations, warranties, and covenants made by Maker shall be deemed representations, warranties, and covenants of each of the persons
or entities comprising Maker; (c) any breach, Default or Event of Default by any of the persons or entities comprising Maker hereunder shall be deemed to be a breach, Default, or Event of Default of Maker; and (d) any reference herein contained to
the knowledge or awareness of Maker shall mean the knowledge or awareness of any of the persons or entities comprising Maker. 
 26.
WAIVER OF JURY TRIAL. MAKER AND HOLDER KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS NOTE, OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS NOTE, THE DEED OF TRUST, OR ANY OTHER LOAN DOCUMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO ANY LOAN DOCUMENT. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR MAKER AND HOLDER TO ENTER INTO THE LOAN TRANSACTION EVIDENCED BY THIS NOTE. 
 27. WAIVER OF PREPAYMENT RIGHT WITHOUT
PREMIUM. MAKER HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE UNDER APPLICABLE LAW (INCLUDING, WITHOUT LIMITATION, CALIFORNIA CIVIL CODE SECTION 2954.10) TO PREPAY THIS NOTE, IN WHOLE OR IN PART, WITHOUT PREPAYMENT PREMIUM, UPON ACCELERATION
OF THE MATURITY DATE OF THIS NOTE, AND AGREES THAT, IF FOR ANY REASON A PREPAYMENT OF ALL OR ANY PART OF THIS NOTE IS MADE, WHETHER VOLUNTARILY OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF THIS NOTE BY HOLDER ON ACCOUNT OF THE OCCURRENCE OF
ANY EVENT OF DEFAULT ARISING FOR ANY REASON, INCLUDING, WITHOUT LIMITATION, AS A RESULT OF ANY PROHIBITED OR RESTRICTED TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION OF THE PROPERTY OR ANY PART THEREOF SECURING THIS NOTE, THEN MAKER SHALL BE
OBLIGATED TO PAY, CONCURRENTLY WITH SUCH PREPAYMENT, THE PREPAYMENT PREMIUM PROVIDED FOR IN THIS NOTE OR, IN THE EVENT OF PREPAYMENT FOLLOWING ACCELERATION OF THE MATURITY DATE HEREOF WHEN THIS NOTE IS CLOSED TO PREPAYMENT, AS PROVIDED IN THE DEED
OF TRUST. MAKER HEREBY DECLARES THAT HOLDER’S AGREEMENT TO MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THIS NOTE CONSTITUTES ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY MAKER, FOR THIS WAIVER AND AGREEMENT.

 MAKER             
 [Balance of Page Intentionally Left Blank] 







 IN WITNESS WHEREOF and intending to be legally bound, Maker has duly executed this Note as of the date first above
written. 
  

			
	MAKER:
	
	RANCON REALTY FUND V SUBSIDIARY TWO LLC, a Delaware limited liability company
		
	By:	 	  

	Name:	 	Daniel Lee Stephenson
	Title:	 	Manager


  

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 STATE OF CALIFORNIA 
 COUNTY OF SAN BERNARDINO 
 Recording requested by: 
 And when recorded mail to: 
 Otten, Johnson, Robinson, Neff & 
 Ragonetti, P.C.

 950 Seventeenth Street 
 Suite 1600 
 Denver, Colorado 80202 
 Attention: Aaron J. Hill, Esq. 
 DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING, FINANCING STATEMENT AND 
 ASSIGNMENT OF LEASES AND RENTS

  

			
	 TRUSTOR:
	  	 RANCON REALTY FUND V SUBSIDIARY TWO LLC,
a Delaware limited liability company

		  	 400 South El Camino Real, 11th Floor

		  	 San Mateo, California 94402

		  	 Attention: G. Lee Burns, Esq.

		
	 BENEFICIARY:
	  	 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY,
a Texas corporation

		  	 c/o AIG Global Investment Corp.

		  	 1 SunAmerica Center, 38th Floor

		  	 Century City

		  	 Los Angeles, California 90067-6022

		  	 Attention: Director-Mortgage Lending and Real Estate

		
	 TRUSTEE:
	  	 CHICAGO TITLE INSURANCE COMPANY

		  	 700 South Flower Street, Suite 900

		  	 Los Angeles, California 90017

		
	 AMOUNT SECURED:
	  	 $30,000,000.00

		
	 GOVERNING LAW:
	  	 CALIFORNIA


  

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 DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING, FINANCING STATEMENT AND 
 ASSIGNMENT OF LEASES AND RENTS 
 THIS DEED OF
TRUST, SECURITY AGREEMENT, FIXTURE FILING, FINANCING STATEMENT AND ASSIGNMENT OF LEASES AND RENTS (this “Deed of Trust”) is given as of April 4, 2006, by RANCON REALTY FUND V SUBSIDIARY TWO LLC, a Delaware limited liability
company (“Trustor”), to CHICAGO TITLE INSURANCE COMPANY (“Trustee”), for the use and benefit of THE VARIABLE ANNUITY LIFE INSURANCE COMPANY, a Texas corporation (“Beneficiary”). 
 ARTICLE 1 
 PARTIES, PROPERTY,
AND DEFINITIONS 
 The following terms and references shall have the meanings indicated: 
 1.1 Beneficiary: The Beneficiary named in the introductory paragraph of this Deed of Trust, whose legal address is c/o AIG Global Investment
Corp., 1 SunAmerica Center, 38th Floor, Century City, Los Angeles, California 90067-6022,
together with any future holder of the Note. 
 1.2 Chattels: All goods, fixtures, inventory, equipment, building and other materials,
supplies, and other tangible personal property of every nature, whether now owned or hereafter acquired by Trustor, used, intended for use, or reasonably required in the construction, development, or operation of the Property, together with all
accessions thereto, replacements and substitutions therefor, and proceeds thereof. 
 1.3 Controlling Persons: Collectively,
(a) if Trustor is a partnership or joint venture, all general partners or joint venturers of Trustor, (b) Guarantor, (c) any other party directly or indirectly liable for payment of the Secured Obligations, whether as maker, endorser,
guarantor, surety, general partner, or otherwise, and (d) any successor to any of the foregoing. 
 1.4 Default: Any matter
which, with the giving of notice, passage of time, or both, would constitute an Event of Default. 
 1.5 Environmental Indemnity
Agreement: The Environmental Indemnity Agreement of even date herewith made by Trustor and Guarantor for the benefit of Beneficiary. 
 1.6 ERISA: The Employee Retirement Income Security Act of 1974, as amended, together with all rules and regulations issued thereunder. 
 1.7 Event of Default: As defined in Article 6. 
 1.8 Guarantor: Rancon Realty
Fund V, a California limited partnership. 
 1.9 Guaranty Agreement: The Guaranty Agreement of even date herewith made by
Guarantor for the benefit of Beneficiary. 
 1.10 Insurance Agreement: The Agreement Concerning Insurance Requirements of even date
herewith executed by Trustor for the benefit of Beneficiary. 
 1.11 Intangible Personalty: All of Trustor’s right, title and
interest in the right to use all trademarks and trade names and symbols or logos used in connection therewith, or any modifications or variations thereof, in connection with the operation of the improvements existing or to be constructed on the
Property, together with all accounts, deposit accounts, letter of credit rights, investment property, monies in the possession of Beneficiary (including, without limitation, proceeds from insurance, retainages and deposits for taxes and insurance),
Permits, contract rights (including, without limitation, rights to receive insurance proceeds) and general 







 intangibles (whether now owned or hereafter acquired, and including proceeds thereof) relating to or arising from
Trustor’s ownership, use, operation, leasing, or sale of all or any part of the Property, specifically including but in no way limited to any right which Trustor may have or acquire to transfer any development rights from the Property to other
real property, and any development rights which may be so transferred. 
 1.12 Lease Certificate: The Certificate of even date
herewith made by Trustor to Beneficiary concerning Leases of the Property. 
 1.13 Leases: Any and all leases, subleases and other
like rental agreements, other than any subleases to which Trustor is not a party, under the terms of which any person other than Trustor has or acquires any right to occupy or use the Property, or any part thereof. 
 1.14 Loan: The loan from Beneficiary to Trustor evidenced by the Note. 
 1.15 Loan Documents: The Note, all of the deeds of trust, mortgages, security agreements and other documents securing or executed and delivered in
connection with the Note, including this Deed of Trust, the Insurance Agreement, the Environmental Indemnity Agreement, the Guaranty Agreement, the Lockbox Agreement, the Pledge Agreement, the Lease Certificate, the Partial Release Agreement and
each other document executed or delivered in connection with the transaction pursuant to which the Note has been executed and delivered. The term “Loan Documents” also includes all modifications, extensions, renewals, and replacements of
each document referred to above. 
 1.16 Lockbox Agreement: The Lockbox Deposit Service Agreement of even date herewith among Trustor,
Beneficiary, the “Servicer” referenced therein and the “Depository Bank” referenced therein. 
 1.17 Note:
Trustor’s promissory note of even date herewith, payable to the order of Beneficiary in the principal face amount of $30,000,000.00, the last payment under which is due on May 1, 2016, or, if extended by Beneficiary pursuant to its terms,
May 1, 2021, unless such due date is accelerated, together with all renewals, extensions and modifications of such promissory note. All terms and provisions of the Note are incorporated by this reference in this Deed of Trust. 
 1.18 Partial Release Agreement: The Loan and Partial Release Agreement of even date herewith among Trustor and Beneficiary. 
 1.19 Permits: All permits, licenses, certificates and authorizations necessary for the beneficial development, ownership, use, occupancy,
operation and maintenance of the Property. 
 1.20 Permitted Exceptions: The matters (excluding matters of survey) set forth in
Schedule B-I of the title insurance policy insuring the lien created by this Deed of Trust, in form and substance satisfactory to, and accepted by, Beneficiary, that Trustor has caused to be delivered to Beneficiary in connection with the Loan.

 1.21 Pledge Agreement: The Pledge and Cash Collateral Agreement of even date herewith among Trustor, Beneficiary and the
“Servicer” referenced therein. 
 1.22 Property: The tract or tracts of land described in Exhibit A attached, together
with all of Trustor’s right, title and interest in and to the following: 
 (a) All buildings, structures, and improvements now or
hereafter located on such tract or tracts, as well as all rights-of-way, easements, and other appurtenances thereto; 
 (b) Any land lying
between the boundaries of such tract or tracts and the center line of any adjacent street, road, avenue, or alley, whether opened or proposed; 
  

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 (c) All of the rents, income, receipts, revenues, issues and profits of and from such tract or tracts
and improvements; 
 (d) All (i) water and water rights (whether decreed or undecreed, tributary, nontributary or not nontributary,
surface or underground, or appropriated or unappropriated); (ii) ditches and ditch rights; (iii) spring and spring rights; (iv) reservoir and reservoir rights; and (v) shares of stock in water, ditch and canal companies and all
other evidence of such rights, which are now owned or hereafter acquired by Trustor and which are appurtenant to or which have been used in connection with such tract or tracts or improvements; 
 (e) All minerals, crops, timber, trees, shrubs, flowers, and landscaping features now or hereafter located on, under or above such tract or tracts;

 (f) All machinery, apparatus, equipment, fittings, fixtures (whether actually or constructively attached, and including all trade,
domestic, and ornamental fixtures) now or hereafter located in, upon, or under such tract or tracts or improvements and used or usable in connection with any present or future operation thereof, including but not limited to all heating,
air-conditioning, freezing, lighting, laundry, incinerating and power equipment; engines; pipes; pumps; tanks; motors; conduits; switchboards; plumbing, lifting, cleaning, fire prevention, fire extinguishing, refrigerating, ventilating, cooking, and
communications apparatus; boilers, water heaters, ranges, furnaces, and burners; appliances; vacuum cleaning systems; elevators; escalators; shades; awnings; screens; storm doors and windows; stoves; refrigerators; attached cabinets; partitions;
ducts and compressors; rugs and carpets; draperies; and all additions thereto and replacements therefor; 
 (g) All development rights
associated with such tract or tracts, whether previously or subsequently transferred to such tract or tracts from other real property or now or hereafter susceptible of transfer from such tract or tracts to other real property; 
 (h) All awards and payments, including interest thereon, resulting from the exercise of any right of eminent domain or any other public or private
taking of, injury to, or decrease in the value of, any of such property; and 
 (i) All other and greater rights and interests of every
nature in such tract or tracts and in the possession or use thereof and income therefrom, whether now owned or subsequently acquired by Trustor. 
 1.23 Secured Obligations: All present and future obligations of Trustor to Beneficiary evidenced by or contained in the Note, this Deed of Trust and all other Loan Documents (excluding the Environmental Indemnity Agreement, which is
not secured by this Deed of Trust), whether stated in the form of promises, covenants, representations, warranties, conditions, or prohibitions or in any other form. If the maturity of the Note secured by this Deed of Trust is accelerated, the
Secured Obligations shall include an amount equal to any prepayment premium which would be payable under the terms of the Note as if the Note were prepaid in full on the date of the acceleration. If under the terms of the Note no voluntary
prepayment would be permissible on the date of such acceleration, then the prepayment fee or premium to be included in the Secured Obligations shall be equal to one hundred fifty percent (150%) of the highest prepayment fee or premium set forth
in the Note, calculated as of the date of such acceleration, as if prepayment were permitted on such date. 
 1.24 Trustee: The
Trustee named in the introductory paragraph of this Deed of Trust, whose address is 700 South Flower Street, Suite 900, Los Angeles, California 90017. 
 1.25 Trustor: The Trustor named in the introductory paragraph of this Deed of Trust (Organizational I.D. No. 4109622), whose legal
address is 400 South El Camino Real, 11th Floor, San Mateo, California 94402, together with
any future owner of the Property or any part thereof or interest therein. 
  

 3 








 ARTICLE 2 
 GRANTING CLAUSE 
 2.1 Grant to Trustee. As security for the Secured Obligations, Trustor
hereby grants, bargains, sells, warrants and conveys the Property to Trustee, in trust, with power of sale, for the use and benefit of Beneficiary, and subject to all provisions hereof. 
 2.2 Security Interest to Beneficiary. As additional security for the Secured Obligations, Trustor hereby grants to Beneficiary a security interest
in the Property, Chattels and Intangible Personalty. To the extent any of the Property, Chattels or Intangible Personalty may be or have been acquired with funds advanced by Beneficiary under the Loan Documents, this security interest is a purchase
money security interest. This Deed of Trust constitutes a security agreement under the Uniform Commercial Code of the state in which the Property is located (the “Code”) with respect to any part of the Property, Chattels and Intangible
Personalty that may or might now or hereafter be or be deemed to be personal property, fixtures or property other than real estate (all collectively hereinafter called “Collateral”); all of the terms, provisions, conditions and agreements
contained in this Deed of Trust pertain and apply to the Collateral as fully and to the same extent as to any other property comprising the Property, and the following provisions of this Section shall not limit the generality or applicability of any
other provisions of this Deed of Trust but shall be in addition thereto: 
 (a) The Collateral shall be used by Trustor solely for business
purposes, and all Collateral (other than the Intangible Personalty) shall be installed upon the real estate comprising part of the Property for Trustor’s own use or as the equipment and furnishings furnished by Trustor, as landlord, to tenants
of the Property; 
 (b) The Collateral (other than the Intangible Personalty) shall be kept at the real estate comprising a part of the
Property, and shall not be removed therefrom without the consent of Beneficiary (being the Secured Party as that term is used in the Code); and the Collateral (other than the Intangible Personalty) may be affixed to such real estate but shall not be
affixed to any other real estate; 
 (c) No financing statement covering any of the Collateral or any proceeds thereof is on file in any
public office; and Trustor will, at its cost and expense, upon demand, furnish to Beneficiary such further information and will execute and deliver to Beneficiary such financing statements and other documents in form satisfactory to Beneficiary and
will do all such acts and things as Beneficiary may at any time or from time to time reasonably request or as may be necessary or appropriate to establish and maintain a perfected first-priority security interest in the Collateral as security for
the Secured Obligations, subject to no adverse liens or encumbrances; and Trustor will pay the cost of filing the same or filing or recording such financing statements or other documents and this instrument in all public offices wherever filing or
recording is deemed by Beneficiary to be necessary or desirable; 
 (d) The terms and provisions contained in this Section and in
Section 7.6 of this Deed of Trust shall, unless the context otherwise requires, have the meanings and be construed as provided in the Code; and 
 (e) This Deed of Trust constitutes a financing statement under the Code with respect to the Collateral. As such, this Deed of Trust covers all items of the Collateral that are or are to become fixtures. The filing of
this Deed of Trust in the real estate records of the county where the Property is located shall constitute a fixture filing in accordance with the Code. Information concerning the security interests created hereby may be obtained at the addresses
set forth in Article 1 of this Deed of Trust. Trustor is the “Debtor” and Beneficiary is the “Secured Party” (as those terms are defined and used in the Code) insofar as this Deed of Trust constitutes a financing statement.

  

 4 








 ARTICLE 3 
 TRUSTOR’S REPRESENTATIONS AND WARRANTIES 
 3.1 Warranty of Title. Trustor represents and
warrants to Beneficiary that: 
 (a) Trustor has good, marketable and indefeasible fee simple title (or easement interest if so indicated on
Exhibit A) in and to the Property, and such interest is free and clear of all liens, encumbrances, security interests and other claims whatsoever, subject only to the Permitted Exceptions; 
 (b) Trustor is the sole and absolute owner of the Chattels and the Intangible Personalty, free and clear of all liens, encumbrances, security interests
and other claims whatsoever, subject only to the Permitted Exceptions; 
 (c) This Deed of Trust is a valid and enforceable first lien and
security interest on the Property, Chattels and Intangible Personalty, subject only to the Permitted Exceptions; 
 (d) Trustor, for itself
and its successors and assigns, hereby agrees to warrant and forever defend, all and singular of the property and property interests granted and conveyed pursuant to this Deed of Trust, against every person whomsoever lawfully claiming, or to claim,
the same or any part thereof; and 
 The representations, warranties and covenants contained in this Section shall survive foreclosure of
this Deed of Trust, and shall inure to the benefit of and be enforceable by any person who may acquire title to the Property, the Chattels, or the Intangible Personalty pursuant to any such foreclosure. 
 3.2 Due Authorization. If Trustor is other than a natural person, then each individual who executes this document on behalf of Trustor represents
and warrants to Beneficiary that such execution has been duly authorized by all necessary corporate, partnership, limited liability company or other action on the part of Trustor. Trustor represents that Trustor has obtained all consents and
approvals required in connection with the execution, delivery and performance of this Deed of Trust. 
 3.3 Other Representations and
Warranties. Trustor represents and warrants to Beneficiary as follows: 
 (a) Trustor is a limited liability company, duly organized,
validly existing and in good standing under the laws of the State of Delaware. Trustor is duly authorized to transact business in and is in good standing under the laws of the State of California. The sole Controlling Person of Trustor is Guarantor;

 (b) The execution, delivery and performance by Trustor of the Loan Documents are within Trustor’s power and authority and have been
duly authorized by all necessary action; 
 (c) This Deed of Trust is, and each other Loan Document to which Trustor or Guarantor is a party
will, when delivered hereunder, be valid and binding obligations of Trustor and/or Guarantor, as applicable, enforceable against Trustor and/or Guarantor, as applicable, in accordance with their respective terms, except as limited by equitable
principles and bankruptcy, insolvency and similar laws affecting creditors’ rights; 
 (d) The execution, delivery and performance by
Trustor and Guarantor of the Loan Documents will not contravene any contractual or other restriction binding on or affecting Trustor or any Controlling Person and will not result in or require the creation of any lien, security interest, other
charge or encumbrance (other than pursuant hereto) upon or with respect to any of its properties; 
 (e) The execution, delivery and
performance by Trustor and Guarantor of the Loan Documents does not contravene any applicable law; 
  

 5 








 (f) No authorization, approval, consent or other action by, and no notice to or filing with, any court,
governmental authority or regulatory body is required for the due execution, delivery and performance by Trustor and Guarantor of any of the Loan Documents or the effectiveness of any assignment of any of Trustor’s rights and interests of any
kind to Beneficiary; 
 (g) No part of the Property, Chattels, or Intangible Personalty is in the hands of a receiver, no application for a
receiver is pending with respect to any portion of the Property, Chattels, or Intangible Personalty, and no part of the Property, Chattels, or Intangible Personalty is subject to any foreclosure or similar proceeding; 
 (h) Neither Trustor nor any Controlling Person has made any assignment for the benefit of creditors, nor has Trustor or any Controlling Person filed, or
had filed against it, any petition in bankruptcy; 
 (i) There is no pending or, to the best of Trustor’s knowledge, threatened,
litigation, action, proceeding or investigation against Trustor, any Controlling Person or the Property before any court, governmental or quasi-governmental, arbitrator or other authority, which could have a materially adverse effect on Trustor, any
such Controlling Person or the Property. There is no pending or, to the best of Trustor’s knowledge, threatened, condemnation proceeding against the Property before any court, governmental or quasi-governmental, arbitrator or other authority;

 (j) Trustor is a “non-foreign person” within the meaning of Sections 1445 and 7701 of the United States Internal Revenue
Code of 1986, as amended, and the regulations issued thereunder; 
 (k) Access to and egress from the Property are available and provided by
public streets, and Trustor has no knowledge of any federal, state, county, municipal or other governmental plans to change the highway or road system in the vicinity of the Property or to restrict or change access from any such highway or road to
the Property; 
 (l) All public utility services necessary for the operation of all improvements constituting part of the Property for their
intended purposes are available at the boundaries of the land constituting part of the Property, including water supply, storm and sanitary sewer facilities, and natural gas, electric, telephone and cable television facilities; 
 (m) The Property is located in a zoning district designated CR-3, by the County of San Bernardino, California. Such designation permits the development,
use and operation of the Property as it is currently operated as a permitted, and not as a non-conforming use. The Property complies in all respects with all zoning ordinances, regulations, requirements, conditions and restrictions, including but
not limited to deed restrictions and restrictive covenants, applicable to the Property; 
 (n) Except as disclosed to Beneficiary in
writing, there are no special or other assessments for public improvements or otherwise now affecting the Property, nor does Trustor know of any pending or threatened special assessments affecting the Property or any contemplated improvements
affecting the Property that may result in special assessments. There are no tax abatements or exceptions affecting the Property; 
 (o)
Trustor and each Controlling Person has filed all tax returns it is required to have filed, and has paid all taxes as shown on such returns or on any assessment received pertaining to the Property; 
 (p) Trustor has not received any notice from any governmental body having jurisdiction over the Property as to any violation of any applicable law, or
any notice from any insurance company or inspection or rating bureau setting forth any requirements as a condition to the continuation of any insurance coverage on or with respect to the Property or the continuation thereof at premium rates existing
at present which have not been remedied or satisfied; 
  

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 (q) Neither Trustor nor any Controlling Person is in default, in any manner which would adversely affect
its properties, assets, operations or condition (financial or otherwise), in the performance, observance or fulfillment of any of the obligations, covenants or conditions set forth in any agreement or instrument to which it is a party or by which it
or any of its properties, assets or revenues are bound; 
 (r) Except as set forth in the Lease Certificate and/or the Permitted Exceptions,
there are no occupancy rights (written or oral), Leases or tenancies presently affecting any part of the Property. The Lease Certificate contains a true and correct description of all Leases presently affecting the Property. No written or oral
agreements or understandings exist between Trustor and the tenants under the Leases described in the Lease Certificate that grant such tenants any rights greater than those described in the Lease Certificate or that are in any way inconsistent with
the rights described in the Lease Certificate; 
 (s) There are no purchase options, purchase contracts or other similar agreements of any
type (written or oral) presently affecting any part of the Property; 
 (t) Other than with respect to the leasing brokerage agreement with
CB Richard Ellis disclosed to Beneficiary, there exists no brokerage agreement with respect to any part of the Property; 
 (u) Except
as otherwise disclosed to Beneficiary in writing prior to the date hereof, (i) there are no contracts presently affecting the Property (“Contracts”) having a term in excess of one hundred eighty (180) days or not terminable by
Trustor (without penalty) on thirty (30) days’ notice; (ii) Trustor has heretofore delivered to Beneficiary true and correct copies of each of the Contracts together with all amendments thereto; (iii) Trustor is not in default of
any obligations under any of the Contracts; and (iv) the Contracts represent the complete agreement between Trustor and such other parties as to the services to be performed or materials to be provided thereunder and the compensation to be paid
for such services or materials, as applicable, and except as otherwise disclosed herein, such other parties possess no unsatisfied claims against Trustor. Trustor is not in default under any of the Contracts and no event has occurred which, with the
passing of time or the giving of notice, or both, would constitute a default under any of the Contracts; 
 (v) Trustor has obtained all
Permits necessary for the operation, use, ownership, development, occupancy and maintenance of the Property as retail and office buildings, as it is currently being operated. None of the Permits has been suspended or revoked, and all of the Permits
are in full force and effect, are fully paid for, and Trustor has made or will make application for renewals of any of the Permits prior to the expiration thereof; 
 (w) All insurance policies held by Trustor relating to or affecting the Property are in full force and effect and shall remain in full force and effect until all Secured Obligations are satisfied. Trustor has not
received any notice of default or notice terminating or threatening to terminate any such insurance policies. Trustor has made or will make application for renewals of any of such insurance policies prior to the expiration thereof; 
 (x) Trustor currently complies with ERISA. Neither the making of the Loan nor the exercise by Beneficiary of any of its rights under the Loan Documents
constitutes or will constitute a non-exempt, prohibited transaction under ERISA; and 
 (y) Trustor’s exact legal name is correctly set
out in the introductory paragraph of this Deed of Trust. Trustor’s organizational identification number is correctly set forth in the definition of “Trustor” set forth in Article 1 hereof. Trustor’s location (as such
term is used in Section 5.8 hereof) is the State of Delaware. 
 3.4 Continuing Effect. Trustor shall be liable to Beneficiary
for any damage suffered by Beneficiary if any of the foregoing representations are inaccurate as of the date hereof, regardless when such inaccuracy may be discovered by, or result in harm to, Beneficiary. Trustor further represents and warrants
that the foregoing representations and warranties, as well as all other representations and warranties of Trustor to Beneficiary relative to the Loan Documents, shall remain true and correct during the term of the Note and shall survive termination
of this Deed of Trust. 
  

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 ARTICLE 4 
 TRUSTOR’S AFFIRMATIVE COVENANTS 
 4.1 Payment of Note. Trustor will pay all principal,
interest, and other sums payable under the Note, on the date when such payments are due, without notice or demand. 
 4.2 Performance of
Other Obligations. Trustor will promptly and strictly perform and comply with all other covenants, conditions, and prohibitions required of Trustor by the terms of the Loan Documents. 
 4.3 Other Encumbrances. Trustor will promptly and strictly perform and comply with all covenants, conditions, and prohibitions required of Trustor
in connection with any other encumbrance affecting the Property, the Chattels, or the Intangible Personalty, or any part thereof, or any interest therein, regardless of whether such other encumbrance is superior or subordinate to the lien hereof.

 4.4 Payment of Taxes. 
 (a) Property Taxes. Unless Trustor is depositing money into escrow pursuant to Section 4.4(b), Trustor will (i) pay, before delinquency, all taxes and assessments, general or special, which may be levied or imposed at any
time against Trustor’s interest and estate in the Property, the Chattels, or the Intangible Personalty, and (ii) within ten days after each payment of any such tax or assessment, Trustor will deliver to Beneficiary, without notice or
demand, an official receipt for such payment (or as soon thereafter as it is available). At Beneficiary’s option, Beneficiary may retain the services of a firm to monitor the payment of all taxes and assessments relating to the Property, the
cost of which shall be borne by Trustor. 
 (b) Deposit for Taxes. Upon demand made by Beneficiary following the occurrence of a
Default or an Event of Default, Trustor shall deposit with Beneficiary an amount equal to 1/12th of the amount which Beneficiary estimates will be required to make the next annual payment of taxes, assessments, and similar governmental charges
referred to in this Section, multiplied by the number of whole or partial months that have elapsed since the date one month prior to the most recent due date for such taxes, assessments and similar governmental charges. Thereafter, with each monthly
payment under the Note, Trustor shall deposit with Beneficiary an amount equal to 1/12th of the amount which Beneficiary estimates will be required to pay the next annual payment of taxes, assessments, and similar governmental charges referred to in
this Section. The purpose of these provisions is to provide Beneficiary with sufficient funds on hand to pay all such taxes, assessments, and other governmental charges thirty (30) days before the date on which they become past due. If the
Beneficiary, in its sole discretion, determines that the funds escrowed hereunder are, or will be, insufficient, Trustor shall upon demand pay such additional sums as Beneficiary shall determine necessary and shall pay any increased monthly charges
requested by Beneficiary. Provided no Default or Event of Default exists hereunder, Beneficiary will apply the amounts so deposited to the payment of such taxes, assessments, and other charges when due, but in no event will Beneficiary be liable for
any interest on any amount so deposited, and any amount so deposited may be held and commingled with Beneficiary’s own funds. 
 (c)
Intangible Taxes. If by reason of any statutory or constitutional amendment or judicial decision adopted or rendered after the date hereof, any tax, assessment, or similar charge is imposed against the Note, against Beneficiary, or against
any interest of Beneficiary in any real or personal property encumbered hereby, Trustor will pay such tax, assessment, or other charge before delinquency and will indemnify Beneficiary against all loss, expense, or diminution of income in connection
therewith. In the event Trustor is unable to do so, either for economic reasons or because the legal provisions or decisions creating such tax, assessment or charge forbid Trustor from doing so, then the Note will, at Beneficiary’s option,
become due and payable in full upon ninety (90) days’ notice to Trustor. 
  

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 (d) Right to Contest. Notwithstanding any other provision of this Section, Trustor will not be
deemed to be in default solely by reason of Trustor’s failure to pay any tax, assessment or similar governmental charge so long as, in Beneficiary’s judgment, each of the following conditions is satisfied: 
 (i) Trustor is engaged in and diligently pursuing in good faith administrative or judicial proceedings appropriate to contest the validity or amount of
such tax, assessment, or charge; and 
 (ii) Trustor’s payment of such tax, assessment, or charge would necessarily and materially
prejudice Trustor’s prospects for success in such proceedings; and 
 (iii) Nonpayment of such tax, assessment, or charge will not
result in the loss or forfeiture of any property encumbered hereby or any interest of Beneficiary therein; and 
 (iv) Trustor deposits with
Beneficiary, as security for such payment which may ultimately be required, a sum equal to the amount of the disputed tax, assessment or charge plus the interest, penalties, advertising charges, and other costs which Beneficiary estimates are likely
to become payable if Trustor’s contest is unsuccessful. 
 If Beneficiary determines that any one or more of such conditions is not satisfied or is no
longer satisfied, Trustor will pay the tax, assessment, or charge in question, together with any interest and penalties thereon, within ten days after Beneficiary gives notice of such determination. 
 4.5 Maintenance of Insurance. 
 (a)
Coverages Required. Trustor shall maintain or cause to be maintained, with financially sound and reputable insurance companies or associations satisfactory to Beneficiary, all insurance required under the terms of the Insurance Agreement, and
shall comply with each and every covenant and agreement contained in the Insurance Agreement. 
 (b) Renewal Policies. Not less than
thirty (30) days prior to the expiration date of each insurance policy required pursuant to the Insurance Agreement, Trustor will deliver to Beneficiary an appropriate renewal policy (or a certified copy thereof), together with evidence
satisfactory to Beneficiary that the applicable premium has been prepaid. 
 (c) Deposit for Premiums. Upon demand made by
Beneficiary following the occurrence of a Default or an Event of Default, Trustor shall deposit with Beneficiary an amount equal to 1/12th of the amount which Beneficiary estimates will be required to make the next annual payments of the premiums
for the policies of insurance referred to in this Section, multiplied by the number of whole and partial months which have elapsed since the date one month prior to the most recent policy anniversary date for each such policy. Thereafter, with each
monthly payment under the Note, Trustor will deposit an amount equal to 1/12th of the amount which Beneficiary estimates will be required to pay the next required annual premium for each insurance policy referred to in this Section. The purpose of
these provisions is to provide Beneficiary with sufficient funds on hand to pay all such premiums thirty (30) days before the date on which they become past due. If the Beneficiary, in its sole discretion, determines that the funds escrowed
hereunder are, or will be, insufficient, Trustor shall upon demand pay such additional sums as Beneficiary shall determine necessary and shall pay any increased monthly charges requested by Beneficiary. Provided no Default or Event of Default exists
hereunder, Beneficiary will apply the amounts so deposited to the payment of such insurance premiums when due, but in no event will Beneficiary be liable for any interest on any amounts so deposited, and the money so received may be held and
commingled with Beneficiary’s own funds. 
 (d) Application of Hazard Insurance Proceeds. Trustor shall promptly notify
Beneficiary of any damage or casualty to all or any portion of the Property or Chattels. Beneficiary may participate in all negotiations and appear and participate in all judicial arbitration proceedings concerning any insurance 
  

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 proceeds which may be payable as a result of any casualty or damage in excess of $200,000.00 (the “Insurance
Threshold”). Any insurance proceeds relating to any casualty in excess of the Insurance Threshold shall be paid to Beneficiary and shall be applied first to reimburse Beneficiary for all costs and expenses, including attorneys’ fees,
incurred by Beneficiary in connection with the collection of such insurance proceeds. The balance of any insurance proceeds received by Beneficiary with respect to an insured casualty may, in Beneficiary’s sole discretion, either (i) be
retained and applied by Beneficiary toward payment of the Secured Obligations, or (ii) be paid over, in whole or in part and subject to such conditions as Beneficiary may impose, to Trustor to pay for repairs or replacements necessitated by the
casualty; provided, however, that if all of the Secured Obligations have been performed or are discharged by the application of less than all of such insurance proceeds, then any remaining proceeds will be paid over to Trustor. Notwithstanding the
preceding sentence, if (A) no Default or Event of Default shall exist hereunder, and (B) the proceeds received by Beneficiary (together with any other funds delivered by Trustor to Beneficiary for such purpose) shall be sufficient, in
Beneficiary’s reasonable judgment, to pay for any restoration necessitated by the casualty, and (C) either (1) the damage involves a loss of less than fifty percent (50%) of the rentable square footage at the damaged building, or
(2) Trustor is required to restore the Property pursuant to the terms of the Lease or Leases of that portion of the Property affected by the casualty, and (D) such restoration can be completed, in Beneficiary’s reasonable judgment, by
the earliest of (x) the 180th day following Trustor’s receipt of the insurance proceeds, (y) the
180th day prior to the maturity date of the Note, or (z) the expiration of the payment period on the
rental-loss insurance coverage in respect of such casualty, then Beneficiary shall apply such proceeds as provided in clause (ii) of the preceding sentence. Beneficiary will have no obligation to see to the proper application of any insurance
proceeds paid over to Trustor, nor will any such proceeds received by Beneficiary bear interest or be subject to any other charge for the benefit of Trustor. Beneficiary may, prior to the application of insurance proceeds, commingle them with
Beneficiary’s own funds and otherwise act with regard to such proceeds as Beneficiary may determine in Beneficiary’s sole discretion. 
 (e) Successor’s Rights. Any person who acquires title to the Property or the Chattels upon foreclosure hereunder will succeed to all of Trustor’s rights under all policies of insurance maintained pursuant to this Section.

 4.6 Maintenance and Repair of Property and Chattels. Trustor will at all times maintain the Property and the Chattels in good
condition and repair, will diligently prosecute the completion of any building or other improvement which is at any time in the process of construction on the Property, and will, subject to Beneficiary’s releasing the insurance or condemnation
proceeds applicable thereto and subject to applicable legal restrictions, promptly repair, restore, replace, or rebuild any part of the Property or the Chattels which may be affected by any casualty or any public or private taking or injury to the
Property or the Chattels. All costs and expenses arising out of the foregoing shall be paid by Trustor whether or not the proceeds of any insurance or eminent domain shall be sufficient therefor. Trustor will comply with all statutes, ordinances,
and other governmental or quasi-governmental requirements and private covenants relating to the ownership, construction, use, or operation of the Property, including but not limited to any environmental or ecological requirements; provided, that so
long as Trustor is not otherwise in default hereunder, Trustor may, upon providing Beneficiary with security reasonably satisfactory to Beneficiary, proceed diligently and in good faith to contest the validity or applicability of any such statute,
ordinance, or requirement. Beneficiary and any person authorized by Beneficiary may enter and inspect the Property at all reasonable times, and may inspect the Chattels, wherever located, at all reasonable times. 
 4.7 Leases. Trustor shall timely pay and perform each of its obligations under or in connection with the Leases, and shall otherwise pay such sums
and take such action as shall be necessary or required in order to maintain each of the Leases in full force and effect in accordance with its terms. Trustor shall immediately furnish to Beneficiary copies of any notices given to Trustor by the
lessee under any Lease, alleging the default by Trustor in the timely payment or performance of its obligations under such Lease and any subsequent communication related thereto. Trustor shall also promptly furnish to Beneficiary copies of any
notices given to Trustor by the lessee under any Lease, extending the term of any Lease, requiring or demanding the expenditure of any sum by Trustor (or demanding the taking of any action by Trustor), or relating to any other material obligation of
Trustor under such Lease and any subsequent communication related thereto. Trustor agrees that Beneficiary, in its reasonable discretion, may advance any sum or take any action which Beneficiary believes is necessary or required to maintain the
Leases in full force and effect, and all such sums advanced by Beneficiary, together with all 
  

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 costs and expenses incurred by Beneficiary in connection with action taken by Beneficiary pursuant to this Section, shall
be due and payable by Trustor to Beneficiary upon demand, shall bear interest until paid at the Default Rate (as defined in the Note), and shall be secured by this Deed of Trust. 
 4.8 Eminent Domain; Private Damage. If all or any part of the Property is taken or damaged by eminent domain or any other public or private
action, Trustor will notify Beneficiary promptly of the time and place of all meetings, hearings, trials, and other proceedings relating to such action. Beneficiary may participate in all negotiations and appear and participate in all judicial or
arbitration proceedings concerning any award or payment which may be due as a result of such taking or damage in excess of $200,000.00 (the “Condemnation Threshold”), and may, in Beneficiary’s reasonable discretion, compromise or
settle, in the names of both Trustor and Beneficiary, any claim for any such award or payment in excess of the Condemnation Threshold. Any such award or payment is to be paid to Beneficiary and will be applied first to reimburse Beneficiary for all
costs and expenses, including attorneys’ fees, incurred by Beneficiary in connection with the ascertainment and collection of such award or payment. The balance, if any, of such award or payment may, in Beneficiary’s sole discretion,
either (a) be retained by Beneficiary and applied toward the Secured Obligations, or (b) be paid over, in whole or in part and subject to such conditions as Beneficiary may impose, to Trustor for the purpose of restoring, repairing, or
rebuilding any part of the Property affected by the taking or damage. Notwithstanding the preceding sentence, if (i) no Default or Event of Default shall have occurred and be continuing hereunder, and (ii) the proceeds received by
Beneficiary (together with any other funds delivered by Trustor to Beneficiary for such purpose) shall be sufficient, in Beneficiary’s reasonable judgment, to pay for any restoration necessitated by the taking or damage, and (iii) either
(1) the condemnation involves a loss of less than fifty percent (50%) of the rentable square footage at the condemned building, or (2) Trustor is required to restore the Property pursuant to the terms of the Lease or Leases of that
portion of the Property affected by the condemnation, and (iv) such restoration can be completed, in Beneficiary’s reasonable judgment, by the earliest of (x) the 180th day following Trustor’s receipt of the condemnation proceeds, or (y) the 180th day prior to the maturity date of the Note, and (v) the remaining Property shall constitute, in Beneficiary’s sole judgment, adequate security for
the Secured Obligations, then Beneficiary shall apply such proceeds as provided in clause (b) of the preceding sentence. Trustor’s duty to pay the Note in accordance with its terms and to perform the other Secured Obligations will not be
suspended by the pendency or discharged by the conclusion of any proceedings for the collection of any such award or payment, and any reduction in the Secured Obligations resulting from Beneficiary’s application of any such award or payment
will take effect only when Beneficiary receives such award or payment. If this Deed of Trust has been foreclosed prior to Beneficiary’s receipt of such award or payment, Beneficiary may nonetheless retain such award or payment to the extent
required to reimburse Beneficiary for all costs and expenses, including attorneys’ fees, incurred in connection therewith, and to discharge any deficiency remaining with respect to the Secured Obligations. 
 4.9 Mechanics’ Liens. Trustor will keep the Property free and clear of all liens and claims of liens by contractors, subcontractors,
mechanics, laborers, materialmen, and other such persons, and will cause any recorded statement of any such lien to be released of record within thirty (30) days after the recording thereof. Notwithstanding the preceding sentence, however,
Trustor will not be deemed to be in default under this Section if and so long as Trustor (a) contests in good faith the validity or amount of any asserted lien and diligently prosecutes or defends an action appropriate to obtain a binding
determination of the disputed matter, and (b) provides Beneficiary with such security as Beneficiary may require to protect Beneficiary against all loss, damage, and expense, including attorneys’ fees, which Beneficiary might incur if the
asserted lien is determined to be valid. 
 4.10 Defense of Actions. Trustor will defend, at Trustor’s expense, any action,
proceeding or claim which affects any property encumbered hereby or any interest of Beneficiary in such property or in the Secured Obligations, and will indemnify and hold Beneficiary harmless from all loss, damage, cost, or expense, including
attorneys’ fees, which Beneficiary may incur in connection therewith. 
 4.11 Expenses of Enforcement. Trustor will pay all costs
and expenses, including attorneys’ fees, which Beneficiary may incur in connection with any effort or action (whether or not litigation or foreclosure is involved) to enforce or defend Beneficiary’s rights and remedies under any of the
Loan Documents, including but not limited to all attorneys’ fees, appraisal fees, consultants’ fees, and other expenses incurred by Beneficiary in securing title to or possession of, and realizing upon, any security for the Secured
Obligations. All such costs and expenses (together with interest thereon at the Default Rate from the date incurred) shall constitute part of the Secured Obligations, and may be included in the computation of the amount owed to Beneficiary for
purposes of foreclosing or otherwise enforcing this Deed of Trust. 
  

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 4.12 Financial Reports. During the term of the Loan, Trustor shall supply to Beneficiary
(a) within thirty (30) days following the end of each quarter, Trustor’s quarterly and annual operating statements for the Property as of the end of and for the preceding quarter and fiscal year, as applicable, in each case prepared
against the budget for such year; (b) contemporaneously with Trustor’s delivery of each of such operating statements, a certified rent roll signed and dated by Trustor detailing the names of all tenants under the Leases, the portion of the
improvements on the Property occupied by each tenant, the rent and any other charges payable under each Lease, and the term of each Lease; and (c) within ninety (90) days following the end of each year, an annual balance sheet and profit
and loss statement of Trustor and each Guarantor. The financial statements and reports described in (a) and (c) above shall be in such detail as Beneficiary may require, shall be prepared in accordance with generally accepted accounting
principles consistently applied, and shall be certified as true and correct by Trustor or the applicable Guarantor (or, if required by Beneficiary, by an independent certified public accountant acceptable to Beneficiary). Trustor shall also furnish
to Beneficiary within thirty (30) days of Beneficiary’s request, any other financial reports or statements of Trustor as Beneficiary may request. Upon Beneficiary’s demand after any Default or Event of Default, or if Beneficiary
securitizes the Loan, Trustor shall supply to Beneficiary the items required in (a) and (b) above on a monthly basis. 
 4.13
Priority of Leases. To the extent Trustor has the right, under the terms of any Lease, to make such Lease subordinate to the lien hereof, Trustor will, at Beneficiary’s request and Trustor’s expense, take such action as may be required
to effect such subordination. Conversely, Trustor will, at Beneficiary’s request and Trustor’s expense, take such action as may be necessary to subordinate the lien hereof to any future Lease designated by Beneficiary. 
 4.14 Inventories; Assembly of Chattels. Trustor will, from time to time at the request of Beneficiary, supply Beneficiary with a current inventory
of the Chattels and the Intangible Personalty, in such detail as Beneficiary may require. Upon the occurrence of any Event of Default hereunder, Trustor will at Beneficiary’s request assemble the Chattels and make them available to Beneficiary
at any place designated by Beneficiary which is reasonably convenient to both parties. 
 4.15 Compliance with Laws, Etc. Trustor
shall comply in all material respects with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, maintaining all Permits and paying before the same become delinquent all taxes, assessments and
governmental charges imposed upon Trustor or the Property. 
 4.16 Records and Books of Account. Trustor shall keep accurate and
complete records and books of account, in which complete entries will be made in accordance with generally accepted accounting principles consistently applied, reflecting all financial transactions relating to the Property. 
 4.17 Inspection Rights. At any reasonable time, and from time to time, upon not less than ten (10) days’ prior notice, Trustor shall
permit Beneficiary, or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the Property and to discuss with Trustor the affairs, finances and accounts of Trustor.

 4.18 Change of Trustor’s Address or State of Organization. Trustor shall promptly notify Beneficiary if changes are made in
Trustor’s address from that set forth in Section 9.10 hereof, or if Trustor shall either change its “location” (as such term is used in Section 5.8 hereof), its state of organization or if Trustor shall organize in any state
other than the State of Delaware. 
 4.19 Further Assurances; Estoppel Certificates. Trustor will execute and deliver to Beneficiary
upon demand, and pay the costs of preparation and recording thereof, any further documents which Beneficiary may request to confirm or perfect the liens and security interests created or intended to be created hereby, or to confirm or perfect any
evidence of the Secured Obligations. Trustor will also, within ten days after any 
  

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 request by Beneficiary, deliver to Beneficiary a signed and acknowledged statement certifying to Beneficiary, or to any
proposed transferee of the Secured Obligations, (a) the balance of principal, interest, and other sums then outstanding under the Note, and (b) whether Trustor claims to have any offsets or defenses with respect to the Secured Obligations
and, if so, the nature of such offsets or defenses. 
 4.20 Costs of Closing. Trustor shall on demand pay directly or reimburse
Beneficiary for any costs or expenses pertaining to the closing of the Loan, including, but not limited to, fees of counsel for Beneficiary, costs and expenses for which invoices were not available at the closing of the Loan, or costs and expenses
which are incurred by Beneficiary after such closing. All such costs and expenses shall constitute a part of the Secured Obligations, and may be included in the computation of the amount owed to Beneficiary for purposes of foreclosing or otherwise
enforcing this Deed of Trust. 
 4.21 Fund for Electronic Transfer. All monthly payments of principal and interest on the Note, and
escrow deposits under this Deed of Trust, shall be made by Trustor by electronic funds transfer from a bank account established and maintained by Trustor for such purpose. Trustor shall establish and maintain such an account until the Note is fully
paid and shall direct the depository of such account in writing to so transmit such payments on or before the respective due dates to the account of Beneficiary as shall be designated by Beneficiary in writing. 
 4.22 Use. Trustor shall use the Property solely for the operation of retail and office buildings, and for no other use or purpose. 
 4.23 Management. The Property shall be managed by Glenborough Properties, LP (“Property Manager”) under a management agreement
previously delivered to, and approved, by Beneficiary (the “Management Agreement”). Trustor shall not permit any amendment to or modification of the Management Agreement, or management of the Property by any person or entity other than
Property Manager, without the prior written consent of Beneficiary. 
 ARTICLE 5 
 TRUSTOR’S NEGATIVE COVENANTS 
 5.1 Waste and Alterations. Trustor will not commit or permit any waste with respect to the Property or the Chattels. Trustor shall not cause or permit any part of the Property, including but not limited to any building, structure,
parking lot, driveway, landscape scheme, timber, or other ground improvement, to be removed, demolished, or materially altered without the prior written consent of Beneficiary. 
 5.2 Zoning and Private Covenants. Trustor will not initiate, join in, or consent to any change in any zoning ordinance or classification, any
change in the “zone lot” or “zone lots” (or similar zoning unit or units) presently comprising the Property, any transfer of development rights, any change in any private restrictive covenant, or any change in any other public or
private restriction limiting or defining the uses which may be made of the Property or any part thereof, without the prior written consent of Beneficiary. If under applicable zoning provisions the use of all or any part of the Property is or becomes
a nonconforming use, Trustor will not cause such use to be discontinued or abandoned without the prior written consent of Beneficiary, and Trustor will use its best efforts to prevent the tenant under any Lease from discontinuing or abandoning such
use. 
 5.3 Interference with Leases. 
 (a) Subject to Section 5.3(c) Trustor will neither do, nor neglect to do, anything which may cause or permit the termination of any Lease of all or any part of the Property, or cause or permit the withholding or
abatement of any rent payable under any such Lease. 
 (b) Without Beneficiary’s prior written consent, which may be granted or
withheld in Beneficiary’s sole discretion, Trustor shall not enter into or modify any Lease of all or any part of the Property. 
  

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 Notwithstanding the foregoing, Trustor may, without Beneficiary’s prior consent, enter into or modify any Lease
other than (i) Leases with a Major Tenant (as defined in the Note); (ii) Leases concerning office space previously leased to a Major Tenant demising greater than 15,000 square feet, and (iii) Leases concerning retail space previously
leased to a Major Tenant. Any submission by Trustor for Beneficiary’s approval of a Lease or modification thereof shall be accompanied by a copy of such Lease or modification, a Lease abstract, a then-current rent roll for the Property,
year-to-date and prior year operating statements for the Property, and a cover letter requesting Beneficiary’s approval (an “Approval Request”) which contains a signature line on which Beneficiary may evidence its approval of such
Lease or modification and a statement (a “Reminder Notice”) which provides “LENDER’S FAILURE TO RESPOND TO BORROWER’S REQUEST FOR APPROVAL WITHIN FIFTEEN (15) DAYS SHALL CONSTITUTE LENDER’S APPROVAL OF SUCH
REQUESTED ACTION.” If Beneficiary shall fail to respond within fifteen (15) days following receipt of any submission for approval, then such Lease or modification shall be deemed approved; provided, however, if the Approval Request does
not include the Reminder Notice, then Beneficiary shall not be deemed to have approved the request of Trustor, and Beneficiary’s consent to any such action may only be obtained by written notice thereof by Beneficiary to Trustor. 
 (c) Except with the prior written consent of Beneficiary, which may be granted or withheld in Beneficiary’s sole discretion, Trustor will not
(i) collect rent from all or any part of the Property for more than one month in advance, (ii) assign the rents from the Property or any part thereof, or (iii) consent to the premature cancellation or surrender of all or any part of
any Lease, except that Trustor may in good faith terminate any Lease for nonpayment of rent or other material breach by the tenant. 
 (d)
Without limiting the generality of the foregoing, whether or not Beneficiary’s consent to the cancellation or surrender of any Lease is required hereunder, Beneficiary may (i) require that Trustor deposit into an escrow account acceptable
to Beneficiary in its reasonable discretion all cancellation penalties or other consideration paid to Trustor in connection with any cancellation or surrender of any Lease to a Major Tenant (the “Termination Fees”), and (ii) require
that vacant space previously leased to a Major Tenant be relet in accordance with the provisions of Section 5.3(b), above (an “Approved Lease”). Upon execution of an Approved Lease, Beneficiary shall refund a pro rata portion of the
Termination Fees equal to the ratio of the number of square feet of newly leased space under the Approved Lease divided by the total square feet of space vacated pursuant to the subject Major Tenant Lease. If the Property and the amount of the debt
service payments then becoming due under the Note; or (B) provided that the Property is at least 87% occupied and the income from the Property is sufficient, in Trustor’s determination, to pay all operating expenses of the Property and
debt service payments due under the Note, then Beneficiary shall deliver any Termination Fees then held in escrow to Trustor. 
 5.4
Transfer or Further Encumbrance of Property. 
 (a) Subject to the Partial Release Agreement, without Beneficiary’s prior written
consent, which consent may be granted or withheld in Beneficiary’s sole and absolute discretion, Trustor shall not (i) sell, assign, convey, transfer or otherwise dispose of any legal, beneficial or equitable interest in all or any part of
the Property, (ii) permit or suffer any owner, directly or indirectly, of any beneficial interest in the Property or Trustor to transfer such interest, whether by transfer of partnership, membership, stock or other beneficial interest in any
entity or otherwise, or (iii) mortgage, hypothecate or otherwise encumber or permit to be encumbered or grant or permit to be granted a security interest in all or any part of the Property or Trustor or any beneficial or equitable interest in
either the Property or Trustor. The provisions of this Section shall not prohibit transfers of title or interest under any will or testament or applicable law of descent. 
 (b) Notwithstanding the provisions of Section 5.4(a) to the contrary, Beneficiary shall permit a one-time transfer of the Property in its entirety
provided that all of the following conditions are satisfied: (i) no Default has occurred and is continuing and no Event of Default has occurred; (ii) Trustor has paid to Beneficiary an assumption fee of one percent (1%) of the
outstanding principal balance of the Loan; (iii) if the proposed transferee is a land trust, Beneficiary has received a first-lien collateral assignment of all beneficial interest therein; (iv) Beneficiary has received and has had a
reasonable opportunity to review all documents and agreements executed or to be executed in connection with the proposed transfer; (v) the non-economic terms (e.g., those terms other than interest rate, payment schedule, principal balance, and
non-recourse nature (subject to exceptions thereto customarily included by Beneficiary in loan documents)) of the Loan Documents have been modified as Beneficiary may request in good faith; (vi) the proposed transferee has assumed all of
Trustor’s obligations under the Loan 
  

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 Documents; (vii) Beneficiary has received at least thirty (30) days’ prior written notice of the proposed
transfer; (viii) the proposed transferee and, if applicable, its general partners or managing members have, in the sole judgment of Beneficiary exercised in good faith, a net worth equal to the net worth of Trustor as of the date hereof or
otherwise satisfactory to Beneficiary, and a satisfactory history of owning, operating and leasing property similar to the Property; (ix) the proposed transferee and, if applicable, its general partners or managing members have, in the sole
judgment of Beneficiary exercised in good faith, a satisfactory credit history and professional reputation and character; (x) the Debt Service Coverage Ratio (as hereinafter defined) is not less than 1.20, and Beneficiary receives
satisfactory evidence that such ratio will be maintained for the succeeding twelve (12) months; (xi) the Loan-to-Value Ratio (as hereinafter defined), taking into account all obligations secured by liens on the Property does not exceed
65%; (xii) Trustor pays all costs and expenses incurred by Beneficiary in connection with such transfer, including, without limitation, all legal, processing, accounting, title insurance, and appraisal fees, whether or not such transfer
is actually consummated; (xiii) Beneficiary has received an endorsement to its mortgagee’s title insurance policy at Trustor’s expense, which endorsement states that the lien of this Deed of Trust remains a first and prior lien
against the Property subject to no exceptions other than as approved by Beneficiary; (xiv) principals of the proposed transferee acceptable to Beneficiary in its sole discretion execute a guaranty agreement in the form of the Guaranty Agreement
and an environmental indemnity agreement in the form of the Environmental Indemnity Agreement; and (xv) proposed transferee shall deliver an opinion of counsel to Beneficiary regarding the due authorization, execution, delivery and
enforceability of all of the loan documents executed in connection with such assumption and the continued enforceability of the Loan Documents. Upon the satisfaction of the foregoing conditions, Beneficiary shall release Trustor and Guarantor from
liability under the Loan Documents except to the extent that, prior to such release, any full-recourse liability has arisen under any of the Loan Documents. The foregoing right to transfer the Property shall terminate upon conveyance of the Property
by the initial Trustor named herein. 
 (c) The term “Debt Service Coverage Ratio” shall mean the ratio, as reasonably determined
by Beneficiary, of (i) Net Operating Income for the Property for the preceding twelve (12) calendar months, to (ii) the annual debt service payments due under the loan evidenced by the Note (the “Loan”) and on all other
indebtedness secured, or to be secured, by a lien on all or any part of the Property, where “Net Operating Income” shall mean all gross revenues generated by the Property (excluding loans or contributions to capital), less operating
expenses (other than debt service payments due under the Loan), as determined on a cash accounting basis, as of the date of such calculation for the period in question, adjusted, however, so that (A) operating expenses shall be deemed to
include (1) a management fee equal to the greater of the actual management fee for the Property or three percent (3%) of gross revenues, and (2) a tenant improvement, leasing commission, and capital improvement reserve equal to $0.75
per rentable square foot in the case of office properties and retail properties, (B) payments of operating expenses, including property taxes and assessments and insurance expenses, are to be spread out over the period during which they accrued
and shall be adjusted for any known future changes to any such expenses, (C) prepaid rents and other prepaid payments received are to be spread out over the periods during which such rents or payments are earned or applicable, (D) security
deposits shall not be included as items of income until duly applied or earned, (E) gross revenue shall be based on a lease-in-place analysis which reflects then current Leases in place, as determined by Beneficiary, in its reasonable
discretion, in accordance with its standard underwriting criteria, consistently applied, and excluding extraordinary, or one time items, and (F) any refunds or rebates to operating expenses are to be applied and credited against the applicable
operating expenses for the period that such operating expenses were incurred. Debt Service Coverage Ratio shall be calculated on a cash flow basis. The “Loan-to-Value Ratio” shall be the ratio, as determined by Beneficiary, of the
aggregate principal balance of the Note and all other indebtedness secured by liens or encumbrances against the Property to the fair market value of the Property, as such fair market value is determined by an M.A.I. appraisal satisfactory to
Beneficiary (the “Appraisal”). Upon Beneficiary’s request, Trustor shall deliver the Appraisal to Beneficiary at Trustor’s sole cost and expense. 
 (d) Notwithstanding the provisions of Section 5.4(a) to the contrary, Beneficiary’s consent shall not be required for transfers or encumbrances of limited partnership interests in Guarantor. 
 (e) Notwithstanding the provisions of Section 5.4(a) to the contrary, Beneficiary’s consent shall not be required for transfers of general
partnership interests in Guarantor and the stock of Rancon Financial Corporation (“RFC”) to or among the Stephenson Family (i) for estate planning purposes if, following any 
  

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 such transfer, Daniel Stephenson retains the ultimate authority to control the Guarantor, or (ii) as a result of
death or legal incompetency of Daniel Stephenson if, following any transfer described in (i) or (ii) above, Guarantor’s partnership agreement remains in effect and Guarantor is not dissolved and remains in existence as a limited
partnership; however, if at any time thereafter any transferee of such ownership interests in Guarantor or RFC stock, or any beneficial owner of a Permitted Trust as herein defined, sells, assigns or transfers any portion of its ownership interests
in Guarantor, in RFC stock, or any portion of its beneficial interest in a Permitted Trust to a person other than a member of the Stephenson Family or encumbers such ownership interest or beneficial interest, a change in the beneficial ownership of
Trustor shall be deemed to have taken place in violation of this provision (unless undertaken with the written consent of the Beneficiary). For the purposes hereof, the “Stephenson Family” shall mean Daniel Stephenson, his spouse, his
descendants and their spouses, any trust or estates for the benefit of said parties (a “Permitted Trust”), and any entities owned and controlled (ownership and voting interests in excess of 50%) by said parties. 
 5.5 Further Encumbrance of Chattels. Trustor will neither create nor permit any lien, security interest or encumbrance against the Chattels or
Intangible Personalty or any part thereof or interest therein, other than the liens and security interests created by the Loan Documents, without the prior written consent of Beneficiary, which may be withheld for any reason. 
 5.6 Assessments Against Property. Trustor will not, without the prior written approval of Beneficiary, which may be withheld for any reason,
consent to or affirmatively act to create any future or additional so-called special districts, special improvement districts, benefit assessment districts or similar districts, or any other body or entity of any type or any additional taxes (other
than annual changes in existing taxes or changes related to additional improvements), assessments or other monetary obligations or burdens on the Property, and this provision shall serve as RECORD NOTICE to any such district or districts or any
governmental entity under whose authority such district or districts exist or are being formed that, should Trustor or any other person or entity include all or any portion of the Property in such district or districts, whether formed or in the
process of formation, without first obtaining Beneficiary’s express written consent, the rights of Beneficiary in the Property pursuant to this Deed of Trust or following any foreclosure of this Deed of Trust, and the rights of any person or
entity to whom Beneficiary might transfer the Property following a foreclosure of this Deed of Trust, shall be senior and superior to any taxes, charges, fees, assessments or other impositions of any kind or nature whatsoever, or liens (whether
statutory, contractual or otherwise) levied or imposed, or to be levied or imposed, upon the Property or any portion thereof as a result of inclusion of the Property in such district or districts. 
 5.7 Transfer or Removal of Chattels. Trustor will not sell, transfer or remove from the Property all or any part of the Chattels, unless the items
sold, transferred, or removed are simultaneously replaced with similar items of equal or greater value. 
 5.8 Change of Name,
Organizational I.D. No. or Location. Trustor will not change its name or the name under which it does business (or adopt or begin doing business under any other name or assumed or trade name), change its organizational identification number, or
change its location, without first notifying Beneficiary of its intention to do so and delivering to Beneficiary such organizational documents of Trustor and executed modifications or supplements to this Deed of Trust (and to any financing statement
which may be filed in connection herewith) as Beneficiary may require. For purposes of the foregoing, Trustor’s “location” shall mean (a) if Trustor is a registered organization, Trustor’s state of registration, (b) if
Trustor is an individual, the state of Trustor’s principal residence, or (c) if Trustor is neither a registered organization nor an individual, the state in which Trustor’s place of business (or, if Trustor has more than one place of
business, the Trustor’s chief executive office) is located. 
 5.9 Improper Use of Property or Chattels. Trustor will not use the
Property or the Chattels for any purpose or in any manner which violates any applicable law, ordinance, or other governmental requirement, the requirements or conditions of any insurance policy, or any private covenant. 
 5.10 ERISA. Trustor shall not engage in any transaction which would cause the Note (or the exercise by Beneficiary of any of its rights under the
Loan Documents) to be a non-exempt, prohibited transaction under ERISA (including for this purpose the parallel provisions of Section 4975 of the Internal Revenue Code of 
  

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 1986, as amended), or otherwise result in Beneficiary being deemed in violation of any applicable provisions of ERISA.
Trustor shall indemnify, protect, defend, and hold Beneficiary harmless from and against any and all losses, liabilities, damages, claims, judgments, costs, and expenses (including, without limitation attorneys’ fees and costs incurred in the
investigation, defense, and settlement of claims and in obtaining any individual ERISA exemption or state administrative exception that may be required, in Beneficiary’s sole and absolute discretion) that Beneficiary may incur, directly or
indirectly, as the result of the breach by Trustor of any warranty or representation set forth in Section 3.3(x) hereof or the breach by Trustor of any covenant contained in this Section. This indemnity shall survive any termination,
satisfaction or foreclosure of this Deed of Trust and shall not be subject to the limitation on personal liability described in the Note. 
 5.11 Use of Proceeds. Trustor will not use any funds advanced by Beneficiary under the Loan Documents for household or agricultural purposes, to purchase margin stock, or for any purpose prohibited by law. 
 5.12 Single-Purpose Entity. Trustor will not engage in any business other than the ownership, development, operation and disposition of the
Property. 
 ARTICLE 6 
 EVENTS OF DEFAULT 
 Each of the following events will constitute an event of default (an “Event of Default”) under this Deed of
Trust and under each of the other Loan Documents: 
 6.1 Failure to Pay Note. 
 (a) Trustor’s failure to make any payment when due under Section 1 of the Note or Sections 4.4 or 4.5 of this Deed of Trust. 

(b) Trustor’s failure to make any payment when due under any other provisions of any Loan Document, provided, however, that such failure shall
not constitute an Event of Default unless such failure continues for ten (10) days beyond the date that Beneficiary delivers to Trustor notice that such payment is due. 
 6.2 Due on Sale or Encumbrance. The occurrence of any violation of any covenant contained in Section 5.4, 5.5 or 5.7 hereof. 
 6.3 Other Obligations. The failure of Trustor to properly perform any obligation contained herein or in any of the other Loan Documents (other
than the obligation to make payments under the Note or the other Loan Documents) and the continuance of such failure for a period of ten (10) days following written notice thereof from Beneficiary to Trustor; provided, however, that if such
failure is not curable within such ten (10) day period, then, so long as Trustor commences to cure such failure within such ten (10) day period and is continually and diligently attempting to cure to completion, such failure shall not be
an Event of Default unless such failure remains uncured for ninety (90) days after such written notice to Trustor. 
 6.4 Levy
Against Property. The levy against any of the Property, Chattels or Intangible Personalty, of any execution, attachment, sequestration or other writ. 
 6.5 Liquidation. The liquidation, termination or dissolution of Trustor or any Controlling Person. 
 6.6 Appointment of Receiver. The appointment of a trustee or receiver for the assets, or any part thereof, of Trustor, or any Controlling Person, or the appointment of a trustee or receiver for any real or personal property, or the
like, or any part thereof, representing the security for the Secured Obligations. 
 6.7 Assignments. The making by Trustor or any
Controlling Person of a transfer in fraud of creditors or an assignment for the benefit of creditors. 
  

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 6.8 Order for Relief. The entry in bankruptcy of an order for relief for or against Trustor or any
Controlling Person. 
 6.9 Bankruptcy. The filing of any petition (or answer admitting the material allegations of any petition), or
other pleading, seeking entry of an order for relief for or against Trustor or any Controlling Person as a debtor or bankrupt or seeking an adjustment of any of such parties’ debts, or any other relief under any state or federal bankruptcy,
reorganization, debtor’s relief or insolvency laws now or hereafter existing, including, without limitation, a petition or answer seeking reorganization or admitting the material allegations of a petition filed against any such party in any
bankruptcy or reorganization proceeding, or the act of any of such parties in instituting or voluntarily being or becoming a party to any other judicial proceedings intended to effect a discharge of the debts of any such parties, in whole or in
part, or a postponement of the maturity or the collection thereof, or a suspension of any of the rights or powers of a trustee or of any of the rights or powers granted to Beneficiary herein, or in any other document executed in connection herewith.

 6.10 Misrepresentation. If any representation or warranty made by Trustor or any Controlling Person, or in any of the other Loan
Documents or any other instrument or document modifying, renewing, extending, evidencing, securing or pertaining to the Note is false, misleading or erroneous in any material respect. 
 6.11 Judgments. The failure of Trustor or any Controlling Person to pay any money judgment in excess of $10,000.00 against any such party before
the expiration of thirty (30) days after such judgment becomes final and no longer appealable. 
 6.12 Admissions Regarding
Debts. The admission of Trustor or any Controlling Person in writing of any such party’s inability to pay such party’s debts as they become due. 
 6.13 Assertion of Priority. Other than with respect to the Permitted Exceptions, the assertion of any claim of priority over this Deed of Trust, by title, lien, or otherwise, unless Trustor within thirty
(30) days after such assertion either causes the assertion to be withdrawn or provides Beneficiary with such security as Beneficiary may require to protect Beneficiary against all loss, damage, or expense, including attorneys’ fees, which
Beneficiary may incur in the event such assertion is upheld. 
 6.14 Other Loan Documents. The occurrence of any default by Trustor,
after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any of the Loan Documents other than this Deed of Trust. 
 6.15 Other Liens. The occurrence of any default by Trustor, after the lapse of any applicable grace or cure period, or the occurrence of any event
or circumstance defined as an Event of Default, under any other consensual lien encumbering the Property, or any part thereof or interest therein, or any document or instrument evidencing obligations secured thereby. 
 6.16 Other Indebtedness. The occurrence of any default by Trustor, after the lapse of any applicable grace or cure period, or the occurrence of
any event or circumstance defined as an Event of Default, under any other indebtedness incurred or owing by Trustor, or any document or instrument evidencing any obligation to pay such indebtedness. 
 ARTICLE 7 
 BENEFICIARY’S
REMEDIES 
 Immediately upon or any time after the occurrence of any Event of Default hereunder, Beneficiary may exercise any remedy available at law or
in equity, including but not limited to those listed below and those listed in the other 
  

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 Loan Documents, in such sequence or combination as Beneficiary may determine in Beneficiary’s sole discretion:

 7.1 Performance of Defaulted Obligations. Beneficiary may make any payment or perform any other obligation under the Loan Documents
or under Leases which Trustor has failed to make or perform, and Trustor hereby irrevocably appoints Beneficiary as the true and lawful attorney-in-fact for Trustor to make any such payment and perform any such obligation in the name of Trustor. All
payments made and expenses (including attorneys’ fees and expenses) incurred by Beneficiary in this connection, together with interest thereon at the Default Rate from the date paid or incurred until repaid, will be part of the Secured
Obligations and will be immediately due and payable by Trustor to Beneficiary. In lieu of advancing Beneficiary’s own funds for such purposes, Beneficiary may use any funds of Trustor which may be in Beneficiary’s possession, including but
not limited to insurance or condemnation proceeds and amounts deposited for taxes, insurance premiums, or other purposes. 
 7.2 Specific
Performance and Injunctive Relief. Notwithstanding the availability of legal remedies, Beneficiary will be entitled to obtain specific performance, mandatory or prohibitory injunctive relief, or other equitable relief requiring Trustor to cure
or refrain from repeating any Default. 
 7.3 Acceleration of Secured Obligations. Beneficiary may, without notice or demand, declare
all of the Secured Obligations immediately due and payable in full. 
 7.4 Suit for Monetary Relief. Subject to the non-recourse
provisions of the Note, with or without accelerating the maturity of the Secured Obligations, Beneficiary may sue from time to time for any payment due under any of the Loan Documents, or for money damages resulting from Trustor’s default under
any of the Loan Documents. 
 7.5 Possession of Property. Beneficiary may enter and take possession of the Property without seeking or
obtaining the appointment of a receiver, may employ a managing agent for the Property, and may lease or rent all or any part of the Property, either in Beneficiary’s name or in the name of Trustor, and may collect the rents, issues, and profits
of the Property. Any revenues collected by Beneficiary under this Section will be applied first toward payment of all expenses (including attorneys’ fees) incurred by Beneficiary, together with interest thereon at the Default Rate from the date
incurred until repaid, and the balance, if any, will be applied against the Secured Obligations in such order and manner as Beneficiary may elect in its sole discretion. 
 7.6 Enforcement of Security Interests. Beneficiary may exercise all rights of a secured party under the Code with respect to the Chattels and the Intangible Personalty, including but not limited to taking
possession of, holding, and selling the Chattels and enforcing or otherwise realizing upon any accounts and general intangibles. Any requirement for reasonable notice of the time and place of any public sale, or of the time after which any private
sale or other disposition is to be made, will be satisfied by Beneficiary’s giving of such notice to Trustor at least five days prior to the time of any public sale or the time after which any private sale or other intended disposition is to be
made. 
 7.7 Foreclosure Against Property. 
 (a) Beneficiary may foreclose this Deed of Trust, insofar as it encumbers the Property, either by judicial action or through Trustee. Should Beneficiary elect to foreclose by exercise of the power of sale herein
contained, Beneficiary shall notify Trustee and shall deposit with Trustee this Deed of Trust and the Note and such receipts and evidence of expenditures made and secured hereby as Trustee may require. 
 (b) Upon receipt of such notice from Beneficiary, Trustee shall cause to be recorded, published and delivered to Trustor such Notice of Default and
Election to Sell as is then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such time as may then be required by law and after recordation of such Notice of Default and after Notice of Sale having
been given as required by law, sell the Property at the time and place of sale fixed by it in said Notice of Sale, either as a whole, or in separate lots or parcels or items as Trustee shall deem expedient, and in such order as it may determine, at
public auction to the highest bidder for cash in lawful money of the United States payable at the time of Sale. Trustee shall 
  

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 deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but
without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, may purchase
at such sale and Trustor hereby covenants to warrant and defend the title of such purchaser or purchasers. Trustor hereby constitutes and appoints Trustee as its attorney-in-fact with full power and authority to execute, deliver, file, record or
process on behalf of Trustor any and all instruments or documents or to take any other action on behalf of Trustor reasonably required to accomplish the vesting of the Property, or any part thereof, in the purchaser or purchasers at any sale
conducted hereunder. 
 (c) All fees, costs and expenses of any kind incurred by Beneficiary in connection with foreclosure of this Deed of
Trust, including, without limitation, the costs of any appraisals of the Property obtained by Beneficiary, the cost of any title reports or abstracts, all costs of any receivership for the Property advanced by Beneficiary, and all attorneys’
and consultants’ fees and expenses incurred by Beneficiary, shall constitute a part of the Secured Obligations and may be included as part of the amount owing from Trustor to Beneficiary at any foreclosure sale. The proceeds of any sale under
this Section shall be applied first to the fees and expenses of the Trustee or other officer conducting the sale, and then to the reduction or discharge of the Secured Obligations; any surplus remaining shall be paid over to Trustor or to such other
person or persons as may be lawfully entitled to such surplus. 
 (d) Subject to California Civil Code § 2924g, Trustee may
postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement or subsequently
noticed sale, and without further notice make such sale at the time fixed by the last postponement, or may in its discretion, give a new notice of sale. 
 (e) A sale of less than the whole of the Property or any defective or irregular sale made hereunder shall not exhaust the power of sale provided for herein; and subsequent sales may be made hereunder until all
obligations secured hereby have been satisfied, or the entire Property sold, without defect or irregularity. 
 7.8 Appointment of
Receiver. Beneficiary shall be entitled, as a matter of absolute right and without regard to the value of any security for the Secured Obligations or the solvency of any person liable therefor, to the appointment of a receiver for the Property
upon ex-parte application to any court of competent jurisdiction. Trustor waives any right to any hearing or notice of hearing prior to the appointment of a receiver. Such receiver and its agents shall be empowered, but shall not be obligated, to
(a) take possession of the Property and any businesses conducted by Trustor or any other person thereon and any business assets used in connection therewith, (b) exclude Trustor and Trustor’s agents, servants, and employees from the
Property, (c) collect the rents, issues, profits, and income therefrom, (d) complete any construction which may be in progress, (e) do such maintenance and make such repairs and alterations as the receiver deems necessary,
(f) use all stores of materials, supplies, and maintenance equipment on the Property and replace such items at the expense of the receivership estate, (g) pay all taxes and assessments against the Property and the Chattels, all premiums
for insurance thereon, all utility and other operating expenses, and all sums due under any prior or subsequent encumbrance, and (h) generally do anything which Trustor could legally do if Trustor were in possession of the Property. All
expenses incurred by the receiver or its agents shall constitute a part of the Secured Obligations. Any revenues collected by the receiver shall be applied first to the expenses of the receivership, including attorneys’ fees incurred by the
receiver and by Beneficiary, together with interest thereon at the Default Rate from the date incurred until repaid, and the balance shall be applied toward the Secured Obligations or in such other manner as the court may direct. Unless sooner
terminated with the express consent of Beneficiary, any such receivership will continue until the Secured Obligations have been discharged in full, or until title to the Property has passed after foreclosure sale and all applicable periods of
redemption have expired. 
 7.9 Right to Make Repairs, Improvements. Should any part of the Property come into the possession of
Beneficiary, Beneficiary may, but shall not be obligated to, use, operate, and/or make repairs, alterations, additions and improvements to the Property for the purpose of preserving it or its value. Trustor covenants to promptly reimburse and pay to
Beneficiary, at the place where the Note is payable, or at such other 
  

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 place as may be designated by Beneficiary in writing, the amount of all reasonable expenses (including the cost of any
insurance, taxes, or other charges) incurred by Beneficiary in connection with its custody, preservation, use or operation of the Property, together with interest thereon from the date incurred by Beneficiary at the Default Rate, and all such
expenses, costs, taxes, interest, and other charges shall be a part of the Secured Obligations. It is agreed, however, that the risk of accidental loss or damage to the Property is undertaken by Trustor and Beneficiary shall have no liability
whatsoever for decline in value of the Property, for failure to obtain or maintain insurance, or for failure to determine whether any insurance ever in force is adequate as to amount or as to the risks insured. 
 7.10 Surrender of Insurance. Beneficiary may surrender the insurance policies maintained pursuant to the terms hereof, or any part thereof, and
receive and apply the unearned premiums as a credit on the Secured Obligations and, in connection therewith, Trustor hereby appoints Beneficiary (or any officer of Beneficiary), as the true and lawful agent and attorney-in-fact for Trustor (with
full powers of substitution), which power of attorney shall be deemed to be a power coupled with an interest and therefore irrevocable, to collect such premiums. 
 7.11 Prima Facie Evidence. Trustor agrees that, in any assignments, deeds, bills of sale, notices of sale, or postings, given by Beneficiary, any and all statements of fact or other recitals
therein made as to the identity of Beneficiary, or as to the occurrence or existence of any Event of Default, or as to the acceleration of the maturity of the Secured Obligations, or as to the request to sell, posting of notice of sale, notice of
sale, time, place, terms and manner of sale and receipt, distribution and application of the money realized therefrom, and without being limited by the foregoing, as to any other act or thing having been duly done by Beneficiary, shall be taken by
all courts of law and equity as prima facie evidence that such statements or recitals state facts and are without further question to be so accepted, and Trustor does hereby ratify and confirm any and all acts that Beneficiary may lawfully do
by virtue hereof. 
 ARTICLE 8 
 ASSIGNMENT OF LEASES AND RENTS 
 8.1 Assignment of Leases and Rents. Trustor hereby unconditionally and absolutely
grants, transfers and assigns unto Beneficiary all of Trustor’s right, title and interest in all rents, royalties, issues, profits and income (“Rents”) now or hereafter due or payable for the occupancy or use of the Property, and all
Leases, whether written or oral, with all security therefor, including all guaranties thereof, now or hereafter affecting the Property; on the condition that Beneficiary hereby grants to Trustor a license to collect and retain such Rents prior to
the occurrence of any Event of Default hereunder. Such license shall be revocable by Beneficiary without notice to Trustor at any time after the occurrence of an Event of Default. Trustor represents that the Rents and the Leases have not been
heretofore sold, assigned, transferred or set over by any instrument now in force and will not at any time during the life of this assignment be sold, assigned, transferred or set over by Trustor or by any person or persons whomsoever; and Trustor
has good right to sell, assign, transfer and set over the same and to grant to and confer upon Beneficiary the rights, interest, powers and authorities herein granted and conferred. Failure of Beneficiary at any time or from time to time to enforce
the assignment of Rents and Leases under this Section shall not in any manner prevent its subsequent enforcement, and Beneficiary is not obligated to collect anything hereunder, but is accountable only for sums actually collected. 
 8.2 Further Assignments. Trustor shall give Beneficiary at any time upon demand any further or additional forms of assignment of transfer of such
Rents, Leases and security as may be reasonably requested by Beneficiary, and shall deliver to Beneficiary executed copies of all such Leases and security. 
 8.3 Application of Rents. Beneficiary shall be entitled to deduct and retain a just and reasonable compensation from monies received hereunder for its services or that of its agents in collecting such monies.
Any monies received by Beneficiary hereunder may be applied when received from time to time in payment of any taxes, assessments or other liens affecting the Property regardless of the delinquency, such application to be in such order as Beneficiary
may determine. The acceptance of this Deed of Trust by Beneficiary or the exercise of any rights by it hereunder shall not be, or be construed to be, an affirmation by it of any Lease nor an assumption of any liability under any Lease. 

 

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 8.4 Collection of Rents. Upon or at any time after an Event of Default shall have occurred and be
continuing, Beneficiary may declare all sums secured hereby immediately due and payable, and may, at its option, without notice, and whether or not the Secured Obligations shall have been declared due and payable, either in person or by agent, with
or without bringing any action or proceeding, or by a receiver to be appointed by a court, (i) enter upon, take possession of, manage and operate the Property, or any part thereof (including without limitation making necessary repairs,
alterations and improvements to the Property); (ii) make, cancel, enforce or modify Leases; (iii) obtain and evict tenants; (iv) fix or modify Rents; (v) do any acts which Beneficiary deems reasonably proper to protect the
security thereof; and (vi) either with or without taking possession of the Property, in its own name sue for or otherwise collect and receive such Rents, including those past due and unpaid. In connection with the foregoing, Beneficiary shall
be entitled and empowered to employ attorneys, and management, rental and other agents in and about the Property and to effect the matters which Beneficiary is empowered to do, and in the event Beneficiary shall itself effect such matters,
Beneficiary shall be entitled to charge and receive reasonable management, rental and other fees therefor as may be customary in the area in which the Property is located; and the reasonable fees, charges, costs and expenses of Beneficiary or such
persons shall be additional Secured Obligations. Beneficiary may apply all funds collected as aforesaid, less costs and expenses of operation and collection, including reasonable attorneys’ and agents’ fees, charges, costs and expenses, as
aforesaid, upon any Secured Obligations, and in such order as Beneficiary may determine. The entering upon and taking possession of the Property, the collection of such Rents and the application thereof as aforesaid shall not cure or waive any
default or waive, modify or affect notice of default under the Note or this Deed of Trust or invalidate any act done pursuant to such notice. 
 8.5 Authority of Beneficiary. Any tenants or occupants of any part of the Property are hereby authorized to recognize the claims of Beneficiary hereunder without investigating the reason for any action taken by Beneficiary, or the
validity or the amount of indebtedness owing to Beneficiary, or the existence of any default in the Note or this Deed of Trust, or under or by reason of this assignment of Rents and Leases, or the application to be made by Beneficiary of any amounts
to be paid to Beneficiary. The sole signature of Beneficiary shall be sufficient for the exercise of any rights under this assignment and the sole receipt of Beneficiary for any sums received shall be a full discharge and release therefor to any
such tenant or occupant of the Property. Checks for all or any part of the rentals collected under this assignment of Rents and Leases shall be drawn to the exclusive order of Beneficiary. 
 8.6 Indemnification of Beneficiary. Nothing herein contained shall be deemed to obligate Beneficiary to perform or discharge any obligation, duty
or liability of any lessor under any Lease of the Property, and Trustor shall and does hereby indemnify and hold Beneficiary harmless from any and all liability, loss or damage which Beneficiary may or might incur under any Lease of the Property or
by reason of this assignment; and any and all such liability, loss or damage incurred by Beneficiary, together with the costs and expenses, including reasonable attorneys’ fees, incurred by Beneficiary in defense of any claims or demands
therefor (whether successful or not), shall be additional Secured Obligations, and Trustor shall reimburse Beneficiary therefor on demand. 
 ARTICLE 9 
 MISCELLANEOUS PROVISIONS 
 9.1 Time of the Essence. Time is of the essence with respect to all of Trustor’s obligations under the Loan Documents. 
 9.2 Joint and Several Obligations. If Trustor is more than one person or entity, then (a) all persons or entities comprising Trustor are
jointly and severally liable for all of the Secured Obligations; (b) all representations, warranties, and covenants made by Trustor shall be deemed representations, warranties, and covenants of each of the persons or entities comprising
Trustor; (c) any breach, Default or Event of Default by any persons or entities comprising Trustor hereunder shall be deemed to be a breach, Default or Event of Default of Trustor; (d) any reference herein contained to the knowledge or
awareness of Trustor shall mean the knowledge or awareness of any of the persons or entities comprising Trustor; and (e) any event creating personal liability of any of the persons or entities comprising Trustor shall create personal liability
for all such persons or entities. 
  

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 9.3 Waiver of Homestead and Other Exemptions. To the extent permitted by law, Trustor hereby
waives all rights to any homestead or other exemption to which Trustor would otherwise be entitled under any present or future constitutional, statutory, or other provision of applicable state or federal law. Trustor hereby waives any right it may
have to require Beneficiary to marshal all or any portion of the security for the Secured Obligations. 
 9.4 Non-Recourse; Exceptions to
Non-Recourse. Except as expressly set forth in the Note, the recourse of Beneficiary with respect to the obligations evidenced by the Note and the other Loan Documents shall be solely to the Property, Chattels and Intangible Personalty, and any
other collateral given as security for the Note. 
 9.5 Rights and Remedies Cumulative. Beneficiary’s rights and remedies under
each of the Loan Documents are cumulative of the right and remedies available to Beneficiary under each of the other Loan Documents and those otherwise available to Beneficiary at law or in equity. No act of Beneficiary shall be construed as an
election to proceed under any particular provision of any Loan Document to the exclusion of any other provision in the same or any other Loan Document, or as an election of remedies to the exclusion of any other remedy which may then or thereafter
be available to Beneficiary. 
 9.6 No Implied Waivers. Beneficiary shall not be deemed to have waived any provision of any Loan
Document unless such waiver is in writing and is signed by Beneficiary. Without limiting the generality of the preceding sentence, neither Beneficiary’s acceptance of any payment with knowledge of a Default by Trustor, nor any failure by
Beneficiary to exercise any remedy following a Default by Trustor shall be deemed a waiver of such Default, and no waiver by Beneficiary of any particular Default on the part of Trustor shall be deemed a waiver of any other Default or of any similar
Default in the future. 
 9.7 No Third-Party Rights. No person shall be a third-party beneficiary of any provision of any of the Loan
Documents. All provisions of the Loan Documents favoring Beneficiary are intended solely for the benefit of Beneficiary, and no third party shall be entitled to assume or expect that Beneficiary will waive or consent to modification of any such
provision in Beneficiary’s sole discretion. 
 9.8 Preservation of Liability and Priority. Without affecting the liability of
Trustor or of any other person (except a person expressly released in writing) for payment and performance of all of the Secured Obligations, and without affecting the rights of Beneficiary with respect to any security not expressly released in
writing, and without impairing in any way the priority of this Deed of Trust over the interests of any person acquired or first evidenced by recording subsequent to the recording hereof, Beneficiary may, either before or after the maturity of the
Note, and without notice or consent: (a) release any person liable for payment or performance of all or any part of the Secured Obligations; (b) make any agreement altering the terms of payment or performance of all or any of the Secured
Obligations; (c) exercise or refrain from exercising, or waive, any right or remedy which Beneficiary may have under any of the Loan Documents; (d) accept additional security of any kind for any of the Secured Obligations; or
(e) release or otherwise deal with any real or personal property securing the Secured Obligations. Any person acquiring or recording evidence of any interest of any nature in the Property, the Chattels, or the Intangible Personalty shall be
deemed, by acquiring such interest or recording any evidence thereof, to have agreed and consented to any or all such actions by Beneficiary. 
 9.9 Subrogation of Beneficiary. Beneficiary shall be subrogated to the lien of any previous encumbrance discharged with funds advanced by Beneficiary under the Loan Documents, regardless of whether such previous encumbrance has been
released of record. 
 9.10 Notices. Any notice required or permitted to be given by Trustor or Beneficiary under this Deed of Trust
shall be in writing and will be deemed given (a) upon personal delivery, (b) on the first business day after receipted delivery to a courier service which guarantees next-business-day delivery, or (c) on the third business day after
mailing, by registered or certified United States mail, postage prepaid, in any case to the appropriate party at its address set forth below: 
  

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 If to Trustor: 
 Rancon Realty Fund V Subsidiary Two LLC 
 400 South El Camino Real, 11th Floor 
 San
Mateo, California 94402 
 Attention: G. Lee Burns, Esq. 
 with a copy to: 
 Glenborough 
 400 South El Camino Real, 11th Floor 
 San Mateo, California 94402 
 Attention:
Chip Burns, Esq. 
 If to Beneficiary: 
 The Variable Annuity Life Insurance Company 
 c/o AIG Global Investment Corp. 
 1 SunAmerica Center, 38th Floor 
 Century City 
 Los Angeles, California 90067-6022 
 Attention: Director-Mortgage Lending and Real Estate 
 with a copy to: 
 Otten, Johnson, Robinson,
Neff & Ragonetti, P.C. 
 950 Seventeenth Street, Suite 1600 
 Denver, Colorado 80202 
 Attention: Aaron J.
Hill, Esq. 
 Either party may change such party’s address for notices or copies of notices by giving notice to the other party in accordance with
this Section. 
 9.11 Release of Lien. Upon payment and performance in full of all of the Secured Obligations, Beneficiary will
execute and deliver to Trustor such documents as may be required to release this Deed of Trust of record. 
 9.12 Illegality. If any
provision of this Deed of Trust is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Deed of Trust, the legality, validity, and enforceability of the remaining provisions of this Deed of
Trust shall not be affected thereby, and in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Deed of Trust a provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid, and enforceable. If the rights and liens created by this Deed of Trust shall be invalid or unenforceable as to any part of the Secured Obligations, then the unsecured portion of the Secured
Obligations shall be completely paid prior to the payment of the remaining and secured portion of the Secured Obligations, and all payments made on the Secured Obligations shall be considered to have been paid on and applied first to the complete
payment of the unsecured portion of the Secured Obligations. 
 9.13 Usury Savings Clause. It is expressly stipulated and agreed to be
the intent of Beneficiary and Trustor at all times to comply with the applicable law governing the highest lawful interest rate. If the applicable law is ever judicially interpreted so as to render usurious any amount called for under the Note or
under any of the other Loan Documents, or contracted for, charged, taken, reserved or received with respect to the Loan, or if acceleration of the maturity of the Note, any prepayment by Trustor, or any other circumstance whatsoever, results in
Trustor having paid any interest in excess of that permitted by applicable law, then it is the 
  

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 express intent of Trustor and Beneficiary that all excess amounts theretofore collected by Beneficiary be credited on the
principal balance of the Note (or, at Beneficiary’s option, paid over to Trustor), and the provisions of the Note and other Loan Documents immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced,
without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder. The right to accelerate maturity of the Note
does not include the right to accelerate any interest which has not otherwise accrued on the date of such acceleration, and Beneficiary does not intend to collect any unearned interest in the event of acceleration. All sums paid or agreed to be paid
to Beneficiary for the use, forbearance or detention of the Secured Obligations evidenced hereby or by the Note shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such Secured
Obligations until payment in full so that the rate or amount of interest on account of such Secured Obligations does not exceed the maximum rate or amount of interest permitted under applicable law. The term “applicable law” as used herein
shall mean any federal or state law applicable to the Loan. 
 9.14 Obligations Binding Upon Trustor’s Successors. This Deed of
Trust is binding upon Trustor and Trustor’s successors and assigns, and shall inure to the benefit of Beneficiary, and its successors and assigns, and the provisions hereof shall likewise be covenants running with the land. The duties,
covenants, conditions, obligations, and warranties of Trustor in this Deed of Trust shall be joint and several obligations of Trustor and Trustor’s successors and assigns. 
 9.15 Construction. All pronouns and any variations of pronouns herein shall be deemed to refer to the masculine, feminine, or neuter, singular or
plural, as the identity of the parties may require. Whenever the terms herein are singular, the same shall be deemed to mean the plural, as the identity of the parties or the context requires. 
 9.16 Attorneys’ Fees. Any reference in this Deed of Trust to attorneys’ or counsel’s fees paid or incurred by Beneficiary shall be
deemed to include paralegals’ fees and legal assistants’ fees. Moreover, wherever provision is made herein for payment of attorneys’ or counsel’s fees or expenses incurred by Beneficiary, such provision shall include but not be
limited to, such fees or expenses incurred in any and all judicial, bankruptcy, reorganization, administrative, or other proceedings, including appellate proceedings, whether such fees or expenses arise before proceedings are commenced, during such
proceedings or after entry of a final judgment. 
 9.17 Waiver and Agreement. TRUSTOR HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE
UNDER APPLICABLE LAW, INCLUDING, WITHOUT LIMITATION, CALIFORNIA CIVIL CODE SECTION 2954.10, TO PREPAY THE NOTE, IN WHOLE OR IN PART, WITHOUT PREPAYMENT CHARGE, UPON ACCELERATION OF THE MATURITY DATE OF THE NOTE, AND AGREES THAT, IF FOR ANY
REASON A PREPAYMENT OF ALL OR ANY PART OF THE NOTE IS MADE, WHETHER VOLUNTARILY OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF THE NOTE BY BENEFICIARY ON ACCOUNT OF THE OCCURRENCE OF ANY EVENT OF DEFAULT ARISING FOR ANY REASON, INCLUDING,
WITHOUT LIMITATION, AS A RESULT OF ANY PROHIBITED OR RESTRICTED TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION OF THE PROPERTY OR ANY PART THEREOF SECURING THE NOTE, THEN TRUSTOR SHALL BE OBLIGATED TO PAY, CONCURRENTLY WITH SUCH PREPAYMENT, THE
PREPAYMENT PREMIUM PROVIDED FOR IN THE NOTE (OR, IN THE EVENT OF ACCELERATION WHEN THE NOTE IS CLOSED TO PREPAYMENT, AS PROVIDED IN THE DEFINITION OF “SECURED OBLIGATIONS” SET FORTH IN ARTICLE 1 HEREOF). TRUSTOR HEREBY DECLARES THAT
BENEFICIARY’S AGREEMENT TO MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THE NOTE CONSTITUTES ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY TRUSTOR, FOR THIS WAIVER AND AGREEMENT. 
              Trustor’s Initials 
 9.18 Waiver of Jury Trial. BENEFICIARY AND TRUSTOR KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS 
  

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 DEED OF TRUST, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS DEED OF TRUST OR ANY LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO ANY LOAN DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BENEFICIARY AND TRUSTOR TO ENTER INTO THE LOAN. 
 9.19 Governing Laws. The substantive laws of the State of California shall govern the validity, construction, enforcement, and interpretation of
this Deed of Trust. 
 9.20 Inconsistency. In the event of any inconsistency between the terms of the Loan Documents and the terms of
that certain First Mortgage Loan Application between Trustor and Beneficiary, as amended, the terms of the Loan Documents shall govern and control in all respects. 
 9.21 Anti-Terrorism. Trustor represents, warrants and covenants to Beneficiary that: 
 (a) None of
Trustor, Guarantor or, to the best of Trustor’s knowledge, any of their respective constituents or affiliates is in violation of any laws relating to terrorism or money laundering, including without limitation, Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, (as the same has been, or may hereafter be, renewed, extended,
amended or replaced, the “Executive Order”) and the Bank Secrecy Act (31 U.S.C. § 5311 et seq.), as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56, as the same has been, or may hereafter be, renewed, extended, amended or replaced, the “Patriot Act”). As used herein, “Anti-Terrorism Laws” shall mean any laws relating to terrorism or
money laundering, including the Executive Order, the Patriot Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by the United States Treasury Department’s Office of Foreign Asset Control (as any of the
foregoing laws may from time to time be renewed, extended, amended, or replaced). 
 (b) None of Trustor, Guarantor, or, to the best of
Trustor’s knowledge, their respective constituents or affiliates, any person having a beneficial interest in Trustor or Guarantor, any person for whom Trustor or Guarantor is acting as agent or nominee, any of their respective brokers or other
agents acting in any capacity in connection with the Loan or Trustor’s predecessor in interest to the Property is a “Prohibited Person,” which is defined as follows: 
 (i) a person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; 
 (ii) a person or entity owned or controlled by, or acting for or on behalf of, any person or entity that is listed in the Annex to, or is otherwise
subject to the provisions of, the Executive Order; 
 (iii) a person or entity with whom Beneficiary or any bank or other institutional
lender is prohibited from dealing or otherwise engaging in any Anti-Terrorism Law; 
 (iv) a person or entity who commits, threatens or
conspires to commit or supports “terrorism” as defined in the Executive Order; 
 (v) a person or entity that is named as a
“specially designated national” or “blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official Website, http://www.treas.gov/ofac/t11sdn.pdf or at any
replacement Website or other replacement official publication of such list; and 
 (vi) a person or entity who is affiliated with a person
or entity listed above. 
  

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 (c) None of Trustor, Guarantor, or, to the best of Trustor’s knowledge, any of their respective
affiliates or constituents, any of their respective brokers or other agents acting in any capacity in connection with the Loan or the seller of the Property (if any portion of the Property is being acquired with proceeds of the Loan), does or shall
(i) conduct any business or engage in any transaction or dealing with any Prohibited Person, including making or receiving any contribution of funds, goods or services to or for the benefit of any Prohibited Person or leasing any portion of the
Property to any Prohibited Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engage in or conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law. 
 (d) Trustor shall promptly deliver to Beneficiary any certification or other evidence reasonably requested from time to time by Beneficiary confirming Trustor’s compliance with this Section. The representations,
warranties and covenants set forth in this Section shall be deemed repeated and reaffirmed by Trustor as of each date that Trustor makes a payment to Beneficiary under the Note, this Deed of Trust and the other Loan Documents or receives any payment
from Beneficiary. Trustor shall promptly notify Beneficiary in writing should Trustor become aware of any change in the information set forth in these representations, warranties and covenants. 
 [Balance of Page Intentionally Left Blank] 
  

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

			
	RANCON REALTY FUND V SUBSIDIARY TWO LLC, a Delaware limited liability company
		
	By:	 	  

	Name:	 	Daniel Lee Stephenson
	Title:	 	Manager