Document:

Exhibit
10.11

	
  When recorded, return to:

  	
  Record
  in Real Property Records

  
	
   

  	
  in
  Eagle County, Colorado

  
	
  Powell Coleman & Arnold
  LLP

  	
   

  
	
  8080 North Central
  Expressway, Suite 1380

  	
   

  
	
  Dallas, Texas 75206

  	
   

  
	
  Attn: Carol D. Satterfield

  	
   

  

 

DEED OF TRUST

This DEED OF TRUST
(herein referred to as the “Deed of Trust”), entered into as of the 6th day of June
2007, by BEHRINGER HARVARD CORDILLERA, LLC, a Delaware limited liability
company, as Grantor, whose mailing address for notice hereunder is at 15601
Dallas Parkway, Suite 600, Addison, Texas 75001, Attn: Asset Manager, to the
Public Trustee of Eagle County, Colorado, as Trustee, for the benefit of the
hereinafter described Beneficiary.

WITNESSETH:

ARTICLE
I

DEFINITION

1.1.          Definitions.  As used herein,
the following terms shall have the following meanings:

Beneficiary:
Behringer Harvard Opportunity OP I, LP, a Texas limited partnership whose
address for notice hereunder is 15601 Dallas Parkway, Suite 600, Addison, Texas
75001, Attn: General Counsel, and the subsequent holder or holders, from time
to time, of the Note.

Code:
The Uniform Commercial Code, as amended from time to time, in effect in the
state in which the Mortgaged Property is located.

Constituent Party:
Any signatory to this Deed of Trust that signs on Grantor’s behalf that is a
corporation, general partner, general partnership, limited partnership, joint
venture, trust, or other type of business organization.

Contracts:
All of the right, title, and interest of Grantor, including equitable rights,
in, to, and under any and all (i) contracts for the purchase and/or sale of all
or any portion of the Mortgaged Property, whether such Contracts are now or at
any time hereafter existing, including but without limitation, any and all
earnest money or other deposits escrowed or to be escrowed or letters of credit
provided or to be provided by the purchasers under the Contracts, including all
amendments and supplements to and renewals and extensions of the Contracts at
any time made, and together with all payments, earnings, income, and profits
arising from sale of all or any portion of the Mortgaged Property or from the
Contracts and all other sums due or to become due under and pursuant thereto
and together with any and all earnest money, security, letters of credit or
other deposits under any of the Contracts; (ii) contracts, licenses, permits,
and rights relating to living unit equivalents or other entitlements for water,
wastewater, and other utility services whether executed, granted, or issued by
a private person or entity or a governmental or quasi-governmental agency,
which are directly or indirectly related to, or connected with, the development
of the Mortgaged Property, whether such contracts, licenses, and permits are
now or at any time thereafter existing, including without limitation, any and
all rights of living unit

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equivalents or other
entitlements with respect to water, wastewater, and other utility services,
certificates, licenses, zoning variances, permits, and no-action letters from
each governmental authority required: (i) to evidence compliance by Grantor and
all improvements constructed or to be constructed on the Mortgaged Property
with all legal requirements applicable to the Mortgaged Property, and (ii) to
develop and/or operate the Mortgaged Property as a commercial and/or
residential project; (iii) any and all right, title, and interest Grantor may
have in any financing arrangements relating to the financing of or the purchase
of all or any portion of the Mortgaged Property by future purchasers; and (iv)
all other contracts which in any way relate to the use, enjoyment, occupancy,
operation, maintenance, or ownership of the Mortgaged Property (save and except
any and all leases, subleases or other agreements pursuant to which Grantor is
granted a possessory interest in the Land), including but not limited to
maintenance agreements and service contracts.

Debtor Relief Laws:
Title 11 of the United States Code, as now or hereafter in effect, or any other
applicable law, domestic or foreign, as now or hereafter in effect, relating to
bankruptcy, insolvency, liquidation, receivership, reorganization, arrangement
or composition, extension or adjustment of debts, or similar laws affecting the
rights of creditors.

Default Rate:
The rate of interest specified in the Note to be paid by the maker of the Note
from and after the occurrence of a default in payment under the provisions of
the Note and Loan Documents but not in excess of the Maximum Lawful Rate.

Disposition:
Any sale, lease, exchange, assignment, conveyance, transfer, trade, or other
disposition of all or any portion of the Mortgaged Property (or any interest
therein) or all or any part of the beneficial ownership interest in Grantor (if
Grantor is a corporation, partnership, general partnership, limited
partnership, joint venture, trust, or other type of business association or
legal entity); provided, however, that the members of Grantor may transfer
their interest in Grantor to an affiliate and Cordillera Partners, LLC may transfer
the ownership interests in Cordillera Partners, LLC so long as Jeff Nelsen
remains an investor and a managing member in Cordillera Partners, LLC and
retains the ability to direct and is actively involved in the day-to-day
management of the business affairs of Cordillera Partners, LLC and such
ownership interests are not transferred to any person or entity that would
adversely impact the REIT status of any other member or the reputation of the
company.

Event of Default:
Any happening or occurrence described in Article VI hereof.

Environmental Law:
Any federal, state, or local law, statute,
ordinance, or regulation, whether now or hereafter in effect, pertaining to
health, industrial hygiene, or the environmental conditions on, under, or about
the Land, including the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (“CERCLA”), 42 U.S.C. §9601 et seq.;
Resource, Conservation and Recovery Act (“RCRA”), 42 U.S.C. §6901 et
seq. as amended by the Superfund Amendments and Reauthorization Act of 1986
(“SARA”), Pub. L. 99-499, 100 Stat. 1613; the Toxic Substances
Control Act, 15 U.S.C. §2601 et seq.; Emergency Planning and Community
Right to Know Act of 1986, 42 U.S.C. §1101 et seq.; Clean Water Act (“CWA”),
33 U.S.C. §1251 et seq.; Clean Air Act (“CAA”), 42 U.S.C. §7401 et
seq.; Federal Water Pollution Control Act (“FWPCA”), 33 U.S.C. §1251
et seq.; and any corresponding state laws or ordinances; and
regulations, rules, guidelines, or standards promulgated pursuant to such laws,
statutes and regulations.

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Fixtures:
All materials, supplies, equipment, systems, apparatus, and other items now
owned or hereafter acquired by Grantor and now or hereafter attached to,
installed in, or used in connection with (temporarily or permanently) any of
the Improvements or the Land, which are now owned or hereafter acquired by
Grantor and are now or hereafter attached to the Land or the Improvements, and
including but not limited to, any and all partitions, dynamos, window screens
and shades, draperies, rugs and other floor coverings, awnings, motors,
engines, boilers, furnaces, pipes, cleaning, call and sprinkler systems, fire
extinguishing apparatus and equipment, water tanks, swimming pools, heating,
ventilating, refrigeration, plumbing, laundry, lighting, generating, cleaning,
waste disposal, transportation (of people or things, including but not limited
to, stairways, elevators, escalators, and conveyors), incinerating, air
conditioning and air cooling equipment and systems, gas and electric machinery,
appurtenances and equipment, disposals, dishwashers, refrigerators and ranges,
recreational equipment and facilities of all kinds, and water, gas, electrical,
storm and sanitary sewer facilities, and all other utilities whether or not
situated in easements, together with all accessions, appurtenances,
replacements, betterments, and substitutions for any of the foregoing and the
proceeds thereof.

Governmental Authority:
Any and all applicable courts, boards, agencies, commissions, offices, or
authorities of any nature whatsoever for any governmental unit (federal, state,
county, district, municipal, city or otherwise), whether now or hereafter in
existence.

Grantor:
The individual or entity described as Grantor in the initial paragraph of this
Deed of Trust and any and all subsequent owners of the Mortgaged Property or
any part thereof (without hereby implying Beneficiary’s consent to any
Disposition of the Mortgaged Property).

Hazardous Substance:
Hazardous Substance is any substance, product, waste, or other material which
is or becomes listed, regulated, or addressed as being a toxic, hazardous,
polluting, or similarly harmful substance under any Environmental Law,
including without limitation: (i) any substance included within the definition
of “hazardous waste” pursuant to Section 1004 of RCRA; (ii) any substance
included within the definition of “hazardous substance” pursuant to Section 101
of CERCLA; (iii) any substance included within (1) the definition of “regulated
substance” pursuant to Section 26.342(9) of TWC or (2) the definition of “hazardous
substance” pursuant to Section 361.003(13) of THSC; (iv) asbestos; (v)
polychlorinated biphenyls; (vi) petroleum products; and (vii) underground
storage tanks, whether empty, filled or partially filled with any substance.

Impositions:
(i) All real estate and personal property taxes, charges, assessments, standby
fees, excises, and levies and any interest, costs, or penalties with respect
thereto, general and special, ordinary and extraordinary, foreseen and
unforeseen, of any kind and nature whatsoever which at any time prior to or
after the execution hereof may be assessed, levied, or imposed upon the
Mortgaged Property or the ownership, use, occupancy, or enjoyment thereof, or
any portion thereof, or the sidewalks, streets, or alleyways adjacent thereto;
(ii) any charges, fees, license payments, or other sums payable for or under
any easement, license, or agreement maintained for the benefit of the Mortgaged
Property; (iii) water, gas, sewer, electricity, and other utility charges and
fees relating to the Mortgaged Property; and (iv) assessments and charges
arising under any subdivision, condominium, planned unit development, or other
declarations, restrictions, regimes, or agreements affecting the Mortgaged
Property.

Improvements:
Any and all buildings, covered garages, air conditioning towers, open parking
areas, structures and other improvements, and any and all additions,
alterations, betterments or

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appurtenances thereto,
now or at any time hereafter situated, placed, or constructed upon the Land or
any part thereof.

Indebtedness:
(i) The principal of, interest on, or other sums evidenced by the Note or the
Loan Documents; (ii) any other amounts, payments, or premiums payable under the
Loan Documents; (iii) such additional sums, with interest thereon, as may
hereafter be borrowed from Beneficiary, its successors or assigns, by Grantor,
when evidenced by a promissory note which, by its terms, is secured hereby; and
(iv) any and all other indebtedness, obligations, and liabilities of any kind
or character of the Grantor to Beneficiary as set forth in the Loan Documents,
now or hereafter existing, absolute or contingent, due or not due, arising by
operation of law or otherwise, or direct or indirect, primary or secondary,
joint, several, joint and several, fixed or contingent, secured or unsecured by
additional or different security or securities.

Land:
The real property or interest therein described in Exhibit A attached
hereto and incorporated herein by this reference, together with all right,
title, interest, and privileges of Grantor in and to (i) all streets, ways,
roads, alleys, easements, rights-of-way, licenses, rights of ingress and
egress, vehicle parking rights and public places, existing or proposed,
abutting, adjacent, used in connection with or pertaining to such real property
or the improvements thereon; (ii) any strips or gores of real property between
such real property and abutting or adjacent properties; (iii) all water and
Water Rights, timber, crops, pertaining to such real property; and (iv) all
appurtenances and all reversions and remainders in or to such real property.

Leases:
Any and all leases, master leases, subleases, licenses, concessions, or other
agreements (written or oral, now or hereafter in effect) which grant to third
parties a possessory interest in and to, or the right to use, all or any part
of the Mortgaged Property, together with all security and other deposits or
payments made in connection therewith.

Legal Requirements:
(i) Any and all present and future judicial decisions, statutes (including
Architectural Barrier Laws and Environmental Laws, rulings, rules, regulations,
permits, certificates, or ordinances of any Governmental Authority in any way
applicable to Grantor or the Mortgaged Property, including, without limiting
the generality of the foregoing, the ownership, use, occupancy, possession,
operation, maintenance, alteration, repair, or reconstruction thereof, (ii) any
and all covenants, conditions, and restrictions contained in any deeds, other
forms of conveyance, or in any other instruments of any nature that relate in
any way or are applicable to the Mortgaged Property or the ownership, use, or
occupancy thereof, (iii) Grantor’s presently or subsequently effective bylaws
and articles of incorporation or partnership, limited partnership, joint
venture, trust, or other form of business association agreement, (iv) any and
all Leases, (v) any and all Contracts, and (vi) any and all leases, other than
those described in (iv) above, and other contracts (written or oral) of any
nature that relate in any way to the Mortgaged Property and to which Grantor
may be bound, including, without limiting the generality of the foregoing, any
lease or other contract pursuant to which Grantor is granted a possessory
interest in and to the Land and/or the Improvements.

Loan Documents:
The Note, this Deed of Trust, the Security Agreement and any and all other
documents now or hereafter executed by the Grantor or any other person or party
in connection with the loan evidenced by the Note or in connection with the
payment of the Indebtedness of the performance and discharge of the
Obligations.

Material Adverse Effect:
Any material and adverse effect on (i) the business condition (financial or
otherwise), operations, prospects, results of operations, capitalization,
liquidity or any

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properties of the
Grantor, taken as a whole, (ii) the value of the Mortgaged Property, (iii) the
ability of Grantor (or if the Grantor is a partnership, joint venture, trust or
other type of business association, of any of the parties comprising Grantor or
of the ground lessor if the estate held by Grantor in the Land is a leasehold
estate) to pay and perform the Indebtedness and the Obligations, respectively,
or (iv) the validity, enforceability or binding effect of any of the Loan
Documents.

Maximum Lawful Rate:
The maximum lawful rate of interest which may be contracted for, charged,
taken, received or reserved by Beneficiary in accordance with the applicable laws
of the State of Colorado (or applicable United States federal law to the extent
that it permits Beneficiary to contract for, charge, take, receive or reserve a
greater amount of interest than under Colorado law), taking into account all
Charges (as herein defined) made in connection with the transaction evidenced
by the Note and the other Loan Documents. 
To the extent United States federal law permits Beneficiary to contract
for, charge, take, receive or reserve a greater amount of interest than under Colorado
law, Beneficiary will rely on United States federal law instead of such
Colorado law for the purpose of determining the Maximum Lawful Rate.  Additionally, to the extent permitted by
applicable law now or hereafter in effect, Beneficiary may, at its option and
from time to time, utilize any other method of establishing the Maximum Lawful
Rate under other applicable law by giving notice, if required, to Grantor as
provided by applicable law.

Minerals:
All substances in, on, or under the Land which are now, or may become in the
future, intrinsically valuable, that is, valuable in themselves, and which now
or may be in the future enjoyed through extraction or removal from the
Mortgaged Property, including without limitation, oil, gas, and all other hydrocarbons,
coal, lignite, carbon dioxide and all other nonhydrocarbon gases, uranium and
all other radioactive substances, and gold, silver, copper, iron and all other
metallic substances or ores.

Mortgaged Property:
The Land, Minerals, Fixtures, Improvements, Personalty, Contracts, Leases and
Rents, and any interest of Grantor now owned or hereinafter acquired in and to
the Land, Minerals, Fixtures, Personalty, Leases and Rents, together with any
and all other security and collateral of any nature whatsoever, now or
hereafter given for the repayment of the Indebtedness or the performance and
discharge of the Obligations.  As used in
this Deed of Trust, the term “Mortgaged Property” shall be expressly defined as
meaning all or, where the context permits or requires, any portion of the above
and all or, where the context permits or requires, any interest therein.

Permitted Hazardous
Substance: Permitted Hazardous Substance means (i) office and
janitorial supplies in usual and customary quantities; (ii) oil, gasoline,
battery acids and other automotive fluids found in Grantor’s maintenance
vehicles or the vehicles of Grantor’s employees, invitees or other third
parties; (iii) coolants or other Hazardous Substances contained in appliances
or HVAC systems; (iv) tobacco smoke; and (iv) prescription and non-prescription
drugs, perfumes, cosmetics and other toiletries, and food and beverages, which
may contain one or more Hazardous Substances.

Note:
That certain Promissory Note of even date herewith, incorporated herein by this
reference, executed by Grantor and payable to the order of Beneficiary in the
principal amount of Twenty-Six Million Two Hundred Fifty Thousand Dollars
($26,250,000), bearing interest as therein specified, containing an attorneys’
fee clause, interest and principal being payable as therein specified, and
secured by, among other things, this Deed of Trust; the Security Agreement and

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any and all renewals,
modifications, rearrangements, reinstatements, enlargements, or extensions of
such promissory note or of any promissory note or notes given in renewal,
substitution or replacement therefor.

Obligations:
Any and all of the covenants, conditions, warranties, representations, and
other obligations (other than to repay the Indebtedness) made or undertaken by
Grantor or any other person or party to the Loan Documents to Beneficiary,
Trustee, or others as set forth in the Loan Documents, the Leases, and in any
deed, lease, sublease, or other form of conveyance, or any other agreement
pursuant to which Grantor is granted a possessory interest in the Land.

Permitted Exceptions:
The liens, easements, restrictions, security interests, and other matters (if
any) as reflected on Exhibit B attached hereto and incorporated
herein by reference and the liens and security interests created by the Loan
Documents.

Personalty:
All of the right, title, and interest of Grantor in and to (i) furniture,
furnishings, equipment, machinery, goods (including, but not limited to, crops,
farm products, timber and timber to be cut, and extracted Minerals); (ii)
general intangibles, money, insurance proceeds, accounts, contract and
subcontract rights, trademarks, trade names, inventory; (iii) all refundable,
returnable, or reimbursable fees, deposits or other funds or evidences of credit
or indebtedness deposited by or on behalf of Grantor with any governmental
agencies, boards, corporations, providers of utility services, public or
private, including specifically, but without limitation, all refundable,
returnable, or reimbursable tap fees, utility deposits, commitment fees and
development costs, any awards, remunerations, reimbursements, settlements, or
compensation heretofore made or hereafter to be made by any Governmental
Authority pertaining to the Land, Improvements, Fixtures, Contracts, or
Personalty, including but not limited to those for any vacation of, or change
of grade in, any streets affecting the Land or the Improvements and those for
municipal utility district or other utility costs incurred or deposits made in
connection with the Land; and (iv) all other personal property of any kind or
character, including but not limited to all customary hotel and spa equipment,
as defined in and subject to the provisions of the Code (Article 9 - Secured
Transactions); any and all of which are now owned or hereafter acquired by
Grantor, and which are now or hereafter situated in, on, or about the Land or
the Improvements, or used in or necessary to the complete and proper planning,
development, construction, financing, use, occupancy, or operation thereof, or
acquired (whether delivered to the Land or stored elsewhere) for use in or on
the Land or the Improvements, together with all accessions, replacements, and
substitutions thereto or therefor and the proceeds thereof.

Release:
“Release”, “removal”, “environment” and “disposal” shall have the meanings
given such terms in CERCLA, and the term “disposal” shall also have the meaning
given it in RCRA; provided that in the event either CERCLA or RCRA is amended
so as to broaden the meaning of any term defined thereby, such broader meaning
shall apply subsequent to the effective date of such amendment, and provided
further that to the extent the laws of the State of Colorado establish a
meaning for “release”, “removal”, “environment” or “disposal”, which is broader
than that specified in either CERCLA and RCRA, such broader meaning shall
apply.

Remedial Work:
Any investigation, site monitoring, containment, cleanup, removal, restoration,
or other work of any kind or nature reasonably necessary or desirable under any
applicable Environmental Law in connection with the current or future presence,
suspected presence, release, or suspected release of a Hazardous Substance in
or into the air, soil, ground water, surface water, or soil vapor at, on, about,
under, or within the Mortgaged Property, or any part thereof.

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Rents:
All of the rents, revenues, income, proceeds, profits, security and other types
of deposits (after Grantor acquires title thereto), and other benefits paid or
payable by parties to the Contracts and/or Leases, other than Grantor for
using, leasing, licensing, possessing, operating from, residing in, selling, or
otherwise enjoying all or any portion of the Mortgaged Property, including but
not limited to revenues and credit card receipts for guest rooms, restaurants,
room service, bars, meeting rooms, banquet rooms and recreational facilities.

Security Agreement:
That certain Security Agreement of even date herewith, incorporated herein by
this reference, executed by Grantor in favor of Beneficiary.

Subordinate Mortgage:
Any mortgage, deed of trust, pledge, lien (statutory, constitutional, or
contractual), security interest, encumbrance or charge, or conditional sale or
other title retention agreement, covering all or any portion of the Mortgaged
Property executed and delivered by Grantor, the lien of which is subordinate
and inferior to the lien of this Deed of Trust.

Trustee:
The individual described as Trustee in the initial paragraph of this Deed of
Trust.

Water Rights:
All water and water rights (whether decreed or undecreed, tributary,
nontributary or not nontributary, surface or underground, or appropriated or
unappropriated); ditches and ditch rights; spring and spring rights; reservoir
and reservoir rights; and shares of stock in water, ditch and canal companies
and all other evidence of such rights, which are now owned or hereafter
acquired by Grantor and which are appurtenant to or which have been used in
connection with the Land.

1.2.          Additional Definitions.  As used
herein, the following terms shall have the following meanings:

(a)           “Hereof”, “hereby”, “hereto”, “hereunder”, “herewith”,
and similar terms mean of, by, to, under and with respect to, this Deed of
Trust or to the other documents or matters being referenced.

(b)           “Heretofore” means before, “hereafter” means after,
and “herewith” means concurrently with, the date of this Deed of Trust.

(c)           All pronouns, whether in masculine, feminine or neuter
form, shall be deemed to refer to the object of such pronoun whether same is
masculine, feminine or neuter in gender, as the context may suggest or require.

(d)           All terms used herein, whether or not defined in
Section 1.1 hereof, and whether used in singular or plural form, shall be
deemed to refer to the object of such term whether such is singular or plural
in nature, as the context may suggest or require.

ARTICLE
II

GRANT

2.1.          Grant.  To
secure the full and timely payment of the Indebtedness and the full and timely
performance and discharge of the Obligations, Grantor has GRANTED, BARGAINED,
SOLD and CONVEYED, and by these presents does GRANT, BARGAIN, SELL and CONVEY,
the Mortgaged Property unto Trustee, in trust, for the use and benefit of
Beneficiary, with power of sale, subject, however, to the Permitted Exceptions,
TO HAVE AND TO HOLD the Mortgaged Property unto Trustee,

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forever, and
Grantor does hereby bind itself, its successors, and assigns to WARRANT AND
FOREVER DEFEND the title to the Mortgaged Property unto Trustee against every
person whomsoever lawfully claiming or to claim the same or any part thereof;
provided, however, that if Grantor shall pay (or cause to be paid) the
Indebtedness as and when the same shall become due and payable and shall fully
perform and discharge (or cause to be fully performed and discharged) the
Obligations on or before the date same are to be performed and discharged, then
the liens, security interests, estates, and rights granted by the Loan
Documents shall terminate, in accordance with the provisions hereof, otherwise
same shall remain in full force and effect. 
A certificate or other written statement executed on behalf of Trustee
or Beneficiary confirming that the Indebtedness has not been fully paid or the
Obligations have not been fully performed or discharged shall be sufficient evidence
thereof for the purpose of reliance by third parties on such fact.

ARTICLE
III

WARRANTIES AND REPRESENTATIONS

Grantor hereby
unconditionally warrants and represents to Beneficiary, as of the date hereof
and at all times during the term of this Deed of Trust, as follows:

3.1.          Organization and Power.  If Grantor or
any Constituent Party is a corporation, general partnership, limited
partnership, joint venture, trust, or other type of business association, as
the case may be, Grantor and any Constituent Party, if any, (i) is either a
corporation duly incorporated with a legal status separate from its affiliates,
or a partnership or trust, joint venture or other type of business association
duly organized, validly existing, and in good standing under the laws of the
state of its formation or existence, and has complied with all conditions
prerequisite to its doing business in the state in which the Mortgaged Property
is located, and (ii) has all requisite power and all governmental certificates
of authority, licenses, permits, qualifications, and documentation to own,
lease, and operate its properties and to carry on its business as now being,
and as proposed to be, conducted.

3.2.          Validity of Loan Documents. 
The execution, delivery, and performance by Grantor of the Loan
Documents, (i) if Grantor, or any signatory who signs on its behalf, is a
corporation, general partnership, limited partnership, joint venture, trust, or
other type of business association, as the case may be, are within Grantor’s
and each Constituent Party’s powers and have been duly authorized by Grantor’s
and each Constituent Party’s board of directors, shareholders, partners,
venturers, trustees, or other necessary parties, and all other requisite action
for such authorization has been taken, (ii) have received any and all requisite
prior governmental approvals in order to be legally binding and enforceable in
accordance with the terms thereof, and (iii) will not violate, be in conflict
with, result in a breach of, or constitute (with due notice or lapse of time,
or both) a default under or violation of any Legal Requirement or result in the
creation or imposition of any lien, charge, or encumbrance of any nature
whatsoever upon any of Grantor’s and any Constituent Party’s property or assets,
except as contemplated by the provisions of the Loan Documents.  The Loan Documents constitute the legal,
valid, and binding obligations of Grantor and others obligated under the terms
of the Loan Documents, enforceable in accordance with their respective terms.

3.3.          Information.  All
information, financial statements, reports, papers, and data given or to be
given to Beneficiary with respect to Grantor, each Constituent Party, others
obligated under the terms of the Loan Documents, or the Mortgaged Property are,
or at the time of delivery will be, accurate, complete, and correct in all
material respects and do not, or will not, omit any fact, the inclusion of
which is necessary to prevent the facts contained therein from being materially
misleading.  Since the date of the
financial statements of Grantor, any Constituent Party, or other party liable
for payment of the

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Indebtedness or
performance of the Obligations or any part thereof heretofore furnished to
Beneficiary, no Material Adverse Effect has occurred, and except as heretofore
disclosed in writing to Beneficiary, Grantor, each Constituent Party, or any
other such party has not incurred any material liability, direct or indirect,
fixed or contingent.

3.4.          Title and Lien.  Grantor has
good and indefeasible title to the Land (in fee simple, if the lien created
hereunder be on the fee, or a first and prior leasehold estate, if it be
created on the leasehold estate) and Improvements, and good and marketable
title to the Fixtures and Personalty, free and clear of any liens, charges,
encumbrances, security interests, claims, easements, restrictions, options,
leases (other than the Leases), covenants, and other rights, titles, interests,
or estates of any nature whatsoever, except the Permitted Exceptions.  This Deed of Trust constitutes a valid,
subsisting first priority lien on the Land, the Improvements, and the Fixtures;
a valid, subsisting first priority security interest in and to the Personalty,
Contracts, and to the extent that the terms Leases and Rents include items
covered by the Code, in and to the Leases and Rents; and a valid, subsisting
first priority assignment of the Leases and Rents not covered by the Code, all
in accordance with the terms hereof.

3.5.          Business Purposes.  The loan
evidenced by the Note is solely for the purpose of carrying on or acquiring a
business of Grantor, and is not for personal, family, household, or
agricultural purposes.

3.6.          Taxes.  Grantor and
each Constituent Party have filed all federal, state, county, municipal, and
city income and other tax returns required to have been filed by them and have
paid all taxes and related liabilities which have become due pursuant to such
returns or pursuant to any assessments received by them.  Neither Grantor nor any Constituent Party
knows of any basis for any additional assessment in respect of any such taxes
and related liabilities.

3.7.          Mailing Address.  Grantor’s
mailing address, as set forth in the opening paragraph hereof or as changed
pursuant to the provisions hereof, is true and correct.

3.8.          No Reliance by Beneficiary. 
Grantor is experienced in the ownership and operation of properties
similar to the Mortgaged Property, and Grantor and Beneficiary have and are
relying solely upon Grantor’s expertise and business plan in connection with
the ownership and operation of the Mortgaged Property.  Grantor is not relying on Beneficiary’s
expertise or business acumen in connection with the Mortgaged Property.

3.9.          Environmental and Hazardous Substances. 
The following representations and warranties of Grantor are made without
regard to whether Beneficiary has, or hereafter obtains, any knowledge or
report of the environmental conditions of the Mortgaged Property.  To the best knowledge, information and belief
of Grantor:

(a)           The Mortgaged Property and the operations conducted
thereon do not violate any applicable law, statute, ordinance, rule,
regulation, order, or determination of any Governmental Authority or any
restrictive covenant or deed restriction (recorded or otherwise), including
without limitation all applicable zoning ordinances and building codes, flood
disaster laws and Environmental Laws.

(b)           Without limitation of Subsection 3.10(a)
immediately preceding, the Mortgaged Property and operations conducted thereon
by the current owner or operator of such Mortgaged Property, are not in
violation of or subject to any existing, pending, or threatened action, suit,
investigation, inquiry, or proceeding by any governmental or nongovernmental
entity or person or to any remedial obligations under any Environmental Law.

 9
 

(c)           All notices, permits, licenses, or similar
authorizations, if any, required to be obtained or filed in connection with the
ownership, operation, or use of the Mortgaged Property, including, without
limitation, the past or present generation, treatment, storage, disposal, or
release of a Hazardous Substance (as hereinafter defined) into the environment,
have been duly obtained or filed.

(d)           The Mortgaged Property does not contain any Hazardous
Substance in violation of any Environmental Laws.

(e)           Grantor has taken all steps necessary to determine and
has determined that no Hazardous Substances have been generated, treated,
placed, held, located, or otherwise released on, under, from, or about the
Mortgaged Property.

(f)            Grantor has not undertaken, permitted, authorized, or
suffered and will not undertake, permit, authorize, or suffer the presence,
use, manufacture, handling, generation, transportation, storage, treatment,
discharge, release, burial, or disposal on, under, from or about the Mortgaged
Property of any Hazardous Substance or the transportation to or from the
Mortgaged Property of any Hazardous Substance other than Permitted Hazardous
Substances.

(g)           There is no pending or, to Grantor’s actual knowledge,
threatened litigation, proceedings, or investigations before or by any
administrative agency in which any person or entity alleges or is investigating
any alleged presence, release, threat of release, placement on, under, from or
about the Mortgaged Property, or the manufacture, handling, generation,
transportation, storage, treatment, discharge, burial, or disposal on, under,
from or about the Mortgaged Property, or the transportation to or from the
Mortgaged Property, of any Hazardous Substance.

(h)           Grantor has not received any notice, and has no actual
or constructive knowledge, that any Governmental Authority or any employee or
agent thereof has determined, or threatens to determine, or is investigating
any allegation that there is a presence, release, threat of release, placement
on, under, from or about the Mortgaged Property, or the use, manufacture,
handling, generation, transportation, storage, treatment, discharge, burial, or
disposal on, under, from or about the Mortgaged Property, or the transportation
to or from the Mortgaged Property, of any Hazardous Substance.

(i)            To Grantor’s knowledge, there have been no
communications or agreements with any Governmental Authority thereof or any
private entity, including, but not limited to, any prior owners or operators of
the Mortgaged Property, relating in any way to the presence, release, threat of
release, placement on, under or about the Mortgaged Property, or the use,
manufacture, handling, generation, transportation, storage, treatment,
discharge, burial, or disposal on, under or about the Mortgaged Property, or
the transportation to or from the Mortgaged Property, of any Hazardous
Substance.

(j)            Neither Grantor nor, to the actual knowledge of
Grantor without inquiry, any other person, including, but not limited, to any
predecessor owner, tenant, licensee, occupant, user, or operator of all or any
portion of the Mortgaged Property, has ever caused, permitted, authorized or
suffered, and Grantor will not cause, permit, authorize, or suffer, any Hazardous
Substance to be placed, held, located, or disposed of, on, under or about any
other real property, all or any portion of which is legally or beneficially
owned (or any interest or estate therein which is owned) by Grantor in any
jurisdiction now or hereafter having in effect a so-called “superlien”
law or ordinance or any part thereof, the effect of which law or ordinance
would be

 10
 

to create a lien on the Mortgaged Property to secure
any obligation in connection with the “superlien” law of such other jurisdiction.

(k)           Grantor has been issued all required federal, state,
and local licenses, certificates, or permits relating to, and Grantor and its
facilities, business assets, property, leaseholds, and equipment are in
compliance in all respects with all applicable federal, state, and local laws,
rules, and regulations relating to, air emissions, water discharge, noise
emissions, solid or liquid waste disposal, hazardous waste or materials, or
other environmental, health, or safety matters.

3.10.        No Litigation.  Except as
disclosed in writing to Beneficiary, there are no (i) actions, suits, or
proceedings, at law or in equity, before any Governmental Authority or
arbitrator pending or threatened against or affecting Grantor or any
Constituent Party or involving the Mortgaged Property; (ii) outstanding or
unpaid judgments against the Grantor, any Constituent Party or the Mortgaged
Property; or (iii) defaults by Grantor with respect to any order, writ,
injunction, decree, or demand of any Governmental Authority or arbitrator.

ARTICLE
IV

AFFIRMATIVE COVENANTS

Grantor hereby
unconditionally covenants and agrees with Beneficiary, until the entire
Indebtedness shall have been paid in full and all of the Obligations shall have
been fully performed and discharged, as follows:

4.1.          Payment and Performance.  Grantor will
pay the Indebtedness as and when specified in the Loan Documents, and will
perform and discharge all of the Obligations, in full and on or before the
dates same are to be performed.

4.2.          Existence.  Grantor will
and will cause each Constituent Party to preserve and keep in full force and
effect its existence (separate and apart from its affiliates), rights,
franchises, and trade names.

4.3.          Compliance with Legal Requirements. 
Grantor will promptly and faithfully comply with, conform to, and obey
all Legal Requirements, whether the same shall necessitate structural changes
in, improvements to, or interfere with the use or enjoyment of, the Mortgaged
Property.

4.4.          First Lien Status.  Grantor will
protect the first lien and security interest status of this Deed of Trust and
the other Loan Documents and will not permit to be created or to exist in
respect of the Mortgaged Property or any part thereof any lien or security
interest on a parity with, superior to, or inferior to any of the liens or
security interests hereof, except for the Permitted Exceptions.

4.5.          Payment of Impositions.  Grantor will
duly pay and discharge, or cause to be paid and discharged, the Impositions not
later than the earlier to occur of (i) the due date thereof, (ii) the day any
fine, penalty, interest, or cost may be added thereto or imposed, or (iii) the
day any lien may be filed for the nonpayment thereof (if such day is used to
determine the due date of the respective item), and Grantor shall deliver to
Beneficiary a written receipt evidencing the payment of the respective
Imposition.

4.6.          Repair.  Grantor will
keep the Mortgaged Property in first-class order and condition and will make
all repairs, replacements, renewals, additions, betterments, improvements, and
alterations

 11
 

thereof and
thereto, interior and exterior, structural and nonstructural, ordinary and
extraordinary, foreseen and unforeseen, which are necessary or reasonably
appropriate to keep same in such order and condition.  Grantor will prevent any act, occurrence, or
neglect which might impair the value or usefulness of the Mortgaged Property
for its intended usage.  In instances
where repairs, replacements, renewals, additions, betterments, improvements, or
alterations are required in and to the Mortgaged Property on an emergency basis
to prevent loss, drainage, waste, or destruction thereof, Grantor shall proceed
to repair, replace, add to, better, improve, or alter same, or cause same to be
repaired, replaced, added to, bettered, improved, or altered, notwithstanding
anything to the contrary contained in Section 5.2 hereof; provided,
however, that in instances where such emergency measures are to be taken,
Grantor will notify Beneficiary in writing of the commencement of same and the
measures to be taken, and, when same are completed, the completion date and the
measures actually taken.

4.7.          Insurance.  Grantor will
obtain and maintain insurance upon and relating to the Mortgaged Property with
such insurers, in such amounts and covering such risks as shall be satisfactory
to Beneficiary, from time to time.

4.8.          Inspection.  Grantor will
permit Trustee and Beneficiary, and their agents, representatives, and
employees, to inspect the Mortgaged Property at all reasonable times.

4.9.          Hold Harmless.  Grantor will
defend, at its own cost and expense, and hold Trustee and Beneficiary harmless
from, any action, proceeding, or claim affecting the Mortgaged Property or the
Loan Documents, and all costs and expenses incurred by Beneficiary in
protecting its interests hereunder in such an event (including all court costs
and attorneys’ fees) shall be borne by Grantor. 
If Grantor is a partnership or joint venture, each partner or venturer
of Grantor jointly and severally agrees that in the event any dispute
whatsoever arises among any or all of the partners or venturers, each partner
or venturer will indemnify Trustee and Beneficiary and any corporation
controlling, controlled by, or under common control with either Trustee or
Beneficiary, and any shareholder, officer, director, employee and agent of
either Trustee or Beneficiary or any such corporation, and will hold Trustee
and Beneficiary and any such corporation and any such shareholder, officer,
director, employee and agent of such corporation or Beneficiary, harmless from
and against all expenses, including without limiting the generality of the
foregoing, all legal fees, damages, and other liabilities of any type
whatsoever (including but not limited to, any liabilities arising out of
demands by any of the partners for undisbursed loan funds) suffered or incurred
as a result of or in connection with any such dispute.  This indemnity provision shall survive
repayment of the Indebtedness, shall be binding upon the respective heirs, legal
representatives, successors, and assigns of Grantor, and if Grantor is a
partnership or joint venture, each partner or venturer of Grantor, and shall
inure to the benefit of Trustee and Beneficiary, their successors, and assigns,
any corporation controlling, controlled by, or under common control with either
Trustee or Beneficiary and the corporation’s shareholders, directors, officers,
employees and agents.

4.10.        Books and Records.  Grantor will
maintain or cause to be maintained full and accurate books of account and other
records reflecting the results of the operations of the Mortgaged Property and
will furnish, or cause to be furnished, to Beneficiary such reports and
financial statements as are required herein or in the other Loan Documents.

4.11.        Financial Statements.  Grantor
shall, from time to time, upon the request of Beneficiary, promptly furnish to
Beneficiary audited financial statements of Grantor prepared in accordance with
generally accepted accounting principles consistently applied by and certified
to be true and correct by an independent certified public accountant and
deliver to Beneficiary upon request within sixty (60) days after the end of
each calendar year, then-current annual statements itemizing the income and
expenses of the Mortgaged Property, all in detail reasonably satisfactory to
Beneficiary and certified by Grantor as

 12
 

true and correct,
and to allow Beneficiary from time to time to inspect the Mortgaged Property
and all books and records relating thereto or to the Indebtedness, and to make
and take away copies of such books and records.

4.12.        Payment for Labor and Materials. 
Grantor will promptly pay all bills for labor, materials, and
specifically fabricated materials incurred in connection with the Mortgaged
Property and never permit to exist in respect of the Mortgaged Property or any
part thereof any lien or security interest, even though inferior to the liens
and security interests hereof, for any such bill, and in any event never permit
to be created or exist in respect of the Mortgaged Property, or any part
thereof, any other or additional lien or security interest on a parity with,
superior, or inferior to any of the liens or security interests hereof, except
for the Permitted Exceptions.

4.13.        Further Assurances and Corrections. 
From time to time, at the request of Beneficiary, Grantor will (i)
promptly correct any defect, error, or omission which may be discovered in the
contents of this Deed of Trust or in any other Loan Document or in the
execution or acknowledgment thereof; (ii) execute, acknowledge, deliver, record
and/or file such further instruments (including, without limitation, further
deeds of trust, security agreements, financing statements, continuation
statements and assignments of rents or leases) and perform such further acts
and provide such further assurances as may be necessary, desirable, or proper,
in Beneficiary’s opinion, to carry out more effectively the purposes of this
Deed of Trust and the Loan Documents and to subject to the liens and security
interests hereof and thereof any property intended by the terms hereof or
thereof to be covered hereby or thereby, including without limitation, any
renewals, additions, substitutions, replacements, or appurtenances to the
Mortgaged Property; (iii) execute, acknowledge, deliver, procure, file, and/or
record any document or instrument (including without limitation, any financing
statement) deemed advisable by Beneficiary to protect the liens and the
security interests herein granted against the rights or interests of third
persons; and (iv) pay all costs connected with any of the foregoing.

4.14.        Tax on Deed of Trust.  At any time
any law shall be enacted imposing or authorizing the imposition of any tax upon
this Deed of Trust, or upon any rights, titles, liens, or security interests
created hereby, or upon the Indebtedness or any part thereof, Grantor will
immediately pay all such taxes, provided that if such law as enacted makes it
unlawful for Grantor to pay such tax, Grantor shall not pay nor be obligated to
pay such tax.  Nevertheless, if a law is
enacted making it unlawful for Grantor to pay such taxes, then Grantor must
prepay the Indebtedness in full within sixty (60) days after demand therefor by
Beneficiary.

4.15.        Statement of Unpaid Balance. 
At any time and from time to time, Grantor will furnish promptly, upon
the request of Beneficiary, a written statement or affidavit, in form
satisfactory to Beneficiary, stating the unpaid balance of the Indebtedness and
that there are no offsets or defenses against full payment of the Indebtedness
and the terms hereof, or if there are any such offsets or defenses, specifying
them.

4.16.        Expenses.  Subject to
the provisions of Section 12.11 hereof, Grantor will pay on demand all
reasonable and bona fide out-of-pocket costs, fees, and expenses and other
expenditures, including, but not limited to, reasonable attorneys’ fees and
expenses, paid or incurred by Beneficiary or Trustee to third parties incident
to this Deed of Trust or any other Loan Document (including without limitation,
reasonable attorneys’ fees and expenses in connection with the negotiation,
preparation, and execution hereof and of any other Loan Document and any
amendment hereto or thereto, any release hereof, any consent, approval or
waiver hereunder or under any other Loan Document, the making of any advance
under the Note, and any suit to which Beneficiary or Trustee is a party
involving this Deed of

 13
 

Trust or the
Mortgaged Property) or incident to the enforcement of the Indebtedness or the exercise
of any right or remedy of Beneficiary under any Loan Document.

4.17.        Address.  Grantor shall
give written notice to Beneficiary and Trustee of any change of address of
Grantor at least five (5) days prior to the effective date of such change of address.  Absent such official written notice of a
change in address for Grantor, then Beneficiary and Trustee shall be entitled
for all purposes under the Loan Documents to rely upon Grantee’s address as set
forth in the initial paragraph of this Deed of Trust, as same may have been
theretofore changed in accordance with the provisions hereof.

4.18.        Environment
and Hazardous Substances.

(a)           Grantor will not use, generate, manufacture, produce,
store, release, discharge, treat, or dispose of on, under, from or about the
Mortgaged Property or transport to or from the Mortgaged Property any Hazardous
Substance in violation of applicable Environmental Laws or allow any other
person or entity to do so; provided that Grantor shall be allowed to use,
store, release and dispose of on, under, from or about the Mortgaged Property
or transport to or from the Mortgaged Property Permitted Hazardous Substances
in ordinary quantities for Grantor’s intended use of the Mortgaged Property and
in compliance with applicable Environmental Laws;

(b)           Grantor will keep and maintain the Mortgaged Property
in compliance with, and shall not cause or permit the Mortgaged Property to be
in violation of, any Environmental Law;

(c)           Grantor will establish and maintain, at Grantor’s sole
expense, a system to assure and monitor continued compliance with Environmental
Laws and the exclusion of Hazardous Substances from the Mortgaged Property, by
any and all owners or operators of the Mortgaged Property;

(d)           Grantor will give prompt written notices to
Beneficiary of: (i) any proceeding or inquiry by any governmental or
nongovernmental entity or person with respect to the presence of any Hazardous
Substance on, under, from or about the Mortgaged Property, the migration
thereof from or to other property, the disposal, storage, or treatment of any
Hazardous Substance generated or used on, under or about the Mortgaged
Property, (ii) all claims made or threatened by any third party against Grantor
or the Mortgaged Property or any other owner or operator of the Mortgaged
Property relating to any loss or injury resulting from any Hazardous Substance,
and (iii) Grantor’s discovery of any occurrence or condition on any real
property adjoining or in the vicinity of the Mortgaged Property that could
cause the Mortgaged Property or any part thereof to be subject to any
investigation or cleanup of the Mortgaged Property pursuant to any
Environmental Law;

(e)           Grantor will permit Beneficiary to join and
participate in, as a party if it so elects, any legal proceedings or actions
initiated with respect to the Mortgaged Property in connection with any
Environmental Law or Hazardous Substance, and Grantor shall pay all attorneys’
fees incurred by Beneficiary in connection therewith;

(f)            Grantor will protect, indemnify, and hold harmless
Trustee and Beneficiary, their parents, subsidiaries, directors, officers,
employees, representatives, agents, successors, and assigns from and against
any and all loss, damage, costs, expense, action, causes of action, or
liability (including attorneys’ fees and costs) directly or indirectly arising
from or attributable to the use, generation, manufacture, production, storage,
release, threatened release, discharge, disposal, or presence of a Hazardous
Substance on, under or about the Mortgaged Property,

 14
 

whether known or unknown at the time of the execution
hereof, including without limitation (i) all foreseeable consequential damages
of any such use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal, or presence, and (ii) the costs of any
required or necessary environmental investigation or monitoring, any repair,
cleanup, or detoxification of the Mortgaged Property, and the preparation and
implementation of any closure, remedial, or other required plans.  This covenant and the indemnity contained
herein shall survive the release of the lien of this Deed of Trust, or the
extinguishment of the lien by foreclosure or action in lieu thereof; and

(g)           In the event that any Remedial Work is reasonably
necessary or desirable, Grantor shall commence and thereafter diligently
prosecute to completion all such Remedial Work within thirty (30) days after
written demand by Beneficiary for performance thereof (or such shorter period
of time as may be required under any Legal Requirement).  All Remedial Work shall be performed by
contractors approved in advance by Beneficiary, and under the supervision of a
consulting engineer approved by Beneficiary. 
All costs and expenses of such Remedial Work shall be paid by Grantor
including, without limitation, Beneficiary’s reasonable attorneys’ fees and
costs incurred in connection with monitoring or review of such Remedial
Work.  In the event Grantor shall fail to
timely commence, or cause to be commenced, or fail to diligently prosecute to
completion, such Remedial Work, Beneficiary may, but shall not be required to,
cause such Remedial Work to be performed, and all costs and expenses thereof,
or incurred in connection therewith, shall become part of the Indebtedness.

ARTICLE
V

NEGATIVE COVENANTS

Grantor hereby
unconditionally covenants and agrees with Beneficiary, until the entire
Indebtedness shall have been paid in full and all of the Obligations shall have
been fully performed and discharged, as follows:

5.1.          Use Violations.  Grantor will
not use, maintain, operate, or occupy, or allow the use, maintenance,
operation, or occupancy of, the Mortgaged Property in any manner which (i)
violates any Legal Requirement, (ii) may be dangerous unless safeguarded as
required by law and/or appropriate insurance, (iii) constitutes a public or
private nuisance, or (iv) makes void, voidable, or cancelable, or increases the
premium of, any insurance then in force with respect thereto.

5.2.          Waste; Alterations.  Grantor will
not commit or permit any waste or impairment of the Mortgaged Property and will
not (subject to the provisions of Sections 4.3 and 4.6 hereof), without
the prior written consent of Beneficiary, make or permit to be made any
alterations or additions to the Mortgaged Property of a material nature.

5.3.          Replacement of Fixtures and Personalty. 
Grantor will not, without the prior written consent of Beneficiary,
permit any of the Fixtures or Personalty to be removed at any time from the
Land or Improvements unless the removed item is removed temporarily for
maintenance and repair or, if removed permanently, is replaced by an article of
equal suitability and value, owned by Grantor, free and clear of any lien or
security interest except as may be approved in writing by Beneficiary.

5.4.          Change in Zoning.  Grantor will
not seek or acquiesce in a zoning reclassification of all or any portion of the
Mortgaged Property or grant or consent to any easement, dedication, plat, or
restriction (or allow any easement to become enforceable by prescription), or
any amendment or

 15
 

modification
thereof, covering all or any portion of the Mortgaged Property, without
Beneficiary’s prior written consent, which consent will not be unreasonably
withheld.

5.5.          No Drilling.  Grantor will
not, without the prior written consent of Beneficiary, permit any drilling or
exploration for or extraction, removal, or production of, any Minerals from the
surface or subsurface of the Land regardless of the depth thereof or the method
of mining or extraction thereof.

5.6.          No Disposition.  Grantor will
not make a Disposition without obtaining Beneficiary’s prior written consent to
the Disposition.

5.7.          No Subordinate Mortgages. 
Grantor will not create, place, or permit to be created or placed, or
through any act or failure to act, acquiesce in the placing of, or allow to
remain any Subordinate Mortgage regardless of whether such Subordinate Mortgage
is expressly subordinate to the liens or security interests of the Loan
Documents with respect to the Mortgaged Property, other than the Permitted
Exceptions.

ARTICLE
VI

EVENTS OF DEFAULT

The term “Event of
Default,” as used herein and in the Loan Documents, shall mean the occurrence
or happening, at any time and from time to time, of any one or more of the
following:

6.1.          Payment of Indebtedness.  If Grantor
shall fail, or refuse to fully and timely ­perform and discharge, or cause the
failure or refusal of the full and timely performance and discharge of the
Indebtedness as and when called for.

6.2.          Performance of Obligations. 
If Grantor shall fail, or refuse, to fully and timely perform and
discharge, or cause the failure or refusal of the full and timely performance
and discharge of, any of the Obligations as and when called for.

6.3.          False Representation.  If any representation,
warranty, or statement made by Grantor or others in, under, or pursuant to the
Loan Documents or any affidavit or other instrument executed in connection with
the Loan Documents shall be false or misleading in any material respect as of
the date hereof or shall become so at any time prior to the repayment in full
of the Indebtedness.

6.4.          Default Under Other Lien Document. 
If Grantor shall default or commit an event of default under and
pursuant to any other mortgage or security agreement which covers or affects
any part of the Mortgaged Property.

6.5.          Insolvency; Bankruptcy.  If Grantor
(i) shall execute an assignment for the benefit of creditors or an admission in
writing by Grantor of Grantor’s inability to pay, or Grantor’s failure to pay,
debts generally as such debts become due; or (ii) shall allow the levy against
the Mortgaged Property or any part thereof, of any execution, attachment,
sequestration or other writ which is not vacated within sixty (60) days after
the levy; or (iii) shall allow the appointment of a receiver, trustee or
custodian of Grantor or of the Mortgaged Property or any part thereof, which
receiver, trustee or custodian is not discharged within sixty (60) days after
the appointment; or (iv) files, as a debtor, a petition, case, proceeding or
other action pursuant to, or voluntarily seeks the benefit of, or benefits of,
any Debtor Relief Law, or takes any action in furtherance thereof; or (v) files
either a petition, complaint, answer or other instrument which seeks to effect
a suspension of, or which has the effect of suspending any of the rights or
powers of Beneficiary or Trustee granted in the Note, herein or in any Loan
Document; or (vi)

 16
 

allows the filing
of a petition, case, proceeding or other action against Grantor, as a debtor,
under any Debtor Relief Law or seeks appointment of a receiver, trustee,
custodian or liquidator of Grantor or of the Mortgaged Property, or any part
thereof, or of any significant portion of Grantor’s other property; and (1)
Grantor admits, acquiesces in or fails to contest diligently the material
allegations thereof, or (2) the petition, case, proceeding or other action
results in the entry of an order for relief or order granting the relief sought
against Grantor, or (3) the petition, case, proceeding or other action is not
permanently dismissed or discharged on or before the earlier of trial thereon
or thirty (30) days next following the date of filing.

6.6.          Dissolution.  If Grantor or
any Constituent Party shall dissolve, terminate or liquidate, or merge with or
be consolidated into any other entity.

6.7.          No Further Encumbrances.  If Grantor
creates, places, or permits to be created or placed, or through any act or
failure to act, acquiesces in the placing of, or allows to remain, any Subordinate
Mortgage, regardless of whether such Subordinate Mortgage is expressly
subordinate to the liens or security interests of the Loan Documents, with
respect to the Mortgaged Property, other than the Permitted Exceptions.

6.8.          Disposition of Mortgaged Property or Beneficial
Interest in Grantor.  If Grantor makes a Disposition, without the
prior written consent of Beneficiary.

6.9.          Condemnation.  If any
condemnation proceeding is instituted or threatened which would, in Beneficiary’s
sole judgment, materially impair the use and enjoyment of the Mortgaged
Property for its intended purposes.

6.10.        Destruction of Improvements. 
If the Mortgaged Property is demolished, destroyed, or substantially
damaged so that, in Beneficiary’s judgment, it cannot be restored or rebuilt
with available funds to the condition existing immediately prior to such
demolition, destruction, or damage within a reasonable period of time.

6.11.        Material Adverse Change.  If
Beneficiary reasonably determines that any event shall have occurred that could
be expected to have a Material Adverse Effect.

6.12.        Abandonment.  If Grantor
abandons all or any portion of the Mortgaged Property.

6.13.        Attachment; Sequestration. 
Grantor shall fail to discharge within a period of thirty (30) days after
the commencement thereof any attachment, sequestration, or similar proceeding
against any of its assets or properties, unless such proceeding is being
contested diligently and in good faith and adequate reserves have been
established.

6.14.        Judgments.  Grantor shall
fail to satisfy and discharge promptly any judgment against it for the payment
of money unless such judgment is being contested diligently and in good faith
and adequate reserves have been established.

6.15.        Other Debt.  Grantor shall
fail to pay when due any principal of or interest on any debt (other than the
Indebtedness), or the maturity of any such debt shall have been accelerated, or
any such debt shall have been required to be prepaid prior to the stated
maturity thereof.

6.16.        Constituent Party’s Default. 
The occurrence of any event referred to in Sections 6.5, 6.11, 6.13,
6.14 and 6.15 hereof with respect to any Constituent Party or other person
or entity obligated

 17
 

in any manner to
pay or perform the Indebtedness or Obligations, respectively, or any part
thereof (as if such Constituent Party or other person or entity were the “Grantor”
in such Sections).

ARTICLE
VII

REMEDIES

7.1.          Beneficiary’s Remedies Upon Default. 
Upon the occurrence of an Event of Default or any event or circumstance
which, with the lapse of time, or the giving of notice, or both, would
constitute an Event of Default, Beneficiary may, at Beneficiary’s option, and
by or through Trustee, by Beneficiary itself or otherwise, do any one or more
of the following:

(a)           Right to Perform Grantor’s Covenants. 
If Grantor has failed to keep or perform any covenant whatsoever
contained in this Deed of Trust or the other Loan Documents, Beneficiary may,
but shall not be obligated to any person to do so, perform or attempt to perform
said covenant, and any payment made or expense incurred in the performance or
attempted performance of any such covenant shall be and become a part of the
Indebtedness, and Grantor promises, upon demand, to pay to Beneficiary, at the
place where the Note is payable, all sums so advanced or paid by Beneficiary,
with interest from the date when paid or incurred by Beneficiary at the Default
Rate.  No such payment by Beneficiary
shall constitute a waiver of any Event of Default.  In addition to the liens and security
interests hereof, Beneficiary shall be subrogated to all rights, titles, liens,
and security interests securing the payment of any debt, claim, tax, or
assessment for the payment of which Beneficiary may make an advance, or which
Beneficiary may pay.

(b)           Right of Entry.  Beneficiary
may, prior or subsequent to the institution of any foreclosure proceedings,
enter upon the Mortgaged Property, or any part thereof, and take exclusive
possession of the Mortgaged Property and of all books, records, and accounts
relating thereto and to exercise without interference from Grantor any and all
rights which Grantor has with respect to the management, possession, operation,
protection, or preservation of the Mortgaged Property, including without
limitation, the right to rent the same for the account of Grantor and to deduct
from such Rents all costs, expenses, and liabilities of every character
incurred by the Beneficiary in collecting such Rents and in managing,
operating, maintaining, protecting, or preserving the Mortgaged Property and to
apply the remainder of such Rents on the Indebtedness in such manner as
Beneficiary may elect.  All such costs,
expenses, and liabilities incurred by the Beneficiary in collecting such Rents
and in managing, operating, maintaining, protecting, or preserving the
Mortgaged Property, if not paid out of Rents as hereinabove provided, shall
constitute a demand obligation owing by Grantor and shall bear interest from
the date of expenditure until paid at the Default Rate, all of which shall
constitute a portion of the Indebtedness. 
If necessary to obtain the possession provided for above, the
Beneficiary may invoke any and all legal remedies to dispossess Grantor,
including specifically one or more actions for forcible entry and detainer,
trespass to try title, and restitution. 
In connection with any action taken by the Beneficiary pursuant to this
subsection, the Beneficiary shall not be liable for any loss sustained by
Grantor resulting from any failure to let the Mortgaged Property, or any part
thereof, or from any other act or omission of the Beneficiary in managing the
Mortgaged Property unless such loss is caused by the willful misconduct of the
Beneficiary, nor shall the Beneficiary be obligated to perform or discharge any
obligation, duty, or liability under any Lease or under or by reason hereof or
the exercise of rights or remedies hereunder. 
Grantor shall and does hereby agree to indemnify the Beneficiary for,
and to hold the Beneficiary harmless from, any and all liability, loss, or
damage, which may or might be incurred by the

 18

Beneficiary under any such Lease or under or by reason
hereof or the exercise of rights or remedies hereunder, and from any and all
claims and demands whatsoever which may be asserted against the Beneficiary by
reason of any alleged obligations or undertakings on its part to perform or
discharge any of the terms, covenants, or agreements contained in any such
Lease.  Should the Beneficiary incur any
such liability, the amount thereof, including without limitation, costs,
expenses, and reasonable attorneys’ fees, together with interest thereon from
the date of expenditure until paid at the Default Rate, shall be secured
hereby, and Grantor shall reimburse the Beneficiary therefor immediately upon
demand.  Nothing in this subsection shall
impose any duty, obligation, or responsibility upon the Beneficiary for the
control, care, management, leasing, or repair of the Mortgaged Property, nor
for the carrying out of any of the terms and conditions of any such Lease; nor
shall it operate to make the Beneficiary responsible or liable for any waste
committed on the Mortgaged Property by the tenants or by any other parties, or
for any Hazardous Substance on or under the Mortgaged Property, or for any
dangerous or defective condition of the Mortgaged Property or for any negligence
in the management, leasing, upkeep, repair, or control of the Mortgaged
Property resulting in loss or injury or death to any tenant, licensee,
employee, or stranger.  Grantor hereby
assents to, ratifies, and confirms any and all actions of the Beneficiary with
respect to the Mortgaged Property taken under this subsection.

The remedies in this subsection are in addition to other remedies
available to the Beneficiary and the exercise of the remedies in this
subsection shall not be deemed to be an election of nonjudicial or judicial
remedies otherwise available to the Beneficiary.  The remedies in this Article VII are
available under and governed by the real property laws of Colorado and are not
governed by the personal property laws of Colorado, including but not limited
to, except as described in Section 7.1(g) hereof, the power to dispose of
personal property in a commercially reasonable manner under Section 9.504 of
the Code.  No action by Beneficiary,
taken pursuant to this subsection, shall be deemed to be an election to dispose
of personal property under Section 9.505 of the Code.  Any receipt of consideration received by
Beneficiary pursuant to this subsection shall be immediately credited against
the Indebtedness (in the inverse order of maturity) and the value of said
consideration shall be treated like any other payment against the Indebtedness.

(c)           Right to Accelerate.  Beneficiary
may, without notice, demand, presentment, notice of nonpayment or
nonperformance, protest, notice of protest, notice of intent to accelerate,
notice of acceleration, or any other notice or any other action, all of which
are hereby waived by Grantor and all other parties obligated in any manner
whatsoever on the Indebtedness, declare the entire unpaid balance of the
Indebtedness immediately due and payable, and upon such declaration, the entire
unpaid balance of the Indebtedness shall be immediately due and payable.  The failure to exercise any remedy available
to the Beneficiary shall not be deemed to be a waiver of any rights or remedies
of the Beneficiary under the Loan Documents, at law or in equity.

(d)           Foreclosure Against Mortgaged Property. 
Beneficiary may foreclose this Deed of Trust, either by judicial action
or through Trustee.  If this Deed of
Trust encumbers more than one parcel of real estate, foreclosure may be by
separate parcel or en masse, as Beneficiary may elect in its 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 in some newspaper of
general circulation then published in the County or City and County in which
the

 19
 

Mortgaged Property is located.  Any sale conducted by Trustee pursuant to
this Section shall be held at the front door of the county courthouse for such
County or City and County, or on the Mortgaged Property, or at such other place
as similar sales are then customarily held in such County or City and County,
provided that the actual place of sale shall be specified in the notice of
sale.  All fees, costs and expenses of
any kind incurred by Beneficiary in connection with foreclosure of this Deed of
Trust, including, without limitation, the costs of any appraisals of the
Mortgaged Property obtained by Beneficiary, all costs of any receivership for
the Mortgaged Property advanced by Beneficiary, all costs of any environmental
audits or tests incurred by Beneficiary, all attorneys’ and consultants’ fees
incurred by Beneficiary and all other costs and expenses authorized by
applicable law, shall constitute a part of the Indebtedness and may be
included as part of the amount owing from Grantor to Beneficiary at any
foreclosure sale.  The proceeds of any
sale under this Section shall be applied first to the fees and expenses of the
Trustee or other officer conducting the sale (all of which shall be part of the
obligations secured by this Deed of Trust), and then to the reduction or
discharge of the Indebtedness in the order Beneficiary may elect; any
surplus remaining shall be paid over to Grantor or to such other person or
persons as may be lawfully entitled to such surplus.  Beneficiary may bid at any such foreclosure
sale, and in connection therewith Beneficiary may credit bid all or any portion
of the Indebtedness (including, without limitation, the Trustee’s fees and
expenses, Beneficiary’s attorneys’ and appraisal fees, all other expenses
incurred by Beneficiary in undertaking the foreclosure and all other costs and
expenses authorized by applicable law). 
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 Mortgaged 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 Mortgaged
Property described in the certificate. 
After the expiration of all applicable periods of redemption, unless the
Mortgaged 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, and such deed shall operate to divest Grantor and all persons
claiming under Grantor of all right, title, and interest, whether legal or
equitable, in the Mortgaged Property described in the deed.  Nothing in this Section or elsewhere in this
Deed of Trust dealing with foreclosure procedures or specifying particular
actions to be taken by Beneficiary or by Trustee or any similar officer 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.

(e)           Beneficiary’s Judicial Remedies. 
Beneficiary may proceed by suit or suits, at law or in equity, to
enforce the payment of the Indebtedness and the performance and discharge of
the Obligations in accordance with the terms hereof, of the Note, and the other
Loan Documents, to foreclose the liens and security interests of this Deed of
Trust as against all or any part of the Mortgaged Property, and to have all or
any part of the Mortgaged Property sold under the judgment or decree of a court
of competent jurisdiction.  This remedy
shall be cumulative of any other nonjudicial remedies available to the
Beneficiary with respect to the Loan Documents. 
Proceeding with a request or receiving a judgment for legal relief shall
not be or be deemed to be an election of remedies or bar any available
nonjudicial remedy of the Beneficiary.

(f)            Beneficiary’s Right to Appointment of Receiver. 
Beneficiary, as a matter of right and without regard to the sufficiency
of the security for repayment of the Indebtedness and performance and discharge
of the Obligations, without notice to Grantor and without any showing of
insolvency, fraud, or mismanagement on the part of Grantor, and without the
necessity of filing any judicial or other proceeding other than the proceeding
for appointment of

 20
 

a receiver, shall be entitled to the appointment of a
receiver or receivers of the Mortgaged Property or any part thereof, and of the
Rents, and Grantor hereby irrevocably consents to the appointment of a receiver
or receivers.  Any receiver appointed
pursuant to the provisions of this subsection shall have the usual powers and
duties of receivers in such matters.

(g)           Beneficiary’s Uniform Commercial Code Remedies. 
The Beneficiary may exercise its rights of enforcement with respect to
Fixtures and Personalty under the Code, and in conjunction with, in addition to
or in substitution for the rights and remedies under the Code:

(i)            the Beneficiary may without demand or notice to
Grantor, enter upon the Mortgaged Property to take possession of, assemble,
receive, and collect the Personalty, or any part thereof, or to render it
unusable; and

(ii)           the Beneficiary may require Grantor to assemble the
Personalty and make it available at a place the Beneficiary designates which is
mutually convenient to allow the Beneficiary to take possession or dispose of
the Personalty; and

(iii)          written notice mailed to Grantor as provided herein at
least ten (10) days prior to the date of public sale of the Personalty or prior
to the date after which private sale of the Personalty will be made shall
constitute reasonable notice; and

(iv)          any sale made pursuant to the provisions of this
subsection shall be deemed to have been a public sale conducted in a
commercially reasonable manner if held contemporaneously with the sale of the
other Mortgaged Property under the power of sale as provided herein, upon
giving the same notice with respect to the sale of the Personalty hereunder as
is required for such sale of the other Mortgaged Property under power of sale,
and such sale shall be deemed to be pursuant to a security agreement covering
both real and personal property under 9.501(d) of the Code; and

(v)           in the event of a foreclosure sale, whether made by
the Trustee under the terms hereof, or under judgment of a court, the
Personalty and the other Mortgaged Property may, at the option of the
Beneficiary, be sold as a whole; and

(vi)          it shall not be necessary that the Beneficiary take possession
of the Personalty, or any part thereof, prior to the time that any sale
pursuant to the provisions of this subsection is conducted, and it shall not be
necessary that the Personalty or any part thereof be present at the location of
such sale; and

(vii)         prior to the application of the proceeds of
disposition of the Personalty to the Indebtedness, such proceeds shall be
applied to the reasonable expenses of retaking, holding, preparing for sale or
lease, selling, leasing and the like, and the reasonable attorneys’ fees and
legal expenses incurred by the Beneficiary; and

(viii)        after notification, if any, hereafter provided in this
subsection, Beneficiary may sell, lease, or otherwise dispose of the
Personalty, or any part thereof, in one or more parcels at public or private
sale or sales, at Beneficiary’s offices or elsewhere, for cash, on credit, or
for future delivery.  Upon the request of
Beneficiary, Grantor shall assemble the Personalty and make it available to
Beneficiary at any place designated by Beneficiary that is reasonably
convenient to Grantor and Beneficiary. 
Grantor agrees that Beneficiary shall not be obligated to give more than
ten (10) days’ written notice of the time and place of any public sale or of
the time after which any

 21
 

private sale may take place and that such notice shall
constitute reasonable notice of such matters. 
Grantor shall be liable for all expenses of retaking, holding, preparing
for sale, or the like, and all attorneys’ fees, legal expenses, and all other
costs and expenses incurred by Beneficiary in connection with the collection of
the Indebtedness and the enforcement of Beneficiary’s rights under the Loan
Documents.  Beneficiary shall apply the
proceeds of the sale of the Personalty against the Indebtedness in accordance
with the provisions of Section 7.4 of this Deed of Trust.  Grantor shall remain liable for any
deficiency if the proceeds of any sale or disposition of the Personalty are
insufficient to pay the Indebtedness in full. 
Grantor waives all rights of marshalling in respect of the Personalty;
and

(ix)           any and all statements of fact or other recitals made
in any bill of sale or assignment or other instrument evidencing any
foreclosure sale hereunder, the nonpayment of the Indebtedness, the occurrence
of any Event of Default, the Beneficiary having declared all or a portion of
such Indebtedness to be due and payable, the notice of time, place, and terms
of sale and of the properties to be sold having been duly given, or any other
act or thing having been duly done by the Beneficiary, shall be taken as prima
facie evidence of the truth of the facts so stated and recited; and

(x)            the Beneficiary may appoint or delegate any one or
more persons as agent to perform any act or acts necessary or incident to any
sale held by the Beneficiary, including the sending of notices and the conduct
of the sale, but in the name and on behalf of the Beneficiary.

(h)           Rights Relating to Leases and Rents. 
Grantor has, pursuant to Article IX of this Deed of Trust,
assigned, as collateral, to Beneficiary all Rents under each of the Leases
covering all or any portion of the Mortgaged Property.  Beneficiary, or Trustee on Beneficiary’s
behalf, may at any time, and without notice, either in person, by agent, or by
receiver to be appointed by a court, enter and take possession of the Mortgaged
Property or any part thereof, and in its own name, sue for or otherwise collect
the Rents.  Grantor hereby agrees that
Beneficiary may, upon notice from Trustee or Beneficiary to Grantor of the occurrence
of an Event of Default, terminate the limited license granted to Grantor in Section
9.2 hereof, and thereafter direct the lessees under the Leases to pay
direct to Beneficiary the Rents due and to become due under the Leases and
attorn in respect of all other obligations thereunder direct to Beneficiary, or
Trustee on Beneficiary’s behalf, without any obligation on their part to
determine whether an Event of Default does in fact exist or has in fact
occurred.  All Rents collected by
Beneficiary, or Trustee acting on Beneficiary’s behalf, shall be applied as
provided for in Section 7.4 of this Deed of Trust; provided, however,
that if the costs, expenses, and attorneys’ fees shall exceed the amount of
Rents collected, the excess shall be added to the Indebtedness, shall bear
interest at the Default Rate, and shall be immediately due and payable.  The entering upon and taking possession of
the Mortgaged Property, the collection of Rents, and the application thereof as
aforesaid shall not cure or waive any Event of Default or notice of default, if
any, hereunder nor invalidate any act done pursuant to such notice, except to
the extent any such default is fully cured. 
Failure or discontinuance by Beneficiary, or Trustee on Beneficiary’s
behalf, at any time or from time to time, to collect said Rents shall not in
any manner impair the subsequent enforcement by Beneficiary, or Trustee on
Beneficiary’s behalf, of the right, power and authority herein conferred upon
it.  Nothing contained herein, nor the
exercise of any right, power, or authority herein granted to Beneficiary, or
Trustee on Beneficiary’s behalf, shall be, or shall be construed to be, an
affirmation by it of any tenancy, lease, or option, nor an assumption of
liability under, nor the subordination of, the lien or charge of this Deed of
Trust, to any such tenancy, lease, or option,

 22
 

nor an election of judicial relief, if any such relief
is requested or obtained as to Leases or Rents, with respect to the Mortgaged
Property or any other collateral given by Grantor to Beneficiary.  In addition, from time to time, Beneficiary
may elect, and notice hereby is given to each lessee under any Lease, to
subordinate the lien of this Deed of Trust to any Lease by unilaterally
executing and recording an instrument of subordination, and upon such election
the lien of this Deed of Trust shall be subordinate to the Lease identified in
such instrument of subordination; provided, however, in each instance such
subordination will not affect or be applicable to, and expressly excludes any
lien, charge, encumbrance, security interest, claim, easement, restriction,
option, covenant and other rights, titles, interests or estates of any nature
whatsoever with respect to all or any portion of the Mortgaged Property to the
extent that the same may have arisen or intervened during the period between
the recordation of this Deed of Trust and the execution of the Lease identified
in such instrument of subordination.

(i)            Other Rights.  Beneficiary
(i) may surrender the insurance policies maintained pursuant to Section 4.7
hereof or any part thereof, and upon receipt shall apply the unearned premiums
as a credit on the Indebtedness, in accordance with the provisions of Section
7.4 hereof, and, in connection therewith, Grantor hereby appoints
Beneficiary as agent and attorney-in-fact (which is coupled with an interest
and is therefore irrevocable) for Grantor to collect such premiums; and (ii)
apply the reserve for Impositions and insurance premiums, if any, required by
the provisions of this Deed of Trust, toward payment of the Indebtedness; and
(iii) shall have and may exercise any and all other rights and remedies which
Beneficiary may have at law or in equity, or by virtue of any Loan Document or
under the Code, or otherwise.

(j)            Beneficiary as Purchaser. 
Beneficiary may be the purchaser of the Mortgaged Property or any part
thereof, at any sale thereof, whether such sale be under ­the power of sale
herein vested in Trustee or upon any other foreclosure of the liens and
security interests hereof, or otherwise, and Beneficiary shall, upon any such
purchase, acquire good title to the Mortgaged Property so purchased, free of
the liens and security interests hereof, unless the sale was made subject to an
unmatured portion of the Indebtedness. 
The Beneficiary, as purchaser, shall be treated in the same manner as
any third party purchaser and the proceeds of the Beneficiary’s purchase shall
be applied in accordance with Section 7.4 of this Deed of Trust.

7.2.          Other Rights of Beneficiary. 
Should any part of the Mortgaged Property come into the possession of
Beneficiary, whether before or after default, Beneficiary may (for itself or by
or through other persons, firms, or entities) hold, lease, manage, use, or
operate the Mortgaged Property for such time and upon such terms as Beneficiary
may deem prudent under the circumstances (making such repairs, alterations,
additions, and improvements thereto and taking such other action as Beneficiary
may from time to time deem necessary or desirable) for the purpose of
preserving the Mortgaged Property or its value, pursuant to the order of a
court of appropriate jurisdiction or in accordance with any other rights held
by Beneficiary in respect of the Mortgaged Property.  Grantor covenants to promptly reimburse and
pay to Beneficiary on demand, at the place where the Note is payable, the
amount of all reasonable expenses (including without limitation the cost of any
insurance, Impositions, or other charges) incurred by Beneficiary in connection
with Beneficiary’s custody, preservation, use, or operation of the Mortgaged
Property, together with interest thereon from the date incurred by Beneficiary
at the Default Rate; and all such expenses, costs, taxes, interest, and other
charges shall be and become a part of the Indebtedness.  It is agreed, however, that the risk of loss
or damage to the Mortgaged Property is on Grantor, and Beneficiary shall have
no liability whatsoever for decline in value of the Mortgaged Property, for
failure to obtain or maintain insurance, or for failure to determine whether
insurance in force is adequate as to amount or as to the risks insured.  Possession by the Beneficiary shall not be

 23
 

deemed an election
of judicial relief, if any such possession is requested or obtained, with
respect to any Mortgaged Property or collateral not in Beneficiary’s
possession.

7.3.          Possession After Foreclosure. 
If the liens or security interests hereof shall be foreclosed by power
of sale granted herein, by judicial action, or otherwise, the purchaser at any
such sale shall receive, as an incident to purchaser’s ownership, immediate
possession of the property purchased, and if Grantor or Grantor’s successors
shall hold possession of said property or any part thereof subsequent to
foreclosure, Grantor and Grantor’s successors shall be considered as tenants at
sufferance of the purchaser at foreclosure sale (without limitation of other
rights or remedies, at a reasonable rental per day, due and payable daily,
based upon the value of the portion of the Mortgaged Property so occupied and
sold to such purchaser), and anyone occupying such portion of the Mortgaged
Property, after demand is made for possession thereof, shall be guilty of
forcible detainer and shall be subject to eviction and removal, forcible or
otherwise, with or without process of law, and all damages by reason thereof
are hereby expressly waived.

7.4.          Application of Proceeds.  The proceeds
from any sale, lease, or other disposition made pursuant to this Article VII,
or the proceeds from the surrender of any insurance policies pursuant hereto,
or any Rents collected by Beneficiary from the Mortgaged Property, or the
reserve for Impositions and insurance premiums, if any, required by the
provisions of this Deed of Trust or sums received pursuant to Section 8.1
hereof, or proceeds from insurance which Beneficiary elects to apply to the
Indebtedness pursuant to Section 8.2 hereof, shall be applied by
Trustee, or by Beneficiary, as the case may be, to the Indebtedness in the
following order and priority: (i) to the payment of all expenses of
advertising, selling, and conveying the Mortgaged Property or part thereof,
and/or prosecuting or otherwise collecting Rents, proceeds, premiums, or other
sums including reasonable attorneys’ fees and a reasonable fee or commission to
Trustee, not to exceed five percent of the proceeds thereof or sums so
received; (ii) to the remainder of the Indebtedness as follows: first, to the
remaining accrued but unpaid interest, second, to the matured portion of principal
of the Indebtedness, and third, to prepayment of the unmatured portion, if any,
of principal of the Indebtedness applied to installments of principal in
inverse order of maturity; and (iii) the balance, if any, and to the extent
applicable, remaining after the full and final payment of the Indebtedness and
full performance and discharge of the Obligations to the holder or beneficiary
of any inferior liens covering the Mortgaged Property, if any, in order of the
priority of such inferior liens (Trustee and Beneficiary shall hereby be
entitled to rely exclusively upon a commitment for title insurance issued to
determine such priority); and (iv) the cash balance, if any, to the
Grantor.  The application of proceeds of
sale or other proceeds as otherwise provided herein shall be deemed to be a
payment of the Indebtedness like any other payment.  The balance of the Indebtedness remaining
unpaid, if any, shall remain fully due and owing in accordance with the terms
of the Note or the other Loan Documents.

7.5.          Abandonment of Sale.  In the event
a foreclosure hereunder is commenced by Trustee in accordance with Subsection
7.1(d) hereof, at any time before the sale, Trustee may abandon the sale,
and Beneficiary may then institute suit for the collection of the Indebtedness
and for the foreclosure of the liens and security interests hereof and of the
Loan Documents.  If Beneficiary should
institute a suit for the collection of the Indebtedness and for a foreclosure
of the liens and security interests, Beneficiary may, at any time before the
entry of a final judgment in said suit, dismiss the same and require Trustee to
sell the Mortgaged Property or any part thereof in accordance with the
provisions of this Deed of Trust.

7.6.          Payment of Fees.  If the Note
or any other part of the Indebtedness shall be collected or if any of the
Obligations shall be enforced by legal proceedings, whether through a probate
or bankruptcy court or otherwise, or shall be placed in the hands of an
attorney for collection after maturity, whether matured by the expiration of
time or by an option given to the Beneficiary to mature same, or if

 24
 

Beneficiary
becomes a party to any suit where this Deed of Trust or the Mortgaged Property
or any part thereof is involved, Grantor agrees to pay Beneficiary’s attorneys’
fees and expenses incurred, and such fees shall be and become a part of the
Indebtedness and shall bear interest from the date such costs are incurred at
the Default Rate.

7.7.          Miscellaneous.

(a)           In case Beneficiary shall have proceeded to invoke any
right, remedy, or recourse permitted under the Loan Documents and shall
thereafter elect to discontinue or abandon same for any reason, Beneficiary
shall have the unqualified right to do so and, in such event, Grantor and
Beneficiary shall be restored to their former positions with respect to the
Indebtedness, the Loan Documents, the Mortgaged Property or otherwise, and the
rights, remedies, recourses and powers of Beneficiary shall continue as if same
had never been invoked.

(b)           In addition to the remedies set forth in this Article
VII, upon the occurrence of an Event of Default, the Beneficiary and Trustee
shall, in addition, have all other remedies available to them at law or in
equity.

(c)           All rights, remedies, and recourses of Beneficiary
granted in the Note, this Deed of Trust, the other Loan Documents, any other
pledge of collateral, or otherwise available at law or equity: (i) shall be
cumulative and concurrent; (ii) may be pursued separately, successively, or
concurrently against Grantor, the Mortgaged Property, or any one or more of
them, at the sole discretion of Beneficiary; (iii) may be exercised as often as
occasion therefor shall arise, it being agreed by Grantor that the exercise or
failure to exercise any of same shall in no event be construed as a waiver or
release thereof or of any other right, remedy, or recourse; (iv) shall be
nonexclusive; (v) shall not be conditioned upon Beneficiary exercising or
pursuing any remedy in relation to the Mortgaged Property prior to Beneficiary
bringing suit to recover the Indebtedness or suit on the Obligations; and (vi)
in the event Beneficiary elects to bring suit on the Indebtedness and/or the
Obligations and obtains a judgment against Grantor prior to exercising any
remedies in relation to Mortgaged Property, all liens and security interests,
including the lien of this Deed of Trust, shall remain in full force and effect
and may be exercised at Beneficiary’s option.

(d)           Beneficiary may release, regardless of consideration,
any part of the Mortgaged Property without, as to the remainder, in any way
impairing, affecting, subordinating, or releasing the lien or security
interests evidenced by this Deed of Trust or the other Loan Documents or
affecting the obligations of Grantor, or any other party, to pay the
Indebtedness or perform and discharge the Obligations.  For payment of the Indebtedness, Beneficiary
may resort to any of the collateral therefor in such order and manner as
Beneficiary may elect.  No collateral
heretofore, herewith, or hereafter taken by Beneficiary shall in any manner
impair or affect the collateral given pursuant to the Loan Documents, and all
collateral shall be taken, considered, and held as cumulative.

(e)           Grantor hereby irrevocably and unconditionally waives
and releases: (i) all benefits that might accrue to Grantor by virtue of any
present or future law exempting the Mortgaged Property from attachment, levy or
sale on execution or providing for any appraisement, valuation, stay of
execution, exemption from civil process, redemption, or extension of time for
payment; (ii) all notices of any Event of Default or of Trustee’s exercise of
any right, remedy, or recourse provided for under the Loan Documents; and (iii)
any right to a marshalling of assets or a sale in inverse order of alienation.

 25
 

(f)            Grantor and Beneficiary mutually agree that there are
no, nor shall there be any, implied covenants of good faith and fair dealing or
other similar covenants or agreements in this Deed of Trust and the other Loan
Documents.  All agreed contractual duties
are set forth in this Deed of Trust, the Note, and the other Loan Documents.

(g)           The remedies in this Article VII are available
under and governed by the real property laws of Colorado and are not governed
by the personal property laws of Colorado, including but not limited to, the
power to dispose of personal property in a commercially reasonable manner under
Section 9.504 of the Code.

ARTICLE
VIII

SPECIAL PROVISIONS

8.1.          Condemnation Proceeds.  Beneficiary
shall be entitled to receive any and all sums which may be awarded and become
payable to Grantor for condemnation of the Mortgaged Property or any part
thereof, for public or quasi-public use, or by virtue of private sale in lieu
thereof, and any sums which may be awarded or become payable to Grantor for
damages caused by public works or construction on or near the Mortgaged
Property.  All such sums are hereby
assigned to Beneficiary, and Grantor shall, upon request of Beneficiary, make, execute,
acknowledge, and deliver any and all additional assignments and documents as
may be necessary from time to time to enable Beneficiary to collect and receipt
for any such sums.  Beneficiary shall not
be, under any circumstances, liable or responsible for failure to collect, or
exercise diligence in the collection of, any of such sums.  Any sums received by Beneficiary as a result
of condemnation shall be applied to the Indebtedness in accordance with the
provision of Section 7.4 hereof.

8.2.          Insurance Proceeds.  The proceeds
of any and all insurance upon the Mortgaged Property (other than proceeds of
general public liability insurance) shall be collected by Beneficiary, and
Beneficiary shall have the option, in Beneficiary’s sole discretion, to apply
any proceeds so collected either to the restoration of the Mortgaged Property,
in the amounts, manner, method and pursuant to such requirements and documents
as Beneficiary may require, or to the liquidation of the Indebtedness in
accordance with the provisions of Section 7.4 hereof.

8.3.          INDEMNITY.  IF BENEFICIARY IS MADE A PARTY DEFENDANT TO
ANY LITIGATION CONCERNING THIS DEED OF TRUST OR THE MORTGAGED PROPERTY OR ANY
INTEREST THEREIN, OR THE OCCUPANCY THEREOF BY GRANTOR, THEN GRANTOR SHALL
INDEMNIFY, DEFEND, AND HOLD HARMLESS BENEFICIARY FROM ALL LIABILITY, CLAIM,
LOSS, COST, OR EXPENSE BY REASON OF SUCH LITIGATION, INCLUDING WITHOUT
LIMITATION ATTORNEYS’ FEES AND EXPENSES INCURRED BY BENEFICIARY IN ANY SUCH
LITIGATION, WHETHER OR NOT ANY SUCH LITIGATION IS PROSECUTED TO JUDGMENT AND
WHETHER OR NOT AS THE RESULT OF THE NEGLIGENCE OF ANY PARTY SO
INDEMNIFIED.  IF BENEFICIARY BRINGS AN
ACTION AGAINST GRANTOR HEREUNDER, GRANTOR SHALL PAY TO BENEFICIARY, BENEFICIARY’S
ATTORNEYS’ FEES AND EXPENSES, AND THE RIGHT TO SUCH ATTORNEYS’ FEES AND
EXPENSES SHALL BE DEEMED TO HAVE ACCRUED ON THE COMMENCEMENT OF SUCH ACTION,
AND SHALL BE ENFORCEABLE WHETHER OR NOT SUCH ACTION IS PROSECUTED TO
JUDGMENT.  IF GRANTOR BREACHES ANY TERM
OF THIS DEED OF TRUST OR IF BENEFICIARY BELIEVES IT IS NECESSARY OR DESIRABLE TO
TAKE ANY ACTION TO PROTECT OR ENFORCE THE LIEN OR SECURITY INTEREST HEREBY
CREATED IN THE MORTGAGED PROPERTY OR THE

 26
 

COVENANTS
HEREIN OR IN THE OTHER LOAN DOCUMENTS, BENEFICIARY MAY EMPLOY AN ATTORNEY OR
ATTORNEYS TO PROTECT ITS RIGHTS HEREUNDER AND THEREUNDER, AND IN THE EVENT OF
SUCH EMPLOYMENT, GRANTOR SHALL PAY BENEFICIARY THE ATTORNEYS’ FEES AND EXPENSES
INCURRED BY BENEFICIARY, WHETHER OR NOT AN ACTION IS ACTUALLY COMMENCED AGAINST
GRANTOR BY REASON OF SUCH BREACH AND INCLUDING, WITHOUT LIMITATION, A JUDICIAL
FORECLOSURE ACTION OR A FORECLOSURE PROCEEDING PURSUANT TO THE POWER OF SALE
PROVIDED HEREIN.

8.4.          Subrogation.  Grantor
waives any and all right to claim, recover, or subrogation against Beneficiary
or its officers, directors, employees, agents, attorneys, or representatives
for loss or damage to Grantor, the Mortgaged Property, Grantor’s property or
the property of others under Grantor’s control from any cause insured against
or required to be insured against by the provisions of the Loan Documents.

8.5.          Waiver of Setoff.  The
Indebtedness, or any part thereof, shall be paid by Grantor without notice,
demand, counterclaim, setoff, deduction, or defense and without abatement,
suspension, deferment, diminution, or reduction by reason of: (i) any damage
to, destruction of, or any condemnation or similar taking of the Mortgaged
Property; (ii) any restriction or prevention of or interference with any use of
the Mortgaged Property; (iii) any title defect or encumbrance or any eviction
from the Mortgaged Property by superior title or otherwise; (iv) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation, or other like proceeding relating to Trustee, Beneficiary, or
Grantor, or any action taken with respect to this Deed of Trust by any trustee
or receiver of Beneficiary or Grantor, or by any court, in any such proceeding;
(v) any claim which Grantor has or might have against Trustee or Beneficiary,
(vi) any default or failure on the part of Beneficiary to perform or comply
with any of the terms hereof or of any other agreement with Grantor; or (vii)
any other occurrence whatsoever, whether similar or dissimilar to the
foregoing, whether or not Grantor shall have notice or knowledge of any of the
foregoing.  Except as expressly provided
herein, Grantor waives all rights now or hereafter conferred by statute or
otherwise to any abatement, suspension, deferment, diminution, or reduction of
the Indebtedness.

8.6.          Setoff.  Beneficiary
shall be entitled to exercise both the rights of setoff and banker’s lien, if
applicable, against the interest of Grantor in and to each and every account
and other property of Grantor which are in the possession of Beneficiary to the
full extent of the outstanding balance of the Indebtedness.

8.7.          Consent to Disposition.  It is
expressly agreed that Beneficiary may predicate Beneficiary’s decision to grant
or withhold consent to a Disposition on such terms and conditions as
Beneficiary may require, in Beneficiary’s sole discretion, including without
limitation, the following: (i) consideration of the creditworthiness of the
party to whom such Disposition will be made and its management ability with
respect to the Mortgaged Property, (ii) consideration of whether the security
for repayment of the Indebtedness and the performance and discharge of the
Obligations, or Beneficiary’s ability to enforce its rights, remedies, and
recourses with respect to such security, will be impaired in any way by the
proposed Disposition, (iii) an increase in the rate of interest payable under
the Note or any other change in the terms and provisions of the Note and other
Loan Documents, (iv) reimbursement of Beneficiary for all costs and expenses
incurred by Beneficiary in investigating the creditworthiness and management
ability of the party to whom such Disposition will be made and in determining
whether Beneficiary’s security will be impaired by the proposed Disposition,
(v) payment to Beneficiary of a transfer fee to cover the cost of documenting
the Disposition in its records, (vi) payment of Beneficiary’s reasonable
attorneys’ fees in connection with such Disposition, (vii) the express
assumption of payment

 27
 

of the
Indebtedness and performance and discharge of the Obligations by the party to
whom such Disposition will be made (with or without the release of Grantor from
liability for such Indebtedness and Obligations), (viii) the execution of
assumption agreements, modification agreements, supplemental loan documents,
and financing statements, satisfactory in form and substance to Beneficiary,
(ix) endorsements (to the extent available under applicable law) to any
existing mortgagee title insurance policies insuring Beneficiary’s liens and
security interests covering the Mortgaged Property, and (x) the provision of additional
security for the payment of the Indebtedness and performance and discharge of
the Obligations.

8.8.          Consent to Subordinate Mortgage. 
In the event of the consent by Beneficiary to the granting of a
Subordinate Mortgage, or in the event the above-described right of
Beneficiary to declare the Indebtedness to be immediately due and payable upon
the granting of a Subordinate Mortgage without the prior written consent of
Beneficiary is determined by a court of competent jurisdiction to be
unenforceable under the provisions of any applicable law, Grantor will not
execute or deliver any Subordinate Mortgage unless (i) it shall contain express
covenants to the effect: (1) that the Subordinate Mortgage is in all respects
unconditionally subject and subordinate to the lien and security interest
evidenced by this Deed of Trust and each term and provision hereof; (2) that if
any action or proceeding shall be instituted to foreclose the Subordinate
Mortgage (regardless of whether the same is a judicial proceeding or pursuant
to a power of sale contained therein), no tenant of any portion of the
Mortgaged Property will be named as a party defendant, nor will any action be
taken with respect to the Mortgaged Property which would terminate any
occupancy or tenancy of the Mortgaged Property without the prior written
consent of Beneficiary; (3) that the rents and profits, if collected through a
receiver or by the holder of the Subordinate Mortgage, shall be applied first
to the Indebtedness, next to the payment of the Impositions, and then to the
performance and discharge of the Obligations; and (4) that if any action or
proceeding shall be brought to foreclose the Subordinate Mortgage (regardless
of whether the same is a judicial proceeding or pursuant to a power of sale
contained therein), written notice of the commencement thereof will be given to
Beneficiary contemporaneously with the commencement of such action or
proceeding; and (ii) a copy thereof shall have been delivered to Beneficiary
not less than ten (10) days prior to the date of the execution of such
Subordinate Mortgage.

ARTICLE
IX

ASSIGNMENT OF LEASES AND RENTS

9.1.          Assignment.  For Ten
Dollars ($10.00) and other good and valuable consideration, including the
indebtedness evidenced by the Note, the receipt and sufficiency of which are
hereby acknowledged and confessed, Grantor has GRANTED, BARGAINED, SOLD, and
CONVEYED, and by these presents does GRANT, BARGAIN, SELL, and CONVEY unto
Beneficiary, as security for the payment of the Indebtedness and the performance
and discharge of the Obligations, the Leases and the Rents subject only to the
Permitted Exceptions applicable thereto and the License (hereinafter defined);
TO HAVE AND TO HOLD the Leases and the Rents unto Beneficiary, forever, and
Grantor does hereby bind itself, its successors, and assigns to warrant and
forever defend the title to the Leases and the Rents unto Beneficiary against
every person whomsoever lawfully claiming or to claim the same or any part
thereof; provided, however, that if Grantor shall pay or cause to be paid the
Indebtedness as and when same shall become due and payable and shall perform
and discharge or cause to be performed and discharged the Obligations on or
before the date same are to be performed and discharged, then this assignment
shall terminate and be of no further force and effect, and all rights, titles,
and interests conveyed pursuant to this assignment shall become vested in
Grantor without the necessity of any further act or requirement by Grantor,
Trustee, or Beneficiary.

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9.2.          Limited License.  Beneficiary
hereby grants to Grantor a limited license (the “License”), nonexclusive
with the rights of Beneficiary reserved in Section 9.1 hereof, to
exercise and enjoy all incidences of the status of a lessor of the Leases and
the Rents, including without limitation, the right to collect, demand, sue for,
attach, levy, recover, and receive the Rents, and to give proper receipts,
releases, and acquittances therefor. 
Grantor hereby agrees to receive all Rents and hold the same as a trust
fund to be applied, and to apply the Rents so collected, first to the payment
of the Indebtedness, next to the payment of the Impositions, and then to the
performance and discharge of the Obligations. 
Thereafter, Grantor may use the balance of the Rent collected in any
manner not inconsistent with the Loan Documents.

9.3.          Enforcement of Leases.  So long as
the License is in effect, Grantor shall (i) duly and punctually perform and
comply with any and all representations, warranties, covenants, and agreements
expressed as binding upon the lessor under any Lease, (ii) maintain each of the
Leases in full force and effect during the term thereof, (iii) appear in and
defend any action or proceeding in any manner connected with any of the Leases,
(iv) deliver to Beneficiary copies of all Leases, and (v) deliver to
Beneficiary such further information, and execute and deliver to Beneficiary
such further assurances and assignments, with respect to the Leases as
Beneficiary may from time to time request. 
Without Beneficiary’s prior written consent, Grantor shall not (1) do or
knowingly permit to be done anything to impair the value of any of the Leases,
(2) except for security or similar deposits, collect any of the Rent more than
one month in advance of the time when the same becomes due under the terms of
any Lease, (3) discount any future accruing Rents, (4) amend, modify, or
terminate any of the Leases without the consent of Beneficiary, which consent
should not be unreasonably withheld, or (5) assign or grant a security interest
in or to the License or any of the Leases and/or Rents.

9.4.          No Merger of Estates.  So long as
any part of the Indebtedness and the Obligations secured hereby remain unpaid
and unperformed or undischarged, the fee and leasehold estates to the Mortgaged
Property shall not merge but rather shall remain separate and distinct,
notwithstanding the union of such estates either in Grantor, Beneficiary, any
lessee, or any third party purchaser or otherwise.

9.5.          Grantor’s Indemnities.  So long as
the License is in effect, Grantor shall indemnify and hold harmless Beneficiary
and Trustee from and against any and all liability, loss, cost, damage, or
expense which Beneficiary may incur under or by reason of this assignment, or
for any action taken by Beneficiary and/or Trustee hereunder, or by reason of
or in defense of any and all claims and demands whatsoever which may be
asserted against Beneficiary and/or Trustee arising out of the Leases or with
respect to the Rents.  In the event Beneficiary
and/or Trustee incurs any such liability, loss, cost, damage, or expense, the
amount thereof together with all reasonable attorneys’ fees and interest
thereon at the Default Rate shall be payable by Grantor to Beneficiary and/or
Trustee immediately, without demand, and shall be deemed a part of the
Indebtedness and secured under Article II hereof.

ARTICLE
X

SECURITY AGREEMENT

10.1.        Security Interest.  This Deed of
Trust (i) shall be construed as a deed of trust on real property, and (ii)
shall also constitute and serve as a “Security Agreement” on personal property
within the meaning of, and shall constitute until the grant of this Deed of
Trust shall terminate as provided in Article II hereof, a first and
prior security interest under the Code as to property within the scope thereof
and in the state where the Mortgaged Property is located with respect to the
Personalty, Fixtures, Contracts, Leases and Rents.  To this end, Grantor has GRANTED, BARGAINED,
CONVEYED, ASSIGNED, TRANSFERRED, and SET OVER, and by these presents does
GRANT, BARGAIN,

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CONVEY, ASSIGN,
TRANSFER and SET OVER, unto Beneficiary, a first and prior security interest in
all of Grantor’s right, title and interest in, to, under and with respect to
the Personalty, Fixtures, Contracts, Leases, and Rents to secure the full and
timely payment of the Indebtedness and the full and timely performance and
discharge of the Obligations.  It is the
intent of Grantor, Beneficiary, and Trustee that this Deed of Trust encumber
all Leases and Rents, that all items contained in the definition of “Leases”
and “Rents” which are included within the Code be covered by the security
interest granted in this Article X, and that all items contained in the
definition of “Leases” and “Rents” which are excluded from the Code be covered
by the provisions of Article II and Article IX hereof.

10.2.        Financing Statements.  Grantor
hereby agrees with Beneficiary to execute and deliver to Beneficiary, in form
and substance satisfactory to Beneficiary, such “Financing Statements” and such
further assurances as Beneficiary may, from time to time, reasonably consider
necessary to create, perfect, and preserve Beneficiary’s security interest
herein granted, and Beneficiary may cause such statements and assurances to be
recorded and filed, at such times and places as may be required or permitted by
law to so create, perfect, and preserve such security interest.

10.3.        Fixture Filing.  This Deed of
Trust shall also constitute a “fixture filing” for the purposes of the
Code.  All or part of the Mortgaged
Property are or are to become fixtures; information concerning the security
interest herein granted may be obtained from the parties at the address of the
parties set forth herein.  For purposes
of the security interest herein granted, the address of debtor (Grantor) is set
forth in the first paragraph of this Deed of Trust and the address of the
secured party (Beneficiary) is set forth in Article I hereof.

ARTICLE
XI

CONCERNING THE TRUSTEE

11.1.        No Required Action.  Trustee shall
not be required to take any action toward the execution and enforcement of the
trust hereby created or to institute, appear in, or defend any action, suit, or
other proceeding in connection therewith where, in his opinion, such action
would be likely to involve him in expense or liability, unless requested so to
do by a written instrument signed by Beneficiary and, if Trustee so requests,
unless Trustee is tendered security and indemnity satisfactory to Trustee
against any and all cost, expense, and liability arising therefrom.  Trustee shall not be responsible for the
execution, acknowledgment, or validity of the Loan Documents, or for the proper
authorization thereof, or for the sufficiency of the lien and security interest
purported to be created hereby, and Trustee makes no representation in respect
thereof or in respect of the rights, remedies, and recourses of Beneficiary.

11.2.        Certain Rights.  With the
approval of Beneficiary, Trustee shall have the right to take any and all of
the following actions: (i) to select, employ, and advise with counsel (who may
be, but need not be, counsel for Beneficiary) upon any matters arising
hereunder, including the preparation, execution, and interpretation of the Loan
Documents, and shall be fully protected in relying as to legal matters on the
advice of counsel, (ii) to execute any of the trusts and powers hereof and to
perform any duty hereunder either directly or through his agents or attorneys,
(iii) to select and employ, in and about the execution of his duties hereunder,
suitable accountants, engineers and other experts, agents and
attorneys-in-fact, either corporate or individual, not regularly in the employ
of Trustee, and Trustee shall not be answerable for any act, default,
negligence, or misconduct of any such accountant, engineer or other expert,
agent or attorney-in-fact, if selected with reasonable care, or for any error
of judgment or act done by Trustee in good faith, or be otherwise responsible
or accountable under any circumstances whatsoever, except for Trustee’s gross
negligence or bad faith, and (iv) any and all other lawful action as
Beneficiary may instruct Trustee to take to protect or enforce Beneficiary’s
rights hereunder.  Trustee shall not be

 30
 

personally liable
in case of entry by Trustee, or anyone entering by virtue of the powers herein
granted to Trustee, upon the Mortgaged Property for debts contracted for or
liability or damages incurred in the management or operation of the Mortgaged
Property.  Trustee shall have the right
to rely on any instrument, document, or signature authorizing or supporting any
action taken or proposed to be taken by Trustee hereunder, believed by Trustee
in good faith to be genuine.  Trustee
shall be entitled to reimbursement for expenses incurred by Trustee in the
performance of Trustee’s duties hereunder and to reasonable compensation for
such of Trustee’s services hereunder as shall be rendered.  Grantor will, from time to time, pay the
compensation due to Trustee hereunder and reimburse Trustee for, and save Trustee
harmless against, any and all liability and expenses which may be incurred by
Trustee in the performance of Trustee’s duties.

11.3.        Retention of Money.  All moneys
received by Trustee shall, until used or applied as herein provided, be held in
trust for the purposes for which they were received, but need not be segregated
in any manner from any other moneys (except to the extent required by
applicable law) and Trustee shall be under no liability for interest on any
moneys received by Trustee hereunder.

11.4.        No Representation by Trustee or Beneficiary. 
By accepting or approving anything required to be observed, performed,
or fulfilled or to be given to Trustee or Beneficiary pursuant to the Loan
Documents, including without limitation, any officer’s certificate, balance
sheet, statement of profit and loss or other financial statement, survey,
appraisal, or insurance policy, neither Trustee nor Beneficiary shall be deemed
to have warranted, consented to, or affirmed the sufficiency, legality, effectiveness,
or legal effect of the same, or of any term, provision, or condition thereof,
and such acceptance or approval thereof shall not be or constitute any warranty
or affirmation with respect thereto by Trustee or Beneficiary.

ARTICLE
XII

MISCELLANEOUS

12.1.        Release.  If the
Indebtedness is paid in full in accordance with the terms of this Deed of
Trust, the Note, and the other Loan Documents, and if Grantor shall well and
truly perform each and every one of the Obligations to be performed and
discharged in accordance with the terms of this Deed of Trust, the Note and the
other Loan Documents, then this conveyance shall become null and void, and
Beneficiary will execute and deliver to Grantor such documents as may be
required to release this Deed of Trust of record at Grantor’s request and
expense, and Beneficiary shall have no further obligation to make advances
under and pursuant to the provisions hereof or in the other Loan Documents.

12.2.        Performance at Grantor’s Expense. 
Subject to the provisions of Section 12.11 hereof, Grantor shall
(i) pay all legal fees incurred by Beneficiary in connection with the
preparation of the Loan Documents (including any amendments thereto or
consents, releases, or waivers granted thereunder); (ii) reimburse Beneficiary,
promptly upon demand, for all amounts expended, advanced, or incurred by
Beneficiary to satisfy any obligation of Grantor under the Loan Documents,
which amounts shall include all court costs, attorneys’ fees (including,
without limitation, for trial, appeal, or other proceedings), fees of auditors
and accountants and other investigation expenses reasonably incurred by
Beneficiary in connection with any such matters; and (iii) any and all other
costs and expenses of performing or complying with any and all of the
Obligations.  Except to the extent that
costs and expenses are included within the definition of “Indebtedness”, the
payment of such costs and expenses shall not be credited, in any way and to any
extent, against any installment on or portion of the Indebtedness.

 31
 

12.3.        Survival of Obligations.  Each and all
of the Obligations shall survive the execution and delivery of the Loan
Documents and the consummation of the loan called for therein and shall
continue in full force and effect until the Indebtedness shall have been paid
in full; provided, however, that nothing contained in this Section 12.3
shall limit the obligations of Grantor as otherwise set forth herein.

12.4.        Recording and Filing.  Grantor will
cause the Loan Documents (requested by the Beneficiary) and all amendments and
supplements thereto and substitutions therefor to be recorded, filed,
re-recorded, and refiled in such manner and in such places as Trustee or
Beneficiary shall reasonably request, and will pay all such recording, filing,
re-recording and refiling taxes, documentary stamp taxes, fees, and other
charges.

12.5.        Notices.  All notices
or other communications required or permitted to be given pursuant to this Deed
of Trust shall be in writing and shall be considered as properly given if (i)
mailed by first class United States mail, postage prepaid, registered or
certified with return receipt requested, (ii) by delivering same in person to
the intended addressee, (iii) by delivery to an independent third party
commercial delivery service for same day or next day delivery and providing for
evidence of receipt at the office of the intended addressee, or (iv) by prepaid
telegram, telex, or telefacsimile to the addressee.  Notice so mailed shall be effective upon its
deposit with the United States Postal Service or any successor thereto; notice
sent by such a commercial delivery service shall be effective upon delivery to
such commercial delivery service; notice given by personal delivery shall be
effective only if and when received by the addressee; and notice given by other
means shall be effective only if and when received at the office or designated
place or machine of the intended addressee. 
For purposes of notice, the addresses of the parties shall be as set
forth on page 1 of this Deed of Trust; provided, however, that either party
shall have the right to change its address for notice hereunder to any other
location within the continental United States by the giving of thirty (30) days’
notice to the other party in the manner set forth herein.

12.6.        Covenants Running with the Land. 
All Obligations contained in this Deed of Trust and the other Loan
Documents are intended by Grantor, Beneficiary, and Trustee to be, and shall be
construed as, covenants running with the Mortgaged Property until the lien of
this Deed of Trust has been fully released by Beneficiary.

12.7.        Successors and Assigns.  Subject to
the provisions of Section 6.8 hereof, all of the terms of the Loan
Documents shall apply to, be binding upon, and inure to the benefit of the
parties thereto, their successors, assigns, heirs, and legal representatives
and all other persons claiming by, through, or under them.

12.8.        No Waiver; Severability.  Any failure
by Trustee or Beneficiary to insist, or any election by Trustee or Beneficiary
not to insist, upon strict performance by Grantor or others of any of the
terms, provisions, or conditions of the Loan Documents shall not be deemed to
be a waiver of same or of any other terms, provisions, or conditions thereof,
and Trustee or Beneficiary shall have the right at any time or times thereafter
to insist upon strict performance by Grantor or others of any and all of such
terms, provisions, and conditions.  The
Loan Documents are intended to be performed in accordance with, and only to the
extent permitted by, all applicable Legal Requirements.  If any provision of any of the Loan Documents
or the application thereof to any person or circumstance shall, for any reason
and to any extent, be invalid or unenforceable, then neither the remainder of
the instrument in which such provision is contained nor the application of such
provision to other persons or circumstances nor the other instruments referred
to herein shall be affected thereby, but rather shall be enforced to the
greatest extent permitted by law.

 32
 

12.9.        Counterparts.  To facilitate
execution, this Deed of Trust may be executed in as many counterparts as may be
convenient or required.  It shall not be
necessary that the signature and acknowledgment of, or on behalf of, each party,
or that the signature and acknowledgment of all persons required to bind any
party, appear on each counterpart.  All
counterparts shall collectively constitute a single instrument.  It shall not be necessary in making proof of
this Deed of Trust to produce or account for more than a single counterpart
containing the respective signatures and acknowledgment of, or on behalf of,
each of the parties hereto.  Any
signature and acknowledgment page to any counterpart may be detached from such
counterpart without impairing the legal effect of the signatures and
acknowledgments thereon and thereafter attached to another counterpart
identical thereto except having attached to it additional signature and
acknowledgment pages.

12.10.      Applicable Law.  The Loan Documents
shall be governed by and construed according to the laws of the State of
Colorado from time to time in effect except to the extent preempted by United
States federal law.

12.11.      Controlling Agreement.  It is
expressly stipulated and agreed to be the intent of Grantor, Trustee and
Beneficiary at all times to comply with applicable Colorado law or applicable
United States federal law (to the extent that it permits Beneficiary to
contract for, charge, take, reserve, or receive a greater amount of interest
than under Colorado law) and that this section shall control every other
covenant and agreement in this Deed of Trust and the other Loan Documents.  If the applicable law is ever judicially
interpreted so as to render usurious any amount called for under the Note or
under any of the other Loan Documents, or contracted for, charged, taken,
reserved, or received with respect to the Indebtedness, or if Beneficiary’s
exercise of the option to accelerate the maturity of the Note, or if any
prepayment by Grantor results in Grantor having paid any interest in excess of
that permitted by applicable law, then it is Grantor’s, Trustee’s and
Beneficiary’s express intent that all excess amounts theretofore collected by
Beneficiary shall be credited on the principal balance of the Note and all
other Indebtedness (or, if the Note and all other Indebtedness have been or
would thereby be paid in full, refunded to Grantor), and the provisions of the
Note and the other Loan Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new documents, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder or thereunder.  All sums paid
or agreed to be paid to Beneficiary for the use, forbearance, or detention of
the Indebtedness shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Indebtedness until payment in full so that the rate or amount of interest
on account of the Indebtedness does not exceed the Maximum Lawful Rate from
time to time in effect and applicable to the Indebtedness for so long as the
Indebtedness is outstanding.  Notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, it is not the intention
of Trustee and/or Beneficiary to accelerate the maturity of any interest that
has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.

12.12.      Subrogation.  If any or all
of the proceeds of the Note have been used to extinguish, extend or renew any
indebtedness heretofore existing against the Mortgaged Property, then, to the
extent of such funds so used, Beneficiary shall be subrogated to all of the
rights, claims, liens, titles, and interests existing against the Mortgaged
Property heretofore held by, or in favor of, the holder of such indebtedness
and such former rights, claims, liens, titles, and interests, if any, are not
waived but rather are continued in full force and effect in favor of
Beneficiary and are merged with the lien and security interest created herein
as cumulative security for the repayment of the Indebtedness and the
performance and discharge of the Obligations.

 33
 

12.13.      Rights Cumulative.  Beneficiary
shall have all rights, remedies, and recourses granted in the Loan Documents
and available at law or in equity (including, without limitation, those granted
by the Code and applicable to the Mortgaged Property or any portion thereof),
and the same (i) shall be cumulative and concurrent, (ii) may be pursued
separately, successively, or concurrently against Grantor or others obligated
for the Indebtedness or any part thereof, or against any one or more of them,
or against the Mortgaged Property, at the sole discretion of Beneficiary, (iii)
may be exercised as often as occasion therefor shall arise, it being agreed by
Grantor that the exercise, discontinuance of the exercise of or failure to
exercise any of the same shall in no event be construed as a waiver or release
thereof or of any other right, remedy, or recourse, and (iv) are intended to
be, and shall be, nonexclusive.  All rights
and remedies of Beneficiary hereunder and under the other Loan Documents shall
extend to any period after the initiation of foreclosure proceedings, judicial
or otherwise, with respect to the Mortgaged Property.

12.14.      Payments.  Remittances
in payment of any part of the Indebtedness other than in the required amount in
funds immediately available at the place where the Note is payable shall not,
regardless of any receipt or credit issued therefor, constitute payment until
the required amount is actually received by Beneficiary in funds immediately
available at the place where the Note is payable (or such other place as
Beneficiary, in Beneficiary’s sole discretion, may have established by delivery
of written notice thereof to Grantor) and shall be made and accepted subject to
the condition that any check or draft may be handled for collection in
accordance with the practice of the collecting bank or banks.  Acceptance by Beneficiary of any payment in
an amount less than the amount then due shall be deemed an acceptance on
account only, and the failure to pay the entire amount then due shall be and
continue to be an Event of Default.

12.15.      Exceptions to Covenants.  Grantor shall
not be deemed to be permitted to take any action or to fail to take any action
with respect to any particular covenant or condition contained herein or in any
of the Loan Documents if the action or omission would result in the breach of
any other covenant or condition contained herein or in any of the Loan
Documents which has not been specifically waived or consented to by
Beneficiary, nor shall Beneficiary be deemed to have consented to any such act
or omission if the same would provide cause for acceleration of the
Indebtedness as a result of the breach of any other covenant or condition
contained herein or in any of the Loan Documents which has not been
specifically waived or consented to by Beneficiary.

12.16.      Reliance.  Grantor
recognizes and acknowledges that in entering into the loan transaction
evidenced by the Loan Documents and accepting this Deed of Trust, Beneficiary
is expressly and primarily relying on the truth and accuracy of the foregoing
warranties and representations set forth in Article III hereof without
any obligation to investigate the Mortgaged Property and notwithstanding any
investigation of the Mortgaged Property by Beneficiary; that such reliance
exists on the part of Beneficiary prior hereto; that such warranties and
representations are a material inducement to Beneficiary in making the loan
evidenced by the Loan Documents and accepting of this Deed of Trust; and that
Beneficiary would not be willing to make the loan evidenced by the Loan
Documents and accept this Deed of Trust in the absence of any of such
warranties and representations.

12.17.      Change of Security.  Any part of
the Mortgaged Property may be released, regardless of consideration, by
Beneficiary from time to time without impairing, subordinating, or affecting in
any way the lien, security interest, and other rights hereof against the
remainder.  The lien, security interest,
and other rights granted hereby shall not be affected by any other security
taken for the Indebtedness or Obligations, or any part thereof.  The taking of additional collateral, or the
amendment, extension, renewal, or rearrangement of the Indebtedness or Obligations,
or any part thereof, shall not release or impair the lien, security interest,
and other rights granted hereby, or affect the liability of any endorser or

 34
 

guarantor or
improve the right of any junior lienholder; and this Deed of Trust, as well as
any instrument given to secure any amendment, extension, renewal, or
rearrangement of the Indebtedness or Obligations, or any part thereof, shall be
and remain a first and prior lien, except as otherwise provided herein, on all
of the Mortgaged Property not expressly released until the Indebtedness is
fully paid and the Obligations are fully performed and discharged.

12.18.      Headings.  The Article,
Section, and Subsection entitlements hereof are inserted for convenience of
reference only and shall in no way alter, modify, or define, or be used in
construing the text of such Articles, Sections, or Subsections.

12.19.      Entire Agreement; Amendment. 
THIS DEED OF TRUST AND THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED
OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
OR DISCUSSIONS OF THE PARTIES HERETO. 
THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.  The provisions of this Deed of Trust and the
other Loan Documents may be amended or waived only by an instrument in writing
signed by the respective parties to such documents.

12.20.      Waiver of Right to Trial by Jury. 
GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM THAT RELATES TO OR
ARISES OUT OF ANY OF THE LOAN DOCUMENTS OR THE ACTS OR FAILURE TO ACT OF OR BY
BENEFICIARY IN THE ENFORCEMENT OF ANY OF THE TERMS OR PROVISIONS OF THIS DEED
OF TRUST OR THE OTHER LOAN DOCUMENTS.

12.21.      SPECIFIC NOTICE REGARDING INDEMNITIES.  IT IS EXPRESSLY AGREED AND UNDERSTOOD THAT
THIS DEED OF TRUST INCLUDES INDEMNIFICATION PROVISIONS WHICH, IN CERTAIN
CIRCUMSTANCES, COULD INCLUDE AN INDEMNIFICATION BY GRANTOR OF BENEFICIARY FROM
CLAIMS OR LOSSES ARISING AS A RESULT OF BENEFICIARY’S OWN NEGLIGENCE.

[SIGNATURES FOLLOW ON
NEXT PAGE]

 35

EXECUTED as of the date
first above written.

	
   

  	
  GRANTOR:

  
	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD CORDILLERA,
  LLC,

  
	
   

  	
  a Delaware limited liability
  company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Gerald J. Reihsen,
  III

  	
   

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President

  

 

	
  STATE OF TEXAS

  	
   

  	
  ‘

  
	
   

  	
   

  	
  ‘

  
	
  COUNTY OF DALLAS

  	
   

  	
  ‘

  

 

The foregoing instrument was ACKNOWLEDGED before me
this 4th day of
June 2007, by Gerald J. Reihsen, III, the Executive Vice President of BEHRINGER
HARVARD CORDILLERA, LLC, a Delaware limited liability company, on behalf of
said limited liability company.

	
  [ S E A L ]

  	
   

  	
  /s/ Patricia Flournoy

  
	
   

  	
   

  	
  Notary Public, State of Texas

  
	
  My Commission Expires:

  	
   

  	
   

  
	
  August 19, 2011

  	
   

  	
  Patricia Flournoy

  
	
   

  	
   

  	
  (Printed Name of Notary Public)

  

 

EXHIBIT A

LEGAL DESCRIPTION

Grouse on
the Green Real Property

TRACT F, CORDILLERA SUBDIVISION, FILING NO. 16, ACCORDING
TO THE CORRECTION PLAT RECORDED NOVEMBER 21, 1994 IN BOOK 655 AT PAGE 562,
COUNTY OF EAGLE, STATE OF COLORADO.

TOGETHER WITH EASEMENTS AND BENEFITS AS DESCRIBED IN
AMENDED AND RESTATED DECLARATION OF PROTECTIVE COVENANTS RECORDED MAY 12, 1993
IN BOOK 608 AT PAGE 785 AND SECOND AMENDMENT THERETO RECORDED MAY 11, 1998 AT
RECEPTION NO. 655728, AFFIDAVIT OF CLARIFICATION RECORDED MAY 10, 1995 IN BOOK
663 AT PAGE 72, COUNTY OF EAGLE, STATE OF COLORADO.

TOGETHER WITH NONEXCLUSIVE INGRESS AND EGRESS EASEMENTS
RESERVED PURSUANT TO THE QUITCLAIM DEEDS RECORDED APRIL 21, 2003 AT RECEPTION
NO. 830524, 830525, 830526, 830527, 830528, 830529 AND 830530, COUNTY OF EAGLE,
STATE OF COLORADO.

Lodge and Spa Real Property

LOT 1, ACCORDING TO THE “AMENDED FINAL PLAT, LOT 36,
CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2; LOT 1, FILING NO. 1,
CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2; AND TRACT X, CORDILLERA SUBDIVISION
FILING NO. 3”, RECORDED JANUARY 14, 2003 AT RECEPTION NO. 820221, COUNTY OF
EAGLE, STATE OF COLORADO.

TOGETHER WITH THOSE RIGHTS AND EASEMENTS CREATED IN FAVOR
OF THE “LODGE OWNER” BY THAT CERTAIN LODGE ACCESS AND USE EASEMENT AND
AGREEMENT DATED AS OF DECEMBER 18, 2003, EXECUTED BY AND AMONG KENSINGTON
PARTNERS, A COLORADO GENERAL PARTNERSHIP, STAG GULCH PARTNERS, A COLORADO
GENERAL PARTNERSHIP, CORDILLERA VALLEY CLUB INVESTORS LIMITED PARTNERSHIP, A
COLORADO LIMITED PARTNERSHIP, GALENA PARTNERS, A COLORADO GENERAL PARTNERSHIP,
SQUAW CREEK REALTY CORP., A COLORADO CORPORATION, EAGLE GOLF LLC, A COLORADO
LIMITED LIABILITY COMPANY, VALLEY GOLF LLC, A COLORADO LIMITED LIABILITY
COMPANY, CORDILLERA SUMMIT GOLF, INC., A COLORADO CORPORATION, CORDILLERA CLUB
PROPERTIES, LLC, A COLORADO LIMITED LIABILITY COMPANY, AND GALENA PARTNERS, A
COLORADO GENERAL PARTNERSHIP, A MEMORANDUM OF WHICH WAS RECORDED DECEMBER 18,
2003, AT RECEPTION NO. 862395, COUNTY OF EAGLE, STATE OF COLORADO.

TOGETHER WITH EASEMENTS AND BENEFITS AS DESCRIBED IN
AMENDED AND RESTATED DECLARATION OF PROTECTIVE COVENANTS RECORDED MAY 12, 1993
IN BOOK 608 AT PAGE 785 AND SECOND AMENDMENT THERETO RECORDED MAY 11, 1998 AT
RECEPTION NO. 655728, AFFIDAVIT OF CLARIFICATION RECORDED MAY 10, 1995 IN BOOK
663 AT PAGE 72, COUNTY OF EAGLE, STATE OF COLORADO.

TOGETHER WITH NONEXCLUSIVE INGRESS AND EGRESS EASEMENTS
RESERVED PURSUANT TO THE QUITCLAIM DEEDS RECORDED APRIL 21, 2003 AT RECEPTION
NO. 830524, 830525, 830526, 830527, 830528, 830529 AND 830530, COUNTY OF EAGLE,
STATE OF COLORADO.

 1
 

Cordillera Mountain Club

CONDOMINIUM UNIT 333-C, THE STRAWBERRY PARK CONDOMINIUMS,
IN ACCORDANCE WITH AND SUBJECT TO THE DECLARATION OF COVENANTS, CONDITIONS AND
RESTRICTIONS OF THE STRAWBERRY PARK CONDOMINIUMS, RECORDED APRIL 3, 1989, IN
BOOK 503 AT PAGE 354, AND AMENDMENT THERETO RECORDED APRIL 12, 1991 IN BOOK 551
AT PAGE 656, AND SECOND AMENDMENT THERETO RECORDED JUNE 4, 1992 IN BOOK 581 AT
PAGE 544, AND RECORDED SEPTEMBER 25, 1992 IN BOOK 590 AT PAGE 185 AND MAP RECORDED
ON APRIL 3, 1989 IN BOOK 503 AT PAGE 353.

FIRST STATEMENT OF INTENTION TO ANNEX ADDITIONAL
CONDOMINIUM UNITS AND COMMON ELEMENTS AND SUPPLEMENT TO DECLARATION OF
COVENANTS, CONDITIONS AND RESTRICTIONS OF STRAWBERRY PARK CONDOMINIUMS,
RECORDED ON MAY 30, 1989 IN BOOK 507 AT PAGE 220, AND FIRST AMENDMENT THERETO
RECORDED MAY 16, 1991 IN BOOK 554 AT PAGE 86, AND THE SUPPLEMENTAL CONDOMINIUM
MAP RECORDED MAY 30, 1989 IN BOOK 507 AT PAGE 219, AND SECOND AMENDMENT THERETO
RECORDED AUGUST 4, 1992 IN BOOK 586 AT PAGE 212, COUNTY OF EAGLE, STATE OF
COLORADO.

TOGETHER WITH PARKING SPACE NOS. 67 AND 68 AS DEPICTED AND
DESCRIBED ON THE MAPS REFERENCED ABOVE, WHICH PARKING SPACES SHALL BE LIMITED
COMMON ELEMENTS APPURTENANT TO CONDOMINIUM UNIT NO. 333-C, THE STRAWBERRY PARK
CONDOMINIUMS.

TOGETHER WITH BENEFITS AS CREATED BY THE BEAVER CREEK
DECLARATION RECORDED DECEMBER 27, 1979 IN BOOK 296 AT PAGE 446 AND ANY AND ALL
AMENDMENTS THERETO AND TOGETHER WITH BENEFITS AS CREATED BY THE STRAWBERRY PARK
CONDOMINIUM DECLARATION RECORDED APRIL 3, 1989 IN BOOK 503 AT PAGE 354 AND ANY
AND ALL SUPPLEMENTS AND AMENDMENTS THERETO.

Village Center Real Property

TRACT X, “AMENDED FINAL PLAT, LOT 36, CORDILLERA
SUBDIVISION, FILING NO. 1 & NO. 2; LOT 1, FILING NO. 1, CORDILLERA SUBDIVISION,
FILING NO. 1 & NO. 2; AND TRACT X, CORDILLERA SUBDIVISION, FILING NO. 3”,
RECORDED JANUARY 14, 2003 AT RECEPTION NO. 820221, COUNTY OF EAGLE, STATE OF
COLORADO.

TOGETHER WITH EASEMENTS AND BENEFITS AS DESCRIBED IN
AMENDED AND RESTATED DECLARATION OF PROTECTIVE COVENANTS RECORDED MAY 12, 1993
IN BOOK 608 AT PAGE 785 AND SECOND AMENDMENT THERETO RECORDED MAY 11, 1998 AT
RECEPTION NO. 655728, AFFIDAVIT OF CLARIFICATION RECORDED MAY 10, 1995 IN BOOK
663 AT PAGE 72, COUNTY OF EAGLE, STATE OF COLORADO.

TOGETHER WITH NONEXCLUSIVE INGRESS AND EGRESS EASEMENTS
RESERVED PURSUANT TO THE QUITCLAIM DEEDS RECORDED APRIL 21, 2003 AT RECEPTION
NO. 830524, 830525, 830526, 830527, 830528, 830529 AND 830530, COUNTY OF EAGLE,
STATE OF COLORADO.

 2

EXHIBIT B

PERMITTED EXCEPTIONS

Title Exceptions – Grouse on the Green

1.             Taxes for the year 2007 and subsequent years, a lien
not yet due or payable.

2.             All applicable zoning, building, land use and other
governmental restrictions, laws, ordinances, rules and regulations.

3.             All matters that would be discovered or disclosed by
an accurate inspection and ALTA/ACSM Minimum Standard Detail Survey of the real
property.

4.             Rights of tenants in possession, as tenants only.

5.             Any matters arising by, through or under grantee, its
heirs and assigns.

6.             Reservations as contained in United States Patent
recorded July 7, 1987 in Book 465 at Page 624.

7.             Terms, conditions and provisions of the Tenth
Amendment to the Cordillera Subdivision Planned Unit Development Control
document recorded October 24, 2003 at Reception No. 854897.

8.             Terms, conditions and provisions of easement agreement
for the purpose of water improvements recorded April 28, 1994 in Book 638 at
Page 880, as shown on ALTA survey prepared by Johnson, Kunkel &
Associates, dated 9/9/04, last revised October 4, 2004, last certified October
19, 2004, Job No. EA04372.

9.             Easements, conditions, covenants, restrictions,
reservations and notes on the corrected final plat of Cordillera Subdivision
Filing No. 16 recorded November 21, 1994 in Book 655 at Page 562.

10.           Terms, conditions and provisions of supplemental
declaration of owner consent to creation of utility easement upon, across, over
and under Tract F, Cordillera Subdivision, Filing No. 16 recorded September 24,
2001 at Reception No. 768136.

11.           Terms, conditions and provisions of agreement recorded
December 11, 2003 at Reception No. 861491.

Note: Amended and
Restated Declaration of Protective Covenants, Conditions, and Restrictions for
Cordillera but omitting any covenants or restrictions, if any, based upon race,
color, religion, sex, sexual orientation, familial status, marital status,
disability, handicap, national origin, ancestry, or source of income, as set
forth in applicable state or federal laws, except to the extent that said
covenant or restriction is permitted by applicable law as contained in
instrument recorded May 12, 1993 in Book 608 at Page 785, Owner
Consent recorded August 19, 1994 in Book 648 at Page 203, supplement
thereto recorded august 19, 1994 in Book 648 at Page 204, and Second
Amendment thereto recorded May 11, 1998 at Reception No. 655728.

Affidavit of
Clarification recorded March 10, 1995 in Book 663 at Page 72.

 1
 

Note: Notice of Levy of
Real Estate Transfer Assessment recorded June 25, 2001 at Reception No. 760375.

12.           The effect of asphalt parking and concrete golf cart
path onto utility easement as shown on ALTA survey prepared by Johnson, Kunkel
& Associates, Inc., dated 9/9/04, last revised October 4, 2004, last
certified October 19, 2004, Job No. EA04372 and updated October, 2006.

13.           The effect of net not within subject property as shown
on ALTA survey prepared by Johnson, Kunkel & Associates, Inc., dated
9/9/04, last revised October 4, 2004, last certified October 19, 2004, Job No.
EA04372 and updated October, 2006.

14.           Terms, conditions and provisions of Memorandum of
Lease recorded December 18, 2003 at Reception No. 862400.

15.           Terms, conditions and provisions of Easement Agreement
recorded December 18, 2003 at Reception No. 862401 and as rerecorded to
correct Exhibit C thereto recorded November 6, 2006 under Reception No.
200630398, as shown on ALTA survey prepared by Johnson, Kunkel &
Associates, dated 9/9/04, last revised October 4, 2004, last certified October
19, 2004, Job No. EA04372 and updated October, 2006.

Title
Exceptions – Lodge and Spa

1.             Taxes for the year 2007 and subsequent years, a lien
not yet due or payable.

2.             All applicable zoning, building, land use and other
governmental restrictions, laws, ordinances, rules and regulations.

3.             All matters that would be discovered or disclosed by
an accurate inspection and ALTA/ACSM Minimum Standard Detail Survey of the real
property.

4.             Rights of tenants in possession, as tenants only.

5.             Any matters arising by, through or under grantee, its
heirs and assigns.

6.             Right of Way for ditches or canals constructed by the
authority of the United States as reserved in United States patent recorded
July 18, 1938 in Book 123 at Page 591 and recorded June 20, 1942 in Book
128 at Page 253.

7.             Reservations contained in United States patent
recorded July 18, 1938 in Book 123 at Page 591 and in United States patent
recorded June 20, 1942 in Book 128 at Page 253, as follows: excepting and
reserving however to the United States all the coal and other minerals in the
lands so entered and patented, together with the right to prospect for, mine
and remove the same pursuant to the provisions and limitations of the act of
December 29, 1916 (39 Stat., 862).

8.             Excepting an undivided one-half interest in and to all
oil, gas and minerals in, on or under the above described property, together
with the right to prospect for, mine and remove the same as reserved in deeds
recorded June 5, 1961 in Book 165 at Page 501, September 20, 1968 in Book
213 at Page 696, October 16, 1968 in Book 213 at Page 854, and May 9,
1986 in Book 441 at Page 620.

9.             Utility easement as granted to Holy Cross Electric
Association, Inc. in instrument recorded April 11, 1994, in Book 637 at Page
50, as shown on ALTA survey prepared by Johnson,

 2
 

Kunkel & Associates,
dated 9/9/04, last revised October 4, 2004, last certified October 19, 2004,
Job No. EA04372 and updated October, 2006.

10.           Terms, conditions and provisions of Easement Agreement
recorded April 28, 1994 in Book 638 at Page 880, as shown on ALTA survey
prepared by Johnson, Kunkel & Associates, dated 9/9/04, last revised
October 4, 2004, last certified October 19, 2004, Job No. EA04372 and updated
October, 2006.

11.           Terms, conditions and provisions of Holy Cross
Electric Underground Right of Way Easement recorded June 18, 1997 in Book 729
at Page 814, Reception N. 625775, as shown on ALTA survey prepared by
Johnson, Kunkel & Associates, dated 9/9/04, last revised October 4, 2004,
last certified October 19, 2004, job no. EA04372 and updated October, 2006.

12.           Terms, conditions and provisions of the Tenth
Amendment to the Cordillera Planned Unit Development recorded October 24, 2003
at Reception No. 854897.

13.           Easements, conditions, covenants, restrictions,
reservations and notes on the recorded Plat of Amended Final Plat Lot 36,
Cordillera Subdivision, Filing No. 1 & No. 2; Lot 1, Filing No. 1,
Cordillera Subdivision Filing No. 1 & 2; and Tract X, Cordillera
Subdivision, Filing No. 3 recorded January 14, 2003 Reception No. 820221.

14.           The effect of dirt road as shown on ALTA survey
prepared by Johnson, Kunkel & Associates, Inc., dated 9/9/04, last revised
October 4, 2004, last certified October 19, 2004, Job No. EA04372 and updated
October, 2006.

15.           The effect of rock wall onto utility easement as shown
on ALTA survey prepared by Johnson, Kunkel & Associates, Inc., dated
9/9/04, last revised October 4, 2004, last certified October 19, 2004, Job No.
EA04372 and updated October, 2006.

16.           The effect of utility lines not within easements as
shown on ALTA survey prepared by Johnson, Kunkel & Associates, Inc., dated
9/9/04, last revised October 4, 2004, last certified October 19, 2004, Job No.
EA04372 and updated October, 2006.

17.           The effect of a portion of asphalt parking not within
subject property and within utility easement as shown on ALTA survey prepared
by Johnson, Kunkel & Associates, Inc., dated 9/9/04, last revised October
4, 2004, last certified October 19, 2004, Job No. EA04372 and updated October.
2006.

18.           Terms, conditions and provisions of agreement recorded
December 11, 2003 at Reception No. 861491.

Note: Amended and
Restated Declaration of Protective Covenants, Conditions, and Restrictions for
Cordillera recorded May 12, 1993 in Book 608 at Page 785, Second Amendment
thereto recorded May 11, 1998 at Reception No. 655728.

Affidavit of
Clarification recorded March 10, 1995 in Book 663 at Page 72.

Note: Notice of Levy of
Real Estate Transfer Assessment recorded June 25, 2001 at Reception No. 760375.

19.           Terms, conditions and provisions of Quitclaim Deed
recorded December 15, 2006 at Reception No. 200634237.

 3
 

20.           Terms, conditions and provisions of Memorandum of
Lease Agreement recorded December 15, 2006 at Reception No. 200634238.

Title
Exceptions – Cordillera Mountain Club

1.             Taxes for the year 2007 and subsequent years, a lien
not yet due or payable.

2.             All applicable zoning, building, land use and other
governmental restrictions, laws, ordinances, rules and regulations.

3.             All matters that would be discovered or disclosed by
an accurate inspection and ALTA/ACSM Minimum Standard Detail Survey of the real
property.

4.             Rights of tenants in possession, as tenants only.

5.             Any matters arising by, through or under grantee, its
heirs and assigns.

6.             Right of proprietor of a vein or lode to extract and
remove his ore therefrom should the same be found to penetrate or intersect the
premises as reserved in united states patent recorded September 20, 1904, in
book 48 at page 504.

7.             Right of way for ditches or canals constructed by the
authority of the United States as reserved in united states patent recorded
September 20, 1904, in book 48 at page 504.

8.             Restrictive covenants which do not contain a
forfeiture or reverter clause, but omitting any covenants or restrictions, if
any, based upon race, color, religion, sex, sexual orientation, familial
status, marital status, disability, handicap, national origin, ancestry, or
source of income, as set forth in applicable state or federal laws, except to
the extent that said covenant or restriction is permitted by applicable law, as
contained in instrument recorded December 27, 1979, in Book 296 at Page
446 and as amended in instrument recorded September 16, 1982 in book 346
at page 5, Amendment thereto recorded January 22, 1998 Reception No.
645127, and Amendment thereto recorded August 24, 1998 Reception No.
666932.

Assignment in connection
therewith recorded November 23, 1993 in Book 625 at Page 654.

9.             Easements, reservations and restrictions as shown or
reserved on the plat of Sixth Amendment to the first filing and Seventh
Amendment to the fifth filing, Beaver Creek Subdivision recorded April 4, 1988
in Book 481 at Page 618.

10.           Terms, conditions and provisions of amended and
restated guide to the Beaver Creek Planned Unit Development recorded April 26,
1994 in Book 638 at Page 584.

11.           Underground right of way easement as granted to Holy
Cross Electric Association, Inc. in instrument recorded August 8, 1988 in Book
488 at Page 743 and as shown on the plat of Sixth Amendment to the first
filing and Seventh Amendment to the fifth filing, Beaver Creek Subdivision
recorded April 4, 1988 in Book 481 at Page 618.

12.           Terms, conditions, and provisions of Consent to
Encroachments recorded September 27, 1988 in Book 491 at Page 933.

13.           Building limitations as set forth on Warranty Deed
recorded April 8, 1988 in Book 481 at Page 909 and as amended by Quit
Claim Deed recorded May 16, 1989 in Book 506 at Page 324.

 4
 

14.           Those provisions, covenants and conditions, easements
and restrictions, which are a burden to the condominium unit described in
Schedule A, but omitting any covenants or restrictions, if any, based upon
race, color, religion, sex, sexual orientation, familial status, marital
status, disability, handicap, national origin, ancestry, or source of income,
as set forth in applicable state or federal laws, except to the extent that
said covenant or restriction is permitted by applicable law as contained in
instrument recorded April 3, 1989 in Book 503 at Page 354 and supplement
thereto recorded May 30, 1989 in Book 507 at Page 220 amendment thereto
recorded April 12, 1991 in Book 551 at Page 656, and amendment thereto
recorded May 16, 1991 in Book 554 at Page 86, and amendment thereto
recorded June 4, 1992 in Book 581 at Page 544, and recorded September 25,
1992 in Book 590 at Page 185.

15.           Easements, reservations and restrictions as shown or
reserved on the condominium map for the Strawberry Park Condominiums recorded
April 3, 1989 in Book 503 at Page 353 and Supplemental Condominium Map recorded
May 30, 1989 in Book 507 at Page 219, and amendment thereto recorded
August 4, 1992 in Book 586 at Page 212.

Title
Exceptions – Village Center

1.             Taxes for the year 2007 and subsequent years, a lien
not yet due or payable.

2.             All applicable zoning, building, land use and other
governmental restrictions, laws, ordinances, rules and regulations.

3.             All matters that would be discovered or disclosed by
an accurate inspection and ALTA/ACSM Minimum Standard Detail Survey of the real
property.

4.             Rights of tenants in possession, as tenants only.

5.             Any matters arising by, through or under grantee, its
heirs and assigns.

6.             Right of way for ditches or canals constructed by the
authority of the United States as reserved in United States Patent recorded
July 18, 1938 in Book 123 at Page 591 and recorded June 20, 1942 in Book
128 at Page 253.

7.             Reservations contained in United States Patent
recorded July 18, 1938 in Book 123 at Page 591 and in United States Patent
recorded June 20, 1942 in Book 128 at Page 253, as follows: excepting and
reserving however to the United States all the coal and other minerals in the
lands so entered and patented, together with the right to prospect for, mine
and remove the same pursuant to the provisions and limitations of the Act of
December 29, 1916 (39 Stat., 862).

8.             Excepting an undivided one-half interest in and to all
oil, gas and minerals in, on or under the above described property, together
with the right to prospect for, mine and remove the same as reserved in deeds
recorded June 5, 1961 in Book 165 at Page 501, September 20, 1968 in Book
213 at Page 696, October 16, 1968 in Book 213 at Page 854, and May 9,
1986 in Book 441 at Page 620.

9.             Utility easement as granted to Holy Cross Electric
Association, Inc. in Instrument recorded April 11, 1994, in Book 637 at Page
50.

10.           Terms, conditions and provisions of Easement Agreement
recorded April 28, 1994 in Book 638 at Page 880.

 5
 

11.           Restrictive covenants which do not contain a
forfeiture or reverter clause, but omitting any covenants or restrictions, if
any, based upon race, color, religion, sex, sexual orientation, familial
status, marital status, disability, handicap, national origin, ancestry, or
source of income, as set forth in applicable state or federal laws, except to the
extent that said covenant or restriction is permitted by applicable law, as
contained in Instrument recorded May 12, 1993, in Book 608 at Page
785, Second Amendment thereto recorded May 11, 1998 Reception No. 655728.

Affidavit of
Clarification recorded March 10, 1995 in Book 663 at Page 72.

12.           Terms, conditions and provisions of the Tenth
Amendment to the Cordillera Planned Unit Development recorded October 24, 2003
at Reception No. 854897.

13.           Easements, conditions, covenants, restrictions,
reservations and notes on the recorded plat of Amended Final Plat Lot 36,
Cordillera Subdivision, Filing No. 1 & No. 2; Lot 1, Filing No. 1,
Cordillera Subdivision Filing No. 1 & 2; and Tract X, Cordillera
Subdivision, Filing No. 3 recorded January 14, 2003 Reception No. 820221.

14.           Terms, conditions and provisions of Notice of Levy of
Real Estate Transfer Assessment recorded June 25, 2001 at reception no. 760375.

15.           The effect of electric lines not within an easement as
shown on ALTA survey prepared by Johnson, Kunkel & Associates, Inc., dated
11/13/03, Job # EA03346 and updated October, 2006.

16.           The effect of tennis court onto utility easement as
shown on ALTA survey prepared by Johnson, Kunkel & Associates, Inc., dated
11/13/03, Job # EA03346 and updated October, 2006.

 6Exhibit
10.12

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (“Agreement”) dated as of June 6,
2007, is executed by BEHRINGER HARVARD
CORDILLERA, LLC, a Delaware limited liability company, having an
address at 15601 Dallas Parkway, Suite 600, Addison, Texas 75001, Attn: Asset
Manager (“Grantor”), in favor of and
for the benefit of BEHRINGER HARVARD
OPPORTUNITY OP I, LP, a Texas limited partnership (“Lender”), with reference to the
following facts:

RECITALS

A.            Pursuant to that
certain Note and Deed of Trust of even date herewith between Grantor and Lender
(as such agreement may from time to time be extended, modified, renewed,
restated, supplemented or amended, the “Loan Documents”),
Lender is making a loan to Grantor (the “Loan”) in
the aggregate principal amount of $26,250,000.00.

B.            As a condition to
the making of the Loan, Grantor is required to enter into this Agreement and
pledge certain Collateral (as hereinafter defined) to Lender for the purpose of
securing Grantor’s obligations under the Loan Documents under the terms and
conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in
order to induce Lender to make the Loan, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Grantor hereby represents, warrants, covenants, agrees, assigns and grants as
follows:

1.             Definitions.  Terms
defined in the Uniform Commercial Code in effect in the state of Colorado (as
amended, the “Colorado Uniform Commercial Code”)
and not otherwise defined in this Agreement shall have the meanings defined for
those terms in the Colorado Uniform Commercial Code.  As used in this Agreement, the following
terms shall have the meanings respectively set forth after each:

“Agreement” means this Security
Agreement, and any extensions, modifications, renewals, restatements,
supplements or amendments hereof.

“Collateral” means and includes all
present and future right, title and interest of Grantor, in or to any property
or assets whatsoever, and all rights and powers of Grantor, to transfer any
interest in or to any property or assets whatsoever, whether now or hereafter
acquired and wherever the same may from time to time be located, including,
without limitation, any and all of the following property:

(a)           All
present and future accounts, accounts receivable, agreements, contracts,
leases, contract rights, payment intangibles, rights to payment, instruments,
documents, chattel paper (whether tangible or electronic), promissory notes,
security agreements, guaranties, letters of credit, letter-of-credit rights,
undertakings, surety bonds, insurance policies (whether or not required by the
terms of the Loan Documents),

 1
 

commercial tort claims, notes and drafts, any rights from or through
any federal or state government agency or program, and all forms of obligations
owing to Grantor or in which Grantor may have any interest, however created or
arising and whether or not earned by performance;

(b)           All present and
future general intangibles, all tax refunds of every kind and nature to which
Grantor now or hereafter may become entitled, however arising, all other
refunds, and all deposits, credits, reserves, loans, royalties, cost savings,
deferred payments, goodwill, choses in action, liquidated damages, rights to
indemnification, trade secrets, computer programs, software, customer and
supplier lists, trademarks (including any applications therefor), tradenames,
patents (including any applications therefor), licenses, copyrights (including
any applications therefor), technology, processes, proprietary information,
rights to or in employee or other pension, retirement or similar plans and the
assets thereof, retained and unearned insurance premiums, rights and claims
under insurance policies, and all insurance proceeds of which Grantor is a
beneficiary;

(c)           Whether
characterized as accounts, general intangibles, rents or otherwise, all present
and future rents (including, without limitation, prepaid rents, fixed,
additional and contingent rents), rent equivalents, room rates, royalties
(including all oil and gas or other mineral royalties and bonuses), accounts,
issues, profits, receipts, earnings, revenues, income, tangible or intangible
benefits derived from the operation of a business and the fees, charges,
accounts or other payments for the use or occupancy of rooms and other public
facilities in hotels, motels or other lodging facilities and whether paid by
cash or credit, including, without limitation, security and other deposits,
occupancy charges, hotel room charges, cabana charges, spa charges, golf course
fees and charges, food and beverage revenues, bar and mini-bar revenues, room
service revenues, vending machine revenues, banquet room revenues, meeting room
revenues, revenues from recreational facilities, merchandise sales revenues,
parking charges, maintenance, common area, tax, insurance, utility and service
charges and contributions, instruction fees, membership charges, restaurant and
snack bar revenues;

(d)           All
present and future deposit accounts of Grantor, including, without limitation, any
demand, time, savings, passbook or like account maintained by Grantor with any
bank, savings and loan association, credit union or like organization, and all
money, cash and cash equivalents of Grantor, whether or not deposited in any
such deposit account;

(e)           All
present and future goods, including, without limitation, all consumer goods,
farm products, equipment, catalogs, machinery, tools, molds, dies, furniture,
furnishings, fixtures, trade fixtures, motor vehicles, aircraft, documented and
undocumented vessels, ships and other watercraft, and all other goods used in
connection with or in the conduct of Grantor’s business, including all goods as
defined in Section 9-102(44) of the Uniform Commercial Code;

(f)            All
present and future inventory and merchandise, including, without limitation,
all present and future goods held for sale or lease or to be furnished under a
contract of service, all raw materials, work in process and finished goods, all

 2
 

packing materials, supplies and containers relating to or used in
connection with any of the foregoing, and all bills of lading, warehouse
receipts or documents of title relating to any of the foregoing;

(g)           All
present and future accessions, appurtenances, components, repairs, repair
parts, spare parts, replacements, substitutions, additions, issue and/or
improvements to or of or with respect to any of the foregoing;

(h)           All
present and future books and records, including, without limitation, books of
account and ledgers of every kind and nature, all electronically recorded data
relating to Grantor or the business thereof, all receptacles and containers for
such records, and all files and correspondence;

(i)            All
present and future stocks, investment property, bonds, debentures, securities
(whether certificated or uncertificated), security entitlements, securities
accounts, commodity contracts, commodity accounts, subscription rights,
options, warrants, puts, calls, certificates, investment property, partnership
interests, limited liability company membership or other interests, joint
venture interests, certificates of deposit, investments and/or brokerage
accounts and all rights, preferences, privileges, dividends, distributions,
redemption payments, or liquidation payments with respect thereto;

(j)            All
other present and future tangible and intangible property of Grantor;

(k)           All
present and future rights, remedies, powers and/or privileges of Grantor with
respect to any of the foregoing, including the right to make claims thereunder
or with respect thereto; and

(l)            Any
and all proceeds and products of any of the foregoing, including, without
limitation, all money, accounts, payment intangibles, general intangibles,
deposit accounts, promissory notes, documents, instruments, certificates of
deposit, chattel paper, investment property, letter-of-credit-rights, goods,
insurance proceeds, and any other tangible or intangible property received upon
the sale or disposition of any of the foregoing.

“Obligations” means any and all
present and future advances to, and debts, liabilities, obligations, covenants
and duties of Grantor or any other party related to any of the foregoing
arising under any Loan Document or otherwise with respect to the Loan, in each
case, whether due or to become due, matured or unmatured, liquidated or
unliquidated, or contingent or noncontingent, including obligations of
performance as well as obligations of payment, and including interest that
accrues after the commencement of any bankruptcy or insolvency proceeding by or
against Grantor or any other party related to any of the foregoing.

2.             Further
Assurances.  At any time and from time to time at the request of
Lender and the expense of Grantor, Grantor shall promptly execute or consent to
the filing of and deliver to Lender all such financing statements and other
instruments and documents in form and

 3
 

substance
reasonably satisfactory to Lender as shall be necessary or Lender shall
reasonably deem desirable to fully create and perfect Lender’s security
interests granted pursuant to Section 3 of this Agreement, including,
without limitation, financing statements covering all assets of
Grantor.  Grantor agrees that at any time, and from time to time, at
its sole expense, Grantor shall promptly execute, deliver and file or record
all further financing statements, instruments and documents, and will take all
further actions that may be necessary or desirable, or that Lender reasonably
may request, in order to perfect and protect any pledge or security interest
granted hereby or to enable Lender to exercise and enforce its rights and
remedies hereunder with respect to any Collateral and to preserve and protect
the Collateral, including, without limitation, payment prior to delinquency of
all taxes, assessments and other charges imposed on or relating to the
Collateral, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP or to the extent that the failure to make such
payment would not reasonably be expected to have a material adverse
effect.  At any time and from time to
time, Lender shall be entitled to file or record any or all such financing
statements, instruments and documents held by it, and any or all such further
financing statements, documents and instruments, and to take all such other
actions, as Lender may deem appropriate to perfect and to maintain perfected
the security interests granted in Section 3 of this Agreement.  With
respect to any Collateral consisting of certificated securities, instruments,
documents, certificates of title or the like, as to which Lender’s security
interest need be perfected by, or the priority thereof need be assured by,
possession of such Collateral, Grantor will upon demand of Lender deliver possession
of same in pledge to Lender.  With
respect to any Collateral consisting of securities, instruments, partnership,
joint venture or limited liability company interests, other investments or the
like, Grantor hereby consents and agrees (a) to notify any securities
intermediary, depositary institution or other bailee therefor, and any issuer
thereof, obligor thereon or registrar, transfer agent or trustee thereof, of
the security interest of Lender therein, (b) to use commercially reasonable
efforts to require any such party to execute and deliver to Lender such
acknowledgments, instruments, control agreements or other agreements as may be
necessary for Lender to maintain the perfection of such security interest; and
(c) that any such party shall be entitled to accept the provisions of this
Agreement as conclusive evidence of the right of Lender to effect any transfer
or exercise any right hereunder or with respect to any such Collateral,
notwithstanding any other notice or direction to the contrary heretofore or
hereafter given by Grantor or any other Person to such issuers or such obligors
or to any such registrar or transfer agent or trustee.

3.             Security
Agreement.  For valuable consideration, Grantor hereby assigns
and pledges to Lender, and grants to Lender a security interest in, all
presently existing and hereafter acquired Collateral, together with all
products, proceeds, dividends, redemption payments, liquidation payments, cash,
instruments and other property, and any and all rights, titles, interests,
privileges, benefits and preferences, in each case appertaining or incidental
to the Collateral, as security for the timely payment and performance of the
obligations under the Loan Document (the “Obligation”), and each of
them.  Until this Agreement and the obligations of Grantor hereunder
are released in accordance with Section 22 hereof, this Agreement is a
continuing and irrevocable agreement and all the rights, powers, privileges and
remedies hereunder shall apply to any and all Obligations, including those
arising under successive transactions which shall either continue the
Obligations, increase or decrease them, or from time to time create new
Obligations after all or any prior Obligations have been satisfied, and

 4
 

notwithstanding
the bankruptcy of Grantor or any other Person or other event or proceeding
affecting any Person.

4.             Intentionally
Omitted.

5.             Partial Releases
of Collateral.  Collateral that is required to be released from
the pledge and security interest created by this Agreement in order to permit
Grantor to (a) comply with its obligations to the maker of any instrument
that constitutes Collateral, if any, or (b) take any other action
permitted under the Loan Documents or otherwise consented to by Lender shall be
so released by Lender at such times and to the extent necessary to permit
Grantor to consummate such permitted transactions promptly following Lender’s
receipt of written request therefor by Grantor specifying the purpose for which
release is requested and such further certificates or other documents as Lender
reasonably shall request in its discretion to confirm that Grantor is permitted
to consummate such permitted transaction and, if applicable, to confirm Lender’s
replacement Lien on appropriate collateral. 
Lender, at the expense of Grantor, shall promptly redeliver all such
Collateral and shall execute and deliver to Grantor all such documents
requested by Grantor that are reasonably necessary to release such Collateral
of record whenever Grantor shall be entitled to the release thereof in
accordance with this Agreement or this Section.

6.             Incorporation of
Representations, Warranties, Covenants and Other Provisions of Loan Documents.  Grantor
further represents, warrants and covenants that: (a) Grantor owns the sole,
full and clear title to all of the existing Collateral and Grantor has the
right and power to grant the security interests granted hereunder; (b) Grantor
will pay, prior to delinquency, all taxes, charges, Liens and assessments
against the Collateral except such as
are timely contested in good faith in accordance with the terms and provisions
of the Loan Documents or those that are immaterial so long as no material
property of Grantor is in jeopardy of being seized, levied upon or forfeited,
and upon its failure to pay or so contest such taxes, charges, Liens and
assessments, Lender at its option may pay any of them, and Lender shall be the
sole judge of the legality or validity thereof and the amount necessary to
discharge the same; (c) Grantor will not use, or permit to be used, the
Collateral for any unlawful purpose or in violation of any Legal Requirement,
nor used in any way that will void or impair any insurance required to be
carried in connection therewith; (d) Grantor will, to the extent consistent
with good business practice, keep the Collateral in reasonably good repair,
working order and condition, and from time to time make all needful and proper
repairs, renewals, replacements, additions and improvements thereto and, as
appropriate and applicable, will otherwise deal with such portion of the
Collateral in all such ways as are considered good practice by owners of like
property; (e) Grantor will promptly notify Lender in writing in the event of
any substantial or material damage to the Collateral from any source
whatsoever, and, except for the disposition of
collections and other proceeds of the Collateral permitted by Section 8
hereof or by the Loan Documents, Grantor will not remove or knowingly permit to
be removed any part of the Collateral from its place of business without the
prior written consent of Lender, except for such
items of the Collateral as are removed in the ordinary course of business or in
connection with any transaction or disposition otherwise permitted by the Loan
Documents and (f) in the event Grantor changes its name or its address as
either are set forth herein or in the Loan Documents, or its location as a
registered organization within the meaning of the Uniform Commercial Code,
Grantor will notify Lender of such name, address and/or location change at
least thirty (30) days prior to its effective date.

 5
 

7.             Lender’s Rights
Re Collateral.  At any time (whether or not an Event of Default
has occurred), without notice or demand and at the expense of Grantor, Lender
may, to the extent it may be necessary or desirable to protect the security
hereunder, but Lender shall not be obligated to, perform any obligation of
Grantor under this Agreement or any obligation of any other Person under the
Loan Documents.  At any time and from time to time, at the expense of
Grantor, Lender may, to the extent it may be necessary or desirable to protect
the security hereunder, but Lender shall not be obligated to: (i) notify
obligors on the Collateral that the Collateral has been assigned to Lender; and
(ii) at any time and from time to time request from obligors on the
Collateral, in the name of Grantor or in the name of Lender, information
concerning the Collateral and the amounts owing thereon.  Grantor shall maintain books and records
pertaining to the Collateral in such detail, form and scope as Lender shall
reasonably require consistent with Lender’s interests hereunder.  Grantor shall at any time, at Lender’s
request, mark the Collateral and Grantor’s ledger cards, books of account and
other records relating to the Collateral with appropriate notations reasonably
satisfactory to Lender disclosing that they are subject to Lender’s security
interests.  Lender shall at all
reasonable times on reasonable prior notice have full access to and the right to
audit any and all of Grantor’s books and records pertaining to the Collateral,
and to confirm and verify the value of the Collateral and to do whatever else
Lender reasonably may deem necessary or desirable to protect its
interests.  Lender shall be under no duty
or obligation whatsoever to take any action to preserve any rights of or
against any prior or other parties in connection with the Collateral, to
exercise any voting rights or managerial rights with respect to any Collateral,
whether or not an Event of Default shall have occurred, or to make or give any
presentments, demands for performance, notices of non-performance,
protests, notices of protests, notices of dishonor or notices of any other
nature whatsoever in connection with the Collateral or the Obligations except
as such notices are expressly required under this Agreement.  Lender shall be under no duty or obligation
whatsoever to take any action to protect or preserve the Collateral or any
rights of Grantor therein, or to make collections or enforce payment thereon,
or to participate in any foreclosure or other proceeding in connection
therewith.

8.             Collections on
the Collateral.  Notwithstanding anything to the contrary herein,
Grantor shall have the right to use and to continue to make collections on and
receive dividends and other proceeds of all of the Collateral in the ordinary
course of business so long as no Event of Default shall have occurred and be
continuing.  Upon the occurrence and during the continuance of an
Event of Default, at the option of Lender, Grantor’s right to make collections
on and receive dividends and other proceeds of the Collateral and to use or
dispose of such collections and proceeds shall terminate, and any and all
dividends, proceeds and collections, including all partial or total
prepayments, then held or thereafter received on or on account of the
Collateral will be held or received by Grantor in trust for Lender and
immediately delivered in kind to Lender. 
Any remittance received by Grantor from any Person shall be presumed to
relate to the Collateral and to be subject to Lender’s security
interests.  Upon the occurrence and during the continuance of an
Event of Default, Lender shall have the sole right at all times to receive,
receipt for, endorse, assign, deposit and deliver, in the name of Lender or in
the name of Grantor, any and all checks, notes, drafts and other instruments
for the payment of money constituting proceeds of or otherwise relating to the
Collateral; and Grantor hereby authorizes Lender to affix, by facsimile
signature or otherwise, the general or special endorsement of it, in such
manner as Lender shall deem advisable, to any such instrument in the event the
same has been delivered to or obtained by Lender without appropriate
endorsement, and Lender and any

 6
 

collecting
bank are hereby authorized to consider such endorsement to be a sufficient,
valid and effective endorsement by Grantor, to the same extent as though it
were manually executed by the duly authorized officer of Grantor, regardless of
by whom or under what circumstances or by what authority such facsimile
signature or other endorsement actually is affixed, without duty of inquiry or
responsibility as to such matters, and Grantor hereby expressly waives demand,
presentment, protest and notice of protest or dishonor and all other notices of
every kind and nature with respect to any such instrument.

9.             Possession of
Collateral by Lender.  Upon the occurrence and during the
continuance of an Event of Default, whenever any of the Collateral is in Lender’s
possession, custody or control, Lender may use, operate and consume the
Collateral, whether for the purpose of preserving and/or protecting the
Collateral, or for the purpose of performing any of Grantor’s obligations with
respect thereto, or otherwise.  Lender
may at any time deliver or redeliver the Collateral or any part thereof to
Grantor, and the receipt of any of the same by Grantor shall be complete and
full acquittance for the Collateral so delivered, and Lender thereafter shall
be discharged from any liability or responsibility therefor.  So long
as Lender exercises reasonable care with respect to any Collateral in its
possession, custody or control, Lender shall have no liability for any loss of
or damage to such Collateral, and in no event shall Lender have liability for
any diminution in value of any Collateral occasioned by economic or market
conditions or events.  Lender shall be deemed to have exercised
reasonable care within the meaning of the preceding sentence if the Collateral
in the possession, custody or control of Lender is accorded treatment
substantially equal to that which Lender accords its own property, it being
understood that Lender shall not have any responsibility for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relating to any Collateral,
whether or not Lender has or is deemed to have knowledge of such matters, or
(b) taking any necessary steps to preserve rights against any Person with respect
to any Collateral.

10.           Events of Default.  There
shall be an event of default (an “Event of Default”)
hereunder upon the occurrence and during the continuance of an Event of Default
under the Loan Documents and/or upon the occurrence of any breach of Section 13
hereof.

11.           Intentionally
Omitted.

12.           Rights Upon Event
of Default.  Upon the occurrence and during the continuance of an
Event of Default, Lender shall have, in any jurisdiction where enforcement
hereof is sought, in addition to all other rights and remedies that Lender may
have under applicable law or in equity or under this Agreement (including,
without limitation, all rights set forth in Section 7 hereof) or under any
other Loan Document, all rights and remedies of a secured party under the
Colorado Uniform Commercial Code and, in addition, the following rights and
remedies, all of which may be exercised with or without notice to Grantor and
without affecting the obligations of Grantor hereunder or under any other Loan
Document, or the enforceability of the Liens created hereby: (a) to
foreclose the Liens created hereunder or under any other agreement relating to
any Collateral by any available judicial procedure or without judicial process;
(b) to enter any premises where any Collateral may be located for the
purpose of securing, protecting, inventorying, appraising, inspecting,
repairing, preserving, storing, preparing, processing, taking possession of or
removing the same; (c) to sell, assign, lease or otherwise dispose of any
Collateral or any part thereof, either at public or private sale or at any
broker’s board, in lot or in

 7
 

bulk,
for cash, on credit or otherwise, with or without representations or warranties
and upon such terms as shall be acceptable to Lender; (d) to notify
obligors on the Collateral that the Collateral has been assigned to Lender and
that all payments thereon are to be made directly and exclusively to Lender;
(e) to renew, extend, modify, amend, accelerate, accept partial payments
on, make allowances and adjustments and issue credits with respect to, release,
settle, compromise, compound, collect or otherwise liquidate, on terms
acceptable to Lender, in whole or in part, the Collateral and any amounts owing
thereon or any guaranty or security therefor; and to give all consents, waivers
and ratifications with respect to the Collateral and exercise any other rights
(including voting rights), powers and remedies and otherwise act with respect
thereto as if Lender were the owner thereof; (f) to collect by legal proceedings
or otherwise all dividends, distributions, interest, principal or other sums
now or hereafter payable upon or on account of the Collateral; (g) to
cause the Collateral to be registered in the name of Lender, as legal owner;
(h) to enter into any extension, reorganization, deposit, merger or
consolidation agreement, or any other agreement relating to or affecting the
Collateral, and in connection therewith Lender may deposit or surrender control
of the Collateral or accept other property in exchange for the Collateral;
(i) to settle, compromise or release, on terms acceptable to Lender, in
whole or in part, any amounts owing on the Collateral and any disputes with
respect thereto; (j) to extend the time of payment, make allowances and
adjustments and issue credits in connection with the Collateral in the name of
Lender or in the name of Grantor; (k) to enforce payment and
prosecute any action or proceeding with respect to any or all of the
Collateral and take or bring, in the name of Lender or in the name of Grantor,
any and all steps, actions, suits or proceedings deemed by Lender necessary or
desirable to effect collection of or to realize upon the Collateral, including
any judicial or nonjudicial foreclosure thereof or thereon, and Grantor
specifically consents to any nonjudicial foreclosure of any or all of the
Collateral or any other action taken by Lender which may release any obligor
from personal liability on any of the Collateral, and, to the extent allowable
by law, Grantor waives any right not expressly provided for in this Agreement
to receive notice of any public or private judicial or non-judicial sale or
foreclosure of any security or any of the Collateral; and any money or other
property received by Lender in exchange for or on account of the Collateral
covered by this Agreement, whether representing collections or proceeds of
Collateral, and whether resulting from voluntary payments or foreclosure
proceedings or other legal action taken by Lender or Grantor, may be applied by
Lender, subject to the provisions of the Loan Documents, without notice to
Grantor to the Obligations in such order and manner as Lender in its sole
discretion shall determine in accordance with applicable Laws; (l) to take
possession of the Collateral with or without judicial process; (m) to
insure, process and preserve the Collateral; (n) to endorse, in the name of
Grantor, all checks, notes, drafts, money orders, instruments and other
evidences of payment relating to the Collateral; (o) to exercise all
rights, remedies, powers or privileges provided under the Loan Documents to
transfer any or all of the Collateral into the name of Lender or its nominee or
nominees; (p) to remove, from any premises where the same may be located,
the Collateral and any and all documents, instruments, files and records, and
any receptacles and cabinets containing the same, relating to the Collateral,
and Lender may, at the cost and expense of Grantor, use such of its supplies,
equipment, facilities and space at its places of business as may be necessary
or appropriate to properly administer, process, store, control, prepare for
sale or disposition and sell or dispose of the Collateral or to properly
administer and control the handling of collections and realizations thereon,
and Lender shall be deemed to have a rent-free tenancy of any premises of
Grantor for such purposes and for such periods of time as reasonably

 8
 

required
by Lender; (q) to receive, open and dispose of all mail addressed to
Grantor and notify postal authorities to change the address for delivery
thereof to such address as Lender may designate; provided
that Lender agrees that it will promptly deliver over to Grantor such opened
mail as does not relate to the Collateral; and (r) to exercise all other
rights, powers, privileges and remedies of an owner of the Collateral; all at
Lender’s sole option and as Lender in its sole discretion to the extent
allowable by law may deem advisable. 
Grantor will, at Lender’s request, assemble the Collateral (or any part
thereof, as requested) and make it available to Lender at places which Lender
may designate, whether at the premises of Grantor or elsewhere, and will make
available to Lender, free of cost, all premises, equipment and facilities of
Grantor for the purpose of Lender’s taking possession of the Collateral or
storing same or removing or putting the Collateral in salable form or selling
or disposing of same.

Upon the occurrence and
during the continuance of an Event of Default, Lender also shall have the
right, without notice or demand, either in person, by agent or by a receiver to
be appointed by a court (and Grantor hereby expressly consents upon the
occurrence and during the continuance of an Event of Default to the appointment
of such a receiver), and without regard to the adequacy of any security for the
Obligations, to take possession of the Collateral or any part thereof and to
collect and receive the rents, issues, profits, income and proceeds
thereof.  Taking possession of the
Collateral shall not cure or waive any Event of Default or notice thereof or
invalidate any act done pursuant to such notice.  The rights, remedies and powers of any
receiver appointed by a court shall be as ordered by said court.

Any public or private sale
or other disposition of the Collateral pursuant to this Section 12 may be held
at any office of Lender, or at Grantor’s place of business, or at any other
place permitted by applicable Law, and without the necessity of the Collateral’s
being within the view of prospective purchasers.  Lender may direct the order and manner of
sale of the Collateral, or portions thereof, as it in its reasonable discretion
may determine, and Grantor expressly waives any right to direct the order and
manner of sale of any Collateral.  Lender,
or any Person on Lender’s behalf, may bid and purchase at any such sale or
other disposition.  The net cash proceeds
resulting from the collection, liquidation, sale, lease or other disposition of
the Collateral shall be applied, first, to the expenses (including reasonable
attorneys’ fees and disbursements) of retaking, holding, storing, processing
and preparing for sale or lease, selling, leasing, collecting, liquidating and
the like, and then, subject to the provisions of the Loan Documents, to the
satisfaction of the Obligations in such order as shall be determined by Lender
in its sole and absolute discretion. 
Grantor and any other Person then obligated therefor shall pay to Lender
on demand any deficiency with regard thereto which may remain after such sale,
disposition, collection or liquidation of the Collateral.  Notwithstanding the foregoing or any other
provision contained in this Agreement, the remedies provided by this Agreement
shall in no way include the right to take any action in contravention of
applicable laws.  In connection with any
public or private sale of the Collateral, Lender shall give Grantor at least
ten (10) days prior written notice of the time and place of any public sale of
the Collateral or of the time after which any private sale or other intended
disposition may be made.

With respect to any
Collateral consisting of securities, partnership interests, joint venture
interests, limited liability company interests, Investments or the like, and
whether or not any of such Collateral has been effectively registered under the
Securities Act of 1933, as amended, or other applicable Laws, Lender may, in
its sole and absolute discretion, subject to

 9
 

compliance
with the requirements of applicable Laws, sell all or any part of such
Collateral at private sale in such manner and under such circumstances as
Lender may deem necessary or advisable in order that the sale may be lawfully
conducted.  Without limiting the
foregoing, Lender may (i) approach and negotiate with a limited number of
potential purchasers, and (ii) restrict the prospective bidders or
purchasers to persons who will represent and agree that they are purchasing
such Collateral for their own account for investment and not with a view to the
distribution or resale thereof.  In the
event that any such Collateral is sold at private sale, Grantor agrees that if
such Collateral is sold for a price which Lender in good faith believes to be
reasonable under the circumstances then existing, then, subject to Section
9-615(f) of the Uniform Commercial Code, if and to the extent same is not
waivable, (a) the sale shall not be deemed to be commercially unreasonable
by reason of price, (b) Grantor shall not be entitled to a credit against
the Obligations in an amount in excess of the purchase price, and (c) Lender
shall not incur any liability or responsibility to Grantor in connection
therewith, notwithstanding the possibility that a substantially higher price
might have been realized at a public sale. 
Grantor recognizes that a ready market may not exist for such Collateral
if it is not regularly traded on a recognized securities exchange, and that a
sale by Lender of any such Collateral for an amount substantially less than a
pro rata share of the fair market value of the Issuer’s assets minus
liabilities may be commercially reasonable in view of the difficulties that may
be encountered in attempting to sell a large amount of such Collateral that is
privately traded.

Unless the Collateral is
perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Lender will send or otherwise make
available to Grantor, such notice as may be required by the Colorado Uniform
Commercial Code of the time and place of any public sale thereof or of the time
on or after which any private sale thereof is to be made.  Grantor expressly waives any right to receive
notice of any public or private sale of any Collateral or other security for
the Obligations except as expressly provided for
in this Section 12.

Upon consummation of any
sale of Collateral hereunder, Lender shall have the right to assign, transfer
and deliver to the purchaser or purchasers thereof the Collateral so sold.  Each such purchaser at any such sale shall
hold the Collateral so sold absolutely free from any claim or right upon the
part of Grantor or any other Person, and Grantor hereby waives (to the extent
permitted by applicable Laws) all rights of redemption, stay and appraisal
which it now has or may at any time in the future have under any rule of Law or
statute now existing or hereafter enacted. 
If the sale of all or any part of the Collateral is made on credit or
for future delivery, Lender shall not be required to apply any portion of the
sale price to the Obligations until such amount actually is received by Lender,
and any Collateral so sold may be retained by Lender until the sale price is
paid in full by the purchaser or purchasers thereof.  Lender shall not incur any liability in case
any such purchaser or purchasers shall fail to pay for the Collateral so sold,
and, in case of any such failure, the Collateral may be sold again.

13.           Transfers and
Other Liens.  Grantor agrees that, except as permitted under the
Loan Documents, it will not (a) sell, assign, exchange, transfer or
otherwise dispose of, or contract to sell, assign, exchange, transfer or
otherwise dispose of, or grant any option with respect to, any of the
Collateral, (b) create or permit to exist any Lien upon or with respect to
any of the Collateral, except for Liens in favor of Lender or Permitted Encumbrances
or (c) take any

 10
 

action
with respect to the Collateral that is inconsistent with the provisions or
purposes of this Agreement or any other Loan Document.

14.           Intentionally
Omitted.

15.           Attorney-in-Fact.  Grantor
hereby irrevocably appoints Lender as its attorney-in-fact, with full authority
in the place and stead of Grantor, and in the name of Grantor, or otherwise,
from time to time, in Lender’s sole and absolute discretion to do any of the
following acts or things: (a) to do all acts and things which Lender may
deem necessary or advisable to perfect and continue perfected the security
interests created by this Agreement, to preserve, maintain and protect the
Collateral and, to preserve, process, develop, maintain and protect the
Collateral; (b) to do any and every act which Grantor is obligated to do
under this Agreement, at the expense of Grantor and without any obligation to
do so; (c) to prepare, sign, file and record, for Grantor, in the name of
Grantor, any financing statement, application for registration, or like paper,
and to take any other action deemed by Lender necessary or desirable in order
to perfect or maintain perfected the security interests granted hereby;
(d) to endorse and transfer any portion of the Collateral upon foreclosure
by Lender; and (e) to execute any and all papers and instruments and do
all other things necessary or desirable to preserve and protect the Collateral
and to protect Lender’s security interests therein; provided, however,
that Lender shall be under no obligation whatsoever to take any of the
foregoing actions, and, absent bad faith, gross negligence, willful misconduct
or actual malice, Lender shall have no liability or responsibility for any act
taken or omission with respect thereto. 
The foregoing power of attorney is coupled with an interest and is
irrevocable.

16.           Lender May
Perform Obligations.  If Grantor fails to perform any Obligation
contained herein, and any applicable cure period has expired, Lender may, but
without any obligation to do so and without demand upon or prior notice to
Grantor, perform the same and take such other action as Lender may deem
necessary or desirable to protect the Collateral or Lender’s security interest
therein, Lender being hereby authorized (without limiting the general nature of
the authority hereinabove conferred) to pay, purchase, contest and compromise
any Lien which in the reasonable judgment of Lender appears to be prior or
superior to Lender’s security interests hereunder (other than Liens permitted
by the Loan Documents), and in exercising any such powers and authority to pay
necessary expenses, employ counsel and pay reasonable attorneys’
fees.  Grantor hereby agrees to repay immediately upon demand all
sums so expended by Lender, together with interest from the date of expenditure
at the rates set forth in the Note.  Lender shall be under no duty or
obligation to (a) except to the extent required by Section 9-207 of the
Colorado Uniform Commercial Code, preserve, maintain or protect the Collateral
or any of Grantor’s rights or interest therein, (b) exercise any voting
rights with respect to the Collateral, whether or not an Event of Default has
occurred or is continuing or (c) except as otherwise provided herein, in
any Loan Document, make or give any notices of default, presentments, demands
for performance, notices of nonperformance or dishonor, protests, notices of
protest or notices of any other nature whatsoever in connection with the
Collateral on behalf of Grantor or any other Person having an interest therein;
and Lender does not assume and shall not be obligated to perform the
obligations of Grantor, if any, with respect to the Collateral.

 11
 

17.           Other Agreements.  Nothing
herein shall in any way modify or limit the effect of terms or conditions set
forth in any other security or other agreement executed by Grantor or in
connection with the Obligations, but each and every term and condition hereof
shall be in addition thereto, except that, in the event of any direct
inconsistency between the provisions of the other Loan Documents shall control.

18.           Continuing Effect.  This
Agreement shall remain in full force and effect and continue to be effective
should any petition be filed by or against Grantor for liquidation or
reorganization, should Grantor become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or
any significant part of Grantor’s assets, and shall continue to be effective or
be reinstated, as the case may be, if at any time payment and performance of
the Obligations, or any part thereof, is, pursuant to applicable law, rescinded
or reduced in amount, or must otherwise be restored or returned by Lender,
whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all
as though such payment or performance had not been made.  In the event that any payment or any part
thereof is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.

19.           Intentionally
Omitted.

20.           Costs and
Expenses.  Grantor agrees to pay to Lender all reasonable costs
and expenses (including, without limitation, reasonable attorneys’ fees and
disbursements, including allocated costs of in-house counsel), incurred by
Lender in the enforcement or attempted enforcement of this Agreement, whether
or not an action is filed in connection therewith, and in connection with any
waiver or amendment of any term or provision hereof.  All advances,
charges, costs and expenses, including reasonable attorneys’ fees and
disbursements, incurred or paid by Lender in exercising any right, privilege,
power or remedy conferred by this Agreement (including, without limitation, the
right to perform any of the Obligations of Grantor under the Loan Documents or
any other Loan Document), or in the enforcement or attempted enforcement
thereof, shall be secured hereby and shall become a part of the Obligations and
shall be paid to Lender by Grantor immediately upon demand, together with
interest thereon at the rate set forth in the Loan Documents.

21.           Statute of
Limitations and Other Laws.  Until the Obligations shall have
been paid and performed in full, the power of sale and all other rights,
privileges, powers and remedies granted to Lender hereunder shall continue to
exist and may be exercised by Lender at any time and from time to time
irrespective of the fact that any of the Obligations may have become barred by
any statute of limitations.  Grantor expressly waives the benefit of
any and all statutes of limitation, and any and all Laws providing for
exemption of property from execution or for valuation and appraisal upon
foreclosure, to the maximum extent permitted by applicable Law.

22.           Release of
Collateral.  This Agreement and all Collateral pledged to Lender
hereunder shall be released when all Obligations have been paid and (except for
surviving obligations of indemnity as to which no claim is then pending)
performed in full and when Grantor has no right to receive any additional
advances under the Loan Documents.  Upon
such release, Lender shall return any Collateral to Grantor, or to the Person
or Persons legally entitled thereto, and shall endorse, execute, deliver,
record and file all instruments and documents, and

 12
 

do
all other acts and things, reasonably required for the return of the Collateral
to Grantor, or to the Person or Persons legally entitled thereto, and to
evidence or document the release of Lender’s interests arising under this
Agreement, all as reasonably requested by, and at the sole expense of, Grantor.

23.           Intentionally
Omitted.

24.           Additional Powers
and Authorization.  Notwithstanding anything contained herein to
the contrary, the Lender may employ agents, trustees, or attorneys-in-fact and
may vest any of them with any property (including, without limitation, any
Collateral pledged hereunder), title, right or power deemed necessary for the
purposes of such appointment.

25.           Governing Law;
Assignment; Jurisdiction; Notices.  This Agreement shall be
governed by, and construed and enforced in accordance with, the Laws of
Colorado (without regard to the conflicts of law or choice of law provisions
thereof).  This Agreement shall (a) bind
Grantor and its successors and assigns, provided that Grantor may not assign
its rights or obligations under this Agreement without the prior written
consent of Lender (and any attempted assignment without such consent shall be
void), and (b) inure to the benefit of the Lender, and its successors and
assigns and Lender may, without notice to Grantor and without affecting Grantor’s
obligations hereunder, assign, sell or grant participations in the Obligations,
the Collateral and this Agreement, in whole or in part.  Grantor hereby irrevocably (i) submits to the
non-exclusive jurisdiction of any United States Federal or State court
sitting in Colorado in any action or proceeding arising out of or relating to
this Agreement, and (ii) waives to the fullest extent permitted by law any
defense asserting an inconvenient forum in connection therewith.  Grantor agrees that the Lender may disclose
to any assignee of or participant in, or any prospective assignee of or
participant in, any rights or obligations of all or part of the Obligations any
and all information in Lenders’ possession concerning Grantor, Borrower’s
Representative, this Agreement and any security for this Agreement.  All notices and other communications under
this Agreement shall be in writing and shall be given in the manner provided in
Section 12.5 of the Deed of Trust.

26.           WAIVER OF JURY TRIAL; FINAL AGREEMENT.  GRANTOR AND, BY ACCEPTING
THIS AGREEMENT, THE LENDER (IN THIS SECTION 26, EACH A “PARTY” AND COLLECTIVELY
THE “PARTIES”) HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES OR ANY
OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT EACH PARTY MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.  THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,

 13
 

CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.

[REMAINDER
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 14

IN WITNESS WHEREOF, Grantor has executed this
Agreement by its duly authorized officer as of the date first written above.

	
  

  	
  GRANTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD CORDILLERA, LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerald J. Reihsen, III

  	
   

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President

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