Document:

<PAGE>

                                                                     Exhibit 4.4

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, NOR PURSUANT TO THE SECURITIES OR "BLUE
SKY" LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED, EXCEPT PURSUANT TO (i) A
REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER
SUCH ACT, (ii) RULE 144 OR RULE 144A UNDER SUCH ACT, OR (iii) ANY OTHER
EXEMPTION FROM REGISTRATION UNDER SUCH ACT, PROVIDED THAT, IF REQUESTED BY THE
ISSUER, AN OPINION OF COUNSEL (REASONABLY SATISFACTORY TO THE ISSUER) IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER IS FURNISHED TO THE ISSUER
THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE.

IN ADDITION, ANY SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THIS
SECURITY IS RESTRICTED BY, AND THE RIGHTS OF THE HOLDER OF SUCH SECURITY ARE
SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN, A NOTE PURCHASE AGREEMENT
DATED AS OF NOVEMBER 6, 2000 AMONG AMPEX DATA SYSTEMS CORPORATION, AS ISSUER,
AMPEX CORPORATION, AS GUARANTOR, AND THE OTHER PARTIES REFERENCED THEREIN, A
COMPLETE AND CORRECT COPY OF THE FORM OF WHICH WILL BE FURNISHED BY THE ISSUER
TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.

                         AMPEX DATA SYSTEMS CORPORATION
                     Senior Discount Note due May 31, 2001

No. 3                                                               $780,461.11

          Ampex Data Systems Corporation, a Delaware corporation (hereinafter
called the "Issuer", which term includes any successor entity under that certain
Agreement referred to herein), for value received, hereby promises to pay to
Goldman Sachs & Company FFC B III-A Capital Partners, L.P., or registered
assigns, the principal sum of Seven Hundred Eighty Thousand Four Hundred Sixty
One Dollars and Eleven Cents ($780,461.11) on May 31, 2001.

          Reference is hereby made to the further provisions of this Note set
forth on the following four (4) pages, which further provisions shall for all
purposes have the same effect as if set forth at this place, and to the
Agreement referred to herein.

          Pursuant to the Agreement referred to herein, the payment of this Note
is unconditionally guaranteed by the Guarantor.  The guaranty by the Guarantor
is endorsed hereon.

          IN WITNESS WHEREOF, the Issuer has caused this Note to be signed
manually or by facsimile by its duly authorized officer and a facsimile of its
seal to be affixed hereto or imprinted hereto.

                                  AMPEX DATA SYSTEMS CORPORATION

                                 By:
                                    -----------------------------------------
                                 Name:
                                 Title:
<PAGE>

                         AMPEX DATA SYSTEMS CORPORATION
                     Senior Discount Note due May 31, 2001

          1.  Note Purchase Agreement.  The Issuer issued this Note pursuant to
              -----------------------
that certain Note Purchase Agreement, dated as of November 6, 2000 (as may be
amended from time to time, the "Agreement"), by and among the Issuer, Ampex
Corporation, as Guarantor, the Purchasers named therein, and DDJ Capital
Management, LLC, as agent for the holders from time to time of the Senior
Discount Notes issued pursuant to the Agreement (the "Holders' Agent").
Capitalized terms used herein without definition have the meanings ascribed to
such terms in the Agreement.  This Note is one of the Senior Discount Notes
referred to in the Agreement, and the terms of this Note are subject to, and
qualified by, all of the terms and conditions set forth in the Agreement,
certain of which are summarized herein.

          2.  Maturity.  This Note shall mature and shall be due and payable in
              --------
full on the earliest to occur of (i) May 31, 2001 (the "Stated Maturity Date"),
(ii) a Mandatory Redemption Date, or (iii) a Designated Voluntary Redemption
Date.

          3.  Principal Amount.  The face principal amount of this Note
              ----------------
represents the Accreted Value of this Note at the Stated Maturity Date.  This
Note is being issued at a discount.  The price paid for this Note at the time of
issue is less than the face principal amount of this Note and is set forth in
the Agreement.

          4.  Interest.  This Note will accrete in value from and after the
              --------
Issue Date.  No interest will accrue on this Note prior to the earliest to occur
of (i) the Stated Maturity Date, (ii) a Mandatory Redemption Date, or (iii) a
Designated Voluntary Redemption Date.  If the Issuer fails to pay to the Holder
of this Note cash in an amount equal to the Accreted Value of this Note as of
any such Redemption Date, interest shall accrue on the unpaid portion of the
Accreted Value of this Note at the Default Rate for each day from and after such
Redemption Date until the entire Accreted Value of this Note as of such
Redemption Date, and all accrued interest thereon, shall have been paid in full.

          5.  Redemption.  This Note may be voluntarily redeemed by the Issuer
              ----------
at any time, without premium or penalty, in accordance with the provisions of
Section 6.1 of the Agreement.  This Note shall be subject to mandatory
redemption upon the earliest to occur of (a) the Stated Maturity Date, (b) a
Change of Control, (c) an Asset Disposition, or (d) an acceleration of maturity
pursuant to Subsections 9.2(a) or 9.2(b) of the Agreement.  Except as otherwise
expressly provided herein, this Note may not be prepaid prior to the Stated
Maturity Date.

          6.  Payments on this Note.  All payments due in respect of this Note
              ---------------------
shall be paid to the registered Holder of this Note as of the date such payment
is due in accordance with the payment instructions provided in writing to the
Issuer by such Holder.  The Issuer shall pay the Accreted Value of this Note
(and, if applicable, interest at the Default Rate) in money of the United States
that at the time of payment is legal tender for payment of public and private
debts, by wire transfer of immediately available funds.
<PAGE>

          7.  Transfer and Exchange.  This Note may be transferred, exchanged
              ---------------------
and/or registered subject to, and in accordance with, the terms, provisions and
conditions set forth in the Agreement.

          8.  Persons Deemed Owners.  The registered holder of this Note shall
              ---------------------
be treated as its owner for all purposes.

          9.  Amendments and Waivers.  This Note may be amended or supplemented
              ----------------------
pursuant to, and in accordance with, the terms, provisions and conditions set
forth in the Agreement.

          10.  Defaults and Remedies.  Events of Default and the rights and
               ---------------------
remedies of the Holder of this Note and of the Holders' Agent upon the
occurrence thereof are as set forth in the Agreement.

          11.  No Recourse Against Others.  No director, officer, employee,
               --------------------------
incorporator or shareholder of the Issuer shall have any liability for any
obligation of the Issuer under the Agreement or this Note or for any claim based
on, in respect of, or by reason of, any such obligation or the creation of any
such obligation.  The Holder hereof, by accepting this Note, waives and releases
such Persons from all such liability, and such waiver and release is part of the
consideration for the issuance of this Note.

          12.  Governing Law.  This Note shall be governed by and construed in
               -------------
accordance with the internal laws of The Commonwealth of Massachusetts, without
regard to the conflict of laws provisions thereof.

          13.  Copies of Agreement.  The Issuer will furnish to the Holder of
               -------------------
this Note, upon written request and without charge, a copy of the Agreement,
which has in it the terms of this Note.  Requests may be made to:  Ampex Data
Systems Corporation, 500 Broadway, Redwood City, CA  94063-3199, Attention:
General Counsel and Secretary.
<PAGE>

                                   GUARANTEE

          The undersigned Guarantor unconditionally and irrevocably guarantees
to each Holder (a) the full and punctual payment of the Accreted Value of this
Note when due, whether at maturity, by acceleration, by redemption or otherwise,
together with accrued interest at the Default Rate, if applicable, and all other
amounts payable by the Issuer under the Agreement and this Note, and (b) the
full and punctual performance of all other obligations of the Issuer under the
Agreement and this Note (all the foregoing described in (a) and (b) being
hereinafter collectively called the "Guaranteed Obligations").

          The Guarantor waives presentation to, demand of payment from and
protest to the Issuer of any of the Guaranteed Obligations and also waives
notice of any Default or Event of Default under the Guaranteed Obligations not
provided for in the Agreement.

          The obligations of the Guarantor to the Holder of this Note pursuant
to the Guarantee and the Agreement are expressly set forth in Article 14 of the
Agreement and reference is hereby made to such Agreement for the precise terms
of the Guarantee therein made.

                                   GUARANTOR:

                                   AMPEX CORPORATION

                                   By:
                                      --------------------------------------
                                   Name:
                                   Title:<PAGE>

                                                                     Exhibit 4.5
                                                                     -----------

                       DEED OF TRUST, SECURITY AGREEMENT,
                       ----------------------------------
                            FINANCING STATEMENT AND
                            -----------------------
                        ASSIGNMENT OF RENTS AND REVENUES
                        --------------------------------

          THIS DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT, AND
ASSIGNMENT OF RENTS AND REVENUES (this "Deed of Trust") is given as of the 6th
day of November, 2000, by the Grantor named below to the Trustee named below,
for the use and benefit of the Beneficiary named below.

                                   ARTICLE 1

                       PARTIES, PROPERTY, AND DEFINITIONS

          The following terms and references shall have the meanings indicated:

     1.1  Grantor: Ampex Data Systems Corporation, a Delaware corporation, whose
legal address is 500 Broadway, Redwood City, California 94063-3199, together
with any future owner of the Property or any part thereof or interest therein.

     1.2 Beneficiary: DDJ Capital Management, LLC, as Holders' Agent under the
Note Purchase Agreement (defined below) for the Holders defined therein,
together with any future holder of the Notes.

     1.3  Trustee:  The Public Trustee of  El Paso County, Colorado.

     1.4 Notes: Collectively, the Grantor's Senior Discount Notes (as defined in
the Note Purchase Agreement) of even date herewith, in the maximum principal
amount of $8,919,555.56 due May 31, 2001, unless such due date is extended or
accelerated, together with all renewals, extensions, and modifications of the
Notes, issued by Grantor in accordance with the terms and conditions of the Note
Purchase Agreement, and any note delivered in substitution or exchange for any
such note. All terms and provisions of the Notes are incorporated by this
reference in this Deed of Trust.

     1.5 Note Purchase Agreement: The Note Purchase Agreement of even date
herewith by and among Grantor, Ampex Corporation, a Delaware corporation, as
guarantor thereunder (the "Guarantor"), the purchasers listed on the signature
pages thereto (collectively, the "Holders"), and Beneficiary, as agent for the
Holders; pursuant to which Grantor has issued the Notes made payable to the
Holders and Guarantor, as owner of all of the issued and outstanding capital
stock of the Grantor, has guaranteed the obligations of the Grantor under the
Notes and the Note Purchase Agreement.

     1.6  Real Property:  The real property described in Exhibit A, attached
                                                         ---------
hereto and by this reference incorporated herein, together with all right, title
and interest of Grantor in the following with respect to the real property,
whether now owned or hereafter acquired by Grantor:

          (a) All improvements now or hereafter located on such real property
     and all easements and appurtenances thereto;
<PAGE>

          (b) The land lying within any street or roadway adjoining the real
     property; any vacated or hereafter vacated street or alley adjoining the
     real property; and any strips and gores adjoining the real property;

          (c) All and singular the passages, waters, water rights (whether
     tributary or non-tributary or not non-tributary), water courses, riparian
     rights, wells, well permits, water stock, other rights, liberties and
     privileges thereof or in any way now or hereafter appertaining to the real
     property, including homestead and any other claim at law or in equity, as
     well as any after-acquired title, franchise or license, and the reversion
     and reversions and remainder and remainders thereof;

          (d) All of the rents, royalties, income (including, without
     limitation, operating income), receipts, revenues, issues, and profits of
     and from the use, operation, or enjoyment of such real property and
     improvements (collectively, the "Income"), whether such Income is
     attributable to the period, or is collected, prior to or subsequent to any
     default by Grantor;

          (e) All machinery, apparatus, equipment, fittings, fixtures (whether
     actually or constructively attached or incorporated, and including all
     trade, domestic, and ornamental fixtures) now or hereafter located in,
     upon, or under such real property or improvements and used or usable in
     connection with any present or future operation thereof, including but not
     limited to all lighting, utility, and power equipment; engines; pipes;
     pumps; tanks; motors; conduits; utility systems, plumbing, lifting,
     cleaning, fire prevention, fire extinguishing, signage, heating, air-
     conditioning; communication apparatus; water heaters; ranges; furnaces;
     appliances, refrigerators, stoves; shades, awnings, screens, storm doors
     and windows; attached cabinets; rugs, carpets and draperies and all
     additions thereto and replacements therefor;

          (f) All plans and specifications for the improvements on the real
     property; soil, environmental, engineering, land planning maps, surveys and
     other studies and reports concerning the real property or prepared for the
     orderly planning and development of the real property, including all plans,
     drawings and studies concerning the platting or replatting of the real
     property; all marketing related materials prepared to market the
     improvements on the real property, including, but not limited to, any sales
     center, scale models, marketing brochures, presentations and advertising
     signs; all contracts and subcontracts relating to the improvements on the
     real property, or any thereof;

          (g) 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, casualty or injury to, or decrease in the value of, any
     of such real property, including without limitation all property insurance
     payments, proceeds and policies related to such real property; and

          (h) All other and greater rights and interests of every nature in such
     property and in the possession or use thereof and income therefrom, whether
     now owned or subsequently acquired by Grantor.

                                       2
<PAGE>

     1.7 Chattels: All right, title and interest of the Grantor in and to the
following with respect to the Real Property: All fixtures, fittings, building
machinery, building apparatus, building equipment, building and other materials
intended to be affixed to or incorporated into the Real Property, supplies, and
other tangible personal property in the nature of fixtures affixed to the Real
Property for the operation of the building (other than Grantor's trade fixtures
and equipment) now owned or hereafter acquired by Grantor and used, intended for
use, or reasonably required in the development, construction, reconstruction,
alteration, repair, or operation of the Property and any improvements or
infrastructure located thereon, together with all accessions thereto,
replacements and substitutions therefor, and proceeds thereof, including,
without limitation, to the extent not deemed to be real property under this Deed
of Trust, all apparatus, machinery, motors, elevators, fittings, equipment, and
other furnishings (other than Grantor's trade fixtures and equipment) and all
plumbing, lighting, heating, ventilation, incinerating, air-conditioning and
sprinkler equipment and fixtures and appurtenances thereto.

     1.8 Intangible Personalty: All right, title and interest of the Grantor in
and to the following with respect to the Real Property:

          (a) All of the licenses, permits, franchises, and other entitlements
     to use and all rights thereto which have been issued by or which are
     pending before any governmental or quasi-governmental agency which are
     necessary or appropriate for the Property (other than operating permits
     related solely to Grantor's business operations);

          (b) All water taps, sewer taps, building permits, curb cut permits,
     storm water discharge permits, refunds, rebates or deposits due or to
     become due from any utility companies or governmental entity, agency,
     authority, board, commission, or governing body authorized by federal,
     state or local laws or regulations as having jurisdiction over the real
     property; and

          (c) The absolute right to all of Grantor's rights in and to contract
     rights related to the ownership or operation of the Real Property, leases,
     concessions, operating systems, warranties, licenses, plans, drawings and
     other items of intangible personal property relating to the ownership or
     operation of the Property.

     1.9 Property: The Real Property, the Chattels and the Intangible Personalty
are sometimes collectively called the "Property." It is specifically understood
that the enumeration of any specific articles of the Property, including
Chattels and Intangible Personalty shall in no wise exclude or be held to
exclude any items of property not specifically mentioned. All of the Real
Property, Chattels and Intangible Personalty, whether affixed or annexed or not,
and all rights hereby conveyed and mortgaged are intended to be as a unit and
are hereby understood and agreed and declared to be appropriated to the use of
the real estate, and shall for the purposes of this Deed of Trust be deemed to
be real estate and conveyed and mortgaged hereby.

     1.10 The Secured Obligations: The Property is granted and shall be held for
the purpose of securing:

          (a)  The payment of the indebtedness as evidenced in the Notes;

                                       3
<PAGE>

          (b) The performance and observance of all terms, covenants,
     conditions, and provisions to be performed or observed by the Grantor
     pursuant to the terms of (i) the Note Purchase Agreement, (ii) this Deed of
     Trust, (iii) UCC-1 financing statements required to perfect the
     Beneficiary's security interest in the personal property as granted by the
     Deed of Trust, if any (the "Financing Statement"), and (iv) any and all
     pledge or other security agreements, loan agreements, disbursement
     agreements, supplemental agreements, assignments (both present and
     collateral), side letters, as the same may be amended, modified or
     supplemented from time to time, being referred to hereinafter as "Related
     Agreements". The Notes, the Note Purchase Agreement, this Deed of Trust,
     Financing Statement, Related Agreements and any and all other documents or
     instruments executed in connection with the foregoing to evidence or secure
     the Notes shall be hereinafter collectively called the "Loan Documents");

          (c) The payment of all sums expended or advanced by Beneficiary
     pursuant to the terms hereof.

                                   ARTICLE 2

                                GRANTING CLAUSE

     2.1  Grant to Trustee.  As security for the Secured Obligations, Grantor
           ----------------
hereby grants, bargains, sells, and conveys the Property to Trustee, in trust
forever, 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, Grantor hereby grants to Beneficiary a security interest in
the Chattels and in the Intangible Personalty and in such of the Real Property
as may be deemed personalty (collectively, the "Collateral"). To the extent any
of the Collateral may be or has 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 Colorado (the "Code") with respect to any part of the
Property and Collateral that may or might now or hereafter be or be deemed to be
personal property, fixtures or property other than real estate; 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 provision
of this Deed of Trust but shall be in addition thereto:

          (a) The Collateral shall be used by Grantor solely for business
     purposes, being installed upon or owned in connection with the real estate
     comprising part of the Property for Grantor's own use or as the equipment
     and furnishings furnished by Grantor, as owner, to tenants of the Property;

          (b) The Chattels shall be kept at the real estate comprising a part of
     the Property, and shall not be removed therefrom without the consent of
     Beneficiary and the Chattels may be affixed to such real estate but shall
     not be affixed to any other real estate;

                                       4
<PAGE>

          (c) No financing statement covering any of the Collateral or any
     proceeds thereof is on file in any public office; and Grantor 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 security interest in the Collateral as security
     for the Secured Obligations, subject to no adverse liens or encumbrances;
     and Grantor 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
     7.5 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 security agreement and financing
     statement under the Code with respect to the Collateral. As such, this Deed
     of Trust covers all items of the Collateral that are personal property
     including all items which are to become fixtures. Grantor 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.

                                   ARTICLE 3

                         BORROWER'S TITLE AND AUTHORITY

     3.1  Warranty of Title.  Grantor represents and warrants to Beneficiary
          -----------------
that Grantor has good and clear record and marketable title to the Property in
fee simple absolute, subject only to the lien of general taxes for the current
year, payable the following year, a lien due and payable, but not yet delinquent
and those additional matters, if any, set forth in Exhibit B, attached hereto
                                                   ---------
and by this reference incorporated herein ("Permitted Exceptions"). Grantor
further represents and warrants to Beneficiary that Grantor is the absolute
owner of the Collateral, free of any liens, encumbrances, security interests,
and other claims whatsoever, except insofar as the Collateral may be encumbered
by the lien of general taxes for the current year, payable the following year, a
lien due and payable, but not yet delinquent. Grantor, for itself and its
successors and assigns, hereby agrees to warrant and forever defend, all and
singular, all of the Property and property interest granted and conveyed in
trust pursuant to this Deed of Trust, against every person whomsoever lawfully
claiming, or to claim, the same or any part thereof, subject to the Permitted
Exceptions. The warranties 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 or the Collateral pursuant to
any such foreclosure.

     3.2  Waiver of Homestead and Other Exemptions.  To the extent permitted
          ----------------------------------------
by law, Grantor hereby waives all rights to any homestead or other exemption to
which Grantor would otherwise be entitled under any present or future
constitutional, statutory, or other provision of applicable state or federal
law.

                                       5
<PAGE>

     3.3  Due Authorization.  If Grantor is other than a natural person, then
          -----------------
each individual who executes this document on behalf of Grantor represents and
warrants to Beneficiary that such execution has been duly authorized by all
necessary corporate, partnership, or other action on the part of Grantor.

                                   ARTICLE 4

                        BORROWER'S AFFIRMATIVE COVENANTS

     4.1  Payment of Notes.  Grantor will pay all principal, interest, and
          ----------------
other sums payable under the Notes or this Deed of Trust or the Loan Documents,
on the date when such payments are due, without notice or demand.

     4.2  Performance of Other Obligations.  Grantor will promptly and strictly
          --------------------------------
perform and comply with all other covenants, conditions, and prohibitions
required of Grantor and Guarantor by the terms of the Loan Documents.

     4.3  Other Encumbrances.  Grantor will promptly and strictly perform and
          ------------------
comply with all covenants, conditions, and prohibitions required of Grantor and
Guarantor in connection with any other encumbrance affecting the Property or the
Collateral, or any part thereof, or any interest therein, regardless of whether
such other encumbrance is superior or subordinate to the lien hereof.  This
paragraph does not authorize any lien or encumbrance against the Property or the
Collateral except as permitted by Section 3.1 or with the prior written consent
of the Beneficiary as provided in this Deed of Trust.

     4.4  Maintaining Priority of Deed of Trust. Grantor shall, at its expense,
          -------------------------------------
cause the recordation of this Deed of Trust and of any other instrument
evidencing or securing the Notes wherever such recording would or might be
required in order to protect the lien and priority of this Deed of Trust or such
instrument against the claims of third parties. Grantor shall, at its expense,
take such other action and execute and record such other instruments as may be
necessary or desirable to preserve and protect the lien and priority of this
Deed of Trust and all other instruments evidencing or securing the Notes.

     4.5  Payment of Taxes.
          ----------------
          (a)  Property Taxes.  Grantor will pay, when due, all taxes and
               --------------
     assessments, including without limitation, general, special and
     metropolitan district taxes, water charges, sewer service charges
     (collectively, the "Impositions"), which may be levied or imposed at any
     time against Grantor's interest and estate in the Property or the
     Collateral. Within thirty (30) days such Impositions are due, Grantor will
     deliver to Beneficiary an official receipt for such payment or other
     evidence that such payment has been made.

          (b)  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
     Notes, against Beneficiary arising directly from Beneficiary's interests in
     the Loan Documents (other than a tax based on Beneficiary's income), or
     against any security interest of Beneficiary in the Property, Grantor will
     pay such tax, assessment, or other charge before delinquency and will
     indemnify Beneficiary against all loss,

                                       6
<PAGE>

     expense, or diminution of income in connection therewith. In the event
     Grantor is unable to do so, either for economic reasons or because the
     legal provisions or decisions creating such tax, assessment or charge
     forbid Grantor from doing so, then the Notes will, at Beneficiary's option,
     become due and payable in full upon 60 day's notice to Grantor.

          (c)  Right to Contest.  Notwithstanding any other provision of this
               ----------------
     section, Grantor will not be deemed to be in default solely by reason of
     Grantor's failure to pay any Impositions so long as, in Beneficiary's
     judgment, each of the following conditions is satisfied:

               (i) Grantor is engaged in and diligently pursuing in good faith
          administrative or judicial proceedings appropriate to contest the
          validity or amount of such Impositions; and

               (ii) Nonpayment of such Impositions will not result in the loss
          or forfeiture of any Property encumbered hereby or any interest of
          Beneficiary therein; and

               (iii) Grantor has set aside reserves on its books to the extent
          required by GAAP (as defined in the Note Purchase Agreement).

               (iv) If Beneficiary determines that any one or more of such
          conditions is not satisfied or is no longer satisfied, Grantor will
          pay the Impositions in question, together with any interest and
          penalties thereon, within ten days after Beneficiary gives notice of
          such determination.

     4.6  Maintenance of Insurance.
          ------------------------
          (a)  Coverages Required.  Grantor shall maintain and deposit with the
               ------------------
     Beneficiary original certificates of insurance policies issued by
     financially sound and reputable insurance companies licensed to conduct
     business within the state where the Property and Collateral is located and
     written in form and content in accordance with the terms of the Note
     Purchase Agreement and otherwise acceptable to Beneficiary, with
     appropriate mortgagee clauses in favor of Beneficiary, providing the
     following minimum insurance coverages for the Property and Collateral:

               (i) Commercial general public liability insurance covering the
          Property, the Collateral and Grantor in an amount satisfactory to the
          Beneficiary, with the Beneficiary named as an additional insured;

               (ii) Throughout the period of any construction of any buildings
          or improvements on the Property, all-risk course of construction
          insurance with standard non-contributing mortgage clause, a lender's
          Loss Payable Endorsement naming the Beneficiary and/or assigns as loss
          payee, attached together with a full replacement cost endorsement
          (provided that in no event, however, may the amount of coverage to be
          maintained by Grantor be less than the amount of coverage necessary to
          prevent Grantor's co-insurance of loss) ("Builder's Risk Insurance")
          in an amount sufficient to cover costs of replacement for any item of
          development or construction which would be covered by Builder's Risk
          Insurance;

                                       7
<PAGE>

               (iii) Throughout the period of any construction of any buildings
          or improvements on the Property, Worker's Compensation Insurance
          covering all persons engaged in the development or construction of the
          improvements on the Property in accordance with the requirements of
          applicable law.

               (iv) Fire and extended coverage property damage insurance,
          including, but not limited to all risk insurance, in an amount equal
          to the full replacement value of the improvements, without coinsurance
          or deducting for depreciation, containing a waiver of subrogation
          clause and a deductible amount acceptable to Beneficiary, with the
          Beneficiary named as an additional insured and as a loss payee;

               (v) Flood insurance required by and obtainable through the
          National Flood Insurance Program sufficient to cover any damage which
          may be anticipated in the event of flood unless Grantor has provided
          Beneficiary evidence satisfactory to Beneficiary that no portion of
          the Property is located within the boundaries of the 100 year flood
          plain; and

               (vi) Boiler and machinery insurance when risks covered thereby
          are present and Beneficiary requires such insurance.

     Each of the foregoing policies shall contain a clause requiring thirty (30)
day notice to Beneficiary of cancellation, termination or material modification.
Grantor shall provide proof of premiums paid and, throughout the term of the
Secured Obligations, shall provide evidence to Beneficiary no later than thirty
(30) days prior to expiration of each annual policy of payment of renewal
premiums and continuation of insurance coverage. A copy of each insurance policy
certified as complete and correct by Grantor shall be delivered to Beneficiary.
If coinsurance is applicable, a certificate of adequacy shall be obtained from
the insurer and delivered to Beneficiary.

          (b)  Renewal Policies.  Not less than fifteen (15) days prior to the
               ----------------
     expiration date of each insurance policy required pursuant to subsection
     4.6(a) above, Grantor will deliver to Beneficiary a copy of an appropriate
     renewal policy certified by Grantor as complete and accurate, together with
     evidence satisfactory to Beneficiary that the applicable premium has been
     prepaid.

          (c)  Application of Hazard Insurance Proceeds.  If no Event of
               ----------------------------------------
     Default has occurred, Beneficiary shall pay to Grantor such portion of any
     insurance proceeds received by it with respect to an insured casualty as
     are necessary for Grantor to perform its obligations pursuant to Section
     4.6 (Maintenance and Repair of Property) except to the extent that a
     different use of such proceeds is, as determined by the Grantor, in good
     faith, desirable in the conduct of its business or the business of the
     Guarantor and not disadvantageous in any material respect to the Holders
     under the Note Purchase Agreement. Any insurance proceeds received by
     Beneficiary with respect to an insured casualty at a time when an Event of
     Default has occurred may, in Beneficiary's sole discretion, either be
     retained and applied by Beneficiary toward payment of the Secured
     Obligations, or be paid over to Grantor to pay for repairs or replacements
     necessitated by the casualty; provided, 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 Grantor. Beneficiary will have no obligation to see to the
     proper application of any insurance proceeds paid over to Grantor, nor will
     any such

                                       8
<PAGE>

     proceeds received by Beneficiary bear interest or be subject to any other
     charge for the benefit of Grantor.

     In case of loss after foreclosure proceedings have been instituted,
the insurance proceeds received by Beneficiary with respect to an insured
casualty, if not applied as aforesaid in rebuilding or restoring the buildings
or improvements, shall be used to pay the amount due the Beneficiary and the
balance, if any, shall be paid to the owner of the equity of redemption if such
owner shall then be entitled to the same.  In case of a judicial foreclosure of
this Deed of Trust, the Court in its decree may provide that the mortgagee's
clause attached to each insurance policy may be canceled and that the decree
creditor may cause a new loss clause to be attached to each policy making the
loss thereunder payable to the decree creditor; and any such foreclosure decree
may further provide that in case of one or more redemptions under such decree,
pursuant to the statute in such case made and provided, then and in every such
case, each successive redemptor may cause the preceding loss clause attached to
each insurance policy to be canceled and a new loss clause to be attached
thereto, making the loss thereunder payable to such redemptor.  In the event of
foreclosure sale, Beneficiary is hereby authorized, without the consent of
Grantor, to assign any and all insurance policies to the purchaser at the sale,
or to take such other steps as Beneficiary may deem advisable, to cause the
interest of such purchaser to be protected by any of the insurance policies.

          (d)  Successor's Rights.  Any person who acquires title to the
               ------------------
     Property or the Collateral upon foreclosure hereunder will succeed to all
     of Grantor's rights under all policies of insurance maintained pursuant to
     this section, including, without limitation, all rights to all claims under
     all such insurance policies regardless of the nature of such claim or when
     such claim arose.

     4.7  Maintenance and Repair of Property and Collateral.  Grantor will at
          -------------------------------------------------
all times maintain the Property and the Collateral in good condition and repair,
and will diligently prosecute the completion of any infrastructure, building or
other improvement which is at any time in the process of construction on the
Property in full compliance with all building codes and other governmental
requirements. Grantor will promptly repair, restore, replace, or rebuild any
part of the Property or the Collateral which may be affected by any casualty or
any public or private taking or injury to the Property or the Collateral. Any
repair, restoration, replacement, or rebuilding shall be consistent with all
applicable laws and regulations. All costs and expenses arising out of the
foregoing shall be paid by Grantor whether or not the proceeds of any insurance
or eminent domain shall be sufficient therefor. Grantor 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 and the Collateral, including but not limited to any
environmental or ecological requirements, legislation or regulations with
respect to the Americans With Disabilities Act; provided, that so long as
Grantor is not otherwise in default hereunder, Grantor may, upon establishing
sufficient reserves therefor in accordance with GAAP, 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
Collateral, wherever located, at all reasonable times.

     4.8  Performance of Lease Obligations.  Grantor will perform promptly all
          --------------------------------
of Grantor's obligations under or in connection with each present and future
lease of all or any part

                                       9
<PAGE>

of the Property. If Grantor receives at any time any written communication from
the tenant under any Lease asserting a default by Grantor under any Lease, or
purporting to terminate or cancel any Lease, Grantor will promptly forward a
copy of such communication (and any subsequent communications relating thereto)
to Beneficiary.

     4.9  Recertified Appraisal.  If at any time (a) an Event of Default under
          ---------------------
the Loan Documents has occurred (giving effect to applicable cure and notice
periods, if any, contained in the Loan Documents), or (b) the Beneficiary
determines in its sole opinion that the security for the Loan has been
physically or economically impaired in any material manner, or (c) the
Beneficiary is required by law or regulation to obtain a new appraisal, the
Beneficiary may require a new appraisal of the Property in form and content
acceptable to the Beneficiary to be prepared at Grantor's expense.

     4.10  Condemnation.  Grantor hereby assigns, transfers and sets over unto
           ------------
Beneficiary the entire proceeds of any award or any claim for damages for any of
the Property taken or damaged under the power of eminent domain or by
condemnation.  Beneficiary may elect, in its discretion, to apply the proceeds
of the award upon or in reduction of the Secured Obligations, whether due or
not.

     4.11  Mechanics' Liens.  Grantor will keep the Property free and clear of
           ----------------
all liens and claims of liens by contractors, subcontractors, mechanics,
laborers, materialmen, and other such persons.

     4.12  Defense of Actions.  Grantor will defend, at Grantor'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.

     4.13  Inventories; Assembly of Chattels.  Grantor will, from time to time
           ---------------------------------
at the request of Beneficiary, supply Beneficiary with a current inventory of
the Chattels, in such detail as Beneficiary may require. Upon the occurrence of
any Event of Default hereunder, Grantor will, at Beneficiary's request assemble
the Chattels and make the Chattels available to Beneficiary at any place
designated by Beneficiary which is reasonably convenient to both parties.

     4.14  Further Assurances; Estoppel Certificates.  Grantor 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.  Grantor will also, within ten (10) days after any 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 Notes, and (b) whether Grantor claims to have any offsets
or defenses with respect to the Secured Obligations and, if so, the nature of
such offsets or defenses.

     4.15   Financial Statements and Inspection of Records.  Grantor covenants
            ----------------------------------------------
and agrees to furnish Beneficiary, such certified reports, financial statements,
supporting schedules, tax returns and such other financial data as required
under Section 7.3 of the Note Purchase Agreement

                                       10
<PAGE>

covering the operation of the Property, including but not limited to certified
rent rolls, income and expense statements and balance sheets, and the financial
condition of Grantor and Guarantor, each of their respective general partners,
Guarantors, and any other principals of Grantor or Guarantor as may be required
by the Beneficiary from time to time, in form and content satisfactory to the
Beneficiary, in addition to the specific financial data required by Section 7.3
of the Note Purchase Agreement.

     All financial data provided to the Beneficiary, unless required by the
Beneficiary to be prepared by independent audit, shall be certified to
Beneficiary by the managing general partner or chief financial officer of
Grantor or Guarantor, as the case may be, to be complete, correct and accurate
in all material respects and to be prepared in accordance with generally
accepted accounting principles consistently applied.

     4.16  Security Deposits.  If required by the Beneficiary, Grantor shall
           -----------------
keep and maintain in a separate bank account with Beneficiary, any security
deposits or advance payments received from tenants in lieu of security deposits.
Upon the Beneficiary's request, the Beneficiary shall be named on the bank
account and no funds shall be withdrawn therefrom without the prior written
consent of the Beneficiary.

     4.17  Environmental Representations and Warranties; Covenants.
           -------------------------------------------------------
          (a) The term "Hazardous Substance," when it appears in this Deed of
     Trust, is used in the broadest sense and shall mean oil, any petroleum
     based product or derivative (and any fraction thereof), any petroleum
     additive, pesticides, paints, solvents, polychlorinated biphenyls, lead,
     cyanide, DDT, acids, bases, ammonium compounds, ethylene glycol,
     antifreeze, asbestos (in any form), chemicals, or any substance or material
     defined or designated as hazardous, toxic, regulated, or other similar
     term, by any federal, state or local environmental statute, regulation,
     ordinance or policy presently in effect or which may be promulgated in the
     future, as they may be amended from time to time ("Environmental Laws"),
     including but not limited to: the Comprehensive Environmental Response,
     Compensation and Liability Act, 42 U.S.C. (S) 9601 et seq.; the Solid Waste
                                                        -------
     Disposal Act, as amended by the Resource Conservation and Recovery Act,
     42 U.S.C. (S) 6901 et seq.; the Emergency Planning and Community
                        -------
     Right-To-Know Act, 42 U.S.C. (S)(S) 1101 et seq.; the Federal Water
                                              -------
     Pollution Control Act, 33 U.S.C. (S)(S) 1251 et seq.; the Oil Pollution
                                                  -------
     Act, 33 U.S.C. (S)(S) 2701 et seq.; the Safe Drinking Water Act, 42 U.S.C.
                                -------
     (S)(S) 300f-300j; the Clean Air Act, 42 U.S.C. (S)(S) 7401 et seq.; the
                                                                -------
     Hazardous Materials Transportation Act, 49 U.S.C. (S)(S) 5101 et seq.;
                                                                   -------
     the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. (S)(S)
     136 et seq.; the Toxic Substances Control Act, 15 U.S.C. (S)(S) 2601
         -------
     et seq.; the Colorado Hazardous Waste Act, C.R.S. (S)(S) 25-15-101 et seq.;
     -------                                                            -------
     Colorado's Hazardous Waste Sites law, C.R.S. (S)(S) 26-16-101 et seq.; the
                                                                   -------
     Colorado Hazardous Substances Act of 1973, C.R.S. (S) 25-5-501 et seq.; the
                                                                    -------
     Colorado Water Quality Control Act, C.R.S. (S)(S) 25-8-101 et seq.; the
                                                                -------
     Colorado Underground and Aboveground Storage Tank law, C.R.S (S)(S)
     8-20.5-101 et seq.; the Colorado Air Quality Control Act, C.R.S. (S)(S)
                -------
     25-7-101 et seq.; and Colorado's Hazardous Materials Transportation Act,
              -------
     C.R.S. (S)(S) 43-6-101 et seq.; and all regulations promulgated under or
                            -------
     which implement the foregoing laws.

          (b) The term "Environmental Event" means (i) the generation, storage,
     disposal, removal, transportation or treatment of any Hazardous Substances
     on the Property (or on any of the real property adjoining or in the
     vicinity of the Property, if through soil or ground

                                       11
<PAGE>

     water migration, such Hazardous Substances could have come to be located at
     any portion of the Property); (ii) the receipt by the Grantor of any notice
     or claim of any violation of any Environmental Law or of any action based
     upon nuisance, negligence or other tort theory alleging liability on the
     basis of improper generation, storage, disposal, removal, transportation or
     treatment of Hazardous Substances on the Property; or (iii) the presence or
     release or threat of release of any Hazardous Substances at or upon the
     Property or other property of the Grantor resulting in a level of
     contamination greater than the levels permitted or established by any
     governmental agency having jurisdiction over the Grantor, any of the
     Property or any such other property of the Grantor.

          (c) The Grantor represents and warrants that (except as heretofore
     disclosed to the Beneficiary in writing) there has been no Environmental
     Event in violation of applicable law. The Grantor covenants to comply
     strictly with (and to cause each occupant of any portion of the Property to
     comply strictly with) the requirements of all Environmental Laws and to
     notify the Beneficiary promptly of the occurrence of any Environmental
     Event; provided, however, that nothing contained herein will be deemed to
     require the Grantor to comply with any Environmental Laws which the Grantor
     is diligently contesting in good faith by appropriate proceedings which
     serve to stay the remedies of the State of Colorado and all other relevant
     Persons so that no lien or other property interest of the Beneficiary or
     any Holder will be jeopardized and as to which the Grantor is maintaining
     adequate reserves. The Grantor hereby covenants to protect, indemnify and
     hold the Beneficiary and the Holders harmless from and against all loss,
     liability, damage and expense, including attorneys' fees, suffered or
     incurred by the Beneficiary under or on account of any Environmental Laws
     (whether or not resulting from an Environmental Event heretofore disclosed)
     and relating to the Property or any portion thereof, including, without
     limitation, the filing of a lien or claim for recovery of costs against the
     Property or any portion thereof or the Grantor by or in favor of the State
     of Colorado; but excluding any loss, liability, damage or expense resulting
     from a release of Hazardous Substances which (i) occurs after foreclosure
     of this Deed of Trust or following and during the continuance of entry by
     the Beneficiary or any Holder as a mortgagee-in-possession and (ii) does
     not result in any manner from actions taken or circumstances existing prior
     to such foreclosure or entry.

          (d) In the event that the Grantor or any occupant of any of the
     Property shall fail to comply strictly with the requirements of any
     Environmental Laws and, in the reasonable opinion of the Beneficiary, the
     effect of such failure (singly or together with all other then existing
     failures to comply with any Environmental Laws, but giving effect to the
     reasonable prospects of remediation) could have a material adverse effect
     on the use, saleability or value of any portion of the Property, the
     Beneficiary may by not less than 60 days' prior written notice to the
     Grantor declare an Event of Default to exist under this Deed of Trust and
     shall have the rights and remedies provided in Article VII hereof and/or in
     the Note Purchase Agreement consequent upon a Default or an Event of
     Default. The Beneficiary, at its election and in its sole discretion, may
     (but is not obligated to) cure any failure on the part of the Grantor or
     any such occupant to comply with any of the Environmental Laws and, without
     limitation, may take any the following actions:

          (a) to the extent legally permissible, arrange for the prevention
     and/or clean-up of any Hazardous Substances in or on the Property, and pay
     for such prevention and/or

                                       12
<PAGE>

     clean-up costs and associated costs;

          (b) pay, on behalf of the Grantor, any fines or penalties imposed on
     the Grantor by any governmental agency or authority (federal, state or
     local) in connection with such failure to comply with any of the
     Environmental Laws; and

          (c) make any other payment or perform any other act which will prevent
     or discharge a lien or claim by or in favor of the State of Colorado or any
     other federal, state or local governmental agency or authority from
     attaching to or being asserted against the Property.

     The Beneficiary will give the Grantor not less than 10 days' prior
written notice before acting under any of clauses (a)-(c) above, except that the
Beneficiary may act after such shorter notice period as is reasonably
practicable or upon no notice at all in the case of emergency (as reasonably
determined by the Beneficiary), including, without limitation, imminent risk of
damage to, or forfeiture of, the Property or any material portion thereof or
imminent threat of harm to any person in, on or in the vicinity of the real
estate constituting any portion of the Property.  Any partial exercise by the
Beneficiary of the remedies herein set forth, or any partial undertaking on the
part of the Beneficiary to cure the Grantor's failure to comply with any of the
Environmental Laws, shall not obligate the Beneficiary to complete the actions
taken or require the Beneficiary to expend further sums to cure the Grantor's
noncompliance; neither shall the exercise of any such remedies operate to place
upon the Beneficiary any responsibility for the operation, control, care,
management or repair of any portion of the Property or make the Beneficiary the
"operator" of any portion of the Property within the meaning of any
Environmental Laws or a so-called lender in possession.  Any amount paid or
costs incurred by the Beneficiary as a result of the exercise by the Beneficiary
of any of the rights hereinabove set forth shall be paid by the Grantor to the
Beneficiary on demand, together with interest thereon at the Default Rate (as
defined in the Note Purchase Agreement), such interest to accrue from the date
such amount was paid or cost incurred through the date of payment by the
Grantor.  All such amounts and costs and the interest thereon, until paid, shall
be added to and become a part of the obligations secured hereby; and the
Beneficiary, by making any such payment or incurring any such costs, shall be
subrogated to any rights of the Grantor to seek reimbursement from any third
parties, including, without limitation, a predecessor-in-interest to the
Grantor's title who may be a "responsible party" under any Environmental Laws in
connection with any Environmental Event.

     The provisions of this Section 4.17 shall survive payment of the
Obligations and payment and discharge of this Deed of Trust.

     4.18  Indemnity.  Except with respect to any loss, liability, damage or
           ---------
expense resulting from a release of Hazardous Substances which (i) occurs after
foreclosure of this Deed of Trust or following and during the continuance of
entry by the Beneficiary or any Holder as a mortgagee-in-possession and (ii)
does not result in any manner from actions taken or circumstances existing prior
to such foreclosure or entry, Grantor shall be solely responsible for, and shall
indemnify and hold harmless Beneficiary, its directors, officers, employees,
agents, successors and assigns from and against, any loss, damage, cost, expense
or liability directly or indirectly arising out of or attributable to the use,
generation, storage, release, threatened release, discharge, disposal, or
presence of Hazardous Substance on, under or about the Property, including,
without limitation: (a) all foreseeable consequential damages; (b) the costs of
any

                                       13
<PAGE>

required or necessary repair, cleanup or detoxification of the Property; and
the preparation and implementation of any closure, remedial or other required
plans; and (c) all reasonable costs and expenses incurred by Beneficiary in
connection with clauses (a) and (b), including but not limited to reasonable
attorneys' fees. The agreements contained in this Section 4.18 shall survive the
repayment of the indebtedness and the termination of this Deed of Trust, whether
by foreclosure or release, as a separate and independent contract between
Grantor and Beneficiary.

                                   ARTICLE 5

                         BORROWER'S NEGATIVE COVENANTS

     5.1  Waste.  Grantor will not commit or permit any waste with respect to
          -----
the Property or the Collateral.

     5.2  Zoning and Private Covenants.  Grantor 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 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 express
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, Grantor
will not cause such use to be discontinued or abandoned without the express
written consent of Beneficiary.

     5.3  Disposition of Mortgaged Property, Leases, or Beneficial Interest in
          --------------------------------------------------------------------
Grantor.  It is expressly acknowledged, covenanted and agreed that, except as
-------
otherwise permitted under the terms of the Note Purchase Agreement, there shall
be no sale, lease (except for leases of space in the improvements on the
Property subordinate to this Deed of Trust), exchange, assignment, conveyance,
encumbrance, mortgage, alienation, transfer or other disposition (herein
collectively called a "Disposition") of (a) all or any portion of the Property
or any lease thereof (or any interest therein) which gives the lessee any option
to purchase the Property or any part thereof, or (b) all or any part of the
legal or beneficial ownership interest in Grantor, unless Beneficiary has
provided its prior written consent thereto.  In the event there occurs a
Disposition which is not permitted by the terms of the Note Purchase Agreement
and without Beneficiary's written consent, then Beneficiary may, at
Beneficiary's option, accelerate the maturity of the Notes and enforce any and
all of Beneficiary's rights, remedies and resources set forth in this Deed of
Trust upon the occurrence of an Event of Default. It is acknowledged and agreed
that the Beneficiary may arbitrarily withhold, at its sole option, its consent
to any Disposition as described above.  Grantor agrees to provide Beneficiary at
least thirty (30) days prior written notice of any proposed Disposition together
with complete information regarding such Disposition. Beneficiary's failure to
respond or otherwise consent within such thirty (30) day period shall be deemed
a denial of the request for approval.  Beneficiary's failure to exercise its
remedies hereunder for a disapproved Disposition shall not be construed as a
waiver of Beneficiary's right to subsequently exercise such remedies, and
Beneficiary's approval of a Disposition shall not be construed as a waiver of
the provisions hereof with respect to any subsequent Disposition.  The rights
and options herein granted to Beneficiary may be exercised at Beneficiary's sole
option and discretion, need not be based upon an increased business risk or any
other risk, and are an integral and valuable part of the security given to
Beneficiary.

                                       14
<PAGE>

     5.4  Further Encumbrance of Property.  Except with respect to Permitted
          -------------------------------
Liens (as defined in the Note Purchase Agreement), Grantor will not create,
place or permit to be created or placed or allow to remain against the Property
any mortgage or deed of trust, regardless of whether the same is expressly
subordinate to the liens and security interests imposed hereby or by any other
instruments securing the Secured Obligations and Grantor shall not encumber the
Property without the prior written consent of Beneficiary, which consent shall
be granted or withheld in Beneficiary's sole discretion.

     5.5  Transfer or Removal of Chattels.  Except as otherwise permitted
          -------------------------------
under the terms of the Note Purchase Agreement, Grantor will not sell, transfer
or remove from the Property all or any material part of the Chattels, unless the
items sold, transferred, or removed are simultaneously replaced with similar
items of equal or greater value.

     5.6  Further Encumbrance of Collateral.  Except with respect to Permitted
          ---------------------------------
Liens (as defined in the Note Purchase Agreement), Grantor will not create or
permit any junior lien, security interest or other encumbrance against the
Collateral without the prior written consent of Beneficiary, which consent shall
be granted or withheld in Beneficiary's sole discretion.

     5.7  Improper Use of Property or Collateral.  Grantor will not use the
          --------------------------------------
Property or the Collateral for any purpose or in any manner, or take any action
with respect to the Property which violates any applicable law, ordinance, or
other governmental requirement, the requirements or conditions of any insurance
policy, or any private covenant.

                                   ARTICLE 6

                               EVENTS OF DEFAULT

     6.1  Events of Default.  Each of the following events will constitute a
          -----------------
default (an "Event of Default") under this Deed of Trust and under each of the
other Loan Documents:

          (a) Grantor shall fail to pay when due any installment of interest
     and/or principal on the Note as provided in the Note Purchase Agreement and
     any deposit or payment required hereunder, under the Note Purchase
     Agreement, under the Note, or under any of the other Loan Documents.

          (b)  Grantor shall breach or fail to perform any obligation, covenant,
     agreement, term or provision required to be performed or observed by
     Grantor hereunder and such failure shall continue for a period of thirty
     (30) days after Grantor first becomes aware of such failure.

          (c) If any representation or warranty made to Beneficiary by Grantor
     shall have been false or incorrect in any material respect on the date as
     of which the same was made or has become false or incorrect in any respect,
     if such representation or warranty was ongoing in nature.

          (d) If Grantor or Guarantor makes an assignment for the benefit of
     creditors, or if a receiver shall be appointed for Grantor or Guarantor or
     for the Property, or any part thereof, or if Grantor or Guarantor is the
     subject of a bankruptcy, reorganization, or

                                       15
<PAGE>

     insolvency proceeding (voluntarily or involuntarily) and, in the case of an
     involuntary proceeding under the Federal Bankruptcy Code, if such
     proceeding shall not be dismissed within forty-five (45) consecutive days
     from the commencement thereof.

          (e) Grantor's or Guarantor's default, following expiration of any
     applicable notice requirements and cure periods, in the performance of any
     of its obligations under any other mortgage, deed of trust, lien,
     encumbrance, security agreement, or ground lease affecting the Property, or
     any portion thereof, and permitted by Beneficiary pursuant to the terms of
     this Deed of Trust, irrespective of whether or not any such permitted
     instrument is subordinate to the lien of this Deed of Trust.

          (f) The occurrence of an Event of Default under the terms of the
     Notes, the Note Purchase Agreement, or any other Loan Documents.

          (g) Grantor shall have no grace or cure periods pursuant to this
     Article 6 to cure Defaults under any of the following Sections except to
     the extent otherwise provided therein: 4.5 (Insurance); 10 (Actions by
     Lender to Preserve the Property); 4.4 (Maintaining Priority of Deed of
     Trust); 5.4 and 5.6 (Encumbrance of the Property or any Interest in
     Grantor); and 5.3 (Transfers).

                                   ARTICLE 7

                                    REMEDIES

     Immediately upon or any time after the occurrence of any Event of
Default hereunder, Beneficiary may, at the direction of the Holders holding at
least 50% in principal amount of the then outstanding Notes, exercise any remedy
available at law or in equity, including but not limited to those listed below
and those listed in the other Loan Documents, in such sequence or combination as
Beneficiary and such Holders may determine in their sole discretion:

     7.1  Performance of Defaulted Obligations.  Beneficiary may make any
          ------------------------------------
payment or perform any other obligation under the Loan Documents which Grantor
has failed to make or perform, and Grantor hereby irrevocably appoints
Beneficiary as the true and lawful attorney-in-fact for Grantor to make any such
payment and perform any such obligation in the name of Grantor, which
appointment is coupled with Beneficiary's interest in the Property and the
Collateral. All payments made and expenses (including attorneys' fees and legal
assistants' fees) incurred by Beneficiary in this connection, together with
interest thereon at the Default Rate, as set forth in the Notes, from the date
paid or incurred until repaid, will be part of the Secured Obligations and will
be immediately due and payable by Grantor to Beneficiary.

     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 Grantor to cure or refrain from repeating any default.

                                       16
<PAGE>

     7.3  Acceleration of Secured Obligations.  Beneficiary may, without
          -----------------------------------
notice or demand, declare all of the Secured Obligations immediately due and
payable in full in accordance with the terms and provisions of Section 9.2 of
the Note Purchase Agreement.

     7.4  Possession of Property.  Beneficiary may enter and take possession
          ----------------------
of the Property without seeking or obtaining the appointment of a receiver, and
may employ a managing agent for the Property, either in Beneficiary's name or in
the name of Grantor.

     7.5  Enforcement of Security Interests.  Beneficiary may exercise all
          ---------------------------------
rights of a secured party under the Uniform Commercial Code with respect to the
Collateral, including but not limited to taking possession of, holding, and
selling the Collateral 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 Grantor at least 15 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.
If permitted by statute or court decision, the Collateral may be sold by the
Trustee as part of the foreclosure sale of the Property.

     7.6  Foreclosure Against Property.  Beneficiary may foreclose this Deed of
          ----------------------------
Trust, insofar as it encumbers the Property, either by judicial action or
through a public trustee foreclosure sale through the Trustee in the manner
provided by statute.

          (a) If this Deed of Trust encumbers more than one parcel of real
     estate, foreclosure may be by separate parcel or lot or en masse, as
                                                             -- -----
     Beneficiary may elect at the direction of the Holders holding at least 50%
     in principal amount of the then outstanding Notes, in their sole
     discretion. Foreclosure through Trustee will be initiated by Beneficiary's
     filing of its notice of election and demand for sale with Trustee. Upon the
     filing of such notice of election and demand for sale, Trustee shall
     promptly comply with all notice and other requirements of the laws of
     Colorado then in force with respect to such sales, and shall give four
     weeks' public notice of the time and place of such sale by advertisement
     weekly five times in some newspaper of general circulation then published
     in the County in which the Property is located.

          (b) All fees, costs and expenses of any kind incurred by the Trustee
     or Beneficiary in connection with, or preparation for, foreclosure of this
     Deed of Trust, including, without limitation, the costs of any appraisals,
     engineering or environmental testing and evaluations of the Property
     obtained by Beneficiary, all costs of any receivership for the Property
     advanced by Beneficiary, and all attorneys', legal assistants' and
     consultants' fees, experts' evidence, stenographers' charges, publication
     costs, (which may be estimated as to items to be expended after foreclosure
     sale or entry of the decree) costs of procuring all such abstracts of
     title, title searches, title insurance policies, and similar data with
     respect to title as Beneficiary may deem reasonably necessary either to
     prosecute such suit or to evidence to bidders at any sale the true
     condition of title to or value of the Property, incurred by Beneficiary,
     shall constitute a part of the Secured Obligations and may be included as
     part of the amount owing from Grantor to Beneficiary at any foreclosure
     sale. All expenditures and expenses of the nature in this paragraph
     mentioned, and such expenses and fees as may be incurred in the protection
     of the Property and the maintenance of the lien of this Deed of Trust,
     including the reasonable fees of any attorney employed by Beneficiary in
     any litigation or proceeding affecting this Deed of Trust, the Notes or the
     Property, including probate, bankruptcy proceedings, proceedings to

                                       17
<PAGE>

     obtain a receiver, or in preparation for the commencement or defense of any
     proceeding or threatened suit or proceeding, shall be immediately due and
     payable by Grantor, with interest thereon at the Default Rate, as more
     particularly defined in the Notes and shall be secured by this Deed of
     Trust.

          (c) The proceeds of any sale under this section shall be applied first
     to the fees and expenses of the officer conducting the sale, and then to
     the reduction or discharge of the Secured Obligations; any surplus
     remaining shall be paid over to Grantor or to such other person or persons
     as may be lawfully entitled to such surplus.

          (d) At the conclusion of any foreclosure sale, the officer conducting
     the sale shall execute and deliver to the purchaser at the sale a
     certificate of purchase which shall describe the property sold to such
     purchaser and shall state that upon the expiration of the applicable
     periods for redemption, the holder of such certificate will be entitled to
     a deed to the property described in the certificate. After the expiration
     of all applicable periods of redemption, unless the property sold has been
     redeemed by Grantor, the officer who conducted such sale shall, upon
     request, execute and deliver an appropriate deed to the holder of the
     certificate of purchase or the last certificate of redemption, as the case
     may be.

          (e) Nothing in this section dealing with foreclosure procedures or
     specifying particular actions to be taken by Beneficiary or by Trustee or
     any officer conducting the foreclosure sale shall be deemed to contradict
     or add to the requirements and procedures now or hereafter specified by
     Colorado law, and any such inconsistency shall be resolved in favor of
     Colorado law applicable at the time of foreclosure.

     7.7  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, the Leases, and the Rents and
Revenues upon ex parte application to any court of competent jurisdiction.
              -- -----
Grantor waives any right to any hearing or notice of hearing prior to the
appointment of a receiver.

     7.8  Right to Make Repairs, Improvements.  Should any part of the
          -----------------------------------
Property come into the possession of Beneficiary or a receiver, after an Event
of Default, Beneficiary or the receiver and receiver's agents shall be
empowered:

          (a) To take possession of the Property, Leases, Rents and Revenues and
     any business conducted by Grantor or any other person thereon and any
     business assets used in connection therewith and any Property in which
     Beneficiary has a security interest granted by Grantor and, if the receiver
     deems it appropriate, to operate the same;

          (b) To exclude Grantor and Grantor's agents, servants, and employees
     from the Property;

          (c) With or without taking possession of the Property, to collect the
     Rents and Revenues, including those past due and unpaid;

                                       18
<PAGE>

          (d) To rent, lease or let all or any portion of the Property to any
     party or parties at such rental and upon such terms as the Beneficiary
     shall, and to pay any leasing or rental commissions associated therewith in
     its discretion, determine;

          (e) To complete any construction or development which may be in
     progress;

          (f) To do such maintenance and make such repairs and alterations as
     the Beneficiary or receiver deems necessary;

          (g) To use all stores of materials, supplies and maintenance equipment
     on the Property and to replace and replenish such items at the expense of
     the receivership estate;

          (h)  To pay the operating expenses of the Property, including costs of
     management and leasing or marketing thereof (which shall include lease
     commissions, sale commissions), payments under contracts and agreements for
     development and construction;

          (i) To pay all taxes and assessments against the Property and any
     property which is collateral for the Secured Obligations, all premiums for
     insurance thereon, all utility and other operating expenses, and all sums
     due under any prior or subsequent encumbrance;

          (j) To borrow from the Beneficiary such funds as may be reasonably
     necessary to the effective exercise of the receiver's powers, on such terms
     as may be agreed upon by the receiver and the Beneficiary, but not in
     excess of the Default Rate under the Notes; and

          (k) Generally do anything which Grantor could legally do if Grantor
     were in possession of the Property.

All expenses incurred by the receiver or the receiver's agent shall constitute
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), to expenses of the Property, and
to preserve, protect, maintain and operate the Property and any other collateral
which is security for the Secured Obligations, and the balance shall be applied
toward the Secured Obligations or any deficiency which may result from any
foreclosure sale, and then in such other manner as the court may direct.  Unless
sooner terminated with the express consent of the Beneficiary, any such
receivership will continue until all amounts remaining due under the Notes have
been discharged in full, or until title to the Property has passed after
foreclosure sale and all applicable periods of redemption have expired, and in
either case, the court has discharged the receiver.  Grantor covenants to
promptly reimburse and pay to Beneficiary or such receiver, at the place where
the Notes are payable, or at such other place as may be designated in writing,
the amount of all reasonable expenses (including the cost of any insurance,
taxes, or other charges) incurred by Beneficiary or such receiver in connection
with its custody, preservation, use or operation of the Property, together with
interest thereon from the date incurred by Beneficiary or such receiver at the
Default Rate, as set forth in the Notes, and all such expenses, costs, taxes,
interest, and other charges shall be part of the Secured Obligations.  It is
agreed, however, that the risk of accidental loss or damage to the Property is
undertaken by

                                       19
<PAGE>

Grantor and, except for Beneficiary's or such receiver's willful misconduct or
gross negligence, Beneficiary or such receiver 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, or to complete
development.

     7.9  Further Assurances.  Upon issuance of a deed or deeds pursuant to
          ------------------
foreclosure of this Deed of Trust, all right, title, and interest of the Grantor
in and to the Leases shall, by virtue of this instrument, thereupon vest in and
become the absolute property of the grantee or grantees in such deed or deeds
without any further act or assignment by the Grantor.  Grantor hereby agrees to
execute all instruments of assignment or further assurance in favor of such
grantee or grantees in such deed or deeds, as may be necessary or desirable for
such purpose.  But nothing contained herein shall prevent Beneficiary from
terminating any subordinated Lease not approved by the Beneficiary through such
foreclosure.

                                   ARTICLE 8

                        ASSIGNMENT OF RENTS AND REVENUES

     8.1  Assignment of Rents and Revenues.  To further secure the Secured
          --------------------------------
Obligations, Grantor does hereby sell, assign and transfer unto the Beneficiary
all rents, issues, profits and income now due and which may hereafter become due
under or by virtue of any lease ("Leases") (collectively "Rents and Revenues"),
whether written or verbal, or any letting of, or of any agreement for the sale,
use or occupancy of the Property or any part thereof, and all proceeds from,
evidence of, and benefits and advantages to be derived therefrom, now or
hereafter existing, whether or not with the Beneficiary's approval.  The Grantor
does hereby appoint irrevocably the Beneficiary its true and lawful attorney in
its name and stead (with or without taking possession of the Property) to rent,
lease or let any improvements located on the Property, and to collect all of
said Rents and Revenues arising from or accruing at any time hereafter, and all
now due or that may hereafter become due under each and every of the Leases,
written or verbal, or which may hereafter exist on the Property, on the
condition that Beneficiary hereby grants to Grantor a license to collect and
retain such Rents and Revenue (but expressly not including the right to collect
                                             ---
any rents more than one month in advance or any amount to prepay, terminate, or
"buy out" any Leases) prior to the occurrence of any Event of Default under the
Loan Documents.  Grantor expressly covenants to apply the Rents and Revenue
received, after application for operating expenses permitted hereunder, to
payment of the Secured Obligations as and when the same become due and in
compliance with the Loan Documents.  Such license shall be revocable by
Beneficiary without notice to Grantor at any time upon or after an Event of
Default under the Loan Documents, and immediately upon any such revocation,
Beneficiary shall be entitled to receive, and Grantor shall deliver to
Beneficiary, any and all Rents and Revenues theretofore collected by Grantor
which remain in the possession or control of Grantor and all Leases.  It is the
intention of the Grantor to create and grant, and it is the intention of
Beneficiary to create and receive, a present and absolute assignment of all of
the Leases, Rents and Revenue now due or which may hereafter become due, but it
is agreed that the Beneficiary's right to collect the Rents and Revenues is
conditioned upon the existence of an Event of Default under the Loan Documents.
Failure of Beneficiary at any time or from time to time to enforce its rights
under this Assignment shall not in any manner prevent its subsequent
enforcement, and Beneficiary is not obligated to collect anything hereunder, but
is accountable only for sums

                                       20
<PAGE>

collected. Nothing contained herein shall be construed as constituting the
Beneficiary a mortgagee in possession in the absence of the taking of actual
possession of the Property by the Beneficiary pursuant to Section (Beneficiary's
Right of Possession In Case of Default) hereof. In the exercise of the powers
herein granted to the Beneficiary, no liability shall be asserted or enforced
against the Beneficiary, all such liability being expressly waived and released
by Grantor.

     8.2  Covenants Regarding Leases.  Grantor agrees:
          --------------------------

          (a) Not to execute any Leases affecting the Property or any part
     thereof without the prior written consent of Beneficiary;

          (b) Not to collect any of the Rents for more than one (1) month in
     advance of the time when the same become due under the terms thereof;

          (c)  Not to discount any future accruing Rents;

          (d) Not to execute any other assignments of said Leases or any
     interest therein or any of the Rents and Revenues thereunder;

          (e) That notwithstanding any variation of the terms of the Deed of
     Trust or any extension of time for payment thereunder or any release of
     part or parts of the Property, the Leases and benefits hereby assigned,
     insofar as they relate to the unreleased Property, shall continue as
     additional security in accordance with the terms hereof;

          (f) To perform all of the Grantor's covenants and agreements under the
     Leases and not to suffer or permit to occur any release of liability of the
     lessees or purchasers.

     8.3  Representations Regarding Leases.  Grantor represents and warrants (a)
          --------------------------------
that, the Leases, if any, are in full force and effect; (b) that the Leases and
the Rents and Revenues thereunder have not been heretofore sold, assigned,
transferred, or set over by Grantor or by any person or persons whatsoever; (c)
that no material default exists on the part of the lessees thereunder, or the
Grantor as lessor; (d) that no Rents have been paid by any of the lessees for
more than one month in advance; (e) that the payment of none of the rents have
been or, will be waived, released, reduced, discounted or otherwise discharged
or compromised by the Grantor directly or indirectly by assuming any lessee's
obligations with respect to other premises; (f) Grantor has good right to sell,
assign, transfer, and set over the same and to grant to and confer upon
Beneficiary the rights, interests, powers, and authorities herein granted and
conferred.

     8.4  Further Assignments.  Grantor shall give Beneficiary at any time upon
          -------------------
demand any further or additional forms of assignment of transfer of such Rents
and Revenues, leases and security as may be reasonably requested by Beneficiary,
and shall deliver to Beneficiary executed copies of all such leases and
security.

     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

                                       21
<PAGE>

to Beneficiary, or the existence of a Default or Event of Default under any Loan
Document, or the application to be made by Beneficiary of any amounts to be paid
to Beneficiary. The sole signature of Beneficiary or a receiver shall be
sufficient for the exercise of any rights under Article 8 and the sole receipt
of Beneficiary or a receiver for any sums received shall be a full discharge and
release therefor to any such tenant or occupant of the Property; and Grantor
hereby releases each such tenant and occupant which makes payments to
Beneficiary under this Section 8.5 from any liability under the applicable Lease
or occupancy agreement. Checks for all or any part of the rentals collected
under Article VIII shall be drawn to the exclusive order of Beneficiary or such
receiver.

     8.6  Indemnification of Beneficiary.  Nothing herein contained shall be
          ------------------------------
deemed to obligate Beneficiary to perform or discharge any obligation, duty, or
liability of lessor under any Lease of the Property and Grantor 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 Beneficiary shall reimburse Beneficiary therefor on demand

     8.7  Beneficiary's Right of Possession in Case of Default.  In any case
          ----------------------------------------------------
in which under the provision of this Deed of Trust, the Beneficiary has a right
to institute foreclosure proceedings, whether before or after the whole
principal sum secured hereby is declared to be immediately due, or whether
before or after the institution of legal proceedings to foreclose the lien
hereof or before or after sale thereunder, promptly upon demand of Beneficiary,
Grantor shall surrender to Beneficiary and Beneficiary shall be entitled to take
actual possession of the Property or any part thereof personally, or by its
agents or attorneys, as for condition broken, and Beneficiary may, at the
direction of the Holders holding at least 50% in principal amount of the then
outstanding Notes in their sole discretion, with or without force and with or
without process of law, enter upon and take and maintain possession of all or
any part of the Property, together with all documents, books, records, papers
and accounts of the Grantor or then owners of the Property relating thereto, and
may exclude the Grantor, its agents or servants, wholly therefrom and may, as
attorney-in-fact or agent of the Grantor, or in its own name as Beneficiary and
under the powers herein granted, hold, operate, manage and control the Property
and conduct the business, if any, thereof, either personally or by its agents,
and with full power to use such measures, legal or equitable, as in its
discretion or in the discretion of its successors or assigns may be deemed
proper or necessary to enforce the payment or security of the rents, issues,
revenues and profits of the Property.

     8.8  Survival and Severability.  The provisions of this Article 8 shall
          -------------------------
survive the foreclosure of the lien of this Deed of Trust and the exercise of
the power of sale granted under this Deed of Trust until the expiration of all
periods of redemption following any such foreclosure or sale and thereafter with
respect to all Rents and Revenues arising prior to or attributable to the period
prior to the expiration of all such redemption periods.

                                       22
<PAGE>

                                   ARTICLE 9

                            MISCELLANEOUS PROVISIONS

     9.1  Time of the Essence.  Time is of the essence with respect to all
          -------------------
provisions of this Deed of Trust.

     9.2  Rights and Remedies Cumulative.  Beneficiary's rights and remedies
          ------------------------------
under each of the Loan Documents are cumulative of the rights 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.

     9.3  No Implied Waivers.  Beneficiary shall not be deemed to have
          ------------------
waived any provision of this Deed of Trust 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 Grantor, nor any failure by Beneficiary to exercise any remedy
following a default by Grantor shall be deemed a waiver of such default, and no
waiver by Beneficiary of any particular default on the part of Grantor shall be
deemed a waiver of any other default or of any similar default in the future.

      9.4  No Third Party Rights.  No person shall be a third party beneficiary
           ---------------------
of any provision of this Deed of Trust. All provisions of this Deed of Trust
favoring Beneficiary are intended solely for the benefit of Beneficiary as agent
for the Holders, and no third party shall be entitled to assume or expect that
Beneficiary will or will not waive or consent to modification of any such
provision in Beneficiary's sole discretion.

     9.5  Preservation of Liability and Priority.  Without affecting the
          --------------------------------------
liability of Grantor 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 Notes, 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 or the Collateral 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.

     9.6  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.

     9.7  Notices.  Any notice required or permitted to be given by Grantor or
          -------
Beneficiary under this Deed of Trust shall be duly given if in writing and
delivered in person, mailed by

                                       23
<PAGE>

registered or certified mail, postage prepaid, return receipt requested or
delivered by telecopier or overnight air courier guaranteeing next day delivery
to the other's address:

     If to the Grantor:       Ampex Data Systems Corporation
                              500 Broadway
                              Redwood City, CA  94063-3199
                              Attn: Joel D. Talcott
                                    Secretary and General Counsel
                              Fax:  (650) 367-2011
                              Tel:  (650) 367-3440

     With a copy to:          Paul Hastings Janofsky & Walker LLP
                              75 East 55th Street
                              New York, NY  10022-3205
                              Attn: David D. Griffin
                              Fax:  (212) 318-6791
                              Tel:  (212) 318-6673

     If to the Beneficiary:   DDJ Capital Management, LLC
                              141 Linden Street, Suite S-4
                              Wellesley, MA  02482
                              Attn: Wendy Schnipper Clayton
                              Fax:  (781) 283-8555
                              Tel:  (781) 283-8500

     With a copy to:          Palmer & Dodge LLP
                              One Beacon Street
                              Boston, MA  02108
                              Attn:  David L. Ruediger
                              Fax:  (617) 227-4420
                              Tel:  (617) 573-0266

     Any party by notice to the other parties may designate additional or
different addresses for subsequent notices or communications.

     All notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; the date receipt is
acknowledged, if mailed by registered or certified mail; when answered back, if
telecopied; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.

                                       24
<PAGE>

     9.8   Defeasance.  Upon payment and performance in full of all the Secured
           ----------
Obligations and all costs of releasing this Deed of Trust, Beneficiary will
execute and deliver to Grantor such documents as may be required to release this
Deed of Trust of record (including without limitation, the original Notes).

     9.9  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.

     9.10  Obligations Binding Upon Grantor's Successors.  This Deed of Trust is
           ---------------------------------------------
binding upon Grantor and Grantor's successors and assigns, including all
grantees and remote grantees of any interest of Grantor in the Property, 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 Grantor in this
Deed of Trust shall be joint and several obligations of Grantor and Grantor's
successors and assigns.

     9.11  Governing Law.  The laws of the State of Colorado shall govern the
           -------------
validity, construction, enforcement, and interpretation of this Deed of Trust.

     9.12  Severability and Survival.  This Deed of Trust shall survive
           -------------------------
foreclosure of the liens created hereby, to the extent necessary to fulfill its
purposes.

     9.13  Captions.  The captions and headings of various paragraphs of this
           --------
Deed of Trust are for convenience only and are not to be construed as defining
or limiting, in any way, the scope or intent of the provisions hereof.

     9.14  Tax Identification Number.  The Grantor's Federal Tax Identification
           -------------------------
Number is 94-3112575.

                                       25
<PAGE>

          Signed and delivered as of the date first mentioned above.

                   GRANTOR:  AMPEX DATA SYSTEMS CORPORATION

                             By:
                                ---------------------------
                             Name:
                             Title:

STATE OF                          )
         ------------------------
                                  ) SS.
COUNTY OF                         )
          ----------------------

     The foregoing instrument was acknowledged before me this       day of
                                                              ------
           , 2000, by                   as                     of Ampex Data
-----------           -----------------    --------------------
Systems Corporation, a Delaware corporation.

                         Witness my hand and official seal.

                         My commission expires:
                                               ------------------------------

                                           ----------------------------------
                                           Notary Public

(SEAL)

                                       26
<PAGE>

                                   Exhibit A
                                   ---------

                          Description of Real Property
                          ----------------------------

Lot 2 in Block 1 in Ampex Corporation Subdivision, in the City of Colorado
Springs, El Paso County, Colorado.

                                       27
<PAGE>

                                   Exhibit B
                                   ---------

                             Permitted Encumbrances
                             ----------------------

1.   Real Estate Taxes for the year 2000 and subsequent years which are not yet
     due and payable.

2.   Reservation in a Deed recorded with the office of the El Paso County
     Recorder in Book 447 at Page 386.

3.   Avigation Easement, given to the city of Colorado Springs, recorded August
     23, 1989 with the El Paso County Recorder in Book 5661 at Page 387.

4.   Right of way and/or Easement, given to THE CITY OF COLORADO SPRINGS, for
     public utility purposes, on the Westerly 10 feet of the Easterly 23 +/-
     feet of Lot 2 thereof, recorded September 25, 1964 with the El Paso County
     Recorder in Book 2036 at Page 447.

5.   Easements as shown on the recorded plat over the Northerly 10 feet of Lot 2
     thereof for public utility purposes.

6.   Easements as shown on the recorded plat over the Easterly 6 feet of Lot 2
     thereof for public utility purposes.

7.   Easements as shown on the recorded plat over the Westerly 7 feet of the
     Northerly 519.42 feet of Lot 2 thereof for public utility purposes.

8.   Easements as shown on the recorded plat over the Northerly 5 feet of the
     Westerly 530.33 feet of Lot 2 thereof for public utility purposes.

                                       28
<PAGE>

                               TABLE OF CONTENTS

                                                                      Page

ARTICLE 1............................................................   1

PARTIES, PROPERTY, AND DEFINITIONS...................................   1
   1.1  Grantor......................................................   1
   1.2  Beneficiary..................................................   1
   1.3  Trustee......................................................   1
   1.4  Notes........................................................   1
   1.5  Note Purchase Agreement......................................   1
   1.6  Real Property................................................   1
   1.7  Chattels.....................................................   3
   1.8  Intangible Personalty........................................   3
   1.9  Property.....................................................   3
   1.10 The Secured Obligations......................................   3

GRANTING CLAUSE.....................................................    4
  2.1  Grant to Trustee.............................................    4
  2.2  Security Interest to Beneficiary.............................    4

BORROWER'S TITLE AND AUTHORITY......................................    5
  3.1  Warranty of Title............................................    5
  3.2  Waiver of Homestead and Other Exemptions.....................    5
  3.3  Due Authorization............................................    6

BORROWER'S AFFIRMATIVE COVENANTS....................................    6
  4.1  Payment of Notes.............................................    6
  4.2  Performance of Other Obligations.............................    6
  4.3  Other Encumbrances...........................................    6
  4.4  Maintaining Priority of Deed of Trust........................    6
  4.5  Payment of Taxes.............................................    6
  4.6  Maintenance of Insurance.....................................    7
  4.7  Maintenance and Repair of Property and Collateral............    9
  4.8  Performance of Lease Obligations.............................    9
  4.9  Recertified Appraisal........................................   10
  4.10 Condemnation.................................................   10

                                      -i-
<PAGE>

                               TABLE OF CONTENTS
                                  (continued)
                                                                      Page

 4.11  Mechanics' Liens.............................................  10
 4.12  Defense of Actions...........................................  10
 4.13  Inventories; Assembly of Chattels............................  10
 4.14  Further Assurances; Estoppel Certificates....................  10
 4.15  Financial Statements and Inspection of Records...............  10
 4.16  Security Deposits............................................  11
 4.17  Environmental Representations and Warranties; Covenants......  11
 4.18  Indemnity....................................................  13

BORROWER'S NEGATIVE COVENANTS......................................   14
 5.1  Waste........................................................   14
 5.2  Zoning and Private Covenants.................................   14
 5.3  Disposition of Mortgaged Property, Leases, or
        Beneficial Interest in Grantor.............................   14
 5.4  Further Encumbrance of Property..............................   15
 5.5  Transfer or Removal of Chattels..............................   15
 5.6  Further Encumbrance of Collateral............................   15
 5.7  Improper Use of Property or Collateral.......................   15

EVENTS OF DEFAULT..................................................   15
 6.1  Events of Default............................................   15

REMEDIES...........................................................   16
 7.1  Performance of Defaulted Obligations.........................   16
 7.2  Specific Performance and Injunctive Relief...................   16
 7.3  Acceleration of Secured Obligations..........................   17
 7.4  Possession of Property.......................................   17
 7.5  Enforcement of Security Interests............................   17
 7.6  Foreclosure Against Property.................................   17
 7.7  Appointment of Receiver......................................   18
 7.8  Right to Make Repairs, Improvements..........................   18
 7.9  Further Assurances...........................................   20

ASSIGNMENT OF RENTS AND REVENUES...................................   20

                                     -ii-
<PAGE>

                               TABLE OF CONTENTS
                                  (continued)
                                                                      Page

 8.1  Assignment of Rents and Revenues.............................   20
 8.2  Covenants Regarding Leases...................................   21
 8.3  Representations Regarding Leases.............................   21
 8.4  Further Assignments..........................................   21
 8.5  Authority of Beneficiary.....................................   21
 8.6  Indemnification of Beneficiary...............................   22
 8.7  Beneficiary's Right of Possession in Case of Default.........   22
 8.8  Survival and Severability....................................   22

MISCELLANEOUS PROVISIONS...........................................   22
 9.1  Time of the Essence..........................................   23
 9.2  Rights and Remedies Cumulative...............................   23
 9.3  No Implied Waivers...........................................   23
 9.4  No Third Party Rights........................................   23
 9.5  Preservation of Liability and Priority.......................   23
 9.6  Subrogation of Beneficiary...................................   23
 9.7  Notices......................................................   23
 9.8  Defeasance...................................................   25
 9.9  Illegality...................................................   25
 9.10 Obligations Binding Upon Grantor's Successors................   25
 9.11 Governing Law................................................   25
 9.12 Severability and Survival....................................   25
 9.13 Captions.....................................................   25
 9.14 Tax Identification Number....................................   25

                                     -iii-

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