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HomeMy WebLinkAboutCIM/Huntington, LLC - aka CIM Group, LLC - 2009-01-20Jennifer McGrath City Attorney July 1, 2009 OFFICE OF CITY ATTORNEY EY P.O. Box 190 Paul D'Alessandro, Assistant City Attorney 2000 Main Street Scott Field, Assistant City Attorney Huntington Beach, California 92648 Neal Moore, Sr. Deputy City Attorney Leonie Mulvihill, Sr. Deputy City Attorney Telephone: (714) 536-5555 John Fujit Sr. Deputy City Attorney Facsimile: (714) 374-1590 Daniel X Ohl, Deputy City Attorney Sarah Sutton, Deputy City Attorney Mike Vigliotta, Deputy City Attorney John Given CIM 6922 Hollywood Boulevard, Ninth Floor Los Angeles, CA 90028 Matt Fragner CIM Group 6922 Hollywood Boulevard, Ninth Floor Los Angeles, CA 90028 Michael Hamilton Paul A. Barrs DLA Piper LLP BuchalterNemer, A Professional Corp. 550 South Hope Street, Suite 2300 1000 Wilshire Boulevard, Suite 1500 Los Angeles, CA 90071 Los Angeles, CA 90017-2457 Re: AGENDA ITEM NO. 20, January 20, 2009 re CIM - Strand Dear Gentlemen: On January 20, 2009, the City Council and the Redevelopment Agency of the City of Huntington Beach conditionally approved the following documents: (1) Construction Deed of Trust; (2) Agreement of Parties re Disposition and Development Agreement; (3) Assignment of Rents and Leases; and (4) Security Agreement and Fixture Filing. These approvals were on the condition that the final Construction Loan Agreement would not be inconsistent with the existing DDA between CIM Huntington, LLC and the Redevelopment Agency. At the same time, the Executive Director and the Mayor of the City of Huntington Beach were authorized to execute additional documents in furtherance of the January 20, 2009 approvals. Notwithstanding the considerable efforts of all parties leading up to the January 20, 2009 action by City Council and the Redevelopment Agency, we understand that the financing contemplated by the agreements has not been completed. In light of the passage of six (6) months since City and Agency approvals, you are hereby notified that all of the condition approvals are hereby deemed null and void and should not be relied upon as they are without any force or effect. Be assured that, as always, staff remains available to assist you in the future. V truly you, IFER McGRATH, City Imevy cc: Stanley Smalewitz, Director of Economic Development Bob Hall, Deputy City Administrator Susan Y. Apy, Esq. Leone Mulvihill, Sr. Deputy City Attorney 06-682.009/35581 1% CITY OF HUNTINGTON BEACH Interdepartmental Communication TO: JOAN FLYNN, City Clerk FROM: JENNIFER MCGRATH, City Attorney DATE: January 20, 2009 SUBJECT: LATE COMMUNICATION: City Council Meeting 1/20/09, Agenda Item 20 Agenda Item 20 relates to the Strand project and that certain Disposition and Development Agreement dated as of June 17, 1999 as amended by (i) an Implementation Agreement executed on April 6, 2000, (ii) a Second Implementation Agreement dated as of March 5, 2001, (iii) a Third Implementation Agreement dated as of October 30, 2002, (iv) a Fourth Implementation Agreement dated as of September 15, 2003, (v) a Fifth Implementation Agreement dated as of July 19, 2004, and (vi) a Sixth Implementation Agreement dated as of November 3, 2008 (collectively, the "DDA"). The request included in Agenda Item 20 seeks approval by the City Council and the Redevelopment Agency of a Construction Deed of Trust and an Agreement of Parties Re: Disposition and Development Agreement. Both documents incorporate by reference a Construction Loan Agreement between the developer of the Strand and Bank of America ("Loan Agreement") and the Agreement of Parties Re: Disposition and Development Agreement indirectly approves the Loan Agreement by approving the lender under the Loan Agreement as an approved "Mortgagee" under the DDA. Because the Agreement of Parties Re: Disposition and Development Agreement indirectly approves the Loan Agreement, this office recommends that any adoption of the Recommended Agency Actions and Recommended City Actions be conditioned upon the requirement that there is no provision included in the final Loan Agreement that is inconsistent with the DDA. We also recommend that the City approval be on the condition that if CIM resigns under the Operating Agreement for the Strand Public Parking Structure approved by City Council on November 3, 2008, CIM agrees that the City can immediately exercise any rights or remedies is has under the Operating Agreement. These specific actions are reflected in the following revised Agency and City actions that we recommend that the City Council/Redevelopment Agency Board consider as an alternative to those actions included in the Request for Council/Redevelopment Agency Action submitted in support of Agenda Item 20: - Ao - aoog Z/9 Te 06-682.009 /30123 Joan Flynn, City Clerk January 20, 2009 Page 2 of 2 Recommended Agency Action: Motion to: (1) Approve the Construction Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing on the condition that there is no provision in the final construction loan agreement that is inconsistent with the DDA; and (2) Approve the Agreement of Parties Re Disposition and Development Agreement on the condition that there is no provision of the final construction loan agreement that is inconsistent with the DDA; and (3) Authorize the Executive Director to execute any and all agreements in furtherance of this request. Recommended City Action: Motion to: (1) Approve the Construction Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing on the condition that there is no provision of the final construction loan agreement that is inconsistent with the DDA; and (2) Approve the Agreement of Parties Re Disposition and Development Agreement on the condition that there is no provision of the final construction loan agreement that is inconsistent with the DDA; and (3) Approve the Construction Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing on the condition of CIM's agreement that if CIM resigns as operator under the Operating Agreement, the City may immediately exercises any rights or remedies it has under the Operating Agreement. . (4) Approve the Agreement of Parties Re Disposition and Development Agreement on the condition of CIM's agreement that if CIM resigns as operator of the Strand Public Parking Structure, the City may immediately exercise any rights or remedies it has under the Operating Agreement. (5) Authorize the City Administrator to execute any and all agreements in furtherance of this 7�1 request. NNIFER MCGRATH, City Attorney c: Fred Wilson, City Administrator Bob Hall, Deputy City Administrator Stanley Smalewitz, Director of Economic Development 06-682.009 /30123 Council/Agency Meeting Held: Deferred/Continued to: 0 Approved ❑ Conditionally Approved �❑ Denied lit erk' Signat Council Meeting Date: 1/20/2009 Department ID Number: 09-05 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: Honorable Chairman and Redev I, ment Agency Members SUBMITTED BY: Fred A. Wilson, Executive Dir PREPARED BY: Stanley Smalewitz, Deputy Exec tive Director SUBJECT: Approval of CIM Loan Documents/The Strand Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: CIM/Huntington, LLC ("CIM") is the developer of The Strand, located on Fifth Street and Pacific Coast Highway. CIM is requesting approval of the financing of the development of the project. The Redevelopment Agency is being asked to consent to the developer assigning all of its rights under the Disposition and Development Agreement dated as of June 17, 1999, as amended by subsequent Implementation Agreements, to the Bank of America, and to use the parking garage as security until it is conveyed to the City. The City is being asked to consent to the developer assigning its right to receive shared parking revenues under the Operating Agreement for the Strand Public Parking Structure approved on November 3, 2008. The request also approves a Deed of Trust encumbering the Redevelopment Agency's ground leasehold interest in a portion of the project site. Funding Source: Not Applicable. Recommended Agency[ Action: Motion to: (1) Approve the Construction Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing; and (2) Approve the Agreement of Parties Re: Disposition and Development Agreement; and (3) Authorize the Executive Director to execute any and all agreements in furtherance of this request. REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: 1/20/2009 DEPARTMENT ID NUMBER: 09-05 Recommended City Action: Motion to: (1) Approve the Construction Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing; and (2) Approve the Agreement of Parties Re Disposition and Development Agreement; and (3) Authorize the City Administrator to execute any and all agreements in furtherance of this request. Alternative Action(s): (1) Do not approve the Construction Deed or Agreement of Parties; or (2) Direct staff to re -negotiate the agreements. Analysis: The Redevelopment Agency is a party to a Disposition and Development Agreement (DDA) dated as of July 17, 1999, with CIM/Huntington LLC (CIM) for the redevelopment of several parcels in the Downtown Huntington Beach. The DDA has been the subject of several implementation agreements, and the mixed use development consisting of retail, restaurant, hotel uses is close to completion with some retail stores holding grand openings in December 2008, including Forever 21, Active Ride and RA Sushi. Having not previously obtained construction ("bridge") financing for the development, CIM is now requesting that the Agency and City approve the bridge financing from Bank of America. The loan agreement is between CIM and Bank of America for approximately $43 million dollars. All improvements on the property, including the parking garage and certain shared revenues due CIM pursuant to an Operating Agreement between the City and CIM are listed as security for the Deed of Trust. However, the Deed of Trust requires Bank of America to release the parking garage as security prior to the City's acceptance of the garage and all of their public improvements. It is anticipated that the City will accept the parking garage no later then April 2009, when the Shorebreak Hotel is proposed to open. Pursuant to the DDA, no payments due CIM under the DDA will be made to CIM until such time as acceptance of all public improvements has occurred and the parking garage has been conveyed to the City. Under the terms of the DDA, the Agency and CIM agreed to cooperate to complete the assemblage of the project site through the acquisition or incorporation of the privately owned parcel. CIM negotiated a ground lease with an option to purchase a small portion of the site from Mr. Frank Cracchiolo. In order to ensure that the Agency's support for the project in the event CIM never built the project, Mr. Cracchiolo required that the Agency be the tenant to the ground lease with the understanding that the Agency would sublease its interest to CIM. The ground lease was an effective way to assemble the site and provided the Agency -2- 1/9/2009 3:31 PM REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: 1/20/2009 DEPARTMENT ID NUMBER: 09-05 additional control over the entire development site. CIM is solely responsible for the obligations under the ground lease. The Construction Deed of Trust encumbers the ground lease. By approving the Deed of Trust, the Agency is agreeing to permit the Agency's leasehold interest to be used as security for the construction loan. Bank of America will sign the documents as part of escrow. By approving the financing, the Redevelopment Agency is also making certain waivers as to rights and remedies it has in the event of default by CIM. Specifically, Bank of America is requiring that the Agency provide surety waivers as a condition to providing financing because the Agency is providing security for the loan but it is not the borrower. On November 3, 2008, the City approved an Operating Agreement for the Strand Public Parking Structure, which provided for CIM's operation of the public parking garage. The Operating Agreement contemplates the sharing of certain revenues with CIM. By approving this request, the City is consenting to CIM's assignment to the lender of the right to payment of those certain shared parking revenues. Further, CIM may be required to resign as operator of the parking garage in the event of default. Strategic Plan Goal: L-4: Create an environment that promotes tourism to increase revenues to support community services and transform the City's economy into a destination economy. Environmental Status: Not Applicable Attachment(s): -3- 1/12/2009 3:15 PM ATTACHMENT #1 BUCHALTER DRAFT 1/12/09 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Bank of America, N.A. 333 S. Hope Street, 1 lth Floor Los Angeles, CA 90071 Attn.: Faina Birger [SPACE ABOVE LINE FOR RECORDER'S USE ONLY] CONSTRUCTION DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES, SECURITY AGREEMENT AND FIXTURE FILING This Document Serves as a Fixture Filiny, Under Section 9-502 of the California Uniform Commercial Code. CIM's Organizational Identification Number: [2001031100551 [CIlV1I f , FIRM Street Address of Property: This Construction Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing (this "Deed of Trust") is made as of January _, 2009, by CIM/Huntington, LLC, a California limited liability company ("CIM") and Redevelopment Agency of the City of Huntington Beach ("Aizency", and, together with CIM, collectively "Grantor"), as trustor, in favor of PRLAP, INC., as trustee ("Trustee"), for the benefit of BANK OF AMERICA, N.A., a national banking association, as beneficiary in its capacity as administrative agent ("Administrative Agent") for the lenders (each, a "Lender" and collectively, "Lenders") from time to time party to that certain Construction Loan Agreement of even date herewith (the "Loan Agreement") among CIM, Lenders and Administrative Agent. Trustee is an affiliate of Administrative Agent. The addresses for CIM, Agency, Administrative Agent and Trustee are set forth at the end of this Deed of Trust. ARTICLE 1 Definitions; Granting Clauses; Secured Indebtedness Section 1.1 Secured Indebtedness; Limitation on Agency Liability. This Deed of Trust is made to secure the obligations of CIM under the Loan Documents and all other matters and indebtedness defined below as Secured Indebtedness, which indebtedness includes the Notes defined and described below. The Notes are collectively made payable in the aggregate original face principal amount of FORTY THREE MILLION Dollars ($43,000,000.00). Notwithstanding any other provision of this Deed of Trust (and notwithstanding the reference to Agency as "Grantor" hereunder or under any of the Loan Documents), Agency shall not, under any circumstances, have any liability for the obligations of Grantor hereunder or thereunder 1 except to the extent of its leasehold interest in the Property which is being pledged hereby, and then only to the extent required to secure such obligations of CIM. In addition: (a) in accordance with Section 317 of the Development Agreement, this Deed of Trust and the rights of Holder or any person acquiring title through or following foreclosure of this Deed of Trust are subordinate and subject to the provisions of the Development Agreement, the "Grant Deed" and the "Agreement Containing Covenants Affecting Real Property" (each as defined in the Development Agreement), and (b) Section 3.20 of the Loan Agreement providing that the Parking Component (as defined in the Loan Agreement) shall be reconveyed in accordance with the provisions of the Development Agreement, is incorporated herein by reference. Nothing in this Section 1.1 shall modify or diminish CIM's obligations as trustor under this Deed of Trust or as borrower under any of the other Loan Documents. Notwithstanding anything to the contrary herein, any representation, warranty, covenant, agreement, obligation or liability of CIM set forth herein is applicable to and made solely with respect to CIM's estate, right, title and interest in and to the Property, and is not meant to nor shall the same be construed to apply to the Agency Interest (defined below). Section 1.2 Definitions. (a) In addition to other terms defined herein, each of the following terms shall have the meaning assigned to it, such definitions to be applicable equally to the singular and the plural forms of such terms and to all genders: "Administrative Agent": Bank of America, N.A, in its capacity as administrative agent for Lenders or any successor administrative agent. "Collateral": All of the Property constituting personal property or fixtures in which Grantor is granting Administrative Agent a security interest for the ratable benefit of Lenders under this Deed of Trust, together with all proceeds and products thereof and all supporting obligations ancillary thereto or arising in any way in connection therewith. "Debtor Relief Law": Any federal, state or local law, domestic or foreign, as now or hereafter in effect relating to bankruptcy, insolvency, liquidation, receivership, reorganization, arrangement, composition, extension or adjustment of debts, or any similar law affecting the rights of creditors. "Default": Any of the events described in Section 4.1 of this Deed of Trust. "Development Agreement": That certain Disposition and Development Agreement by and between Agency and CIM (as successor in interest to CIM Group, LLC) dated as of June 17, 1999 as amended by (i) an Implementation Agreement executed on April 6, 2000, (ii) a Second Implementation Agreement dated as of March 5, 2001, (iii) a Third Implementation Agreement dated as of October 30, 2002, (iv) a Fourth Implementation Agreement dated as of September 15, 2003, (v) a Fifth Implementation Agreement dated as of July 19, 2004, and (vi) a Sixth Implementation Agreement dated as of November 3, 2008. 2 "Dispute": Any controversy, claim or dispute between CIM and Administrative Agent or any other Lender(s) or Holder, including any such controversy, claim or dispute arising out of or relating to (i) this Agreement, (ii) any other Loan Document, (iii) the Environmental Agreement, (iv) any related agreements or instruments, or (v) the transaction contemplated herein or therein (including any claim based on or arising from an alleged personal injury or business tort). "Environmental Agreement": The Environmental Indemnity Agreement dated of even date herewith executed by CIM in favor of Administrative Agent, Lenders and certain other parties. The Environmental Agreement is not a Loan Document. "Grantor": Unless the context clearly indicates otherwise, the Grantor(s) named in the introductory paragraph hereof, together with all heirs, devisees, representatives, successors and assigns of such Grantor(s) pursuant to Section 6.18 below, or any of them. "Ground Lease": the Amended and Restated Ground Lease and Option to Purchase Fee dated as of June 30, 2005 by and between Dolores L. Cracchiolo and Salvator W. Cracchiolo, as trustees for the Declaration of Trust dated June 12, 1979, and Salvator W. Cracchiolo and Barbara F. Cracchiolo, as trustees of the Cracchiolo Family Trust dated March 28, 2003 (collectively, "Trust"), and Grantor, pursuant to which the Trust leased its undivided tenancy -in - common interest in the Land to Grantor. "Holder": Administrative Agent for the ratable benefit of Lenders or the subsequent beneficiary at the time in question under this Deed of Trust. "Indemnified Matters": Any and all claims, demands, liabilities (including strict liability), losses, damages (including consequential damages), causes of action, judgments, penalties, fines, costs and expenses (including reasonable fees and expenses of attorneys and other professional consultants and experts, and of the investigation and defense of any claim, whether or not such claim is ultimately defeated, and the settlement of any claim or judgment including all value paid or given in settlement) of every kind, known or unknown, foreseeable or unforeseeable, which may be imposed upon, asserted against or incurred or paid by any Indemnified Party at any time and from time to time, whenever imposed, asserted or incurred, because of, resulting from, in connection with, or arising out of any transaction, act, omission, event or circumstance in any way connected with the Property or with this Deed of Trust or any other Loan Document, including any bodily injury or death or property damage occurring in or upon or in the vicinity of the Property through any cause whatsoever at any time, any act performed or omitted to be performed hereunder or under any other Loan Document, any breach by CIM of any representation, warranty, covenant, agreement or condition contained in this Deed of Trust or in any other Loan Document, any Default, or any claim under or with respect to any Lease. Notwithstanding anything to the contrary herein, Indemnified Matters shall only apply to events occurring and/or conditions existing prior to Grantor being dispossessed of the Property by foreclosures, deed in lieu or otherwise. "Indemnified Party": Each of the following persons and entities: (i) Administrative Agent, any Lender and any Holder; (ii) Trustee; (iii) any persons or entities owned or controlled by, owning or controlling, or under common control or affiliated with, Administrative Agent, any Lender, any Holder and/or Trustee; (iv) any participants and future co -lenders in the Loan; 3 (v) the directors, officers, partners, employees, attorneys, agents and representatives of each of the foregoing persons and entities; and (vi) the heirs, personal representatives, successors and assigns of each of the foregoing persons and entities. "Interest Rate Protection Agreement": Any interest rate swap agreement, International Swaps and Derivatives Association, Inc. (ISDA) Master Agreement, or any similar agreement or arrangement now existing or hereafter entered into by CIM and Bank of America, N.A. or one of its affiliates in connection with the Loan to hedge the risk of variable interest rate volatility or fluctuations of interest rates, as any such agreement or arrangement may be modified, supplemented and in effect from time to time. "Law": Any federal, state or local law, statute, ordinance, code, rule, regulation, license, permit, authorization, decision, order, injunction or decree, domestic or foreign. "Lease": Each existing or future lease, sublease (to the extent of Grantor's rights thereunder) or other agreement under the terms of which any person has or acquires any right to occupy or use the Property or any part thereof or interest therein, and each existing or future guaranty of payment or performance thereunder, and any and all existing or future security therefor and letter of credit rights with respect thereto, whether or not the letter of credit is evidenced by a writing. "Legal Requirement": Any law, agreement, covenant, restriction, easement or condition (including, without limitation of the foregoing, any condition or requirement imposed by any insurance or surety company), as any of the same now exists or may be changed or amended or come into effect in the future. "Lender": Each Lender from time to time party to the Loan Agreement. "Loan": The Loan collectively evidenced by the Notes. "Loan Agreement": The Construction Loan Agreement dated of even date herewith evidencing and governing the Loan, executed by and among CIM, Administrative Agent and Lenders, as it may from time to time be amended, modified, restated, replaced or supplemented. "Loan Documents": The Notes, this Deed of Trust, and any other document now or hereafter evidencing, governing, securing or otherwise executed in connection with the Loan, including the Loan Agreement and any letter of credit or reimbursement agreement, tri-party financing agreement, guaranty executed by a third party, Interest Rate Protection Agreement or any other agreement among CIM, Administrative Agent and Lenders and any, other party or parties (including without limitation Agency), pertaining to the repayment or use of the Loan proceeds, as such documents or any of them may have been or may be from time to time renewed, extended, supplemented, increased or modified; provided, however, that the Loan Documents do not include the Environmental Agreement. "Notes": (i) The Deed of Trust Notes dated of even date herewith, made by CIM and payable to the order of a Lender, collectively in the aggregate face principal amount of $43,000,000.00, bearing interest as provided in the Loan Agreement, and containing a provision for, among other things, the payment of attorneys' fees, and (ii) all other promissory notes given S in substitution thereof or in modification, supplement, increase, renewal or extension thereof, in whole or in part, whether one or more, as any or all of such promissory notes may from time to time be renewed, extended, supplemented, increased or modified. "Permitted Encumbrances": (i) Any matters set forth in any policy of mortgagee title insurance issued to Administrative Agent for the benefit of Lenders, (ii) the liens and security interests evidenced by this Deed of Trust, (iii) statutory liens for real estate taxes and assessments on the Property which are not yet delinquent, (iv) other liens and security interests (if any) in favor of Administrative Agent for the benefit of Lenders, (v) the rights of tenants in possession as of the date hereof, if any, pursuant to Leases approved by Administrative Agent and the rights of future tenants under any Leases made in accordance with the Loan Documents, and the assignment of such Leases pursuant to this Deed of Trust, and (vi) any matters arising after the date hereof which may be acceptable to Administrative Agent or any Holder in its sole and absolute discretion, which Permitted Encumbrances in the aggregate do not materially adversely affect the value or use of the Property or CIM's ability to repay the Secured Indebtedness. "Permitted Transfers": means (i) any transfers direct or indirect in CIM Urban Real Estate Fund, L.P., (ii) transfers of direct or indirect interests in CIM Group, Inc., provided that at least one of Avraham Shemesh, Shaul Kuba or Richard Ressler continues to maintain management control over day-to-day affairs of CIM Group, Inc.; (iii) transfers of interests in the Property by the Trust to CIM or any of its affiliates; (iv) subject to Section 8.1, transfers of interests in the Property by Agency to CIM or any of its affiliates; and (v) transfers arising by devise, descent, intestate succession and/or operation of law in connection with estate planning and/or the death or permanent incapacity of any person directly or indirectly owning any interest in CIM, Guarantor or CIM Group, Inc. "Rents": All of the rents, revenue, accounts, deposit accounts, payment intangibles, commercial tort claims, income, profits and proceeds derived and to be derived from CIM's right, title and interest -to the Property or arising from the use or enjoyment of any portion thereof or from any Lease, including the proceeds from any negotiated lease termination or buyout of such Lease, liquidated damages following default under any such Lease, all proceeds payable under any policy of insurance covering loss of rents resulting from untenantability caused by damage to any part of the Property, all of CIM's rights to recover monetary amounts from any tenant in bankruptcy, including rights of recovery for use and occupancy and damage claims arising out of Lease defaults, including rejections, under any applicable Debtor Relief Law, together with any sums of money that may now or at any time hereafter be or become due and payable to CIM by virtue of any and all royalties, overriding royalties, bonuses, delay rentals and any other amount of any kind or character arising under any and all present and future oil, gas, mineral and mining leases covering the Property or any part thereof, and all proceeds and other amounts paid or owing to CIM under or pursuant to any and all contracts and 'bonds relating to the construction or renovation of the Property. "Secured Indebtedness": The following promissory notes, obligations, indebtedness, duties and liabilities and all renewals, extensions, supplements, increases and modifications thereof and thereto, in whole or in part, from time to time: E (1) The Notes; (ii) All indebtedness, liabilities, duties, covenants, promises and other obligations owed by CIM to Administrative Agent and/or Lenders pursuant to the Loan Documents, expressly excluding, however, the Environmental Agreement (which is not a Loan Document) and also excluding any guaranty executed by a third party, whether now existing or hereafter arising, and whether joint or several, direct or indirect, primary or secondary, fixed or contingent, liquidated or unliquidated, and the cost of collection of all such amounts; (iii) All amounts that Administrative Agent, Lenders or any other Holder may from time to time advance pursuant to the terms and conditions of this Deed of Trust with respect to an obligation secured by a lien or encumbrance prior to the lien of this Deed of Trust or for the protection of this Deed of Trust, together with interest thereon; and (iv) If and only if evidenced by a writing signed by CIM reciting that it is secured by this Deed of Trust, any other loan, future advance, debt, obligation or liability owed by CIM of every kind or character, whether now existing or hereafter arising, whether joint or several, direct or indirect, primary or secondary, fixed or contingent, liquidated or unliquidated, and the cost of collection of all such amounts, and whether or not originally payable to Administrative Agent, Lenders or any other Holder, it being contemplated that CIM may hereafter become indebted to Administrative Agent, Lenders or another Holder for one or more of such further loans, future advances, debts, obligations and liabilities. "Subground Lease": the Subground Lease and Option to Purchase Fee dated as of April 16, 2001 by and between Grantor as sublandlord and CIM as subtenant, pursuant to which CIM and Agency collectively leased their leasehold interests in the Trust's undivided tenancy -in - common interest in the Land to CIM. "TIC Agreement" means that certain Tenancy In Common Agreement dated as of June 30, 2005 by and between the Trust and CIM with respect to the ownership of the Land and setting forth, among other things, the Trust's undivided 4.505% tenancy in common interest in the Land and CIM's undivided 95.495% tenancy in common interest in the Land. "Transfer": Any sale, lease, conveyance, assignment, pledge, encumbrance or transfer, whether voluntary, involuntary, by operation of law or otherwise, excluding Permitted Transfers. "Trustee": The trustee identified in the introductory paragraph of this Deed of Trust, and any successor or substitute appointed and designated as herein provided, from time to time acting hereunder. (b) Any term used or defined in the California Uniform Commercial Code, as in effect from time to time, which is not defined in this Deed of Trust has the meaning given to that term in the California Uniform Commercial Code, as in effect from time to time, when used in this Deed of Trust. However, if a term is defined in Division 9 of the California Uniform Commercial Code differently than in another Division of the California Uniform Commercial Code, the term has the meaning specified in Division 9. 0 Section 13 Granting Clause. For good and valuable consideration, the receipt and sufficiency of which are acknowledged by Grantor, to secure the obligations of CIM under the Loan Documents and all other matters and indebtedness constituting the Secured Indebtedness, (i) Agency hereby GRANTS, TRANSFERS and ASSIGNS to Trustee, in trust for the benefit of Administrative Agent for the ratable benefit of Lenders, with power of sale and right of entry and possession, all estate, right, title and interest which Agency now has in and to the leasehold interest of Agency created by the Ground Lease in the undivided 4.505% tenancy -in -common interest of the Trust evidenced by the TIC Agreement (the "Agency Interest"), and (ii) CIM hereby GRANTS, TRANSFERS and ASSIGNS to Trustee, in trust for the benefit of Administrative Agent for the ratable benefit of Lenders, with power of sale and right of entry and possession, all estate, right, title and interest which CIM now has or may hereafter acquire in and to the following Premises, Accessories and other rights, interests and properties, and all rights, estates, powers and privileges appurtenant thereto (collectively, the "Property"): (a) (1) The undivided 95.495 % tenancy -in -common interest of CIM evidenced by the TIC Agreement, (2) the leasehold interest of CIM created by the Ground Lease in the undivided 4.505% tenancy -in -common interest of the Trust evidenced by the TIC Agreement, and (3) the subleasehold interest of CIM in the leasehold interests of CIM and Agency, collectively, created by the Subground Lease, all (i.e., subparagraphs (1) through (3) inclusive) in and to the real property described in Exhibit A which is attached hereto and incorporated herein by reference (the "Land"), together with: (i) any and all buildings, structures, improvements, alterations or appurtenances now or hereafter situated or to be situated on the Land (collectively, the "Improvements"); and (ii) all right, title and interest of CIM, now owned or hereafter acquired, in and to (A) all streets, 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 the Land or the Improvements; (B) any strips or gores between the Land and abutting or adjacent properties; (C) all options to purchase the Land or the Improvements or any portion thereof or interest therein, and any greater estate in the Land or the Improvements; (D) all water, water rights (whether riparian, appropriative or otherwise, and whether or not appurtenant) and water stock, timber, crops and mineral interests on or pertaining to the Land; and (E) all development rights and credits and air rights (the Land, Improvements and other rights, titles and interests referred to in this clause (a) being herein sometimes collectively called the "Premises")- (b) All estate, right, title and interest which CIM now has or may hereafter acquire in and to all fixtures, equipment, systems, machinery, furniture, furnishings, appliances, inventory, goods, building and construction materials, supplies, and other articles of personal property, of every kind and character, tangible and intangible (including software embedded therein), now owned or hereafter acquired by CIM, which are now or hereafter attached to or situated in, on or about the Land or the Improvements, or used in or necessary to the complete and proper planning, development, use, occupancy or operation thereof, or acquired (whether delivered to the Land or stored elsewhere) for use or installation in or on the Land or the Improvements, and all renewals and replacements of, substitutions for and additions to the foregoing (the properties referred to in this clause (b) being herein sometimes collectively called the "Accessories," all of which are hereby declared to be permanent accessions to the Land); 7 (c) All estate, right, title and interest which CIM now has or may hereafter acquire in and to all (i) plans and specifications for the Improvements, (ii) CIM's rights, but not liability for any breach by Grantor, under all commitments (including any commitments for financing to pay any of the Secured Indebtedness), insurance policies (or additional or supplemental coverage related thereto, including from an insurance provider meeting the requirements of the Loan Documents or from or through any state or federal government - sponsored program or entity), Interest Rate Protection Agreements, contracts and agreements for the design, construction, operation or inspection of the Improvements and other contracts (including the Development Agreement and all payments to be made by Agency to CIM thereunder) and general intangibles (including payment intangibles and any trademarks, trade names, goodwill, software and symbols) related to the Premises or the Accessories or the operation thereof, (iii) deposits and deposit accounts arising from or relating to any transactions related to the Premises or the Accessories (including CIM's rights in tenants' security deposits, deposits with respect to utility services to the Premises, and any deposits, deposit accounts or reserves hereunder or under any other Loan Documents for taxes, insurance or otherwise), (iv) rebates or refunds of impact fees or other taxes, assessments or charges, money, accounts (including deposit accounts), instruments, documents, promissory notes and chattel paper (whether tangible or electronic) arising from or by virtue of any transactions related to the Premises or the Accessories, (v) permits, licenses, franchises, certificates, development rights, commitments and rights for utilities, and other rights and privileges obtained in connection with the Premises or the Accessories, (vi) Leases, Rents and other benefits of the Premises and the Accessories (without derogation of Article 3 hereof), (vii) as -extracted collateral produced from or allocated to the Land, including oil, gas and other hydrocarbons and other minerals and all products processed or obtained therefrom and the proceeds thereof, and (viii) engineering, accounting, title, legal, and other technical or business data concerning the Property, including software, which are in the possession of CIM or in which CIM can otherwise grant a security interest; (d) All estate, right, title and interest which CIM now has or may hereafter acquire in and to all (i) accounts and proceeds (whether cash or non -cash and including payment intangibles), of or arising from the properties, rights, titles and interests referred to above in this Section 1.3, including the proceeds of any sale, lease or other disposition thereof, proceeds of each policy of insurance, present and future (or additional or supplemental coverage related thereto, including from an insurance provider meeting the requirements of the Loan Documents or from or through any state or federal government -sponsored program or entity), payable because of loss sustained to all or part of the Property (including premium refunds), whether or not such insurance policies are required by Administrative Agent, proceeds of the taking thereof or of any rights appurtenant thereto, including change of grade of streets, curb cuts or other rights of access, by condemnation, eminent domain or transfer in lieu thereof for public or quasi public use under any law, proceeds arising out of any damage thereto, including any and all commercial tort claims, (ii) all letter -of -credit rights (whether or not the letter of credit is evidenced by a writing) CIM now has or hereafter acquires relating to the properties, rights, titles and interests referred to in this Section 1.3, (iii) all commercial tort claims CIM now has or hereafter acquires relating to the properties, rights, titles and interests referred to in this Section 1.3, and (iv) other interests of every kind and character which CIM now has or hereafter acquires in, to or for the benefit of the properties, rights, titles and interests referred to above in this Section 1.3 and all property used or useful in connection therewith, including rights of ingress and egress and remainders, reversions and reversionary rights or interests; (e) If the estate of CIM in any of the property referred to above in this Section 1.3 is a leasehold estate, this conveyance shall include, and the lien and security interest created hereby shall encumber and extend to, all other or additional title, estates, interests or rights which are now owned or may hereafter be acquired by CIM in or to the property demised under the lease creating the leasehold estate; and (f) All estate, right, title and interest which CIM now has or may hereafter acquire in and to all proceeds and products of, additions and accretions to, substitutions and replacements for, and changes in any of the property referred to above in this Section 1.3. Collateral, Property and Rents shall specifically exclude any Rents derived and to be derived from the Parking Component and/or that certain Operating Agreement by and between CIM and the City of Huntington Beach entered into as of November 25, 2008 (the "Operating Agreement') or arising from the use or enjoyment of any portion thereof or from any Lease thereof and any revenues, proceeds, or other products of the Parking Component and/or the Operating Agreement or any supporting obligations ancillary thereto or arising in any way in connection therewith; provided, however, that Collateral, Property and Rents shall include for all purposes any and all payments paid or to be paid to CIM under the Operating Agreement to which CIM is beneficially entitled (including without limitation payments under Section 7.3(c) thereof), but no other estate, right, title or interest of CIM under the Operating Agreement except to the extent approved in writing by the City of Huntington Beach. The grant, transfer and assignment made by Agency of the Agency Interest shall only be to the extent required to secure the obligations of CIM under the Loan Documents. Section 1.4 Security Interest. To secure the obligations of CIM under the Loan Documents and all other matters and indebtedness constituting the Secured Indebtedness, CIM hereby grants to Administrative Agent for the ratable benefit of Lenders a security interest in all of the Collateral, including all proceeds and products thereof and all supporting obligations ancillary thereto or arising in any way in connection therewith. In addition to its rights hereunder or otherwise, Administrative Agent, on behalf of itself and Lenders, and any Holder shall have all of the rights of a secured party under the California Uniform Commercial Code, as in effect from time to time, or under the Uniform Commercial Code in force from time to time in any other state to the extent the same is applicable law. ARTICLE 2 Representations, Warranties and Covenants Section 2.1 CIM represents, warrants and covenants as follows: (a) Payment and Performance. CIM will make due and punctual payment of the Secured Indebtedness. CIM will timely and properly perform and comply with all of the covenants, agreements and conditions imposed upon it by this Deed of Trust and the other Loan I Documents and will not permit a Default to occur hereunder or thereunder. Time shall be of the essence in this Deed of Trust. (b) Title and Permitted Encumbrances. CIM has in CIM's own right, and CIM covenants to maintain, lawful, good and marketable title to the Property, is lawfully seized and possessed of the Property and every part thereof, and has the right to convey the same, free and clear of all liens, charges, claims, security interests, and encumbrances except for the Permitted Encumbrances. CIM will warrant generally and forever defend title to the Property, subject as aforesaid to the Permitted Encumbrances, to Trustee and its successors or substitutes and assigns, against the claims and demands of all persons claiming or to claim the same or any part thereof. CIM will punctually pay, perform, observe and keep in all material respects all covenants, obligations and conditions in or pursuant to any Permitted Encumbrance and will not modify or permit modification of any Permitted Encumbrance in any materially adverse respect without the prior written consent of Holder. Inclusion of any matter as a Permitted Encumbrance does not constitute approval or waiver by Holder or Lenders of any existing or future violation or other breach thereof by CIM, the Property or otherwise. No part of the Property constitutes all or any part of the principal residence of CIM if CIM is an individual. If any right or interest of Holder or any Lender in the Property or any part thereof shall be endangered or questioned or shall be attacked directly or indirectly, Trustee, Holder and Lenders, or any of them (whether or not named as parties to legal proceedings with respect thereto), are hereby authorized and empowered to take such steps as in their discretion may be proper for the defense of any such legal proceedings or the protection of such right or interest of Holder and each Lender, including the employment of independent counsel, the prosecution or defense of litigation, and the compromise or discharge of adverse claims. All expenditures so made of every kind and character shall be a demand obligation (which obligation CIM hereby promises to pay) owing by CIM to Trustee or to Holder, for its own account or the account of Lenders (as the case may be), and the party (Trustee, Holder or Lenders, as the case may be) making such expenditures shall be subrogated to all rights of the person receiving such payment. (c) Taxes and Other Impositions. CIM will pay or cause to be paid all taxes, assessments and other charges or levies imposed upon or against or with respect to the Property or the ownership, use, occupancy or enjoyment of any portion thereof, or any utility service thereto, as the same become due and payable, including all real estate taxes assessed against the Property or any part thereof, and shall deliver promptly to Holder such evidence of the payment thereof as Holder may require. CIM may contest in good faith, at its own expense (a "Contest"), the validity, amount, or calculation (or underlying assessment) of any tax, assessment or other charge or levy upon or against the Property or the ownership, use, or occupancy or enjoyment thereof (a "Contested Matter"): CIM shall prosecute any Contest with reasonable diligence and continuity. CIM shall give Administrative Agent reasonable prior notice of any Contest and periodic written reports on its status, when and as Administrative Agent reasonably requests. If at any time in Administrative Agent's reasonable judgment payment or performance of a Contested Matter becomes necessary to prevent a material adverse effect to CIM, the Property or Administrative Agent or any Lenders, then CIM shall pay or perform such Contested Matter prior to the occurrence of such effect. If (a) required by applicable law as a condition to such contests, and (b) Administrative Agent so requires, then before CIM commences such Contest, and at all times while such Contest continues, CIM shall (as a condition to CIM's right to commence and continue such Contest) deliver to Administrative Agent and maintain in full force 10 and effect a surety bond, letter of credit, or other security reasonably satisfactory to Administrative Agent, to indemnify Administrative Agent and Lenders against the Contest. Such security shall equal the full incremental payment that CIM would be required to make if the Contest failed, including any additional interest, charge, penalty, or expense arising from, or to be incurred as a result of, such Contest. (d) Insurance Coverajze. CIM shall obtain and maintain at CIM's sole expense: (i) property insurance with respect to all insurable Property, against loss or damage by fire, lightning, windstorm, explosion, hail, tornado and such additional hazards as are presently included in Special Form (also known as "all risk") coverage and against any and all acts of terrorism and such other insurable hazards as Holder may require, in an amount not less than 100% of the full replacement cost, including the cost of debris removal, without deduction for depreciation and sufficient to prevent CIM, Holder and Lenders from becoming a coinsurer, such insurance to be in "builder's risk" completed value (non reporting) form during and with respect to any construction on the Premises; (ii) if and to the extent any portion of the Improvements is, under the Flood Disaster Protection Act of 1973 ("FDPA"), as it may be amended from time to time, in a Special Flood Hazard Area, within a Flood Zone designated A or V in a participating community, a flood insurance policy in an amount required by Holder, but in no event less than the amount sufficient to meet the requirements of applicable law and the FDPA, as such requirements may from time to time be in effect; (iii) general liability insurance, on an "occurrence" basis against claims for "personal injury" liability, including bodily injury, death or property damage liability, for the benefit of CIM as named insured and Holder as additional insured on behalf of itself and Lenders; (iv) statutory workers' compensation insurance with respect to any work on or about the Premises (including employer's liability insurance, if required by Holder), covering all employees of CIM and any contractor; (v) if there is a general contractor, commercial general liability insurance, including products and completed operations coverage, and in other respects similar to that described in clause (iii) above, for the benefit of the general contractor as named insured and CIM and Holder (on behalf of itself and Lenders) as additional insureds, in addition to statutory workers' compensation insurance with respect to any work on or about the Premises (including employer's liability insurance, if required by Holder), covering all employees of the general contractor and any contractor; and (vi) such other insurance on the Property and endorsements as may from time to time be required by Holder (including soft cost coverage, automobile liability insurance, business interruption insurance or delayed rental income insurance, wind insurance, boiler and machinery insurance, earthquake insurance, sinkhole coverage, and/or permit to occupy endorsement) and against other insurable hazards or casualties which at the time are commonly insured against in the case of premises similarly situated, due regard being given to the height, type, construction, location, use and occupancy of buildings and improvements. (e) Insurance Policy Requirements. All insurance policies shall be issued and maintained by insurers, in amounts, with deductibles, limits and retentions and in forms satisfactory to Holder. All insurance policies shall require at least ten (10)' days' prior written notice to Holder of any cancellation for nonpayment of premiums and at least thirty (30) days' prior written notice to Holder of any other cancellation or any change of coverage. All insurance companies must be licensed to do business in the state in which the Property is located and must have A. M. Best Company financial and performance ratings of A -:IX or better. All insurance policies maintained, or caused to be maintained, by CIM with respect to the Property, except for 11 general liability insurance, shall provide that each such policy shall be primary without right of contribution from any other insurance that may be carried by CIM, Holder or any Lender and that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured. If any insurer which has issued a policy of hazard, liability or other insurance required pursuant to this Deed of Trust or any other Loan Document becomes insolvent or the subject of any petition, case, proceeding or other action pursuant to any Debtor Relief Law or if in Holder's reasonable opinion the financial responsibility of such insurer is or becomes inadequate, CIM shall, upon its discovery thereof or upon request by Holder therefor, promptly obtain and deliver to Holder, at CIM's expense in each instance, a like policy (or, if and to the extent permitted by Holder, acceptable evidence of insurance) issued by another insurer, which insurer and policy meet the requirements of this Deed of Trust or such other Loan Document, as the case may be. Without limiting the discretion of Holder with respect to required endorsements to insurance policies, all such policies for loss of or damage to the Property shall contain a standard mortgagee clause (without contribution) naming Holder as mortgagee for the benefit of itself and Lenders with loss proceeds payable to Holder on behalf of itself and Lenders notwithstanding (i) any act, failure to act or negligence of or violation of any warranty, declaration or condition contained in any such policy by any named or additional insured, (ii) the occupation or use of the Property for purposes more hazardous than permitted by the terms of any such policy, (iii) any foreclosure or other action by Holder or Lenders under the Loan Documents, or (iv) any change in title to or ownership of the Property or any portion thereof, such proceeds to be held for application as provided in the Loan Documents. Certificates evidencing each initial insurance policy together with a copy of the original policy and such other evidence of insurance as may be acceptable to Holder shall be delivered to Holder at the time of execution of this Deed of Trust, with all premiums fully paid current, and each renewal or substitute policy (or evidence of insurance) shall be delivered to Holder, with all premiums fully paid current, at least ten (10) days before the termination of the policy it renews or replaces. CIM shall pay all premiums on policies required hereunder as they become due and payable and promptly deliver to Holder evidence satisfactory to Holder of the timely payment thereof. (f) Insurance Proceeds. If any loss occurs at any time when CIM has failed to perform CIM's covenants and agreements with respect to any insurance payable because of loss sustained to any part of the Property, whether or not such insurance is required by Holder, Holder, on behalf of itself and Lenders, shall nevertheless be entitled to the benefit of all insurance covering the loss and held by or for CIM, to the same extent as if it had been made payable to Holder for the benefit of itself and Lenders. Upon any foreclosure hereof or transfer of title to the Property in extinguishment of the whole or any part of the Secured Indebtedness, all of CIM's right, title and interest in and to the insurance policies referred to in this clause (f) (including unearned premiums) and all proceeds payable thereunder shall thereupon vest in the purchaser at foreclosure or other such transferee, to the extent permissible under such policies. Holder shall have the right on behalf of Lenders (but not the obligation) to make proof of loss for, settle and adjust any claim under, and receive the proceeds of, all insurance for loss of or damage to the Property, regardless of whether or not such insurance policies are required by Holder, and the expenses incurred by Holder and Lenders in the adjustment and collection of insurance proceeds shall be a part of the Secured Indebtedness and shall be due and payable to Holder on demand (for its own account or for the account of Lenders, as applicable). Neither Holder nor Lenders shall be, under any circumstances, liable or responsible for failure to collect 12 or exercise diligence in the collection of any of such proceeds or for the obtaining, maintaining or adequacy of any insurance or for failure to see to the proper application of any amount paid over to CIM. CIM shall at all times comply with the requirements of the insurance policies required hereunder and of the issuers of such policies and of any board of fire underwriters or similar body as applicable to or affecting the Property. (g) Reserve for Insurance, Taxes and Assessments. During a Default, upon request of Holder, to secure the payment and performance of the Secured Indebtedness, but not in lieu of such payment and performance, CIM will deposit with Holder for the benefit of itself and Lenders a sum equal to real estate taxes, assessments and charges (which charges for the purposes of this clause (g) shall include any recurring charge which could result in a lien against the Property) against the Property for the current year and the premiums for such policies of insurance for the current year, all as estimated by Holder and prorated to the end of the calendar month following the month during which Holder's request is made, and thereafter will deposit with Holder, on each date when an installment of principal and/or interest is due on the Note, sufficient funds (as estimated from time to time by Holder) to permit Holder to pay at least fifteen (15) days prior to the due date thereof, the next maturing real estate taxes, assessments and charges and premiums for such policies of insurance. Holder shall have the right to rely upon tax information furnished by applicable taxing authorities in the payment of such taxes or assessments and shall have no obligation to make any protest of any such taxes or assessments. Any excess over the amounts required for such purposes shall be held by Holder for future use, applied to any Secured Indebtedness or refunded to CIM, at Holder's option, and any deficiency in such funds so deposited shall be made up by CIM upon demand of Holder. All such funds so deposited shall bear interest (for CIM's benefit), may be commingled with the general funds of Holder and shall be applied by Holder toward the payment of such taxes, assessments, charges and premiums when statements therefor are presented to Holder by CIM (which statements shall be presented by CIM to Holder a reasonable time before the applicable amount is due); provided, however, that, if a Default shall have occurred hereunder, such funds may at Holder's option be applied to the payment of the Secured Indebtedness in the order determined by Holder in its sole discretion, and that Holder may (but shall have no obligation) at any time, in its discretion, apply all or any part of such funds toward the payment of any such taxes, assessments, charges or premiums which are past due, together with any penalties or late charges with respect thereto. The conveyance or transfer of CIM's interest in the Property for any reason (including the foreclosure of a subordinate lien or security interest or a transfer by operation of law) shall constitute an assignment or transfer of CIM's interest in and rights to such funds held by Holder under this clause (g) but subject to the rights of Holder and Lenders hereunder. (h) Condemnation. CIM shall notify Holder immediately of any threatened or pending proceeding for condemnation affecting the Property or arising out of damage to the Property, and CIM shall, at CIM's expense, diligently prosecute any such proceedings. Holder shall have the right (but not the obligation) to participate in any such proceeding and to be represented by counsel of its own choice. Holder shall be entitled to receive, on behalf of itself and Lenders, all sums in excess of $2,500,000 in the aggregate which may be awarded or become payable to CIM for the condemnation of the 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 CIM for injury or damage to the Property. CIM shall, promptly upon request of Holder, execute such additional assignments and other documents as may be necessary 13 from time to time to permit such participation and to enable Holder to collect and receipt for any such sums. Neither Holder nor Lenders shall be, under any circumstances, liable or responsible for failure to collect or to exercise diligence in the collection of any such sum or for failure to see to the proper application of any amount paid over to CIM. Holder is hereby authorized, in its own name on behalf of itself and Lenders or in CIM's name, to settle or compromise any condemnation claim or cause of action, and to execute and deliver valid acquittances for, and to appeal from, any award, judgment or decree arising from any such claim or cause of action in excess of $2,500,000 in the aggregate. All costs and expenses (including reasonable attorneys' fees) incurred by Holder or Lenders in connection with any condemnation shall be a demand obligation owing by CIM (which CIM hereby promises to pay) to Holder (for its own account or for the account of Lenders, as applicable) pursuant to this Deed of Trust. (i) Damages and Insurance and Condemnation Proceeds. CIM hereby absolutely and irrevocably assigns to Administrative Agent for the ratable benefit of itself and Lenders, and authorizes the payor to pay to Administrative Agent or any other Holder, the following claims, causes of action, awards, payments and rights to payment in excess of $2,500,000 in the aggregate (collectively, "Claims"): all awards of damages and all other compensation payable directly or indirectly because of a condemnation, proposed condemnation or taking which affects any part of the Property; all awards and other Claims arising out of any warranty affecting any part of the Property or for damage or injury to any part of the Property; all proceeds of any insurance policies payable because of loss sustained to any part of the Property, whether or not such insurance policies are required by Holder, and all interest that may accrue on any of the foregoing. All proceeds of Claims described in this clause (i) shall be payable to Holder and shall be applied first to reimburse Holder and Lenders for their costs and expenses of recovering such proceeds, including attorneys' fees. Upon satisfaction of each of the following conditions (in all cases where Holder or Lender receives the awards and they exceed $2,500,000), provided that no Default exists, CIM shall be permitted to use the balance of the proceeds ("Net Claims Proceeds") to pay the costs of repairing or reconstructing the Property: (i) Holder shall have approved the plans and specifications, construction budget, construction schedule, contractor, architect, engineer and payment and performance bond (if required by Holder); (ii) CIM shall have presented sufficient evidence to Holder that after the repair or reconstruction, the Property will be substantially restored to its use, value and condition immediately prior to the occurrence of the damage or condemnation; (iii) Holder shall have determined that the Net Claims Proceeds are sufficient to pay the total cost of the repair or reconstruction, including all development costs and interest due on the Secured Indebtedness until the work is complete, or CIM must provide (or deposit with Holder) (a) its own funds or (b) a letter of credit approved by Holder in its sole discretion, in each case equal to the difference between the Net Claims Proceeds and the total cost of the work, as estimated by CIM and approved by Holder; (iv) CIM shall have presented sufficient evidence that the Property's operations and income (including any business interruption or rent loss proceeds) after the repair or reconstruction will be sufficient to pay the operating expenses of the Property and debt service 14 on the Secured Indebtedness with the same coverage ratios considered by Administrative Agent and Lenders in underwriting the Loan, including evidence that a sufficient number of existing Leases will continue in full force and effect (subject to rent abatement as may be provided in the Leases) or if any have been terminated, a sufficient number of terminated Leases shall have been replaced with Leases of equal quality in the reasonable judgment of Holder. Any tenant leasing more than 2,500 square feet and having the right to terminate its Lease due to the damage or condemnation, which has not exercised that right, shall have confirmed in writing to Holder its irrevocable waiver of such termination right; (v) All parties having operating, management or franchise interests in and arrangements concerning the Property shall have agreed that they will continue their interests and arrangements for the contract terms then in effect following the repair or reconstruction; (vi) All parties having commitments to provide financing with respect to the Property, to purchase CIM's interest in full or in part in the Property or to purchase the Loan shall have agreed in a manner satisfactory to Holder that their commitments will continue in full force and effect and, if necessary, the expiration of such commitments shall be extended by the time necessary to complete the repair or reconstruction; (vii) CIM shall have presented sufficient evidence to Holder that all necessary governmental approvals and permits can be obtained to allow the rebuilding and reoccupancy of the Property; (viii) CIM shall have presented sufficient evidence to Holder that the Improvements will take no more than nine (9) months to reconstruct and that such reconstruction will be completed prior to the stated maturity of the Loan. If the foregoing conditions are met to Holder's reasonable satisfaction, Holder shall hold the Net Claims Proceeds and any funds that CIM is required to provide in an interest -bearing account and shall disburse them to CIM to pay the costs of the work on the terms and subject to the conditions of the provisions of the Loan Agreement governing disbursements. Interest on the funds shall accrue at the rate of interest then being paid by Holder to regular savings account customers and shall be credited to CIM. CIM shall provide evidence acceptable to Holder that all work has been completed lien -free, in a workmanlike manner and in accordance with all Legal Requirements. CIM agrees that the conditions described above are reasonable. If the foregoing conditions are not satisfied, or if a Default occurs after Holder's receipt of the Net Claims Proceeds, Holder may, at Holder's absolute discretion and regardless of whether the security of Holder and Lenders is impaired, apply all or any of the Net Claims Proceeds to pay or prepay, without any Consequential Loss (as defined in the Loan Agreement) the Secured Indebtedness in such order and in such amounts as Holder may elect. Following the application of any Net Claims Proceeds as contemplated by this clause (i), the unpaid portion of the Secured Indebtedness shall remain in full force and effect and the payment thereof shall not be excused. Notwithstanding the foregoing, the rights of Holder and Lenders shall be subject to applicable law governing use of the Net Claims Proceeds, if any. 15 Notwithstanding anything to the contrary in this Deed of Trust, and so long as there is no Default under any of the Loan Documents, CIM shall have the right to: (A) settle, adjust or compromise claims for less than $2,500,000, to receive the insurance proceeds from such claims and to use such insurance proceeds to restore the Property without the consent or approval of Administrative Agent; and (B) receive proceeds from rental interruption insurance and business loss insurance policies directly from the insurer provided that CIM shall apply such proceeds first to pay operating expenses of the Property. Any proceeds received by Administrative Agent under subparagraphs (A) and (B) above shall be held in trust by Administrative Agent for the benefit of CIM, and Administrative Agent agrees that it shall deliver the same to CIM within 15 business days of its receipt thereof. 0) Compliance with Legal Requirements. The Property and the use, operation and maintenance thereof and all activities thereon do and shall at all times comply with all applicable Legal Requirements. The Property is not, and shall not be, dependent on any other property or premises or any interest therein other than the Property to fulfill any requirement of any Legal Requirement. CIM shall not, by act or omission, permit any building or other improvement not subject to the lien of this Deed of Trust to rely on the Property or any interest therein to fulfill any requirement of any Legal Requirement. Except as disclosed in writing to Administrative Agent by CIM, no improvement upon or use of any part of the Property constitutes a nonconforming use under any zoning law or similar law or ordinance. CIM has obtained and shall preserve in force all requisite zoning, utility, building, health, environmental and operating permits from the governmental authorities having jurisdiction over the Property. If CIM receives a notice or claim from any person that the Property, or any use, activity, operation or maintenance thereof or thereon, is not in compliance with any Legal Requirement, CIM will promptly furnish a copy of such notice or claim to Holder. CIM has received no notice and has no knowledge of any such noncompliance for which the noncompliance has not been cured. (k) Maintenance, Repair and Restoration. Subject to the obligations of Administrative Agent and Lenders under clause (i) above, CIM will keep the Property in first class order, repair, operating condition and appearance, causing all necessary repairs, renewals, replacements, additions and improvements to be promptly made, and will not allow any of the Property to be misused, abused or wasted or to deteriorate. Notwithstanding the foregoing, CIM will not, without the prior written consent of Holder, (i) remove from the Property any fixtures or personal property covered by this Deed of Trust except such as is replaced by CIM by an article of equal suitability and value, owned by CIM, free and clear of any lien or security interest (except that created by this Deed of Trust), or (ii) make any structural alteration to the Property or any other alteration thereto which impairs the value thereof, in each case other than any such construction specifically contemplated in the Loan Documents. Subject to the obligations of Administrative Agent and Lenders under clause (i) above, if any act or occurrence of any kind or nature (including any condemnation or any casualty for which insurance was not obtained or obtainable) shall result in material damage to or loss or destruction of the Property, CIM shall give prompt notice thereof to Holder and CIM shall promptly, at CIM's sole cost and expense and regardless of whether insurance or condemnation proceeds (if any) shall be available or sufficient for the purpose, secure the Property as necessary and commence and continue diligently to completion to restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to the damage, loss or destruction. 16 (1) No Other Liens. CIM will not, without the prior written consent of Holder, 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 deed of trust, mortgage, voluntary or involuntary lien, whether statutory, constitutional or contractual, security interest, encumbrance or charge, or conditional sale or other title retention document, against or covering the Property, or any part thereof, other than the Permitted Encumbrances, regardless of whether the same are expressly or otherwise subordinate to the lien or security interest created in this Deed of Trust, and should any of the foregoing become attached hereafter in any manner to any part of the Property without the prior written consent of Holder, CIM will cause the same to be promptly discharged and released. CIM will own all parts of the Property and will not acquire any fixtures, equipment or other property (including software embedded therein) forming a part of the Property pursuant to a lease, license, security agreement or similar agreement, whereby any party has or may obtain the right to repossess or remove same, without the prior written consent of Holder (provided that such consent shall not be required with respect to equipment leases with an aggregate value of less than $300,000 measured on an annual basis). If Holder consents to the voluntary grant by CIM of any deed of trust, lien, security interest, or other encumbrance (hereinafter called "Subordinate Lien") covering any of the Property or if the foregoing prohibition is determined by a court of competent jurisdiction to be unenforceable as to a Subordinate Lien, any such Subordinate Lien shall contain express covenants to the effect that: (i) the Subordinate Lien is unconditionally subordinate to this Deed of Trust and all Leases; (ii) if any action (whether judicial or pursuant to a power of sale) shall be instituted to foreclose or otherwise enforce the Subordinate Lien, no tenant of any of the Leases shall be named as a party defendant, and no action shall be taken that would terminate any occupancy or tenancy without the prior written consent of Holder; (iii) Rents, if collected by or for the holder of the Subordinate Lien, shall be applied first to the payment of the Secured Indebtedness then due and expenses incurred in the ownership, operation and maintenance of the Property in such order as Holder may determine, prior to being applied to any indebtedness secured by the Subordinate Lien; (iv) written notice of default under the Subordinate Lien and written notice of the commencement of any action (whether judicial or pursuant to a power of sale) to foreclose or otherwise enforce the Subordinate Lien or to seek the appointment of a receiver for all or any part of the Property shall be given to Holder with or immediately after the occurrence of any such default or commencement; and (v) neither the holder of the Subordinate Lien, nor any purchaser at foreclosure thereunder, nor anyone claiming by, through or under any of them shall succeed to any of CIM's rights hereunder without the prior written consent of Holder. (m) Operation of Property. CIM will operate the Property in a good and workmanlike manner and in accordance with all Legal Requirements and will pay all fees or charges of any kind in connection therewith. CIM will keep the Property occupied so as not to impair the insurance carried thereon. CIM will not use or occupy or conduct any activity on, or allow the use or occupancy of or the conduct of any activity on, the Property in any manner which violates any Legal Requirement or which constitutes a public or private nuisance or which makes void, voidable or cancelable, or increases the premium of, any insurance then in force with respect thereto. CIM will not initiate or permit any zoning reclassification of the Property or seek any variance under existing zoning ordinances applicable to the Property or use or permit the use of the Property in such a manner which would result in such use becoming a nonconforming use under applicable zoning ordinances or other Legal Requirement. CIM will not impose any material easement, restrictive covenant or encumbrance upon the Property, nor 17 execute or file any subdivision plat or condominium declaration affecting the Property or consent to the annexation of the Property to any municipality, without the prior written consent of Holder. CIM will not intentionally do or suffer to be done any act whereby the value of any part of the Property may be lessened. CIM will preserve, protect, renew, extend and retain all material rights and privileges granted for or applicable to the Property. Without the prior written consent of Holder, there shall be no drilling or exploration for or extraction, removal or production of any mineral, hydrocarbon, gas, natural element, compound or substance (including sand and gravel) from the surface or subsurface of the Land regardless of the depth thereof or the method of mining or extraction thereof, except as contemplated by a Permitted Encumbrance. CIM will cause all debts and liabilities of any character (including all debts and liabilities for labor, material and equipment (including software embedded therein) and all debts and charges for utilities servicing the Property) incurred in the construction, maintenance, operation and development of the Property to be promptly paid. (n) Further Assurances. CIM and Agency will each, promptly on request of Holder, (i) correct any defect, error or omission which may be discovered in the contents, execution or acknowledgment of this Deed of Trust or any other Loan Document; (ii) execute, acknowledge, deliver, procure and record and/or file such further documents (including further deeds of trust, security agreements, and assignments of rents or leases) and do such further acts as may reasonably be necessary, desirable or proper to carry out more effectively the purposes of this Deed of Trust and the other Loan Documents, to more fully identify and subject to the liens and security interests hereof any property intended to be covered hereby (including specifically, but without limitation, any renewals, additions, substitutions, replacements, or appurtenances to the Property) or as deemed advisable by Holder to protect the lien or the security interest hereunder against the rights or interests of third persons; and (iii) provide such certificates, documents, reports, information, affidavits and other instruments and do such further acts as may be necessary, desirable or proper in the reasonable determination of Holder to enable Holder and Lenders to comply with the requirements or requests of any agency having jurisdiction over Holder or any Lender or any examiners of such agencies with respect to the indebtedness secured hereby, CIM or the Property. CIM shall pay all reasonable costs connected with any of the foregoing, which shall be a demand obligation owing by CIM (which CIM hereby promises to pay) to Holder (for its own account or the account of Lenders, as applicable) pursuant to this Deed of Trust. (o) Fees and Expenses. Without limitation of any other provision of this Deed of Trust or of any other Loan Document and to the extent not prohibited by applicable law, CIM will pay, and will reimburse to Holder (for its own account or the account of Lenders, as applicable) and/or Trustee on demand to the extent paid by Holder, Lenders and/or Trustee: (i) costs of appraisals obtained in connection with the origination of the Loan and after the occurrence of a Default; (ii) all reasonable filing, registration and recording fees, recordation, transfer and other taxes, brokerage fees and commissions, abstract fees, title search or examination fees, title policy and endorsement premiums and fees, Uniform Commercial Code search fees, judgment and tax lien search fees, escrow fees, attorneys' fees, architect's fees, engineering fees, construction consultant fees, environmental inspection fees, survey fees, and all other costs and expenses of every character incurred by CIM or Holder, Lenders and/or Trustee in connection with the preparation of the Loan Documents, the evaluation, closing and funding of the Loan, and any and all amendments and supplements to this Deed of Trust, the Note or any M other Loan Documents or any approval, consent, waiver, release or other matter requested or required hereunder or thereunder, or otherwise attributable or chargeable to CIM as owner of the Property; and (iii) all costs and expenses, including attorneys' fees and expenses (including the market value of services provided by in-house counsel), incurred or expended in connection with the exercise of any right or remedy, or the defense of any right or remedy or the enforcement of any obligation of CIM, hereunder or under any other Loan Document. (p) Indemnification. CIM will indemnify and hold harmless each and every Indemnified Party from and against, and reimburse them on demand for, any and all Indemnified Matters. Without limitation, the foregoing indemnity shall apply to each Indemnified Party with respect to matters which in whole or in part are caused by or arise out of the negligence of such (and/or any other) Indemnified Party. However, such indemnity shall not apply to a particular Indemnified Party to the extent that the subject of the indemnification is caused by or arises out of the gross negligence or willful misconduct of that Indemnified Party. Any amount to be paid under this clause (p) by CIM to any Indemnified Party shall be a demand obligation owing by CIM (which CIM hereby promises to pay) to such Indemnified Party pursuant to this Deed of Trust. The indemnity in this clause (p) shall not terminate upon the release, foreclosure or other termination of this Deed of Trust but will survive the enforcement of any remedy provided in any Loan Document including the foreclosure of this Deed of Trust or conveyance in lieu of foreclosure, the repayment of the Secured Indebtedness, the discharge and release of this Deed of Trust and the other Loan Documents, any bankruptcy or other proceeding under any Debtor Relief Law, and any other event whatsoever. The rights of Indemnified Parties under this clause (p) shall be in addition to all other rights that Indemnified Parties or any of them may have under this Deed of Trust, any other Loan Document, or the Environmental Agreement. Nothing in this clause (p) or elsewhere in this Deed of Trust or in the Environmental Agreement shall limit or impair any rights or remedies that any Indemnified Party may have (including any rights of contribution or indemnification) against CIM or any other person under any other provision of this Deed of Trust, any other Loan Document, any other agreement including the Environmental Agreement, or any applicable Legal Requirement. (q) Taxes on Note or Deed of Trust. CIM will promptly pay all income, franchise and other taxes owing by CIM and any stamp, documentary, recordation and transfer taxes or other taxes (unless such payment by CIM is prohibited by law) which may be required to be paid with respect to any Note, this Deed of Trust or any other instrument evidencing or securing any of the Secured Indebtedness. In the event of the enactment after ,this date of any law of any governmental entity applicable to Holder, any Lender, any Note, the Property or this Deed of Trust deducting from the value of property for the purpose of taxation any lien or security interest thereon, or imposing upon Holder or any Lender the payment ,of the whole or any part of the taxes or assessments or charges or liens herein required to be paid by CIM, or changing in any way the laws relating to the taxation of deeds of trust or mortgages or security agreements or debts secured by deeds of trust or mortgages or security agreements or the interest of the mortgagee or secured party in the property covered thereby, or the manner of collection of such taxes, so as to affect this Deed of Trust or the Secured Indebtedness or Holder or any Lender, then, and in any such event, CIM, upon demand by Holder, shall pay such taxes, assessments, charges or liens, or reimburse Holder therefor (for its own account or the account of the affected Lender(s), as applicable); provided, however, that if in the opinion of counsel for Holder (i) it might be unlawful to require CIM to make such payment or (ii) the making of such 19 payment might result in the imposition of interest beyond the maximum amount permitted by law, then and in such event, Holder may elect, by notice in writing given to CIM, to declare all of the Secured Indebtedness to be and become due and payable sixty (60) days from the giving of such notice. (r) Statement Concerning Notes or Deed of Trust. CIM shall at any time and from time to time furnish within seven (7) days of request by Holder a written statement in such form as may be required by Holder stating that (i) the Notes, this Deed of Trust and the other Loan Documents are valid and binding obligations of CIM, enforceable against CIM in accordance with their terms; (ii) the unpaid principal balance of each Note and the aggregate unpaid principal balance of the Loan; (iii) the date to which interest on each Note is paid; (iv) the Notes, this Deed of Trust and the other Loan Documents have not been released, subordinated or modified; and (v) there are no offsets or defenses against the enforcement of the Notes, this Deed of Trust or any other Loan Document. Alternatively, if any of the foregoing statements in clauses (i), (iv) and (v) are untrue, CIM shall specify the reasons therefor. (s) Letter -of -Credit Rights. If CIM is at any time a beneficiary under a letter of credit (whether or not the letter of credit is evidenced by a writing) relating to the properties, rights, titles and interests referred to in Section 1.3 of this Deed of Trust now or hereafter issued in favor of CIM, CIM shall promptly notify Holder thereof and, at the request and option of Holder, CIM shall, pursuant to an agreement in form and substance satisfactory to Holder, either (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to Holder of the proceeds of any drawings under the letter of credit, or (ii) arrange for Holder to become the transferee beneficiary of the letter of credit, with Holder agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be applied as provided in Section 5.2 of this Deed of Trust. (t) Status of CIM. If CIM is a corporation, partnership, limited liability company or other legal entity, CIM is and will continue to be (i) duly organized, validly existing and in good standing under the laws of its state of organization, (ii) authorized to do business and in good standing in each state in which the Property is located, and (iii) possessed of all requisite power and authority to carry on its business and to own and operate the Property. CIM's exact legal name is correctly set forth at the end of this Deed of Trust. If CIM is not an individual, CIM is an organization of the type specified in the introductory paragraph of this Deed of Trust. If CIM is a registered entity, CIM is incorporated in or organized under the laws of the state specified in the introductory paragraph of this Deed of Trust. If CIM is an unregistered entity (including a general partnership), it is organized under the laws of the state specified in the introductory paragraph of this Deed of Trust. Except in accordance with Transfers permitted under the Loan Documents (including Permitted Transfers), CIM will not cause or permit any change to be made in its name, identity (including its trade name or names), or corporate or partnership structure unless CIM shall have notified Holder in writing of such change at least 30 days prior to the effective date of such change, and shall have first taken all action required by Holder for the purpose of further perfecting or protecting the lien and security interest of Holder in the Property. CIM's principal place of business and chief executive office, and the place where CIM keeps its books and records, including recorded data of any kind or nature, regardless of the medium of recording, including software, writings, plans, specifications and schematics concerning the Property, has been for the preceding four months (or, if less, the entire period of 20 the existence of CIM) and will continue to be the address of CIM set forth at the end of this Deed of Trust (unless CIM notifies Holder of any change in writing). If CIM is an individual, CIM's principal residence has been for the preceding four months and will continue to be the address of the principal residence of CIM set forth at the end of this Deed of Trust (unless CIM notifies Holder of any change in writing). CIM's organizational identification number, if any, assigned by the state of incorporation or organization is correctly set forth on the first page of this Deed of Trust. CIM shall promptly notify Holder of any change in its organizational identification number. If CIM does not now have an organizational identification number and later obtains one, CIM shall promptly notify Holder of such organizational identification number. Section 2.2 Performance by Holder on CIM's Behalf. CIM agrees that if CIM fails to perform any act or to take any action which under any Loan Document CIM is required to perform or take, or to pay any money which under any Loan Document CIM is required to pay, and whether or not the failure then constitutes a Default, and whether or not there has occurred any Default or the Secured Indebtedness has been accelerated, Holder, in CIM's name or its own name on behalf of itself and Lenders, may, but shall not be obligated to, perform or cause to be performed such act or take such action or pay such money, and any expenses so incurred by Holder or Lenders and any money so paid by Holder or Lenders shall be a demand obligation owing by CIM to Holder for its own account or the account of Lenders, as applicable (which obligation CIM hereby promises to pay), shall be a part of the Secured Indebtedness, and Holder and/or Lenders, upon making such payment, shall be subrogated to all of the rights of the person, entity or body politic receiving such payment. Holder and its designees shall have the right to enter upon the Property at any time and from time to time for any such purposes. No such payment or performance by Holder or Lenders shall waive or cure any Default or waive any right, remedy or recourse of Holder or Lenders. Any such payment may be made by Holder or Lenders in reliance on any statement, invoice or claim without inquiry into the validity or accuracy thereof. Each amount due and owing by CIM to Holder or Lenders pursuant to this Deed of Trust shall bear interest, from the date such amount becomes due until paid, at the rate per annum provided in the Loan Agreement for interest on past -due principal owed on the Loan but never in excess of the maximum nonusurious amount permitted by applicable law, which interest shall be payable to Holder on demand for its own account or the account of Lenders, as applicable; and all such amounts, together with such interest thereon, shall automatically and without notice be a part of the Secured Indebtedness. The amount and nature of any expense by Holder or Lenders hereunder and the time when paid shall be fully established by the certificate of Holder or any of Holder's officers or agents. Section 2.3 Absence of Obligations of Holder and Lenders with Respect to Property. Notwithstanding anything in this Deed of Trust to the contrary, including the definition of "Property" and/or the provisions of Article 3 hereof, (i) to the extent permitted by applicable law, the Property is composed of Grantor's rights, title and interests therein but not Grantor's obligations, duties or liabilities pertaining thereto, (ii) Holder and Lenders neither assume nor shall have any obligations, duties or liabilities in connection with any portion of the items described in the definition of "Property" herein, either prior to or after obtaining title to such Property, whether by foreclosure sale, the granting of a deed in lieu of foreclosure or otherwise, and (iii) Holder may, at any time prior to or after the acquisition of title to any portion of the Property as above described, advise any party in writing as to the extent of Holder's and Lenders' interest therein and/or expressly disaffirm in writing any rights, interests, obligations, 21 duties and/or liabilities with respect to such Property or matters related thereto. Without limiting the generality of the foregoing, it is understood and agreed that neither Holder nor Lenders shall have any obligations, duties or liabilities prior to or after acquisition of title to any portion of the Property, as lessee under any lease or purchaser or seller under any contract or option unless Holder elects otherwise by written notification. Section 2.4 Authorization to File Financing Statements; Power of Attorney. CIM hereby authorizes Holder at any time and from time to time to file any initial financing statements, amendments thereto and continuation statements as authorized by applicable law, required by Holder to establish or maintain the validity, perfection and priority of the security interests granted by this Deed of Trust. For purposes of such filings, CIM agrees to furnish any information requested by Holder promptly upon request by Holder. CIM also ratifies its authorization for Holder to have filed any like initial financing statements, amendments thereto or continuation statements if filed prior to the date of this Deed of Trust. CIM hereby irrevocably constitutes and appoints Holder and any officer or agent of Holder, with full power of substitution, as its true and lawful attorneys -in -fact with full irrevocable power and authority in the place and stead of CIM or in CIM's own name to execute in CIM's name any such documents and to otherwise carry out the purposes of this Section 2.4, to the extent that CIM's authorization above is not sufficient. To the extent permitted by law, CIM hereby ratifies all acts said attorneys -in -fact have lawfully done in the past or shall lawfully do or cause to be done in the future by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable. ARTICLE 3 Assignment of Rents and Leases Section 3.1 Assi _gnment. To secure the obligations of CIM under the Loan Documents and all matters and indebtedness constituting the Secured Indebtedness, CIM hereby assigns to Administrative Agent for the ratable benefit of itself and Lenders all Rents and all of CIM's rights in and under all Leases. Upon the occurrence and during the continuation of any Default, Administrative Agent and any other Holder shall have the right, power and authority to collect any and all Rents on behalf of itself and Lenders. While any Default is continuing, all Rents shall be paid directly to Holder and not through CIM, all without the necessity of any further action by Holder, including any action to obtain possession of the Land, Improvements or any other portion of the Property or any action for the appointment of a receiver. CIM hereby authorizes and directs the tenants under the Leases to pay Rents to Holder upon written demand by Holder, without further consent of CIM, without any obligation of such tenants to determine whether a Default has in fact occurred and regardless of whether Holder has taken possession of any portion of the Property, and the tenants may rely upon any written statement delivered by Holder to the tenants. Any such payments to Holder shall constitute payments to CIM under the Leases, and CIM hereby irrevocably appoints Holder as its attorney -in -fact, which power of attorney is with full power of substitution and coupled with an interest, to do all things during the continuance of a Default, which CIM might otherwise do with respect to the Property and the Leases thereon, including: (a) demanding, receiving and enforcing payment of any and all Rents; (b) giving receipts, releases and satisfactions for any and all Rents; (c) suing either in the name of CIM or in Holder's own name on behalf of itself and Lenders for any and all Rents; 22 (d) applying the net proceeds of any and all Rents collected by Holder, after deducting all expenses of collection, including attorneys' fees and expenses, to the Secured Indebtedness in such order and manner as Holder may elect and/or to the operation and management of the Property, including the payment of management, brokerage and attorneys' fees and expenses (including reasonable reserves for anticipated expenses), or at the option of Holder, holding the same as security for the payment of the Secured Indebtedness; (e) leasing, in the name of CIM, the whole or any part of the Property which may become vacant; (f) employing agents for such leasing and paying such agents reasonable compensation for their services; and (g) requiring CIM to deliver to Holder all security deposits and executed originals of all Leases and copies of all records relating thereto. Holder may take any or all of the foregoing actions with or without taking possession of any portion of the Property or taking any action with respect to such possession. The assignment contained in this Section 3.1 shall become null and void upon the reconveyance of this Deed of Trust. Section 3.2 Covenants, Representations and Warranties Concerning Leases and Rents. CIM covenants, represents and warrants that, except as set forth on Schedule 3.2 hereof: (a) CIM has good title to, and is the owner of the entire landlord's interest in, the Leases and Rents hereby assigned and has authority to assign them; (b) All Leases are valid and enforceable (subject to Debtor Relief Laws), and in full force and effect, and are unmodified except as stated therein; (c) CIM is not in default under its Lease (and no event has occurred which with the passage of time or notice or both would result in a default under its Lease) and is not the subject of any petition, case, proceeding or other action pursuant to any Debtor Relief Law; (d) To CIM's knowledge, no tenant in the Property is in default under its Lease (and no event has occurred which with the passage of time or notice or both would result in a default under its Lease) or is the subject of any petition, case, proceeding or other action pursuant to any Debtor Relief Law; (e) Unless otherwise stated in a Permitted Encumbrance, no Rents or Leases have been or will be assigned, mortgaged, pledged or otherwise encumbered and no other person has acquired or will acquire any right, title or interest in such Rents or Leases; (f) No Rents have been waived, released, discounted, set off or compromised; (g) Except as stated in the Leases, CIM has not received any funds or deposits from any tenant for which credit has not already been made on account of accrued Rents; (h) CIM shall perform all of its obligations under the Leases and enforce the tenants' obligations under the Leases to the extent enforcement is prudent under the circumstances; (i) Except for customary concessions as determined by CIM in its good faith reasonable business judgment, CIM will not, without the prior written consent of Holder waive, 23 release, discount, set off, compromise, reduce or defer any Rent, receive or collect Rents more than one (1) month in advance (other than security deposits and charges subject to year-end reconciliation), grant any rent free period to any tenant, reduce any Lease term or waive, release or otherwise modify any other material obligation under any Lease, renew or extend any Lease except in accordance with a right of the tenant thereto in such Lease, approve or consent to an assignment of a Lease or a subletting of any part of the premises covered by a Lease, or settle or compromise any claim against a tenant under a Lease in bankruptcy, in any other proceeding pursuant to any Debtor Relief Law or otherwise; 0) CIM will not, without the prior written consent of Holder, terminate or consent to the cancellation or surrender of any Lease having an unexpired term of one (1) year or more for premises in excess of 2,500 square feet; (k) CIM will not execute any Lease except in accordance with the Loan Documents and for actual occupancy by the tenant thereunder; (1) CIM shall give prompt notice to Holder, as soon as CIM first obtains notice, of any claim, or the commencement of any action, by any tenant or subtenant under or with respect to a Lease regarding any claimed damage, default, diminution of or offset against Rent, cancellation of the Lease, or constructive eviction, excluding, however, notices of default under residential Leases, and CIM shall defend, at CIM's expense, any proceeding pertaining to any Lease, including, if Holder so requests, any such proceeding if Holder and/or Lenders are parties thereto; (m) Promptly upon request by Holder, during the occurrence of a Default, CIM shall deliver to Holder all security deposits and executed originals of all Leases and copies of all records relating thereto; (n) There shall be no merger of the leasehold estates created by the Leases, with the fee estate of the Land without the prior written consent of Holder; (o) Holder, on behalf of itself and Lenders, may at any time and from time to time by specific written instrument intended for the purpose, unilaterally subordinate the lien of this Deed of Trust to any Lease, without joinder or consent of or notice to CIM, any tenant or any other person, and notice is hereby given to each tenant under a Lease of such right to subordinate. No such subordination shall constitute a subordination to any lien or other encumbrance, whenever arising, or improve the right of any junior lienholder, and nothing herein shall be construed as subordinating this Deed of Trust to any Lease; and (p) CIM will not, without the prior written consent of Holder, undertake or make any alterations to the Improvements; provided, however, that such consent shall not be required with respect to tenant improvements under approved Leases or alterations valued at less than $2,500,000. Section 3.3 No Liability of Holder or Lenders. Holder and Lenders neither have nor assume any obligations as lessor or landlord with respect to any Lease. Administrative Agent's acceptance of this assignment on behalf of itself and Lenders shall not be deemed to constitute any Holder or any Lender a "mortgagee in possession," nor shall such acceptance obligate ►3'! Holder or any Lender to appear in or defend any proceeding relating to any Lease or to the Property, or to take any action hereunder, expend any money, incur any expenses, perform any obligation or liability under any Lease, or assume any obligation for any deposit delivered to CIM by any tenant and not as such delivered to and accepted by Holder. Neither Holder nor Lenders shall be liable for any injury or damage to person or property in or about the Property, or for Holder's failure to collect or to exercise diligence in collecting Rents, but Holder and Lenders shall be accountable only for Rents that they shall actually receive. Neither the assignment of Leases and Rents, nor enforcement of the rights of Holder and Lenders regarding Leases and Rents (including collection of Rents), nor possession of the Property by Holder or Lenders, nor Holder's consent to or approval of any Lease (nor all of the same), shall render Holder or any Lender liable on any obligation under or with respect to any Lease or constitute affirmation of, or any subordination to, any Lease, occupancy, use or option. Section 3.4 Rights Cumulative. The powers and rights of Holder and Lenders under this Article 3 shall be cumulative of all other powers and rights of Holder and Lenders under the Loan Documents or otherwise. Such powers and rights granted in this Article 3 shall be in addition to the other remedies provided for in this Deed of Trust upon the occurrence of a Default and may be exercised independently of or concurrently with any of said remedies. If Holder or Lenders seek or obtain any judicial relief regarding Rents or Leases, the same shall in no way prevent the concurrent or subsequent employment of any other appropriate rights or remedies nor shall the same constitute an election of judicial relief for any foreclosure or any other purpose. ARTICLE 4 Default Section 4.1 Events of Default. The occurrence of any one of the following shall be a default under this Deed of Trust ("Default"): (a) Nonperformance of Covenants. Any covenant, agreement or condition of this Deed of Trust (other than covenants otherwise addressed in another clause of this Section 4.1) is not fully and timely performed, observed or kept, and such failure is not cured within thirty (30) days after notice from Administrative Agent, provided, however, that if the nature of such failure to perform is such that the same cannot be cured within such thirty (30) day period, such failure to perform shall not be deemed a Default if CIM shall within such period commence to cure that failure to perform and thereafter diligently prosecute the cure to completion, but in no event more than sixty (60) days in the aggregate. (b) Default under other Loan Documents or Environmental Agreement. A Default occurs under any other Loan Document or the Environmental Agreement. (c) Transfer of the Property. Any Transfer occurs with respect to all or any part of the Property or any interest therein, except for: (i) sales or transfers of items of the Accessories which have become obsolete or worn beyond practical use and which have been replaced by adequate substitutes owned by CIM, having a value equal to or greater than the replaced items when new; (ii) the grant, in the ordinary course of business, of a leasehold interest 25 in a part of the Improvements to a tenant for occupancy, not containing a right or option to purchase and not in contravention of any provision of this Deed of Trust or of any other Loan Document; and (iii) as otherwise permitted under the Loan Documents. Holder may, in its sole discretion, waive a Default under this clause (c), but it shall have no obligation to do so. Any waiver will be conditioned upon the grantee's integrity, reputation, character, creditworthiness and management ability being satisfactory to Holder in its sole judgment, and may also be conditioned upon such one or more of the following, if any, that Holder may require: the execution by the grantee of a written assumption agreement prior to such Transfer containing such terms as Holder may require; the receipt by Holder and Lenders of a principal paydown on each Note; the receipt by Holder and Lenders of an assumption fee; the reimbursement of all of the expenses incurred by Holder and Lenders in connection with such Transfer, including attorneys' fees; and any modification of the Loan Documents as Holder may require, including an increase in the rate of interest payable under the Loan and/or a modification of the terms of the Loan. NOTICE - THE SECURED INDEBTEDNESS IS SUBJECT TO ACCELERATION IN THE EVENT OF A TRANSFER WHICH IS PROHIBITED UNDER THIS CLAUSE (c). (d) Transfer of Interests in CIM. (i) If CIM is a corporation, a Transfer occurs with respect to shares possessing, in the aggregate, more than fifty percent (50%) of the voting power without the prior written consent of Holder; (ii) if CIM is a partnership or joint venture, a Transfer occurs with respect to more than fifty percent (50%) of the partnership or joint venture interests in the aggregate, or any general partner or joint venturer withdraws or is removed or admitted without the prior written consent of Holder; or (iii) if CIM is a limited liability company, a Transfer occurs with respect to more than fifty percent (50%) of the voting power or ownership interests, in either case in the aggregate, or any managing member withdraws or is removed or admitted without the prior written consent of Holder; provided, however, that Transfers of all of the interests in CIM shall be permitted if such Transfer is to the Guarantor, or an entity which is wholly -owned by Guarantor, and provided further that prior to such Transfer, Holder receives such assurances and written instruments as it may reasonably require with respect to the lien of this Deed of Trust and the enforceability of the Loan Documents including an assignment and assumption agreement satisfactory to Holder, all at the transferee's sole cost and expense.. NOTICE - THE SECURED INDEBTEDNESS IS SUBJECT TO ACCELERATION IN THE EVENT OF A TRANSFER WHICH IS PROHIBITED UNDER THIS CLAUSE (d). (e) Grant of Easement, Etc. Without the prior written consent of Holder, CIM grants any easement or dedication, or files any plat, condominium declaration or restriction, or otherwise encumbers the Property, or seeks or permits any zoning reclassification or variance, unless such action is expressly permitted by the Loan Documents or does not affect the Property in any material respect. (f) Abandonment. The owner of the Property abandons any of the Property. (g) Default Under Other Lien. A default or event of default occurs under any lien, security interest or assignment covering the Property or any part thereof (whether or not Holder and Lenders have consented, and without hereby implying any consent by Holder or Lenders, to any such lien, security interest or assignment not created hereunder), or the holder of c any such lien, security interest or assignment declares a default or institutes foreclosure or other proceedings for the enforcement of its remedies thereunder. (h) Destruction. The Property is so demolished, destroyed or damaged that in the reasonable opinion of Holder, it cannot be restored or rebuilt with available funds to substantially the same physical condition within a reasonable period of time and in any event prior to the final maturity date of the Note and Holder has accelerated the Loan and the obligations evidenced and secured by the Loan Documents as a result of such demolition, destruction or damage and CIM has failed to pay all amounts due in respect of the Loan and the Loan Documents within thirty (30) days after written demand therefore.. (i) Condemnation. (i) Any governmental authority requires or commences any proceeding for the demolition of any building or structure comprising a part of the Premises, or (ii) there is commenced any proceeding to condemn or otherwise take pursuant to the power of eminent domain, or a contract for sale or a conveyance in lieu of such a taking is executed which provides for the transfer of, a material portion of the Premises, including the taking (or transfer in lieu thereof) of any portion which would result in the substantial blockage or substantial impairment of access or utility service to the Improvements or which would cause the Premises to fail to comply with any Legal Requirement and such failure constitutes a condition subject to penalty under applicable law if operations at the Property continue without remediation of the failure to comply. Section 4.2 Notice and Cure. If any provision of this Deed of Trust or any other Loan Document provides for Holder to give to Grantor any notice regarding a default or incipient default, then if Holder shall fail to give such notice to Grantor as provided, the sole and exclusive remedy of Grantor for such failure shall be to seek appropriate equitable relief to enforce the agreement to give such notice and to have any acceleration of the maturity of the Notes and the Secured Indebtedness postponed or revoked and foreclosure proceedings in connection therewith delayed or terminated pending or upon the curing of such default in the manner and during the period of time permitted by such agreement, if any, and Grantor shall have no right to damages or any other type of relief not herein specifically set out against Holder or Lenders, all of which damages or other relief are hereby waived by Grantor. Nothing herein or in any other Loan Document shall operate or be construed to add on or make cumulative any cure or grace periods specified in any of the Loan Documents. ARTICLE 5 Remedies Section 5.1 Certain Remedies. If a Default shall occur, Holder may (but shall have no obligation to) exercise any one or more of the following remedies, without notice (unless notice is required by applicable statute): (a) Acceleration. Holder may at any time and from time to time declare any or all of the Secured Indebtedness immediately due and payable and such Secured Indebtedness shall thereupon be immediately due and payable, without presentment, demand, protest, notice of 27 protest, notice of acceleration or of intention to accelerate or any other notice or declaration of any kind, all of which are hereby expressly waived by Grantor. (b) Enforcement of Assignment of Rents. Holder may take any of the actions described in Article 3 with or without taking possession of any portion of the Property or taking any action with respect to such possession. (c) Trustee's Sale. (i) Holder may execute and deliver to Trustee written declaration of default and demand for sale and written notice of default and of election to cause all or any part of the Property to be sold, which notice Trustee shall cause to be filed for record; and after the lapse of such time as may then be required by law following the recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Grantor, shall sell such Property at the time and place fixed by Trustee in such notice of sale, either as a whole or in separate parcels and in such order as Holder may direct (Grantor waiving any right to direct the order of sale), at public auction to the highest bidder for cash in lawful money of the United States (or cash equivalents acceptable to Trustee to the extent permitted by applicable law), payable at the time of sale. Trustee may postpone the sale of all or any part of the Property by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser at such sale its deed conveying the property so sold, but without any covenant or warranty, express or implied, and the recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustee, Holder or any Lender, may purchase at such sale, and any bid by Holder or any Lender may be, in whole or in part, in the form of cancellation of all or any part of the Secured Indebtedness. (ii) The sale by Trustee of less than the whole of the Property shall not exhaust the power of sale herein granted, and Trustee is specifically empowered to make successive sales under such power until the whole of the Property shall be sold. In the event any sale hereunder is not completed or is defective in the opinion of Holder, such sale shall not exhaust the power of sale hereunder and Holder shall have the right to cause a subsequent sale or sales to be made hereunder. If the proceeds of any sale of less than the whole of the Property shall be less than the aggregate of the Secured Indebtedness and the expense of executing this trust as provided herein, this Deed of Trust and the lien hereof shall remain in full force and effect as to the unsold portion of the Property just as though no sale had been made; provided, however, that Grantor shall never have any right to require the sale of less than the whole of the Property but Holder shall have the right, at its sole election, to request Trustee to sell less than the whole of the Property. (iii) Trustee may, after any request or direction by Holder, sell not only the real property but also the Collateral and other interests which are a part of the Property, or any part thereof, as a unit and as a part of a single sale, or may sell any part of the Property separately from the remainder of the Property. It shall not be necessary for Trustee to have taken possession of any part of the Property or to have present or to exhibit at any sale any of the Collateral. 28 (iv) After each sale, Trustee shall receive the proceeds of said sale and apply the same as herein provided. Payment of the purchase price to Trustee shall satisfy the obligation of purchaser at such sale therefor, and such purchaser shall not be responsible for the application thereof. (v) Trustee or its successor or substitute may appoint or delegate any one or more persons as agent to perform any act or acts necessary or incident to any sale held by Trustee, including the posting of notices and the conduct of sale, but in the name and on behalf of Trustee, its successor or substitute. If Trustee or its successor or substitute shall have given notice of sale hereunder, any successor or substitute Trustee thereafter appointed may complete the sale and the conveyance of the property pursuant thereto as if such notice had been given by the successor or substitute Trustee conducting the sale. (d) Uniform Commercial Code. Without limitation of any rights of enforcement of Holder and Lenders with respect to the Collateral or any part thereof in accordance with the procedures for foreclosure of real estate, Holder may exercise its rights of enforcement with respect to the Collateral or any part thereof under the California Uniform Commercial Code, as in effect from time to time (or under the Uniform Commercial Code in force, from time to time, in any other state to the extent the same is applicable law) and in conjunction with, in addition to or in substitution for those rights and remedies: (i) Holder may enter upon Grantor's premises to take possession of, assemble and collect the Collateral or, to the extent and for those items of the Collateral permitted under applicable law, to render it unusable; (ii) Holder may require Grantor to assemble the Collateral and make it available at a place Holder designates which is mutually convenient to allow Holder to take possession or dispose of the Collateral; (iii) written notice mailed to Grantor as provided herein at least ten (10) days prior to the date of public sale of the Collateral or prior to the date on which private sale of the Collateral will be made shall constitute reasonable notice; provided that, if " Holder fails to comply with this clause (iii) in any respect, the liability of Holder and Lenders for such failure shall be limited to the liability (if any) imposed on them as a matter of law under the California Uniform Commercial Code, as in effect from time to time (or under the Uniform Commercial Code, in force from time to time, in any other state to the extent the same is applicable law); (iv) any sale made pursuant to the provisions of this clause (d) shall be deemed to have been a public sale conducted in a commercially reasonable manner if held contemporaneously with and upon the same notice as required for the sale of the Property under power of sale as provided in clause (c) above in this Section 5.1; (v) in the event of a foreclosure sale, whether made by Trustee under the terms hereof, or under judgment of a court, the Collateral and the other Property may, at the option of Holder, be sold as a whole; (vi) it shall not be necessary for Holder to take possession of the Collateral or any part thereof prior to the time that any sale pursuant to the provisions of this clause (d) is conducted and it shall not be necessary for the Collateral or any part thereof to be present at the location of such sale; (vii) with respect to application of proceeds from disposition of the Collateral under Section 5.2 hereof, the costs and expenses incident to disposition shall include 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 Holder and Lenders (including the market value of services provided by in-house counsel); (viii) 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 as to nonpayment of the Secured Indebtedness or as to the occurrence of any Default, or as to Holder having 29 declared all of such indebtedness to be due and payable, or as to notice of time, place and terms of sale and of the properties to be sold having been duly given, or as to any other act or thing having been duly done by Holder or Lenders, shall be taken as prima facie evidence of the truth of the facts so stated and recited; (ix) Holder 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 Holder, including the sending of notices and the conduct of the sale, but in the name of Holder on behalf of itself and Lenders; (x) Holder may comply with any applicable state or federal law or regulatory requirements in connection with a disposition of the Collateral, and such compliance will not be considered to affect adversely the commercial reasonableness of any sale of the Collateral; (xi) Holder may sell the Collateral without giving any warranties as to the Collateral, and may specifically disclaim all disposition warranties, including warranties relating to title, possession, quiet enjoyment and the like, and all warranties of quality, merchantability and fitness for a specific purpose, and this procedure will not be considered to affect adversely the commercial reasonableness of any sale of the Collateral; (xii) Grantor acknowledges that a private sale of the Collateral may result in less proceeds than a public sale; and (xiii) Grantor acknowledges that the Collateral may be sold at a loss to Grantor, and that in such event neither Holder nor Lenders shall have any liability or responsibility to Grantor for such loss. (e) Judicial Action. Subject to any provision of the Loan Agreement regarding reference and arbitration, Holder may bring an action on behalf of itself and Lenders in any court of competent jurisdiction to foreclose this instrument or to obtain specific performance of any of the covenants or agreements of this Deed of Trust. (f) Entry on Property. Holder is authorized on behalf of itself and Lenders, prior or subsequent to the institution of any foreclosure proceedings, to the fullest extent permitted by applicable law, to enter upon the Property or any part thereof, and to take possession of the Property and all books and records, and all recorded data of any kind or nature, regardless of the medium of recording, including all software, writings, plans, specifications and schematics relating thereto, and to exercise without interference from CIM any and all rights which CIM has with respect to the management, possession, operation, protection or preservation of the Property. Holder shall not be deemed to have taken possession of the Property or any part thereof except upon the exercise of its right to do so, and then only to the extent evidenced by its demand and overt act specifically for such purpose. All costs, expenses and liabilities of every character incurred by Holder and Lenders in managing, operating, maintaining, protecting or preserving the Property shall constitute a demand obligation of CIM (which obligation CIM hereby promises to pay) to Holder (for its own account or the account of Lenders, as applicable) pursuant to this Deed of Trust. If necessary to obtain the possession provided for above, Holder may invoke any and all legal remedies to dispossess Grantor. In connection with any action taken by Holder pursuant to this clause (f), neither Holder nor Lenders shall be liable for any loss sustained by Grantor resulting from any failure to let the Property or any part thereof, or from any act or omission of Holder in managing the Property unless such loss is caused by the willful misconduct and bad faith of Holder, nor shall Holder or Lenders be obligated to perform or discharge any obligation, duty or liability of Grantor arising under any lease or other agreement relating to the Property or arising under any Permitted Encumbrance or otherwise arising. Grantor hereby assents to, ratifies and confirms any and all actions of Holder with respect to the Property taken under this clause (f). 30 (g) Receiver. Holder, on behalf of itself and Lenders, shall as a matter of right (subject to applicable law) be entitled to the appointment of a receiver or receivers for all or any part of the Property, whether such receivership is incident to a proposed sale (or sales) of such property or otherwise, and without regard to the value of the Property or the solvency of any person or persons liable for the payment of the Secured Indebtedness, and Grantor does hereby irrevocably consent to the appointment of such receiver or receivers, waives notice of such appointment, of any request therefor or hearing in connection therewith, and any and all defenses to such appointment, agrees not to oppose any application therefor by Holder, and agrees that such appointment shall in no manner impair, prejudice or otherwise affect the rights of Holder and Lenders to application of Rents as provided in this Deed of Trust. Nothing herein is to be construed to deprive Holder or Lenders of any other right, remedy or privilege they may have under the law to have a receiver appointed. Any money advanced by Holder or Lenders in connection with any such receivership shall be a demand obligation (which obligation CIM hereby promises to pay) owing by CIM to Holder (for its own account or the account of Lenders, as applicable) pursuant to this Deed of Trust. (h) Powers of Holder. Subject to applicable law, Holder may, on behalf of itself and Lenders, either directly or through an agent or court -appointed receiver, and without regard to the adequacy of any security for the Secured Indebtedness: (i) enter, take possession of, manage, operate, protect, preserve and maintain, and exercise any other rights of an owner of, the Property, and use any other properties or facilities of CIM relating to the Property, all without payment of rent or other compensation to CIM; (ii) enter into such contracts and take such other action as Holder deems appropriate to complete all or any part of the Improvements or any other construction on the Land, subject to such modifications and other changes in the Improvements or the plan of development as Holder may deem appropriate; (iii) make, cancel, enforce or modify leases, obtain and evict tenants, fix or modify rents and, in its own name or in the name of CIM, otherwise conduct any business of CIM in relation to the Property and deal with CIM's creditors, debtors, tenants, agents and employees and any other persons having any relationship with CIM in relation to the Property, and amend any contracts between them, in any manner Holder may determine; (iv) either with or without taking possession of the Property, notify obligors on any contracts that all payments and other performance are to be made and rendered directly and exclusively to Holder, and in its own name on behalf of itself and Lenders supplement, modify, amend, renew, extend, accelerate, accept partial payments or performance on, make allowances and adjustments and issue credits with respect to, give approvals, waivers and consents under, release, settle, compromise, compound, sue for, collect or otherwise liquidate, enforce or deal with any contracts or other rights, including collection of amounts past due and unpaid (CIM agreeing not to take any such action after the occurrence of a Default without prior written authorization from Holder); 31 (v) endorse, in the name of CIM, all checks, drafts and other evidences of payment relating to the Property, and receive, open and dispose of all mail addressed to CIM and notify the postal authorities to change the address for delivery of such mail to such address as Holder may designate; and (vi) take such other action as Holder deems appropriate to protect the security of this Deed of Trust. (i) Other Rights and Remedies. Holder and Lenders may exercise any and all other rights and remedies which Holder and Lenders may have under the Loan Documents, or at law or in equity or otherwise. Section 5.2 Proceeds of Foreclosure. The proceeds of any sale held by Trustee or Holder or any receiver or public officer in foreclosure of the liens and security interests evidenced hereby shall be applied in accordance with the requirements of applicable laws and to the extent consistent therewith, FIRST, to the payment of all necessary costs and expenses incident to such foreclosure sale, including all reasonable attorneys' fees and legal expenses (including the market value of services provided by in-house counsel), advertising costs, auctioneer's fees, costs of title rundowns, lien searches, trustee's sale guaranties, foreclosure sale guaranties, litigation guaranties and/or other title policies and endorsements, inspection fees, appraisal costs, fees for professional services, environmental assessment and remediation fees, all court costs and charges of every character, and the maximum fee legally permitted, or a reasonable fee when the law provides no maximum limit, to Trustee acting under the provisions of clause (c) of Section 5.1 hereof if foreclosed by power of sale as provided in said clause (c), and to the payment of the other Secured Indebtedness, including specifically without limitation the principal, accrued interest and attorneys' fees due and unpaid on the Notes and the amounts due and unpaid and owed to Holder and Lenders under this Deed of Trust, the order and manner of application to the items in this clause FIRST to be in Holder's sole discretion; and SECOND, the remainder, if any, shall be paid to Grantor, or to Grantor's heirs, devisees, representatives, successors or assigns, or such other persons (including the holder or beneficiary of any inferior lien) as may be entitled thereto by law; provided, however, that if Holder is uncertain which person or persons are so entitled, Holder, on behalf of itself and Lenders, may interplead such remainder in any court of competent jurisdiction, and the amount of any attorneys' fees, court costs and expenses incurred in such action shall be a part of the Secured Indebtedness and shall be reimbursable (without limitation) from such remainder. Section 5.3 Holder or Lender as Purchaser. Holder and any Lender shall have the right to become the purchaser at any sale held by Trustee or its substitute or successor or by any receiver or public officer or at any public sale. Holder shall have the right to credit upon the amount of Holder's successful bid, to the extent necessary to satisfy such bid, all or any part of the Secured Indebtedness in such manner and order as Holder may elect. Any Lender shall have the right to credit upon the amount of the Lender's successful bid, all or any part of the Secured Indebtedness evidenced by the Note made payable to the Lender in such manner and order as the Lender may elect. Section 5.4 Remedies Cumulative. All rights and remedies provided for herein and in any other Loan Document are cumulative of each other and of any and all other rights and 32 remedies existing at law or in equity, and Trustee, Holder and Lenders shall, in addition to the rights and remedies provided herein or in any other Loan Document, be entitled to avail themselves of all such other rights and remedies as may now or hereafter exist at law or in equity for the collection of the Secured Indebtedness and the enforcement of the covenants herein and the foreclosure of the liens and security interests evidenced hereby, and the resort to any right or remedy provided for hereunder or under any such other Loan Document or provided for by law or in equity shall not prevent the concurrent or subsequent employment of any other appropriate right or rights or remedy or remedies. Section 5.5 Discretion as to Security. Holder, on behalf of itself and Lenders, may resort to any security_ given by this Deed of Trust or to any other security now existing or hereafter given to secure the payment of the Secured Indebtedness, in whole or in part, and in such portions and in such order as may seem best to Holder in its sole and uncontrolled discretion, and any such action shall not in anywise be considered as a waiver of any of the rights, benefits, liens or security interests evidenced by this Deed of Trust. Section 5.6 Grantor's Waiver of Certain Rights. To the full extent Grantor may do so, Grantor agrees that Grantor will not at any time insist upon, plead, claim or take the benefit or advantage of any law now or hereafter in force providing for any appraisement, valuation, stay, extension or redemption, homestead, moratorium, reinstatement, marshaling or forbearance, and Grantor, for Grantor, Grantor's heirs, devisees, representatives, successors and assigns, and for any and all persons ever claiming any interest in the Property, to the extent permitted by applicable law, hereby waives and releases all rights of redemption, valuation, appraisement, stay of execution and all rights to a marshaling of assets of Grantor, including the Property, or to a sale in inverse order of alienation in the event of foreclosure of the liens and/or security interests hereby created. Grantor shall not have or assert any right under any statute or rule of law pertaining to the marshaling of assets, sale in inverse order of alienation, the exemption of homestead, the administration of estates of decedents, or other matters whatsoever to defeat, reduce or affect the right of Holder and Lenders under the terms of this Deed of Trust to a sale of the Property for the collection of the Secured Indebtedness without any prior or different resort for collection, or the right of Holder and Lenders under the terms of this Deed of Trust to the payment of the Secured Indebtedness out of the proceeds of sale of the Property in preference to every other claimant whatsoever. Section 5.7 Delivery of Possession After Foreclosure. In the event there is a foreclosure sale hereunder and at the time of such sale, Grantor or Grantor's heirs, devisees, representatives, or successors as owners of the Property are occupying or using the Property, or any part thereof, each and all shall immediately become the tenant of the purchaser at such sale, which tenancy shall be a tenancy from day to day, terminable at the will of purchaser, at a reasonable rental per day based upon the value of the property occupied, such rental to be due daily to the purchaser; and to the extent permitted by applicable law, the purchaser at such sale shall, notwithstanding any language herein apparently to the contrary, have the sole option to demand immediate possession following the sale or to permit the occupants to remain as tenants at will. 33 ARTICLE 6 Miscellaneous Section 6.1 Scope of Deed of Trust. This Deed of Trust is a deed of trust with respect to that portion of the Property which is real property, a security agreement with respect to that portion of the Property which is personal property (it being agreed that, whenever possible, components of the Property shall be deemed to be real property rather than personal property), an assignment of rents and leases, a financing statement and fixture filing and a collateral assignment. In addition to the foregoing, this Deed of Trust covers all proceeds. Section 6.2 Effective as a Financing Statement and Fixture Filing. This Deed of Trust shall be effective as a financing statement filed as a fixture filing with respect to all fixtures included within the Property and is to be filed for record in the real estate records of each county where any part of the Property (including said fixtures) is situated. This Deed of Trust shall also be effective as a financing statement covering as -extracted collateral (including oil and gas), accounts and general intangibles under the California Uniform Commercial Code, as in effect from time to time, and the Uniform Commercial Code, as in effect from time to time, in any other state where the Property is situated which will be financed at the wellhead or minehead of the wells or mines located on the Property and is to be filed for record in the real estate records of each county where any part of the Property is situated. This Deed of Trust shall also be effective as a financing statement covering any other Property and may be filed in any other appropriate filing or recording office. The respective mailing addresses of Grantor and Administrative Agent are set forth at the end of this Deed of Trust. A carbon, photographic or other reproduction of this Deed of Trust or of any financing statement relating to this Deed of Trust shall be sufficient as a financing statement for any of the purposes referred to in this Section 6.2. Section 6.3 Notice to Account Debtors. In addition to the rights granted elsewhere in this Deed of Trust, Holder may at any time notify the account debtors or obligors of any accounts, chattel paper, general intangibles, negotiable instruments or other evidences of indebtedness included in the Collateral to pay Holder directly. Section 6.4 Waiver by Holder. Holder may at any time and from time to time by a specific writing intended for the purpose: (a) waive any Default without waiving any other prior or subsequent Default; (b) waive compliance by Grantor with any covenant herein made by Grantor to the extent and in the manner specified in such writing; (c) consent to Grantor's doing any act which hereunder Grantor is prohibited from doing, or to Grantor's failing to do any act which hereunder Grantor is required to do, to the extent and in the manner specified in such writing; (d) release any part of the Property or any interest therein from the lien and security interest of this Deed of Trust, without the joinder of Trustee; or (e) release any party liable, either directly or indirectly, for the Secured Indebtedness or for any covenant herein or in any other Loan Document without impairing or releasing the liability of any other party. In addition to the foregoing, Holder may remedy any Default without waiving the Default remedied. No such act shall in any way affect the rights or powers of Holder, Lenders or Trustee hereunder except to the extent specifically agreed to by Holder in such writing. Neither failure by Holder or Lenders to exercise, nor delay by Holder or Lenders in exercising, nor discontinuance of the exercise of 34 any right, power or remedy (including the right to accelerate the maturity of the Secured Indebtedness or any part thereof) upon or after any Default shall be construed as a waiver of such Default or as a waiver of the right to exercise any such right, power or remedy at a later date. No single or partial exercise by Holder or Lenders of any right, power or remedy hereunder shall exhaust the same or shall preclude any other or further exercise thereof, and every such right, power or remedy hereunder may be exercised at any time and from time to time. No waiver of any provision hereof or consent to any departure by Grantor therefrom shall in any event be effective unless the same shall be in writing and signed by Holder and then such waiver or consent shall be effective only in the specific instance, for the purpose for which given and to the extent therein specified. No notice to or demand on Grantor in any case shall of itself entitle Grantor to any other or further notice or demand in similar or other circumstances. Section 6.5 No Impairment of Security. The lien, security interest and other security rights of Holder and Lenders hereunder or under any other Loan Document shall not be impaired by any indulgence, moratorium or release granted by Holder including any renewal, extension or modification which Holder may grant with respect to any Secured Indebtedness, or any surrender, compromise, release, renewal, extension, exchange or substitution which Holder may grant in respect of the Property, or any part thereof or any interest therein, or any release or indulgence granted to any endorser, guarantor or surety of any Secured Indebtedness. The taking of additional security by Holder and Lenders shall not release or impair the lien, security interest or other security rights of Holder and Lenders hereunder or affect the liability of CIM or of any endorser, guarantor or surety, or improve the right of any junior lienholder in the Property (without implying hereby any consent to any junior lien by Holder or Lenders). Section 6.6 Grantor's Successors. If the ownership of the Property or any part thereof becomes vested in a person other than Grantor, Holder may, on behalf of itself and Lenders, without notice to Grantor, deal with such successor or successors in interest with reference to this Deed of Trust and to the Secured Indebtedness in the same manner as with Grantor, without in any way vitiating or discharging CIM's liability hereunder or its liability for the payment of the Secured Indebtedness or performance of the obligations secured hereby. No transfer of the Property, no forbearance on the part of Holder, and no extension of the time for the payment of the Secured Indebtedness given by Holder shall operate to release, discharge, modify, change or affect, in whole or in part, the liability of CIM hereunder for the payment of the Secured Indebtedness or performance of the obligations secured hereby or the liability of any other person hereunder for the payment of the Secured Indebtedness. Each Grantor agrees that it shall be bound by any modification of this Deed of Trust or any of the other Loan Documents made by Holder on behalf of itself and Lenders and any subsequent owner of the Property, with or without notice to such Grantor, and no such modifications shall impair the obligations of CIM under this Deed of Trust or any other Loan Document. Subject to Section l.l(b) with respect to the Parking Component, nothing in this Section or elsewhere in this Deed of Trust shall be construed to imply any consent by Holder or Lenders to any transfer of the Property. Section 6.7 Place of Payment; Forum. All Secured Indebtedness which may be owing hereunder at any time by CIM shall be payable at the place designated in the Notes (or if no such designation is made, at the address of Holder indicated at the end of this Deed of Trust). CIM hereby irrevocably submits generally and unconditionally for itself and in respect of its property to the non exclusive jurisdiction of any California state court or any United States federal court 35 sitting in the county in which the Secured Indebtedness is payable, and to the non exclusive jurisdiction of any state or United States federal court sitting in the state in which any of the Property is located, over any suit, action or proceeding arising out of or relating to this Deed of Trust or the Secured Indebtedness. CIM hereby irrevocably waives, to the fullest extent permitted by law, any objection that CIM may now or hereafter have to the laying of venue in any such court and to any claim that any such court is an inconvenient forum. Grantor hereby agrees and consents that, in addition to any methods of service of process provided for under applicable law, all service of process in any such suit, action or proceeding in any California state court or any United States federal court sitting in the state in which the Secured Indebtedness is payable may be made by certified or registered mail, return receipt requested, directed to Grantor at its address stated at the end of this Deed of Trust or at a subsequent address of Grantor of which Holder received actual notice from Grantor in accordance with this Deed of Trust, and service so made shall be complete five (5) days after the same shall have been so mailed. Nothing herein shall affect the right of Holder to serve process in any manner permitted by law or limit the right of Holder to bring proceedings against CIM in any other court or jurisdiction; provided, however, that in the event of any inconsistency between the terms and conditions of this Section 6.7 and those of any provision in the Loan Agreement regarding reference and arbitration, the terms and conditions of the reference and arbitration provision of the Loan Agreement shall prevail. Section 6.8 WAIVER OF JURY TRIAL. WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES' AGREEMENT TO SUBMIT TO JUDICIAL REFERENCE OR ARBITRATION ANY "DISPUTE" (AS DEFINED IN SECTION 1.2(a)) AS SET FORTH IN THE LOAN AGREEMENT, CIM, HOLDER AND LENDERS WAIVE TRIAL BY JURY IN RESPECT OF ANY AND ALL "DISPUTES" AND ANY ACTION ON ANY "DISPUTE." THIS WAIVER SHALL APPLY TO THE EXTENT ANY "DISPUTE" IS NOT SUBMITTED TO JUDICIAL REFERENCE OR ARBITRATION, OR IS DEEMED BY THE ARBITRATOR, REFEREE OR ANY COURT WITH JURISDICTION TO BE NOT REQUIRED TO BE DETERMINED BY JUDICIAL REFERENCE OR ARBITRATION, OR NOT SUSCEPTIBLE OF BEING SO DETERMINED. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY CIM, HOLDER AND LENDERS, AND CIM, HOLDER AND LENDERS HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN DOCUMENTS. CIM, HOLDER AND LENDERS ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. CIM FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS DEED OF TRUST AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. 36 Section 6.9 Subrogation to Existing Liens; Vendor's Lien. To the extent that proceeds of the Notes are used to pay indebtedness secured by any outstanding lien, security interest, charge or prior encumbrance against the Property, such proceeds have been advanced by Holder and Lenders at CIM's request, and Holder and Lenders shall be subrogated to any and all rights, security interests and liens owned by any owner or holder of such outstanding liens, security interests, charges or encumbrances, however remote, regardless of whether said liens, security interests, charges or encumbrances are released, and all of the same are recognized as valid and subsisting and are renewed and continued and merged herein to secure the Secured Indebtedness, but the terms and provisions of this Deed of Trust shall govern and control the manner and terms of enforcement of the liens, security interests, charges and encumbrances to which Holder and Lenders are subrogated hereunder. It is expressly understood that, in consideration of the payment of such indebtedness by Holder and Lenders, CIM hereby waives and releases all demands and causes of action for offsets and payments in connection with said indebtedness. If all or any portion of the proceeds of the Loan or of any other Secured Indebtedness has been advanced for the purpose of paying the purchase price for all or a part of the Property, no vendor's lien is waived; and Holder shall have, and is hereby granted, for the ratable benefit of itself and Lenders, a vendor's lien on the Property as cumulative additional security for the Secured Indebtedness. Holder, on behalf of itself and Lenders, may foreclose under this Deed of Trust or under the vendor's lien without waiving the other or may foreclose under both. Section 6.10 Application of Payments to Certain Indebtedness. If any part of the Secured Indebtedness cannot be lawfully secured by this Deed of Trust or if any part of the Property cannot be lawfully subject to the lien and security interest hereof to the full extent of such indebtedness, then all payments made shall be applied on said indebtedness first in discharge of that portion thereof which is not secured by this Deed of Trust. Section 6.11 Nature of Loan; Compliance with Usury Laws. The Loan is being made solely for the purpose of carrying on or acquiring a business or commercial enterprise. It is the intent of CIM, Holder and Lenders and all other parties to the Loan Documents to conform to and contract in strict compliance with applicable usury law from time to time in effect. All agreements among Holder, Lenders and CIM (or any other party liable with respect to any indebtedness under the Loan Documents) are hereby limited by the provisions of this Section 6.11, which shall override and control all such agreements, whether now existing or hereafter arising. In no event or contingency (including prepayment, default, demand for payment or acceleration of the maturity of any obligation), shall the interest taken, reserved, contracted for, charged, chargeable or received under this Deed of Trust, the Notes or any other Loan Document or otherwise, exceed the maximum nonusurious amount permitted by applicable law (the "Maximum Amount"). If from any possible construction of any document, interest would otherwise be payable in excess of the Maximum Amount, any such construction shall be subject to the provisions of this Section 6.11 and such document shall ipso facto be automatically reformed and the interest payable shall be automatically reduced to the Maximum Amount, without the necessity of execution of any amendment or new document. If Holder and Lenders shall ever receive anything of value which is characterized as interest under applicable law and which would apart from this provision be in excess of the Maximum Amount, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Secured Indebtedness in the inverse order of its maturity and not to the payment of interest, or refunded to CIM or the other payor thereof if and 37 to the extent such amount which would have been excessive exceeds such unpaid principal. The right to accelerate the maturity of the Notes or any other Secured Indebtedness does not include the right to accelerate any interest which has not otherwise accrued on the date of such acceleration, and Holder and Lenders do not intend to charge or receive any unearned interest in the event of acceleration. All interest paid or agreed to be paid to Holder and Lenders shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full stated term (including any renewal or extension) of the Secured Indebtedness so that the amount of interest on account of such indebtedness does not exceed the Maximum Amount. As used in this Section, the term "applicable law" shall mean the laws of the State of California or the federal laws of the United States applicable to this transaction, whichever laws allow the greater interest, as such laws now exist or may be changed or amended or come into effect in the future. Section 6.12 Substitute Trustee. Trustee may resign by an instrument in writing addressed to Holder or Trustee may be removed at any time with or without cause by an instrument in writing executed by Holder. In case of the resignation, removal or disqualification of Trustee, or if for any reason Holder shall deem it desirable to appoint a substitute or successor trustee to act instead of the herein -named trustee or any substitute or successor trustee, then Holder shall have the right and is hereby authorized and empowered to appoint a successor trustee(s) or a substitute trustee(s) without any formality other than appointment and designation in writing executed by Holder and the authority hereby conferred shall extend to the appointment of other successor and substitute trustees successively until the Secured Indebtedness has been paid in full or until the Property is fully and finally sold hereunder. If Holder is a corporation or association and such appointment is executed on its behalf by an officer of such corporation or association, such appointment shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the board of directors or any superior officer of the corporation or association. Upon the making of any such appointment and designation, all of the estate and title of Trustee in the Property shall vest in the named successor or substitute Trustee(s) and it shall thereupon succeed to, and shall hold, possess and execute, all of the rights, powers, privileges, immunities and duties herein conferred upon Trustee. Section 6.13 No Liability of Trustee. Trustee shall not be liable for any error of judgment or act done by Trustee in good faith, or be otherwise responsible or accountable under any circumstances whatsoever (including Trustee's negligence), except for Trustee's gross negligence or willful misconduct. 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 it hereunder, believed by it in good faith to be genuine. 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 law), and Trustee shall be under no liability for interest on any moneys received by it hereunder. CIM hereby ratifies) and confirms any and all acts which the herein -named Trustee or its successor or successors, substitute or substitutes, in this trust, shall do lawfully by virtue hereof. CIM will reimburse Trustee for, and save Trustee harmless against, any and all liability and expenses which may be incurred by Trustee in the performance of its duties. The foregoing indemnity shall not terminate upon discharge of the Secured Indebtedness or foreclosure, release or other termination of this Deed of Trust. 38 Section 6.14 Reconveyances. (a) Reconveyance from Deed of Trust. If all of the Secured Indebtedness shall have been paid in full, and all of the covenants, warranties, undertakings and agreements made in this Deed of Trust shall have been kept and performed, and all obligations, if any, of Holder and Lenders for further advances shall have been terminated, then, and in that event only, all rights under this Deed of Trust shall terminate (except to the extent expressly provided herein with respect to indemnifications, representations and warranties and other rights which are to continue following the reconveyance hereof) and the Property shall become wholly clear of the liens, security interests, conveyances and assignments evidenced hereby, and the Property shall be reconveyed by Holder in due form at CIM's cost. Without limitation, all provisions herein for indemnity of Holder, Lenders and/or Trustee shall survive discharge of the Secured Indebtedness and any foreclosure, reconveyance or termination of this Deed of Trust. (b) Partial Reconveyance; No Reconveyance in Default. Holder may, regardless of consideration, cause the reconveyance of any part of the Property from the lien of this Deed of Trust without in any manner affecting or impairing the lien or priority of this Deed of Trust as to the remainder of the Property. No partial reconveyance shall be sought, requested or required if any Default has occurred which has not been cured. (c) Reconveyance Fee. CIM agrees to pay fees in the maximum amounts legally permitted, or reasonable fees when the law provides no maximum limit, for Trustee's rendering of services in connection with each partial or complete reconveyance of the Property from the lien of this Deed of Trust. Section 6.15 Notices. All notices, requests, consents, demands and other communications required or which any party desires to give hereunder or under any other Loan Document shall be in writing and, unless otherwise specifically provided in such other Loan Document, shall be deemed sufficiently given or furnished if delivered by personal delivery, by nationally recognized overnight courier service, or by registered or certified United States mail, postage prepaid, addressed to the party to whom directed at the addresses specified at the end of this Deed of Trust (unless changed by similar notice in writing given by the particular party whose address is to be changed) or by facsimile. Any such notice or communication shall be deemed to have been given either at the time of personal delivery or, in the case of courier or mail, as of the date of first attempted delivery at the address and in the manner provided herein, or, in the case of facsimile, upon receipt; provided, that service of a notice required by the . California Civil Code shall be considered complete when the requirements of that statute are met. Notwithstanding the foregoing, no notice of change of address shall be effective except upon receipt. Any Grantor whose address is set forth at the end of this Deed of Trust hereby requests that a copy of notice of default and notice of sale be mailed to it at that address. If any Grantor fails to insert an address, that failure shall constitute a designation of such Grantor's last known address as the address for such notice. This Section shall not be construed in any way to affect or impair any waiver of notice or demand provided in any Loan Document or to require giving of notice or demand to or upon any person in any situation or for any reason. Section 6.16 Invalidity of Certain Provisions. A determination that any provision of this Deed of Trust is unenforceable or invalid shall not affect the enforceability or validity of any 39 other provisions, and the determination that the application of any provision of this Deed of Trust to any person or circumstance is illegal or unenforceable shall not affect the enforceability or validity of such provision as it may apply to other persons or circumstances. Section 6.17 Interpretation. References to Articles, Sections and Exhibit(s) are, unless specified otherwise, references to articles, sections and exhibit(s) of this Deed of Trust. Words of any gender shall include each other gender. Words in the singular shall include the plural and words in the plural shall include the singular. The words "herein," "hereof," "hereunder" and other similar compounds of the word "here" shall refer to this entire Deed of Trust and not to any particular Article, Section, paragraph or provision. The words "include" and "including" shall be interpreted as if followed by the words "without limitation." Captions and headings in this Deed of Trust are for convenience only and shall not affect the construction of this Deed of Trust. The term " ep rson" and words importing persons as used in this Deed of Trust shall include firms, associations, partnerships (including limited partnerships and limited liability partnerships), joint ventures, trusts, corporations, limited liability companies and other legal entities, including public or governmental bodies, agencies or instrumentalities, as well as natural persons. Section 6.18 Binding Effect; Grantor. The terms, provisions, covenants and conditions hereof shall be binding upon Grantor and the heirs, devisees, representatives, successors and assigns of Grantor; provided, however, that, except as set forth in the Loan Agreement, Grantor may not assign this Deed of Trust, or assign or delegate any of its rights or obligations under this Deed of Trust, without the prior written consent of each Lender in each instance (and any attempted assignment or delegation by Grantor without such consent shall be null and void). If any Grantor or any signatory who signs on behalf of any Grantor is a corporation, partnership or other legal entity, Grantor and any such signatory, and the person or persons signing for it (solely in his or her capacity as a signatory for such an entity), represent and warrant to Holder and Lenders that this instrument is executed, acknowledged and delivered by Grantor's duly authorized representatives. If Grantor is an individual, no power of attorney granted by Grantor herein shall terminate on Grantor's disability. Section 6.19 Trustee, Holder and Lender Assigns; Covenants Running with the Land. The terms, provisions, covenants and conditions hereof shall inure to the benefit of Trustee, Holder, any Lender and any of their successors and assigns and shall constitute covenants running with the Land. Holder and any Lender may, from time to time, sell, transfer or assign all or a portion of its respective interest in the Secured Indebtedness and the Loan Documents, on and subject tot he terms and conditions of the Loan Agreement. In the event of any such sale, transfer or assignment, the corresponding whole or part of the rights and benefits under this Deed of Trust and the corresponding interest herein may be transferred with such Secured Indebtedness. Except as provided in the Loan Agreement, Grantor waives notice of any sale, transfer or assignment of the Secured Indebtedness or any part thereof or any interest therein. Grantor agrees that failure by Holder, Lenders or any other party to give notice of any such sale, transfer or assignment will not affect the liability of CIM hereunder. Section 6.20 Execution; Recording. This Deed of Trust may be executed in several counterparts, all of which counterparts together shall constitute one and the same instrument. The date or dates reflected in the acknowledgments hereto indicate the date or dates of actual execution of this Deed of Trust, but such execution is as of the date shown on the first page hereof, and for purposes of identification and reference the date of this Deed of Trust shall be deemed to be the date reflected on the first page hereof. Grantor will cause this Deed of Trust and all amendments and supplements thereto and substitutions therefor and all financing statements and continuation statements relating thereto to be recorded, filed, re recorded and refiled in such manner and in such places as Trustee or Holder shall reasonably request and CIM will pay all such recording, filing, re recording and refiling taxes, fees and other charges. Section 6.21 Modification or Termination. The Loan Documents may be modified or terminated only by a written instrument or instruments intended for that purpose and executed by the party against which enforcement of the modification or termination is asserted. Any alleged modification or termination which is not so documented shall not be effective as to any party. Section 6.22 No Partnership, Etc. The relationship between CIM on the one hand and Holder and Lenders on the other is solely that of borrower and lender. Holder and Lenders have no fiduciary or other special relationship with CIM. Nothing contained in the Loan Documents or the Environmental Agreement is intended to create any partnership, joint venture, association or special relationship between CIM and Holder and Lenders or in any way to make Holder or any Lender a co principal with CIM with reference to the Property. All agreed contractual duties between or among Holder, Lenders, CIM and Trustee are set forth herein and in the other Loan Documents and in the Environmental Agreement, and any additional implied covenants or duties are hereby disclaimed. Any inferences to the contrary of any of the foregoing are hereby expressly negated. Section 6.23 Applicable Law. THIS DEED OF TRUST, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH AND PURSUANT TO THE LAWS OF THE STATE OF CALIFORNIA (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF CALIFORNIA ARE GOVERNED BY THE LAWS OF SUCH OTHER JURISDICTION. Section 6.24 Entire Agreement. The Loan Documents and the Environmental Agreement constitute the entire understanding and agreement among CIM, Holder and Lenders with respect to the transactions arising in connection with the Secured Indebtedness and supersede all prior written or oral understandings and agreements among CIM, Holder and Lenders with respect to the matters addressed in the Loan Documents and the Environmental Agreement. CIM hereby acknowledges that, except as incorporated in writing in the Loan Documents or the Environmental Agreement, there are not and were not, and no persons are or were authorized by Holder or Lenders to make, any representations, understandings, stipulations, agreements or promises, oral or written, with respect to the matters addressed in the Loan Documents and the Environmental Agreement. ARTICLE 7 Leasehold Provisions 41 Section 7.1 Representations; Warranties; Covenants. CIM hereby represents, warrants and covenants that: (a) (1) The Ground Lease and the Subground Lease are each unmodified and in full force and effect, (2) all rent and other charges therein have been paid to the extent they are payable to the date hereof, (3) CIM enjoys the quiet and peaceful possession of the Premises, (4) to the best of its knowledge, CIM is not in default under any of the terms of the Subground Lease and CIM is not in default under any of the terms of the Ground Lease, and there are no circumstances which, with the passage of time or the giving of notice or both, would constitute an event of default under either the Ground Lease or the Subground Lease, (5) to the best of CIM's knowledge, the Trust is not in default under any of the terms or provisions of the Ground Lease and CIM is not in default under any of the terms or provisions of the Subground Lease; (b) CIM shall promptly pay or cause to be paid, when due and payable, the rent and other charges payable pursuant to the Ground Lease and the Subground Lease, and will timely perform and observe or cause to be timely performed and observed all of the other terms, covenants and conditions required to be performed and observed by CIM as lessee under the Subground Lease and Grantor as tenant under the Ground Lease; (c) CIM shall notify Administrative Agent in writing of any written notice of default from the applicable landlord with respect to a default by CIM or by Grantor in the performance or observance of any terms, covenants or conditions on the part of CIM or Grantor, as applicable, to be performed or observed under the Subground Lease or the Ground Lease, within three (3) business days after Grantor receives such written notice; (d) CIM shall, immediately upon receipt thereof, deliver a copy of each notice given to Grantor by the Trust under the Ground Lease or by CIM under the Subground Lease and promptly notify Administrative Agent in writing of any default by the Trust under the Ground Lease or by Grantor under the Subground Lease in the performance or observance of any of the material terms, covenants or conditions on the part of the Trust under the Ground Lease or Grantor under the Subground Lease, as applicable; (e) Unless required under the terms of the Ground Lease or the Subground Lease, Grantor shall not, without the prior written consent of Administrative Agent (which may be granted or withheld in Administrative Agent's sole and absolute discretion) terminate, modify in any material respect, or surrender the Ground Lease or the Subground Lease, and any such attempted termination, material modification or surrender without Administrative Agent's written consent shall be void; and (f) CIM shall, within twenty (20) days after written request from Administrative Agent, use its commercially reasonable good faith efforts to obtain from the Trust under the Ground Lease and deliver to Administrative Agent a certificate setting .forth the name of the tenant under the Ground Lease and the Subground Lease and stating that the Ground Lease or the Subground Lease, as applicable, is in full force and effect, is unmodified (or, if the Ground Lease or the Subground Lease, as applicable, has been modified, the date of each modification (together with copies of each such modification)), that no notice of termination thereof has been 42 served on Grantor, or CIM, that no default or event which with notice or lapse of time (or both) would become a default is existing under the Ground Lease or the Subground Lease, as applicable (or if any such default or event is existing, specifying the nature of such default or event), the date to which rent has been paid, and containing such other statements and representations as may be requested by Administrative Agent. Section 7.2 No Merger. So long as any of the Secured Indebtedness remains unpaid or unperformed, the fee title to and the leasehold estate in the Premises subject to the Ground Lease and the Subground Lease shall not merge but shall always be kept separate and distinct notwithstanding the union of such estates in the Trust, CIM or Grantor, or in a third party, by purchase or otherwise. If CIM acquires the fee title or any other estate, title or interest in the Premises, or any part thereof, the lien of this Deed of Trust shall attach to, cover and be a lien upon such acquired estate, title or interest and the same shall thereupon be and become a part of the Property with the same force and effect as if specifically encumbered herein. CIM agrees to execute all instruments and documents that Administrative Agent may reasonably require to ratify, confirm and further evidence the lien of this Deed of Trust on the acquired estate, title or interest. Furthermore, CIM hereby appoints Administrative Agent as its true and lawful attorney -in -fact to execute and deliver, during the continuance of a Default, all such instruments and documents in the name and on behalf of CIM. This power, being coupled with an interest, shall be irrevocable as long as any portion of the Secured Indebtedness remains unpaid. Section 7.3 Administrative Agent as Lessee. If the Ground Lease or the Subground Lease shall be terminated prior to the natural expiration of its term due to default by Grantor or any tenant thereunder, and if, pursuant to the provisions of the Ground Lease or the Subground Lease, Administrative Agent or its designee shall acquire from the Trust or the Grantor, as applicable, a new lease of the Premises, Grantor shall have no right, title or interest in or to such new lease or the leasehold estate created thereby, or renewal privileges therein contained. Section 7.4 No Assignment. Notwithstanding anything to the contrary contained herein, this Deed of Trust shall not constitute an assignment of the Ground Lease or the Subground Lease within the meaning of any provision thereof prohibiting its assignment and Administrative Agent shall have no liability or obligation thereunder by reason of its acceptance of this Deed of Trust. ARTICLE 8 Special Provisions Regarding Agency Section 8.1 Transfer or Assignment of Agency's Interest in the Ground Lease. Notwithstanding Section 7.2 or any other provision of this Deed of Trust, if Agency's interest in the Ground Lease shall be transferred or assigned to CIM with the prior written consent of Administrative Agent (not to be unreasonably withheld, conditioned or delayed), then following such transfer or assignment, any and all obligations of Agency under this Deed of Trust shall immediately and automatically thereafter cease, and CIM and Administrative Agent agree to execute any documents reasonably required by Agency in connection with such transfer or assignment, including an amendment to this Deed of Trust removing Agency as a trustor 43 hereunder from and after the date of such transfer. Any transfer or assignment of Agency's interest in the Ground Lease to any party other than CIM without the prior written consent of Administrative Agent shall be a Default under this Deed of Trust. Section 8.2 Non -Grantor Trustor Provisions. The following waivers and agreements are subject to applicable law, and are made by the Agency solely for purposes of inducing Holder to accept the grant of security interest made herein by Agency as security for the obligations of CIM, and only to the extent required therefor. (a) Authority of Holder. As Agency is not a maker of a Note, Agency hereby authorizes Holder to perform any of the following acts at any time and from time to time, all without notice to Agency and without affecting Holder's rights or Agency's obligations under this Deed of Trust: (i) alter any terms of the Loan Documents (other than this Deed of Trust to the extent such alteration would increase the Agency's obligations or reduce its rights hereunder), including renewing, compromising, extending or accelerating, or otherwise changing the time for payment of, or increasing or decreasing the rate of interest under, the Note, (ii) take and hold security for the Loan Documents, accept additional or substituted security for the Loan Documents, and subordinate, exchange, enforce, waive, release, compromise, fail to perfect, sell or otherwise dispose of any such security, (iii) apply any security now or later held for the Loan Documents in any order that Holder in its sole discretion may choose, and direct the order and manner of any sale of all or any part of it and bid at any such sale, (iv) release any obligor under the Note or any of the other Loan Documents, including without limitation CIM (each, for purposes of this Section 8.2, an "Obligor") of its liability under any Loan Document, and/or (v) substitute, add or release any one or more guarantors or endorsers of the Loan Documents. Notwithstanding the foregoing, but without limiting the obligations of CIM hereunder and under the Loan Documents, no modification or alteration of any of the Loan Documents made without the consent of Agency shall be binding upon Agency to the extent that the same would increase Agency's obligations or reduce its rights hereunder. (b) Waivers of Agency. Agency absolutely, unconditionally, knowingly, and expressly waives: (i) (1) notice of acceptance hereof; (2) notice of any loans or other financial accommodations made or extended under this Deed of Trust and the Loan Documents to which it is a party or the creation or existence of any Secured Indebtedness; (3) notice of the amount of the Secured Indebtedness, subject, however, to Agency's right to make inquiry of the Holder to ascertain the amount of the Secured Indebtedness at any reasonable time; (4) notice of any adverse change in the financial condition of any Obligor or of any other fact that might increase Agency's risk hereunder; (5) notice of presentment for payment, demand, protest, and notice thereof as to any instruments among the Loan Documents to which the Agency is a party; (6) notice of any Default; and (7) all other notices (except, in each case, if such notice is specifically required to be given to Agency hereunder or under the Loan Documents to which the Agency is a party) and demands to which Agency might otherwise be entitled; (ii) its right, under Sections 2845 or 2850 of the California Civil Code, or otherwise, to require the Holder to institute suit against, or to exhaust any rights and remedies which the Holder has or may have against, any Obligor or any third party, or against any collateral for the Secured Indebtedness provided by any Obligor or any third party. Agency further waives any defense arising by reason of any disability or other defense (other than the defense that the Indebtedness shall have been fully and finally performed and indefeasibly paid) of any Obligor or by reason of the cessation from any cause whatsoever of the liability of any Obligor in respect thereof, (iii) (1) any rights to assert against Holder any defense (legal or equitable), set-off, counterclaim, or claim which the Agency may now or at any time hereafter have against any Obligor or any other party liable to the Holder; (2) any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of the Secured Indebtedness or any security therefor; (3) any defense the Agency has to performance hereunder, and any right the Agency has to be exonerated, provided by Sections 2819, 2822, or 2825 of the California Civil Code, or otherwise, arising by reason of: the impairment or suspension of the Holder's rights or remedies against any Obligor; the alteration by the Holder of the Secured Indebtedness; any discharge of any Obligor's obligations to the Holder by operation of law as a result of the Holder's intervention or omission; or the acceptance by Holder of anything in partial satisfaction of the Secured Indebtedness; and (4) the benefit of any statute of limitations affecting CIM's liability hereunder or the enforcement thereof, and any act which shall defer or delay the operation of any statute of limitations applicable to the Secured Indebtedness shall similarly operate to defer or delay the operation of such statute of limitations applicable to CIM's liability hereunder. (iv) any defense arising by reason of or deriving from (1) any claim or defense based upon an election of remedies by any Holder including any defense based upon an election of remedies by the Holder under the provisions of Sections 580a, 580b, 580d, and 726 of the California Code of Civil Procedure or any similar law of California or any other jurisdiction; or (2) any election by any Holder under Section I I I I (b) of the Bankruptcy Code to limit the amount of, or any collateral securing, its claim against an Obligor; (v) Pursuant to California Civil Code Section 2856(b): (1) Agency waives all rights and defenses arising out of an election of remedies by the creditor, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed such Agency's rights of subrogation and reimbursement against any Obligor by the operation of Section 580(d) of the California Code of Civil Procedure or otherwise; (2) Agency waives all rights and defenses that the Holder may have because the Secured Indebtedness is secured by real property. This means, among other things: (1) Holder may collect from an Obligor without first foreclosing on any real or personal property collateral pledged by any Obligor; and (2) if the Holder forecloses on any real property collateral pledged by any Obligor: (A) the amount of the Secured Indebtedness may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price; and (B) Holder may collect from an Obligor even if Holder, by foreclosing on the real property collateral, has destroyed any right Agency may have to collect 45 from such Obligor. This is an unconditional and irrevocable waiver of any rights and defenses Agency may have because the Secured Indebtedness is secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure. (3) If any of the Secured Indebtedness at any time is secured by a mortgage or deed of trust upon real property, Holder may elect, in its sole discretion, upon a default with respect to the Secured Indebtedness, to foreclose such mortgage or deed of trust judicially or nonjudicially in any manner permitted by law, before or after enforcing this Deed of Trust and the Loan Documents, without diminishing or affecting the liability of Agency hereunder except to the extent the Secured Indebtedness is repaid with the proceeds of such foreclosure. Agency understands that (a) by virtue of the operation of California's antideficiency law applicable to nonjudicial foreclosures, an election by the Holder nonjudicially to foreclose such a mortgage or deed of trust probably would have the effect of impairing or destroying rights of subrogation, reimbursement, contribution, or indemnity of Agency against any Obligor or other guarantors or sureties, and (b) absent the waiver given by Agency, such an election would prevent Holder from enforcing this Deed of Trust and the Loan Documents to which Agency is a party against Agency. Understanding the foregoing, and understanding that Agency is hereby relinquishing a defense to the enforceability of this Deed of Trust and the Loan Documents to which Agency is a party, Agency hereby waives any right to assert against the Holder any defense to the enforcement of this Deed of Trust and the Loan Documents to which Agency is a party, whether denominated "estoppel" or otherwise, based on or arising from an election by the Holder nonjudicially to foreclose any such mortgage or deed of trust. Agency understands that the effect of the foregoing waiver may be that after exercise of remedies by the Holder, Agency may be left without rights of subrogation, reimbursement, contribution, or indemnity against any Obligor or other guarantors or sureties. Agency also agrees that the "fair market value" provisions of Section 580a of the California Code of Civil Procedure shall have no applicability under this Deed of Trust and the Loan Documents to which Agency is a party. (vi) Agency hereby absolutely, unconditionally, knowingly, and expressly waives: (i) any right of subrogation such Agency has or may have as against any Obligor with respect to the Secured Indebtedness; (ii) any right to proceed against any Obligor or any other person or entity, now or hereafter, for contribution, indemnity, reimbursement, or any other suretyship rights and claims, whether direct or indirect, liquidated or contingent, whether arising under express or implied contract or by operation of law, which such Agency may now have or hereafter have as against any Obligor with respect to the Secured Indebtedness; and (iii) any right to proceed or seek recourse against or with respect to any property or asset of any Obligor. WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS AGREEMENT, AGENCY HEREBY ABSOLUTELY, KNOWINGLY, UNCONDITIONALLY, AND EXPRESSLY WAIVES AND AGREES NOT TO ASSERT ANY AND ALL BENEFITS OR DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE SECTIONS 2799, 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2825, 2839, 2845, 2848, 2849, AND 2850, CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 580a, 580b, 580c, 580d, 46 AND 726, CALIFORNIA UNIFORM COMMERCIAL CODE SECTIONS 3116, 3118, 3119, 3419, 3605, 9504, 9505 AND 9507, AND CHAPTER 2 OF TITLE 14 OF PART 4 OF DIVISION 3 OF THE CALIFORNIA CIVIL CODE. (c) Obligor's Financial Condition. Agency agrees that Holder shall have no duty to disclose to Agency any information which Holder may receive about Obligor's financial condition, business operations or any other circumstances bearing on Obligor's ability to perform, except as expressly set forth herein. (Signatures appear on following page) 47 IN WITNESS WHEREOF, Grantor has executed this instrument as of the date first written on page 1 hereof. The address and federal tax identification number of CIM is: CIM/HUNTINGTON, LLC, a California limited liability company By: CIM Urban Real Estate Fund, L.P., a Delaware limited partnership, its sole member By: CIM Urban Fund GP, LLC, a California limited liability company, its general partner By: Name: Title: . ......... ... Borrower's Address for Notices: c/o CIM Urban Real Estate Fund, LP 6922 Hollywood Blvd., Suite 900 Los Angeles, CA 90028 Attention.: Mr. Kelly Eppich and General Counsel Telephone: (323) 860-4900 Telecopier: (323) 860-4901 Electronic Mail: keppich@cimgroup.com With Copy To: DLA Piper LLP (US) 550 South Hope Street, Suite 2300 Los Angeles, CA 90071 Attention: Michael Hamilton, Esq. The Federal Ex Identification Number of Borrower: 95-4846862 [SIGNATURE PAGE CONTINUES] SIGNATURE PAGE TO CONSTRUCTION DEED OF TRUST IN WITNESS WHEREOF, Grantor has executed this instrument as of the date first written on page 1 hereof. The address and federal tax identification number of CIM are: CIM CIM/Huntington, LLC c/o CIM Urban Real Estate Fund, LP 6922 Hollywood Blvd., Suite 900 Los Angeles, CA 90028 Attn.: Mr. Kelly Eppich Federal Tax ID: 95-4846862 CIM/HUNTINGTON, LLC, a California limited liability company By: CIM Urban Real Estate Fund, L.P., a Delaware limited partnership, its sole member By: CIM Urban Fund GP, LLC, a California limited liability company, its general partner By: Name: Title: The address of Administrative Agent/Holder is: Bank of America, N.A. 333 S. Hope Street, I Ith Floor Los Angeles, California 90071 Attn: Faina Biraer The address of Trustee is: PRLAP, Inc. P.O. Box 2240 Brea, California 92822 [AGENCY SIGNATURE APPEARS ON FOLLOWING PAGE] IN WITNESS WHEREOF, Borrower has executed this instrument as of the date first written on page 1 hereof. The address and federal tax identification number of CIM is: CM44 UNTINGTON, LLC, a California limited liability company By: CIM Urban Real Estate Fund, L.P., a Delaware limited partnership, its sole member By: C11\4 Urban Fund GP, LLC, a California limited liability c�pany, its general partner,. By: Name: vra_b= Shcmesh Title: Authorized Signatory Borrower's Address for Notices: c/o CIM Urban Real Estate Fund, L.P. 6922 Hollywood Boulevard, Suite 900 Los Angeles, CA 90028 Attention: Mr. Kelly Eppich and General Counsel Telephone: (323) 860-4900 Telecopier: (323) 860-4901 Electronic Mail: kgppich(iDcimgroup.com With Copy To: DLA Piper LLP (US) 550 South Hope Street, Suite 2300 Los Angeles, CA 90071 Attention: Michael Hamilton, Esq. The Federal Tax Identification Number of Borrower: 95-4846862 [SIGNATURE PAGE CONTINUES] SIGNATURE PAGE TO CONSTRUCTION DEED OF TRUST ACKNOWLEDGMENT STATE OF CALIFORNIA ) ss. COUNTY OFZ2S O ,eb7- , before me, �� ,personally appeared A-t1raka,,W who proved to me on the basis of satisfactory evidence to be the person whose name( s/ subscribed to the within instrument and acknowledged to me tha�ll , h/y executed the same i /th r authorized capacity(i�), and that 4��th# signature(oon the instrument the person(; or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. DENiSE DEL REY ^` Commission # 1548472 Notary Public - California Signat4-e1L�� (Seal) Z _� : Los Angeles County My Comm. Expires .Jan 29, 2009 ACKNOWLEDGMENT The address of Administrative Agent/Holder is: Bank of America, N.A. 333 S. Hope Street, 11t" Floor Los Angeles, California 90071 Attn: Faina Birger The address of Trustee is: PRLAP, Inc. P.O. Box 2240 Brea, California 92822 [AGENCY SIGNATURE APPEARS ON FOLLOWING PAGE] AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF HLTNTINGTON BEACH Attest: Agency Secretary REVIEWED AND APPROVED AS TO FORM Agency General Counsel APPROVED AS TO FORM: Agency Special Counsel The address of Agency is: By: _ Name: Title: REVIEWED AND APPROVED: FFilson E ec tive Director Redevelopment Agency Redevelopment Agency of the City of Huntington Beach Attn: Executive Director City Hall, 2000 Main Street Huntington Beach, CA 92648 . • AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: _ Name: Title: Attest: Agency Secretary REVIEWED AND APPROVED AS TO FORM: Agency General Counsel APPROVED AS TO FORM: S-3 ACKNOWLEDGMENT STATE OF CALIFORNIA ss. COUNTY OF On , before me, , personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 50 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ss. COUNTY OF ) On , before me, , personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 51 EXHIBTI' A LAND All that parcel or parcels of real property located in the City of Huntington Beach, County of Orange, State of California, and more particularly described as follows: (SEE NEXT PAGE) 52 EXHIBIT "A" LEGAL DESCRIPTION LOT 1 OF TRACT NO. 16406, IN THE CITY OF HUNTINGTON BEACH, AS SHOWN ON A MAP RECORDED IN BOOK 870, PAGES 47 THROUGH 50, INCLUSIVE, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA. EXCEPTING THEREFROM ALL THAT PORTION OF SAID LAND LYING BELOW A DEPTH OF 500 FEET MEASURED VERTICALLY FROM THE PRESENT SURFACE OF THE GROUND. ALSO EXCEPTING FROM A PORTION OF THE LAND, ALL PETROLEUM, GAS, ASPHALTUM AND OTHER HYDROCARBONS AND OTHER MINERALS BELOW A DEPTH OF 500 FEET, WITHOUT THE RIGHT OF SURFACE ENTRY THEREOF, AS RESERVED IN THE DEED FROM R. W. HILDEBRANDT AND WIFE, RECORDED NOVEMBER 9, 1966 IN BOOK 8099, PAGE 202 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM A PORTION OF THE LAND, ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES AND MINERALS LYING BELOW A DEPTH OF 500 FEET FROM THE SURFACE OF SAID LAND, BUT WITHOUT THE RIGHT OF SURFACE ENTRY AT ANY TIME UPON SAID LAND OR WITHIN THE TOP 500 FEET THEREOF, FOR THE PURPOSE OF EXPLOITING FOR, DEVELOPING, PRODUCING, REMOVING AND MARKETING SAID SUBSTANCES, AS EXCEPTED IN THE DEED FROM GWENDOLYN R. TALBERT, THOMAS V. TALBERT AND GORDON WALKER, CO -TRUSTEES, RECORDED JUNE 28, 1971 IN BOOK 9695, PAGE 846 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM A PORTION OF THE LAND, ALL OIL, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE OF SAID LAND, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF SAID LAND LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID LANDS BUT WITHOUT, HOWEVER, THE RIGHT TO USE ETTHERTHE SURFACE OF SAID LAND OR ANY PORTION OF SAID LAND WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, AS RESERVED IN THE DEED RECORDED OCTOBER 11, 1988 AS INSTRUMENT NO. 88-518517 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM A PORTION OF THE LAND, ALL OIL, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE OF SAID LAND, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF SAID LAND LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID LANDS BUT WITHOUT, HOWEVER, THE RIGHT TO USE EiTHERTHESURFACE OFSAID LAND OR ANY PORTION OF SAID LAND WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, AS RESERVED IN THE DEED RECORDED NOVEMBER 30,1988 AS INSTRUMENT NO. 88-624067 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM A PORTION OF THE LAND, ALL OIL, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE OF SAID LAND, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF SAID LAND LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID LANDS BUT WITHOUT, HOWEVER, THE RIGHTTO USE EITHER THE SURFACE OF SAID LAND OR ANY PORTION OF SAID LAND WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, AS RESERVED IN THE DEED RECORDED JUNE 2, 1989 AS INSTRUMENT NO, 89-5293437 OF OFFICIAL RECORDS. APN: 024-153-24 ATTACHMENT #2 AGREEMENT OF PARTIES RE DISPOSITION AND DEVELOPMENT AGREEMENT THIS AGREEMENT OF PARTIES RE DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement") is made and entered into as of January ® Q, 2009, by and between CIM/HUNTINGTON, LLC, a California limited liability company ("CIM"), BANK OF AMERICA, N.A., and its successor and assigns, in its capacity as administrative agent ("Bank"), and REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and public ("Agency") with reference to the following Recitals: RECITALS A. Agency and CIM Group, LLC, as developer, entered into that certain Disposition and Development Agreement dated as of June 17, 1999 as amended by (i) an Implementation Agreement executed on April 6, 2000, (ii) a Second Implementation Agreement dated as of March 5, 2001, (iii) a Third Implementation Agreement dated as of October 30, 2002, (iv) a Fourth Implementation Agreement dated as of September 15, 2003, (v) a Fifth Implementation Agreement dated as of July 19, 2004, and (vi) a Sixth Implementation Agreement dated as of November 3, 2008 (collectively, the "Development Agreement"). The Development Agreement was assigned by CIM Group, LLC to CIM pursuant to the Third Implementation Agreement. The Development Agreement provides for, among other things, (i) the development of a project consisting of a full -service hotel, retail space, office space and a public parking garage (collectively, the "Improvements") on certain real property located in the City of Huntington Beach, County of Orange, State of California (the "Property"), and (ii) the payment to CIM, under certain circumstances, of the "Agency Obligation" (as defined in the Second Revised Schedule of Feasibility Gap Payments to the Sixth Implementation Agreement) (collectively, the "Agency Payments"). B. Bank, in its capacity as administrative agent, for certain lender's, and CIM, as borrower, are parties to that certain Construction Loan Agreement dated as of even date herewith (the "Loan Agreement"), pursuant to which Bank has agreed to make a loan to CIM (the "Loan") in connection with the construction of the Improvements. The Loan is evidenced by certain other documents described in the Loan Agreement (the "Loan Documents"). C. As a condition to the effectiveness of the Loan Agreement and as security for CIM's obligations under the Loan Documents, Bank has required that (i) CIM assign all of its rights under the Development Agreement to Bank (including without limitation its rights to receive the Agency Payments) subject to the terms and conditions set forth below, and (ii) Agency execute and deliver this Agreement to (A) confirm the parties' understanding of the Agency obligations with respect to the Development Agreement and the Agency Payments, (B) consent to the assignment contained in this Agreement, and (C) certify the status of the Development Agreement as of the date hereof. NOW, THEREFORE, in consideration of the foregoing Recitals, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties 1 to this Agreement agree as follows: 1. Agreements of CIM. (a) To secure the obligations of CIM under the Loan Agreement, CIM hereby assigns to Bank all of its right, title and interest, now or hereafter arising, in and to the Development Agreement (including without limitation its rights to receive the Agency Payments); provided that so long as no Default (as defined in the Loan Agreement) has occurred and is continuing under the Loan Agreement, and subject to Section 2(c)(ii) below, CIM shall be entitled to the benefits accorded to it and to exercise all of its rights and privileges under the Development Agreement. In no event shall anything in this Agreement be deemed to release CIM of its obligations under the Development Agreement, nor does Bank assume any of such obligations. (b) CIM agrees that it shall not, cancel, terminate, modify or amend the Development Agreement in any material respect without Bank's prior written consent. (c) CIM represents, warrants and covenants that, it has not sold, assigned, transferred, mortgaged or pledged its interest in the Development Agreement. CIM agrees that it shall not sell, assign, transfer, mortgage or pledge its interest in the Development Agreement, or any part thereof, except to the extent permitted under the Loan Agreement and the Development Agreement or as otherwise consented to by the Bank and the Agency. (d) CIM agrees to execute and deliver to Bank and Agency, at any time or times during which this Agreement is in effect, such further instruments as Bank or Agency reasonably deems necessary to make effective or implement the assignment of CIM's rights, and CIM's covenants hereunder, in a manner consistent with the terms of the Development Agreement. 2. Agreements and Certifications of Agency. (a) Agency consents to the collateral assignment by CIM of the Development Agreement and agrees that it shall not modify or amend in any material respect the Development Agreement without Bank's prior written consent; provided, however, that nothing herein shall be deemed to provide Bank with any rights in addition to those granted to a "Mortgagee" under Section 317.1 of the Development Agreement. In addition, except in the event of an uncured default thereunder (subject to the Bank's cure rights under Section 317.1 of the Development Agreement), Agency agrees that it shall not cancel or terminate the Development Agreement without Bank's prior written consent. (b) Agency agrees to execute and deliver to Bank (at the sole cost and expense of CIM), at any time or times during which this Agreement is in effect, such further instruments as Bank reasonably deems necessary to make effective or implement the assignment of CIM's rights, and CIM's covenants hereunder, in a manner consistent with the terms of the Development Agreement, and provided further that the form and content of such further instruments shall be approved by Agency. (c) Agency agrees to pay the Agency Payments to Bank (i) on receipt of written notice from Bank or CIM that there has been a Default under the Loan Agreement, or (ii) on receipt of written notice from Bank or CIM that CIM has failed to satisfy the Performance 0 Threshold (as defined in the Loan Agreement), in each case until such time as Agency receives written notice from Bank instructing Agency to recommence payment of the Agency Payments to CIM. Nothing in this Agreement shall modify any provision of the Development Agreement, including, without limitation, with respect to Agency's obligation to make the Agency Payments or any of them, and under no circumstances shall Agency have any obligation to make the Agency Payments or any of them to Bank if it would not have had the obligation to make them to CIM. Nothing in this Agreement shall be deemed to modify any provision of that certain Operating Agreement for the Strand Public Parking Structure by and between CIM and the City of Huntington Beach dated as of November 25, 2008 (the "Operating Agreement"). CIM shall indemnify and hold harmless Agency and its members, officers, employees, agents, contractors and consultants (collectively, "Agency Indemnified Parties") from and against any and all liabilities, claims, costs or expenses (including reasonable attorneys' fees) arising from any payment of the Agency Payments to Bank pursuant to this Agreement. (d) Agency hereby reaffirms the mortgagee protection provisions set forth in Section 317.1 of the Development Agreement, and the same are incorporated herein by reference in favor of Bank. Agency acknowledges and agrees that Bank is a "Mortgagee" as that term is defined in Section 317.1 of the Development Agreement. Without limiting the foregoing, performance rendered by Bank on Bank's behalf is without prejudice to Bank's rights against CIM under the Loan Agreement. (e) Agency certifies that as of the date hereof, the Development Agreement is in full force and effect, and that there are no defaults or events which, with the giving of notice or lapse of time or both would, unless cured or waived, become a default. From time to time, within ten (10) business days following a request by Bank, Agency shall deliver to Bank, a duly executed estoppel certificate from Agency certifying that, except as set forth in such estoppel, the Development Agreement is in full force and effect, and that there are no defaults or events which, with the giving of notice or lapse of time or both would, unless cured or waived, become a default. Agency certifies that its Executive Director shall have the right to provide any such certificates on behalf of the Agency. 3. Miscellaneous. (a) Notices. All notices and other communications under this Agreement are to be in writing and sent to the addresses as set forth below. All such notices and other communications shall be deemed sufficiently given or furnished if delivered by personal delivery, by courier, by registered or certified United States mail, postage prepaid, or by facsimile (with a confirmatory duplicate copy sent by first class United States mail). Any such notice or communication shall be deemed to have been given and received either at the time of personal delivery, or in the case of courier or mail, as of the date of first attempted delivery at the address and in the manner provided herein, or in the case of facsimile, upon receipt; provided, however, that service of a notice required by any applicable statute shall be considered complete when the requirements of that statute are met. A new address for notice may be established by written notice to the other parties; provided, however, that no address change will be effective until written notice thereof actually is received by the party to whom such address change is sent. If any party fails to insert an address, that failure shall constitute a designation of such party's last known address as the address for such notice. This provision shall not be construed in any way to affect or impair any 3 waiver of notice or demand provided herein or to require giving of notice or demand to or upon any person in any situation or for any reason. To CIM: CIM/Huntington, LLC c/o CIM Urban Real Estate Fund, LP 6922 Hollywood Blvd., Suite 900 Los Angeles, CA 90028 Attn.: Mr. Kelly Eppich Fax: (323) 860-4901 with a copy to: CIM/Huntington, LLC 6922 Hollywood Blvd., Suite 900 Hollywood, California 90028 Attn: General Counsel Fax: (323) 860-4901 And to: DLA Piper LLP 550 S. Hope Street, Suite 2300 Los Angeles, CA 90071 Attn: Michael Hamilton, Esq. Fax: (213) 330-7536 To Bank: Bank of America, N.A. 333 S. Hope Street, 1 Ith Floor Los Angeles, CA 90071 Attn: Faina Birger Fax: (213) 621-4832 with a copy to: Buchalter Nemer 1000 Wilshire Boulevard, Suite 1500 Los Angeles, CA 90017 Attn: Michael Williamson, Esq. Fax: (213) 896-0400 To Agency: Redevelopment Agency of the City of Huntington Beach P.O. Box 190 2000 Main Street Huntington Beach, CA 92648 Attn: Executive Director with a copy to: Redevelopment Agency of the City of Huntington Beach P.O. Box 190 2000 Main Street Huntington Beach, CA 92648 Attn: Agency General Counsel M (b) No Waiver. No failure by Bank or Agency to exercise, and no delay by Bank or Agency in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. (c) Attorney in Fact. Without limiting any other provision hereof, CIM hereby irrevocably constitutes and appoints Bank as its attorney -in -fact, which power is coupled with an interest, so that Bank shall have the right during the occurrence of a Default by CIM under the Loan Documents to demand, receive and enforce CIM's rights with respect to the Development Agreement, to give appropriate receipts, releases and satisfactions for and on behalf of CIM, and to do any and all acts in the name of CIM or in the name of Bank with the same force and effect as CIM could have done. Nothing herein is intended to modify or amend the rights of the parties under Section 317.1 of the Development Agreement. (d) Invalidity. A determination that any provision of this Agreement is unenforceable or invalid shall not affect the enforceability or validity of any other provision of this Agreement or the Loan Documents and a determination that the application of any provision of this Agreement to any person or circumstance is illegal or unenforceable shall not affect the enforceability or validity of such provision as it may apply to other persons, entities or circumstances. (e) No Amendment. This Agreement may not be amended, modified or changed, nor shall any waiver of any provision hereof be effective, except by a written instrument signed by the party against whom enforcement of the waiver, amendment, change or modification is sought. (f) CIM Indemnity. CIM shall indemnify and hold harmless Bank and Agency Indemnified Parties against any liabilities, claims, costs or expenses (including reasonable attorneys' fees) incurred by Bank or Agency Indemnified Parties as a result of CIM's or Agency's breach or default under this Agreement or Bank's or Agency's exercise of its rights hereunder. (g) Successors and Assigns. This Agreement shall be binding upon the parties hereto and their respective successors and assigns, and shall inure to the benefit of Bank and its successors and assigns. The parties acknowledge and agree that the Bank's successors and assigns shall include all such successors and assigns permitted under the Loan Documents, including without limitation any purchasers of the Property or any part thereof at a foreclosure sale. (h) Termination. Upon payment of the Loan in full and satisfaction of all of Borrower's obligations under the Loan Documents, this Agreement shall automatically terminate. CIM agrees to notify Agency of the termination of this Agreement within ten (10) business days following the occurrence thereof. 5 (1) Counterparts. This Agreement may be executed in several counterparts, all of which are identical, and all of which counterparts together shall constitute one and the same instrument. 0) Governing Law. This Agreement and its validity, enforcement and interpretation shall be governed by California law (without regard to any conflict of laws principles) and applicable United States federal law. (k) Deed of Trust. In accordance with Section 317 of the Development Agreement, Bank acknowledges and agrees that the Deed of Trust (as defined in the Loan Agreement) and the rights of any holder or person acquiring title through or following foreclosure of the Deed of Trust are subordinate and subject to the provisions of the Development Agreement, the "Grant Deed" and the "Agreement Containing Covenants Affecting Real Property" (each as defined in the Development Agreement). Nothing herein or in any Loan Document is intended to or does amend any provision of the Development Agreement (including without limitation any provision providing for Agency's approval over any of the Loan Documents, or any amendment thereto), the Grant Deed or the Agreement Containing Covenants or any right or remedy of Agency thereunder. (1) Insurance. The parties acknowledge and agree that any and all insurance required under the Deed of Trust (as defined in the Loan Agreement) is an obligation of CIM exclusively, and is not a common area expense or other cost under any agreement to which the Agency or the City of Huntington Beach is a party. (Signatures on Following Pages) G IN WITNESS WHEREOF, CIM, Bank and Agency have caused this Agreement to be executed as of the date and year first set forth herein. BORROWER: CIM/HUNTINGTON, LLC, a California limited liability company By: CIM Urban Real Estate Fund, L.P., a Delaware limited partnership, its sole member By: CIM Urban Fund GP, LLC _--- -- a California limited liabil" " corny, its general partner; i� By: Name: Title: ,rh.,,;�Ad Signate [SIGNATURE PAGE CONTINUE;_ - -- SIGNATURE PAGE TO AGREEMENT OF THE PARTIES BANK: BANK OF AMERICA, N.A., in its capacity as Administrative Agent LO-A Name: Title: (Signatures Continue on Next Page) S-2 AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH Attest: Agency Secretary REVIEWED AND APPROVED AS TO FORM: Agency General Counsel U APPROVED AS TO FORM: Agency Special Counsel S-3 By: _ Name: Title: Keith Bohr Chairman APPROVED: Fihh(;7 Wilson ecutive Director Redevelopment Agency AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: _ Name: Title: Attest: Agency Secretary REVIEWED AND APPROVED AS TO FORM: Agency General Counsel APPROVED AS TO FORM: S-3 INITIATING DEPARTMENT: Economic Development SUBJECT: Approval of CIM Loan Documents/The Strand COUNCIL MEETING DATE: January 20, 2009 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable Contract/Agreement (w/exhibits if applicable) Attached ❑ (Signed in full by the City Attorney) Not Applicable Subleases, Third Party Agreements, etc. Attached (Approved as to form by City Attorney) Not Applicable ❑ Certificates of Insurance (Approved by the City Attorney) Attached ❑ Not Applicable Fiscal Impact Statement (Unbudgeted, over $5,000) Attached ❑ Not Applicable Bonds (If applicable) Attached ❑ Not Applicable Staff Report (If applicable) Attached ❑ Not Applicable Commission, Board or Committee Report (If applicable) Attached ❑ Not Applicable Findings/Conditions for Approval and/or Denial Attached ❑ Not Applicable EXPLANATION FOR MISSING ATTACHMENTS Due to required changes to documents, they will be signed and delivered on Monday 1/12/09 ' .-. REVIEWED RETURNED FORWAODED Administrative Staff ( ) Deputy City Administrator (Initial) ( ) ( ) City Administrator (Initial) ( ) ) City Clerk ( ) EXPLANATION FOR RETURN OF ITEM: I RCA Author: Fritzal 1519 AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: _ Name: Title: Attest: Agency Secretary REVIEWED AND APPROVED AS TO FORM: Agency General Counsel APPROVED AS TO FORM: S-3