PROMISSORY NOTE

[TEXAS – NUF]

January 24, 2014

U.S. $9,919,800.00

FOR VALUE RECEIVED, and at the times hereinafter specified, THE GC NET LEASE (HOUSTON ENCLAVE) INVESTORS, LLC , a Delaware limited liability company (“ Maker ”), whose address is 2121 Rosecrans Avenue, Suite 3321, El Segundo, California 90245, hereby promises to pay to the order of NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA. , a Pennsylvania corporation (hereinafter referred to, together with each subsequent holder hereof, as “ Holder ”), at c/o AIG Investments, 777 South Figueroa Street, 16 ^th Floor, Los Angeles, California 90017, or at such other address as may be designated from time to time hereafter by any Holder, the maximum principal sum of NINE MILLION NINE HUNDRED NINETEEN THOUSAND EIGHT HUNDRED AND NO/100THS DOLLARS ($9,919,800.00), together with interest on the principal balance outstanding from time to time, as hereinafter provided, in lawful money of the United States of America.

Concurrently herewith, Maker is entering into that certain Promissory Note of even date herewith payable to the order of The Variable Annuity Life Insurance Company, a Texas corporation (“ VALIC ”), in the original principal face amount of $20,140,200.00 (the “ VALIC Note ”).

Concurrently herewith, Lender is making loans to (i) The GC Net Lease (Warren) Investors, LLC, a Delaware limited liability company (“ GC Warren ”) evidenced by that certain Promissory Note payable to the order of VALIC in the original principal amount referenced therein, and that certain Promissory Note payable to the order of Holder in the original principal amount referenced therein, each of even date herewith (collectively, the “ New Jersey Notes ”), which are collectively secured by that certain Mortgage, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (New Jersey) executed by GC Warren for the benefit of Lender, covering certain real property more particularly described therein, (ii) The GC Net Lease (Beaver Creek) Investors, LLC, a Delaware limited liability company (“ GC Beaver Creek ”) evidenced by that certain Promissory Note payable to the order of VALIC in the original principal amount referenced therein, and that certain Promissory Note payable to the order of Holder in the original principal amount referenced therein, each of even date herewith (collectively, the “ Ohio Notes ”), which are collectively secured by that certain Open-End Mortgage, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (Ohio) executed by GC Beaver Creek for the benefit of Lender, covering certain real property more particularly described therein, (iii) The GC Net Lease (Phoenix Chandler) Investors, LLC, a Delaware limited liability company (“ GC Phoenix Chandler ”) evidenced by that certain Promissory Note payable to the order of VALIC in the original principal amount referenced therein, and that certain Promissory Note payable to the order of Holder in the original principal amount referenced therein, each of even date herewith (collectively, the “ Arizona Notes ”), which are collectively secured by that certain Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (Arizona) executed by GC Phoenix Chandler for the benefit of Lender, covering certain real property more particularly described therein, and (iv) The GC Net Lease (Charlotte) Investors, LLC, a Delaware limited liability company (“ GC Charlotte ”) evidenced by that certain Promissory Note payable to the order of VALIC in the original principal amount referenced therein, and that certain Promissory Note payable to the order of Holder in the original principal amount referenced therein, each of even date herewith (collectively, the “ North Carolina Notes ”), which are collectively secured by that certain Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (North Carolina) executed by GC Charlotte for the benefit of Lender, covering certain real property more particularly described therein. GC Warren, GC Beaver Creek, GC Phoenix Chandler, and GC Charlotte, are collectively referred to herein as the “ Other Borrowers .” The loans made to the Other Borrowers are collectively referred to as the “ Other Loans .” The New Jersey Notes, the Ohio Notes, the Arizona Notes and the North Carolina Notes are collectively referred to herein as the “ Other Property Notes .” The Other Property Notes, together with all of the documents executed by the Other Borrowers in connection with the Other Loans are collectively referred to herein as the “ Portfolio Loan Documents ” (including without limitation the “Loan Documents” as defined in the mortgages or deeds of trust securing the Other Loans). The principal amount of the Other Loans taken together with the Loan is $110,640,000.

By its execution and delivery of this promissory note (this “ Note ”), Maker covenants and agrees as follows:

1. Interest Rate and Payments.

(a)    The balance of principal outstanding from time to time under this Note shall bear interest at the rate of four and ninety-six hundredths percent (4.96%) per annum (the “ Original Interest Rate ”), based on a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each; provided, however , (i) interest for partial months shall be calculated by multiplying the principal balance of this Note by the applicable interest rate (i.e., the Original Interest Rate or the New Rate (hereinafter defined)), dividing the product by three hundred sixty (360), and multiplying that result by the actual number of days elapsed.

(b)    Interest only shall be payable on the date the loan evidenced by this Note (the “ Loan ”) is funded by Holder, in advance, for the period from and including the date of funding through and including January 31, 2014 (the “ Stub Interest Period ”).

(c)    Commencing on March 1, 2014 and on the first day of each month thereafter through and including February 1, 2017, payments of interest only on the outstanding principal balance of this Note shall be due and payable in arrears.

(d)    Commencing on March 1, 2017 and on the first day of each month thereafter through and including January 1, 2029, combined payments of principal and interest shall be payable, in arrears, in the amount of $53,009.39 each (such amount representing an amount sufficient to fully amortize the original principal amount of this Note over a three hundred sixty (360) month period (the “ Amortization Period ”), if such amortization were based on a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each) at the Original Interest Rate.

(e)    The entire outstanding principal balance of this Note, together with all accrued and unpaid interest and all other sums due hereunder, shall be due and payable in full on February 1, 2029 (the “ Original Maturity Date ”).

2.     Holder’s Extension Option; Net Operating Income .

(a)    If Maker shall fail to pay the outstanding principal balance of this Note and all accrued interest and other charges due hereon at the Original Maturity Date, Holder shall have the right, at Holder’s sole option and discretion, to extend the term of the Loan for an additional period of five (5) years (the “ Extension Term ”). If both Holder and NUF elect an Extension Term, both this Note and the NUF Note shall be so extended, and neither Note may be extended without the extension of the other Note. If Holder elects to extend the term of the Loan, Maker shall pay all fees of Holder incurred in connection with such extension, including, but not limited to, attorneys’ fees and title insurance premiums. Maker shall execute all documents reasonably requested by Holder to evidence and secure the Loan, as extended, and shall obtain and provide to Holder any title insurance policy or endorsement requested by Holder.

(b)    Should Holder elect to extend the term of the Loan as provided above, Holder shall (i) reset the interest rate borne by the then‑existing principal balance of the Loan to a rate per annum (the “ New Rate ”) equal to the greater of (A) the Original Interest Rate, or (B) Holder’s (or comparable lenders’, if Holder is no longer making such loans) then‑prevailing interest rate for five (5) year loans secured by properties similar to the Property (hereinafter defined), as determined by Holder in its sole discretion; (ii) re‑amortize the then‑existing principal balance of the Loan over the remaining portion of the Amortization Period (the “ New Amortization Period ”); (iii) have the right to require Maker to enter into modifications of the non‑economic terms of the Loan Documents as Holder may request (the “ Non‑Economic Modifications ”); and (iv) notwithstanding any provision set forth in the Loan Documents to the contrary, have the right to require Maker to make monthly payments into escrow for insurance premiums and real property taxes, assessments and similar governmental charges. Hence, monthly principal and interest payments during the Extension Term shall be based upon the New Rate, and calculated to fully amortize the outstanding principal balance of the Loan over the New Amortization Period.

(c)    If Holder elects to extend the term of the Loan, Holder shall advise Maker of the New Rate within fifteen (15) days following the Original Maturity Date.

(d)    In addition to the required monthly payments of principal and interest set forth above, commencing on the first day of the second month following the Original Maturity Date and continuing on the first day of each month thereafter during the Extension Term (each an “ Additional Payment Date ”), Maker shall make monthly payments to Holder in an amount equal to all Net Operating Income (hereinafter defined) attributable to the Property for the calendar month ending on the last day of the month that is two months preceding each such Additional Payment Date. For example, assuming the Original Maturity Date is January 1, then Net Operating Income for the period from January 1 through January 31 shall be payable to Holder on March 1; Net Operating Income for the period from February 1 through February 28 shall be payable to Holder on April 1, and so on.

(e)    All such Net Operating Income received from Maker shall be held by, and in the possession of, Holder and shall be deposited into an account or accounts maintained at a financial institution chosen by Holder in its sole discretion (the “ Deposit Account ”) and all such funds shall be invested in a manner acceptable to Holder in its sole discretion. All interest, dividends and earnings credited to the Deposit Account shall be held and applied in accordance with the terms hereof.

(f)    On the third Additional Payment Date and on each third Additional Payment Date thereafter, Holder shall apply all Excess Funds (hereinafter defined), if any, to prepayment of amounts due under this Note, without premium or penalty.

(g)    As security for the repayment of the Loan and the performance of all other obligations of Maker under the Loan Documents, Maker hereby assigns, pledges, conveys, delivers, transfers and grants to Holder a first priority security interest in and to: all Maker’s right, title and interest in and to the Deposit Account; all rights to payment from the Deposit Account and the money deposited therein or credited thereto (whether then due or in the future due and whether then or in the future on deposit); all interest thereon; any certificates, instruments and securities, if any, representing the Deposit Account; all claims, demands, general intangibles, choses in action and other rights or interests of Maker in respect of the Deposit Account; any monies then or at any time thereafter deposited therein; any increases, renewals, extensions, substitutions and replacements thereof; and all proceeds of the foregoing.

(h)    From time to time, but not more frequently than monthly, Maker may request a disbursement (a “ Disbursement ”) from the Deposit Account for capital expenses, tenant improvement expenses, leasing commissions and special contingency expenses. Holder may consent to or deny any such Disbursement in its sole discretion.

(i)    Upon the occurrence of any Event of Default (hereinafter defined) (i) Maker shall not be entitled to any further Disbursement from the Deposit Account; and (ii) Holder shall be entitled to take immediate possession and control of the Deposit Account

(and all funds contained therein) and to pursue all of its rights and remedies available to Holder under the Loan Documents, at law and in equity.

(j)    All of the terms and conditions of the Loan shall apply during the Extension Term, except as expressly set forth above, and except that no further extensions of the Loan shall be permitted.

(k)    For the purposes of the foregoing:

(i)    “ Excess Funds ” shall mean, on any Additional Payment Date, the amount of funds then existing in the Deposit Account (including any Net Operating Income due on the applicable Additional Payment Date), less an amount equal to the sum of three regularly scheduled payments of principal and interest due on this Note;

(ii)    “ Net Operating Income ” shall mean, for any particular period of time, Gross Revenue for the relevant period, less Operating Expenses for the relevant period; provided, however, that if such amount is equal to or less than zero (0), Net Operating Income shall equal zero (0);

(iii)    “ Gross Revenue ” shall mean all payments and other revenues (exclusive, however, of any payments attributable to sales taxes) received by or on behalf of Maker from all sources related to the ownership or operation of the Property, including, but not limited to, rents, room charges, parking fees, interest, security deposits (unless required to be held in a segregated account), business interruption insurance proceeds, operating expense pass‑through revenues and common area maintenance charges, for the relevant period for which the calculation of Gross Revenue is being made; and

(iv)    “ Operating Expenses ” shall mean the sum of all ordinary and necessary operating expenses actually paid by Maker in connection with the operation of the Property during the relevant period for which the calculation of Operating Expenses is being made, including, but not limited to, (a) payments made by Maker for taxes and insurance required under the Loan Documents, and (b) monthly debt service payments as required under this Note.

3.     Budgets During Extension Term .

(a)    Within fifteen (15) days following the Original Maturity Date and on or before December 1 of each subsequent calendar year, Maker shall deliver to Holder a proposed revenue and expense budget for the Property for the remainder of the calendar year in which the Original Maturity Date occurs or the immediately succeeding calendar year (as applicable). Such budget shall set forth Maker’s projection of Gross Revenue and Operating Expenses for the applicable calendar year, which shall be subject to Holder’s reasonable approval. Once a proposed budget has been reviewed and approved by Holder, and Maker has made all revisions requested by Holder, if any, the revised budget shall be delivered to Holder and shall thereafter become the budget for the Property hereunder (the “ Budget ”) for the applicable calendar year. If Maker and Holder are unable to agree upon a Budget for any calendar year, the budgeted Operating Expenses (excluding extraordinary items) provided in the Budget for the Property for the preceding calendar year shall be considered the Budget for the Property for the subject calendar year until Maker and Holder agree upon a new Budget for such calendar year.

(b)    During the Extension Term, Maker shall operate the Property in accordance with the Budget for the applicable calendar year, and the total of expenditures relating to the Property exceeding one hundred and five percent (105%) of the aggregate of such expenses set forth in the Budget for the applicable time period shall not be treated as Operating Expenses for the purposes of calculating “Net Operating Income,” without the prior written consent of Holder except for emergency expenditures which, in the Maker’s good faith judgment, are reasonably necessary to protect, or avoid immediate danger to, life or property.

4.     Reports During Extension Term .

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

(b)    In addition, on or before March 1 of each calendar year during the Extension Term, Maker shall submit to Holder an annual income and expense statement for the Property which shall include the calculation of Gross Revenue, Operating Expenses and Net Operating Income for the preceding calendar year and shall be accompanied by Maker’s reconciliation of any difference between the actual aggregate amount of the Net Operating Income for such calendar year and the aggregate amount of Net Operating Income for such calendar year actually remitted to Holder. All such statements shall be certified by an executive officer of Maker or Maker’s manager, managing member or general partner (as applicable) as having been prepared in accordance with the terms hereof and to be true, accurate and complete in all material respects. If any such annual financial statement discloses any inconsistency between the calculation of Net Operating Income and the amount of Net Operating Income actually remitted to Holder, Maker shall immediately remit to Holder the

amount of any underpayment of Net Operating Income for such calendar year or, in the event of an overpayment by Maker, such amount may be withheld from any subsequent payment of Net Operating Income required hereunder.

(c)    Holder may notify Maker within sixty (60) days after receipt of any statement or report required hereunder that Holder disputes any computation or item contained in any portion of such statement or report. If Holder so notifies Maker, Holder and Maker shall meet in good faith within twenty (20) days after Holder’s notice to Maker to resolve such disputed items. If, despite such good faith efforts, the parties are unable to resolve the dispute at such meeting or within ten (10) days thereafter, the items shall be resolved by an independent certified public accountant designated by Holder within fifteen (15) days after such ten (10) day period. The determination of such accountant shall be final. All fees of such accountant shall be paid by Maker. Maker shall remit to Holder any additional amount of Net Operating Income found to be due for such periods within ten (10) days after the resolution of such dispute by the parties or the accountant’s determination, as applicable. The amount of any overpayment found to have been made for such periods may be withheld from any required future remittance of Net Operating Income.

(d)    Maker shall at all times keep and maintain full and accurate books of account and records adequate to reflect correctly all items required in order to calculate Net Operating Income.

5.     Prepayment .

(a)    Subject to Section 5(h) below, Maker shall have no right to prepay all or any part of this Note before the date (the “ Lockout Expiration Date ”) that is thirty-six (36) calendar months from and after the first day immediately following the Stub Interest Period.

(b)    At any time on or after the Lockout Expiration Date, Maker shall have the right to prepay the full principal amount of this Note and all accrued but unpaid interest hereon as of the date of prepayment, provided that (i) Maker gives not less than thirty (30) days’ prior written notice to Holder of Maker’s election to prepay this Note, (ii) Maker pays a prepayment premium to Holder equal to either (A) one percent (1%) of the outstanding principal amount of this Note, or (B) the Present Value of this Note (hereinafter defined), whichever is greater, less the amount of principal being prepaid, calculated as of the prepayment date, and (iii) Maker pays the full principal amount of the VALIC Note and all accrued but unpaid interest thereon as of the date of prepayment together with any prepayment premium payable with respect thereto under the VALIC Note.

(c)    Holder shall notify Maker of the amount and basis of determination of the prepayment premium. Holder shall not be obligated to accept any prepayment of the principal balance of this Note unless such prepayment is accompanied by the applicable prepayment premium and all accrued interest and other sums due under this Note. Maker may not prepay the Loan on a Friday or on any day preceding a public holiday, or the equivalent for banks generally under the laws of the State in which the Property is located (the “ State ”), or on any day that is not a Business Day (as hereinafter defined).

(d)    Except for making payments of Net Operating Income as required above, and except for the application of insurance proceeds or condemnation awards to the principal balance of this Note, as provided in the Security Instrument (as hereinafter defined), in no event shall Maker be permitted to make any partial prepayments of this Note.

(e)    If Holder accelerates this Note for any reason, then in addition to Maker’s obligation to pay the then outstanding principal balance of this Note and all accrued but unpaid interest thereon, Maker shall pay an additional amount equal to the prepayment premium that would be due to Holder if Maker were voluntarily prepaying this Note at the time that such acceleration occurred, or if under the terms hereof no voluntary prepayment would be permissible on the date of such acceleration, Maker shall pay a prepayment premium calculated as set forth in the Security Instrument together with any prepayment premium payable with respect thereto under the VALIC Note.

(f)    For the purposes of the foregoing:

(i)    The “ Present Value of this Note ” with respect to any prepayment of this Note, as of any date, shall be determined by discounting all scheduled payments of principal and interest remaining to maturity of this Note, attributed to the amount being prepaid, at the Discount Rate. If prepayment occurs on a date other than a regularly scheduled payment date, the actual number of days remaining from the prepayment date to the next regularly scheduled payment date will be used to discount within such period;

(ii)    The “ Discount Rate ” is the rate which, when compounded monthly, is equivalent to the Treasury Rate, when compounded semi‑annually;

(iii)    The “ Treasury Rate ” is the semi‑annual yield on the Treasury Constant Maturity Series with maturity equal to the remaining weighted average life of this Note, for the week prior to the prepayment date, as reported in Federal Reserve Statistical Release H.15 ‑ Selected Interest Rates, conclusively determined by Holder on the prepayment date. The rate will be determined by linear interpolation between the yields reported in Release H.15, if necessary. In the event Release H.15 is no longer published, Holder shall select a comparable publication to determine the Treasury Rate.

(g)    Holder shall not be obligated actually to reinvest the amount prepaid in any treasury obligations as a condition precedent to receiving any prepayment premium.

(h)    Notwithstanding the foregoing, (i) at any time during the Extension Term, Maker shall have the right to prepay the full principal amount of this Note and all accrued but unpaid interest thereon as of the date of prepayment, without prepayment premium thereon, (ii) no prepayment premium shall be due in connection with the application by Holder of any insurance proceeds or condemnation awards to the principal balance of this Note, as provided in the Security Instrument, and (iii) Maker shall have the right to prepay the full principal amount of this Note and all accrued but unpaid interest thereon as of the date of prepayment, without prepayment premium thereon at any time during the three calendar month period immediately prior to the Original Maturity Date.

6.     Payments . Whenever any payment to be made under this Note shall be stated to be due on a Saturday, Sunday or public holiday or the equivalent for banks generally under the laws of the State (any other day being a “ Business Day ”), such payment may be made on the next succeeding Business Day.

7.     Default Rate .

(a)    The entire balance of principal, interest, and other sums due upon the maturity hereof, by acceleration or otherwise, shall bear interest from the date due until paid at the greater of (i)  a per annum rate equal to five percent (5%) over the prime rate (for corporate loans at large United States money center commercial banks) published in The Wall Street Journal on the first business day of each month, or (ii) a per annum rate equal to five percent (5%) over the Original Interest Rate or the New Rate, as applicable (the “ Default Rate ”); provided, however, that such rate shall not exceed the maximum permitted by applicable state or federal law. In the event The Wall Street Journal is no longer published or no longer publishes such prime rate, Holder shall select a comparable reference.

(b)    If any payment under this Note is not made when due, interest shall accrue on the entire principal balance on the Loan at the Default Rate from the date such payment was due until payment is actually made.

8.     Late Charges . In addition to interest as set forth herein, Maker shall pay to Holder a late charge equal to four percent (4%) of any amounts due under this Note (the “ Late Charge ”) in the event any such amount is not paid when due; provided, however, that any such Late Charge with respect to the payment due upon the Maturity Date shall only equal four percent (4%) of the two most recent full monthly combined payments of principal and interest theretofore paid by Maker and no notice from Holder shall be required.

9.     Application of Payments . All payments hereunder shall be applied first to the payment of late charges, if any, then to the payment of prepayment premiums, if any, then to the repayment of any sums advanced by Holder for the payment of any insurance premiums, taxes, assessments, or other charges against the property securing this Note, if any, and any other costs and expenses incurred by Holder in accordance with the Loan Documents (together with interest thereon at the Default Rate from the date of advance until repaid), then to the payment of accrued and unpaid interest, and then to the reduction of principal. Notwithstanding the foregoing, for so long as any Event of Default is continuing, Holder shall have the continuing exclusive right to apply any payments received by Holder from or on behalf of Maker as Holder may elect against the then due and owing obligations of Maker under this Note in such order of priority or in such allocation as Holder may deem advisable in its sole and absolute discretion.

10.     Immediately Available Funds . Except as contemplated in the Cash Collateral Agreement, payments under this Note shall be payable in immediately available funds without setoff, counterclaim or deduction of any kind, and shall be made by electronic funds transfer from a bank account established and maintained by Maker for such purpose.

11.     Security . This Note is secured by a first priority Deed of Trust, Security Agreement, Fixture Filing and Assignment of Leases and Rents (Texas) of even date herewith granted by Maker for the benefit of the named Holder hereof (the “ Security Instrument ”) encumbering certain real property and improvements thereon and as more particularly described in such Security Instrument (the “ Property ”).

12.     Certain Definitions . Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Security Instrument.

13.     Event of Default . Each of the following events will constitute an event of default (an “ Event of Default ”) under this Note, each other Loan Document, and each Portfolio Loan Document, and the occurrence of any “Event of Default” (as defined in any other Loan Document or any Portfolio Loan Documents) under any Loan Document or Portfolio Loan Document shall constitute an Event of Default hereunder and under each of the other Loan Documents and each of the Portfolio Loan Documents:

(a)    Any failure to pay when due any sum under this Note, including, without limitation, any and all amounts due on the Maturity Date; or

(b)    Any failure of Maker or Guarantor to properly perform any obligation contained in this Note (other than the obligation to make payments under this Note) and the continuance of such failure for a period of thirty (30) days following written notice thereof from Holder to Maker; provided, however, that if such failure is curable but cannot be cured within such thirty (30) day period, then, so long as Maker commences to cure such failure within such thirty (30) day period and is continually and diligently attempting to

cure to completion, such failure shall not be an Event of Default unless such failure remains uncured for one hundred twenty (120) days after such written notice to Maker. For the avoidance of doubt, any “Event of Default” as defined under the Security Instrument, any other Loan Document, or any other Portfolio Loan Document is an Event of Default under this Note, and shall not be subject to the cure period set forth in this Section 13(b) (but rather, the cure period under any such other instrument or document shall govern with respect to any such other “Event of Default”).

14.     Acceleration . Upon the occurrence of any Event of Default, the entire balance of principal, accrued interest, and other sums owing hereunder and under the Other Notes shall, at the option of Holder, become at once due and payable without notice or demand. Upon the occurrence of an Event of Default described in Section 13(c) hereof, Holder shall have the option, in its sole discretion, to either (a) exercise any remedies available to it under the Loan Documents and the Portfolio Loan Documents, at law or in equity, or (b) require Maker to submit a new proposed budget for Holder’s approval. If Holder agrees to accept such new proposed budget, then such budget shall become the Budget for all purposes hereunder.

15.     Conditions Precedent . Maker hereby certifies and declares that all acts, conditions and things required to be done and performed by Maker and to have happened precedent to the creation and issuance of this Note, and to constitute this Note as the legal, valid and binding obligation of Maker, enforceable in accordance with the terms hereof, have been done and performed and happened in due and strict compliance with all applicable laws.

16.     Certain Waivers and Consents . Maker and all parties now or hereafter liable for the payment hereof, primarily or secondarily, directly or indirectly, and whether as endorser, guarantor, surety, or otherwise, hereby severally (a) waive presentment, demand, protest, notice of protest and/or dishonor, and all other demands or notices of any sort whatever with respect to this Note, (b) consent to impairment or release of collateral, extensions of time for payment, and acceptance of partial payments before, at, or after maturity, (c) waive any right to require Holder to proceed against any security for this Note before proceeding hereunder, (d) waive diligence in the collection of this Note or in filing suit on this Note, and (e) agree to pay all costs and expenses, including reasonable attorneys’ fees, which may be incurred in the collection of this Note or any part thereof or in preserving, securing possession of, and realizing upon any security for this Note.

17.     Usury Savings Clause . The provisions of this Note and of all agreements between Maker and Holder are, whether now existing or hereinafter made, hereby expressly limited so that in no contingency or event whatever, whether by reason of acceleration of the maturity hereof, prepayment, demand for payment or otherwise, shall the amount paid, or agreed to be paid, to Holder for the use, forbearance, or detention of the principal hereof or interest hereon, which remains unpaid from time to time, exceed the maximum amount permissible under applicable law, it particularly being the intention of the parties hereto to conform strictly to the laws of the State and Federal law, whichever is applicable. If from any circumstance whatever, the performance or fulfillment of any provision hereof or of any other agreement between Maker and Holder shall, at the time performance or fulfillment of such provision is due, involve or purport to require any payment in excess of the limits prescribed by law, then the obligation to be performed or fulfilled is hereby reduced to the limit of such validity, and if from any circumstance whatever Holder should ever receive as interest an amount which would exceed the highest lawful rate, the amount which would be excessive interest shall be applied to the reduction of the principal balance owing hereunder (or, at Holder’s option, be paid over to Maker) and shall not be counted as interest. To the extent permitted by applicable law, determination of the legal maximum amount of interest shall at all times be made by amortizing, prorating, allocating and spreading in equal parts during the period of the full stated term of this Note, all interest at any time contracted for, charged, or received from Maker in connection with this Note and all other agreements between Maker and Holder, so that the actual rate of interest on account of the indebtedness represented by this Note is uniform throughout the term hereof.

18.     Non‑Recourse; Exceptions to Non‑Recourse . Nothing contained in this Note or any of the other Loan Documents shall be deemed to impair or limit Holder’s rights: in foreclosure proceedings or in any ancillary proceedings brought to facilitate Holder’s foreclosure on the Property or any portion thereof or to exercise any specific rights or remedies afforded Holder under any other provisions of the Loan Documents or the Portfolio Loan Documents, or by law or in equity, subject to the non‑recourse provisions set forth below; to recover under any guarantee given in connection with the Loan; or to pursue any personal liability of Maker or any Guarantor under the Environmental Indemnity Agreement or Section 5.10 of the Security Instrument. Except as expressly set forth in this Section 18, the recourse of Holder with respect to the Secured Obligations shall be solely to the Property, Chattels and Intangible Personalty (as defined in the Security Instrument) and any other collateral given as security for the Loan:

(a)    Notwithstanding anything to the contrary contained in this Note or in any Loan Document, nothing shall be deemed in any way to impair, limit or prejudice the rights of Holder to collect or recover from Maker and Guarantor: (i) damages or costs (including without limitation reasonable attorneys’ fees) incurred by Holder as a result of actual physical waste by Maker; (ii) any condemnation or insurance proceeds attributable to the Property which were not paid to Holder or used to restore the Property in accordance with the terms of the Security Instrument; (iii) any rents, profits, advances, rebates, prepaid rents, lease termination payments or other similar sums attributable to the Property collected by or for Maker (A) following an Event of Default (as defined in the Security Instrument) and not properly applied to the reasonable fixed and operating expenses of the Property, including payments of this Note, the Other Note, and other sums due under the Loan Documents, or (B) to the extent not deposited in the Deposit Account as and when required pursuant to the Loan Documents; (iv) any security deposits collected by or for Maker and not applied in accordance with applicable leases; (v) the amount of any accrued taxes, assessments, and/or utility charges affecting the Property (whether or not the same have been billed to

Maker) that are either unpaid by Maker or advanced by Holder under the Security Instrument, except to the extent that (x) the combined gross revenues of the Property taken together with the gross revenues of the Other Properties were not sufficient to pay such taxes and expenses, and (y) of any of the foregoing accruing after the Termination Date (hereinafter defined); (vi) any sums expended by Holder in fulfilling the obligations of Maker, as lessor, under any leases affecting the Property, except to the extent that the combined gross revenues of the Property taken together with the gross revenues of the Other Properties were not sufficient to pay such expenses, and except to the extent of any of the foregoing accruing after the Termination Date; and (vii) the amount of any loss suffered by Holder (that would otherwise be covered by insurance) as a result of Maker’s failure to maintain the insurance required under the terms of any Loan Document, except to the extent that the combined gross revenues of the Property taken together with the gross revenues of the Other Properties were not sufficient to pay such expenses, and except to the extent of any of the foregoing accruing after the Termination Date; (viii) the amount of losses suffered by Holder by reason of any execution, modification, assignment by the applicable tenant or other party thereto (if Maker has the right to consent to such assignment under the applicable lease), or any supplement, amendment and restatement or termination of any lease to any Required Tenant, or any tenant that leases, together with its affiliates, an aggregate of 10,000 or more rentable square feet at the Property (in each case, each such Required Tenant and each such other tenant is referred to herein as a " Major Tenant ") without the prior written consent of Holder, which consent will not be unreasonably withheld, conditioned or delayed; and (ix) damages or costs (including without limitation reasonable attorneys’ fees) incurred by Holder as a result of any breach or violation of Section 5.5 (but only if such breach or violation of said Section 5.5 arises by reason of a lien, security interest or encumbrance against Intangible Property) or Section 5.7 of the Security Instrument.

(b)    The agreement set forth in the introductory paragraph of this Section 18 to limit the personal liability of Maker shall become null and void and be of no further force and effect, and Maker and each Guarantor shall be personally liable for the obligations evidenced by this Note, in the event (i) of any breach or violation of Section 5.4 of the Security Instrument (except to the extent a sale or encumbrance results from the nonpayment of real estate taxes when the combined gross revenues generated by the Property taken together with the gross revenues of the Other Properties were not sufficient to pay such taxes); (ii) of any fraud or intentional misrepresentation by Maker in connection with the Property, the Loan Documents or the application made by Maker for the Loan; (iii) that Maker forfeits the Property or Chattels or any portion of the Property or Chattels due to criminal activity; (iv) of any attempt by Maker or GC Member, any Guarantor, or any other person directly or indirectly responsible for the management of Maker or GC Member, or liable for repayment of Maker’s obligations under the Loan (whether as maker, endorser, guarantor, surety, general partner or otherwise) to materially delay any foreclosure against the Property, Chattels and/or Intangible Personalty or any other exercise by Holder of its remedies under the Loan Documents, which attempts shall include, without limitation, (A) any claim that any Loan Document is invalid or unenforceable to an extent that would preclude any such foreclosure or other exercise of remedies, (B) Maker or GC Member filing a petition in bankruptcy, either Maker or GC Member failing to oppose in good faith the entry of an order for relief pursuant to any involuntary bankruptcy petition filed against it (other than a petition filed by Holder) or Maker or GC Member seeking any reorganization, liquidation, dissolution or similar relief under the bankruptcy laws of the United States or under any other similar federal, state or other statute relating to relief from indebtedness, or consenting to or colluding in the filing of any involuntary bankruptcy petition against Maker or GC Member, or (C) the appointment (other than by Holder) of a receiver, trustee or liquidator with respect to Maker or GC Member or the Property or any part thereof; or (v) of any termination by Maker, or acceptance by Maker of a surrender by the applicable tenant, of any lease to any Major Tenant without the prior written consent of Holder, which consent will not be unreasonably withheld, conditioned or delayed.

For the purposes of the foregoing, the " Termination Date " shall mean the earlier of (i) the date that Maker and the Other Borrowers tender to Holder or Holder's designee deeds-in-lieu of foreclosure for the Property and the Other Property, subject to no title exceptions other than real estate taxes and assessments, the Permitted Exceptions (as defined in the Security Instrument and the Other First Security Instruments) and such additional exceptions approved by Holder pursuant to the Loan Documents and the Portfolio Loan Documents or which are otherwise acceptable to Holder in its reasonable discretion, together with such ancillary conveyances, releases of Holder parties and other documentation that are customarily delivered in connection with a deed-in-lieu transaction, all in form reasonably satisfactory to Holder, and (ii) [intentionally deleted] (iii) the date Holder, its affiliate, or any other party takes title to the Property and the Other Property in connection with or pursuant to foreclosures (whether by power of sale or non-judicial foreclosure, or by judicial foreclosure) of the Security Instrument or the Other First Security Instruments. If Maker elects to deliver such deeds-in-lieu of foreclosure, Holder shall retain the right to determine whether to accept each such deed-in-lieu of foreclosure or to proceed with non-judicial or judicial foreclosure proceedings with respect to one or more of the Property, the Other Property and, upon Holder making such election, Maker shall execute and deliver to Holder an appropriate deed-in-lieu or deeds-in-lieu, as Holder shall have elected; provided however, that if Holder chooses to proceed with judicial or non-judicial (including, without limitation, by power of sale) foreclosure proceedings, the Termination Date shall nonetheless be the earlier of the date specified in (i) and (iii) above, provided further that if Maker thereafter fails to cooperate with Holder's reasonable requests and requirements in respect of Holder's exercise of any and all remedies available at law or in equity to Holder (including without limitation judicial, power of sale, or non-judicial foreclosure), then the Termination Date shall be the date specified in (iii). With respect to clause (i) above, if the Maker tenders deeds-in-lieu, ancillary conveyances, releases of Holder parties and other documentation pursuant to clause (i), Holder shall respond to Maker in writing within fifteen (15) Business Days after its receipt of the same indicating whether Holder either (A) agrees that such submission and documents satisfy the terms and conditions of such clause (i), or (B) does not agree that such submission and documents satisfy the terms and conditions of such clause (i) (in which event, Holder shall also indicate such changes to such submission and documents required to make the same satisfy the

terms and conditions of such clause (i)). Holder's failure to respond within such period shall be deemed its agreement that such submission and documents satisfy the terms and conditions of such clause (i), and Maker's submission of such documents shall in any event include a statement to Holder in a cover letter submitted to Holder in bold enlarged type, that Holder's approval will be deemed given if it fails to respond within fifteen (15) Business Days after its receipt of such documents.

19.     Severability . If any provision hereof or of any other document securing or related to the indebtedness evidenced hereby is, for any reason and to any extent, invalid or unenforceable, then neither the remainder of the document in which such provision is contained, nor the application of the provision to other persons, entities, or circumstances, nor any other document referred to herein, shall be affected thereby, but instead shall be enforceable to the maximum extent permitted by law.

20.     Transfer of Note . Holder may transfer or participate out this Note or any portion thereof at any time in its sole discretion. Each provision of this Note shall be and remain in full force and effect notwithstanding any negotiation or transfer hereof and any interest herein to any other Holder or participant.

21.     Governing Law . THIS NOTE AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, MAKER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS NOTE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

22.     Time of Essence . Time is of the essence with respect to all of Maker’s obligations under this Note.

23.     Remedies Cumulative . The remedies provided to Holder in this Note, the Security Instrument and the Other Loan Documents are cumulative and concurrent and may be exercised singly, successively or together against Maker, the Property, and other security, or any guarantor of this Note, at the sole and absolute discretion of the Holder.

24.     No Waiver . Holder shall not by any act or omission be deemed to waive any of its rights or remedies hereunder unless such waiver is in writing and signed by the Holder and then only to the extent specifically set forth therein. A waiver of one event shall not be construed as continuing or as a bar to or waiver of any right or remedy granted to Holder hereunder in connection with a subsequent event.

25.     Joint and Several Obligation . If Maker is more than one person or entity, then (a) all persons or entities comprising Maker are jointly and severally liable for all of the Maker’s obligations hereunder; (b) all representations, warranties, and covenants made by Maker shall be deemed representations, warranties, and covenants of each of the persons or entities comprising Maker; (c) any breach, Default or Event of Default by any of the persons or entities comprising Maker hereunder shall be deemed to be a breach, Default, or Event of Default of Maker; and (d) any reference herein contained to the knowledge or awareness of Maker shall mean the knowledge or awareness of any of the persons or entities comprising Maker.

26.     WAIVER OF JURY TRIAL . MAKER HEREBY AGREES TO WAIVE TO THE FULLEST EXTENT NOT PROHIBITED BY LAW, ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF: (A) THE LOAN OR THE PROPERTY, (B) THIS NOTE, THE SECURITY INSTRUMENT, OR ANY OTHER LOAN DOCUMENT OR INSTRUMENT BETWEEN MAKER AND HOLDER RELATING TO THIS NOTE, THE PROPERTY OR THE LOAN, OR (C) ANY DEALINGS BETWEEN MAKER AND HOLDER RELATING TO THE SUBJECT MATTER OF THIS NOTE OR THE LOAN. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE CONTRACT CLAIMS, TORT CLAIMS, ANTITRUST CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. MAKER HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH LEGAL COUNSEL OF ITS OWN CHOOSING, OR HAS HAD AN OPPORTUNITY TO DO SO, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS HAVING HAD THE OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO THIS NOTE OR ANY OTHER LOAN DOCUMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS WRITTEN CONSENT TO A TRIAL BY THE COURT WITHOUT A JURY TRIAL.

27.     WAIVER OF PREPAYMENT RIGHT WITHOUT PREMIUM . EXCEPT AS OTHERWISE PROVIDED IN THE LOAN DOCUMENTS, MAKER HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE UNDER APPLICABLE LAW TO PREPAY THIS NOTE, IN WHOLE OR IN PART, WITHOUT CHARGE, FEE OR PENALTY, UPON ACCELERATION OF THE MATURITY DATE OF THIS NOTE, AND AGREES THAT, IF FOR ANY REASON A PREPAYMENT OF ALL OR ANY PART OF THIS NOTE IS MADE, WHETHER VOLUNTARILY OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF

THIS NOTE BY HOLDER ON ACCOUNT OF THE OCCURRENCE OF ANY EVENT OF DEFAULT ARISING FOR ANY REASON, INCLUDING, WITHOUT LIMITATION, AS A RESULT OF ANY PROHIBITED OR RESTRICTED TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION OF THE PROPERTY OR ANY PART THEREOF SECURING THIS NOTE, OR ANY PROHIBITED DIRECT OR INDIRECT INTEREST IN MAKER, THEN MAKER SHALL BE OBLIGATED TO PAY, CONCURRENTLY WITH SUCH PREPAYMENT, THE PREPAYMENT PREMIUM, IF ANY, PROVIDED FOR IN THIS NOTE (OR, IN THE EVENT OF PREPAYMENT FOLLOWING ACCELERATION OF THE MATURITY DATE HEREOF WHEN THIS NOTE IS CLOSED TO PREPAYMENT, AS PROVIDED IN THE SECURITY INSTRUMENT) AND ANY AND ALL OTHER CHARGES AND FEES DUE UNDER THE LOAN DOCUMENTS. MAKER HEREBY DECLARES THAT HOLDER’S AGREEMENT TO MAKE THE LOAN EVIDENCED BY THIS NOTE AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THIS NOTE CONSTITUTES ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY MAKER, FOR THIS WAIVER AND AGREEMENT.

28.     Attorney’s Fees and Charges . If Holder refers this Note or any of the other Loan Documents to any attorney for collection or seeks legal advice following the occurrence of an Event of Default that has not been waived by Holder expressly in writing, or if Holder is the prevailing party in any action instituted on this Note or any other Loan Document, or if any other judicial or non-judicial proceeding is instituted by Holder or any other person or entity (provided that with respect to any judicial or non-judicial proceeding instituted by any other person or entity, either (A) such person or entity shall consist of Maker or any Affiliate thereof, or (B) such proceeding shall include Maker or any Affiliate thereof as a party thereto, and the facts alleged, on the basis of which any cause of action or claim shall be asserted in such proceeding, involve the action(s) or omission(s) on the part of Maker or any Affiliate thereof under this Note or any other Loan Document), and an attorney is employed by Holder to appear in any such action or proceeding, or in any action that materially affects Holder’s interest in this Note or any Property, or to seek appointment of a receiver, to reclaim, seek relief from a judicial or statutory stay, sequester, protect, preserve or enforce Holder’s interest in the Security Instrument or any other security for this Note (including, but not limited to, proceedings under federal bankruptcy law, in eminent domain, under the probate code, on appeal (provided that for Holder to recover appeal costs from Maker hereunder, Holder shall have to be judicially determined to be a prevailing party in such appeal), in arbitration, or in connection with any municipal, state or federal tax lien), then Maker and every endorser hereof and every person who assumes the obligations evidenced by this Note or any of the other Loan Documents jointly and severally promise(s) to pay third party attorneys’ fees for services performed by Holder’s attorneys, and all costs and expenses (including, without limitation, expert witness reasonable fees, costs of exhibit preparation, document reproduction, postage, telecommunication expenses and courier charges), incurred incident to such employment (provided, however, that in any action commenced by Holder against Maker, such obligation to pay third party attorneys’ fees shall only apply if Holder is the prevailing party in such action). If such fees are not paid within five (5) Business Days after demand therefor by Holder, all such costs and expenses shall bear interest at the Default Rate and the repayment thereof shall also be secured by every instrument securing the indebtedness evidenced hereby.

29.     Successors and Assigns . The covenants, terms and conditions contained in this Note apply to and bind the heirs, successors, executors, administrators and assigns of Maker.

30.     Notices . Notices and other communications to be delivered pursuant to the provisions of this Note shall be delivered in accordance with the provisions for delivery of notices set forth in the Security Instrument. Notices and other written communications hereunder shall be sent, in the case of Maker, to the address(es) for delivery of notice to Trustor under the Security Instrument, and, in the case of Holder, to the address(es) for delivery of notice to Beneficiary under the Security Instrument.

31.     Notice of No Oral Agreements . IN ACCORDANCE WITH APPLICABLE LAW, THIS NOTE, THE SECURITY INSTRUMENT AND ALL OF THE OTHER LOAN DOCUMENTS EVIDENCING, SECURING OR PERTAINING TO ALL OR ANY PORTION OF THE INDEBTEDNESS AND THE OBLIGATIONS REPRESENT THE FINAL AGREEMENT BETWEEN MAKER AND HOLDER AS TO THE SUBJECT MATTER THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH PARTIES.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGE TO PROMISSORY NOTE (ARIZONA-NUF)]

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

MAKER :

THE GC NET LEASE (HOUSTON ENCLAVE) INVESTORS, LLC,

a Delaware limited liability company

By: The GC Net Lease (Houston Enclave) Member, LLC,

a Delaware limited liability company,

its Sole Member

By: Griffin Capital Essential Asset Operating Partnership, L.P.,

a Delaware limited partnership,

its Sole Member

By: Griffin Capital Essential Asset REIT, Inc.,

a Maryland corporation,

its General Partner

By: /s/ Joseph E. Miller            

Joseph E. Miller, Chief Financial Officer

PROMISSORY NOTE

[TEXAS – VALIC]

U.S. $20,140,200.00

January 24, 2014

FOR VALUE RECEIVED, and at the times hereinafter specified, THE GC NET LEASE (HOUSTON ENCLAVE) INVESTORS, LLC , a Delaware limited liability company (“ Maker ”), whose address is 2121 Rosecrans Avenue, Suite 3321, El Segundo, California 90245, hereby promises to pay to the order of THE VARIABLE ANNUITY LIFE INSURANCE COMPANY , a Texas corporation (hereinafter referred to, together with each subsequent holder hereof, as “ Holder ”), at c/o AIG Investments, 777 South Figueroa Street, 16 ^th Floor, Los Angeles, California 90017, or at such other address as may be designated from time to time hereafter by any Holder, the maximum principal sum of TWENTY MILLION ONE HUNDRED FORTY THOUSAND TWO HUNDRED AND NO/100THS DOLLARS ($20,140,200.00), together with interest on the principal balance outstanding from time to time, as hereinafter provided, in lawful money of the United States of America.

Concurrently herewith, Maker is entering into that certain Promissory Note of even date herewith payable to the order of National Union Fire Insurance Company of Pittsburgh, PA., a Pennsylvania corporation (“ NUF ”), in the original principal face amount of $9,919,800.00 (the “ NUF Note ”).

Concurrently herewith, Lender is making loans to (i) The GC Net Lease (Phoenix Chandler) Investors, LLC, a Delaware limited liability company (“ GC Phoenix Chandler ”) evidenced by that certain Promissory Note payable to the order of Holder in the original principal amount referenced therein, and that certain Promissory Note payable to the order of NUF in the original principal amount referenced therein, each of even date herewith (collectively, the “ Phoenix Chandler Notes ”), which are collectively secured by that certain Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (New Jersey) executed by GC Warren for the benefit of Lender, covering certain real property more particularly described therein, (ii) The GC Net Lease (Warren) Investors, LLC, a Delaware limited liability company (“ GC Warren ”) evidenced by that certain Promissory Note payable to the order of Holder in the original principal amount referenced therein, and that certain Promissory Note payable to the order of NUF in the original principal amount referenced therein, each of even date herewith (collectively, the “ New Jersey Notes ”), which are collectively secured by that certain Mortgage, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (New Jersey) executed by GC Warren for the benefit of Lender, covering certain real property more particularly described therein, (iii) The GC Net Lease (Beaver Creek) Investors, LLC, a Delaware limited liability company (“ GC Beaver Creek ”) evidenced by that certain Promissory Note payable to the order of Holder in the original principal amount referenced therein, and that certain Promissory Note payable to the order of NUF in the original principal amount referenced therein, each of even date herewith (collectively, the “ Ohio Notes ”), which are collectively secured by that certain Open-End Mortgage, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (Ohio) executed by GC Beaver Creek for the benefit of Lender, covering certain real property more particularly described therein, and (iv) The GC Net Lease (Charlotte) Investors, LLC, a Delaware limited liability company (“ GC Charlotte ”) evidenced by that certain Promissory Note payable to the order of Holder in the original principal amount referenced therein, and that certain Promissory Note payable to the order of NUF in the original principal amount referenced therein, each of even date herewith (collectively, the “ North Carolina Notes ”), which are collectively secured by that certain Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (North Carolina) executed by GC Charlotte for the benefit of Lender, covering certain real property more particularly described therein. GC Phoenix Chandler, GC Warren, GC Beaver Creek, and GC Charlotte are collectively referred to herein as the “ Other Borrowers .” The loans made to the Other Borrowers are collectively referred to as the “ Other Loans .” The Arizona Notes, the New Jersey Notes, the Ohio Notes and the North Carolina Notes are collectively referred to herein as the “ Other Property Notes .” The Other Property Notes, together with all of the documents executed by the Other Borrowers in connection with the Other Loans are collectively referred to herein as the “ Portfolio Loan Documents ” (including without limitation the “Loan Documents” as defined in the mortgages or deeds of trust securing the Other Loans). The principal amount of the Other Loans taken together with the Loan is $110,640,000.

By its execution and delivery of this promissory note (this “ Note ”), Maker covenants and agrees as follows:

1. Interest Rate and Payments.

(a)    The balance of principal outstanding from time to time under this Note shall bear interest at the rate of four and ninety-six hundredths percent (4.96%) per annum (the “ Original Interest Rate ”), based on a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each; provided, however , (i) interest for partial months shall be calculated by multiplying the principal balance of this Note by the applicable interest rate (i.e., the Original Interest Rate or the New Rate (hereinafter defined)), dividing the product by three hundred sixty (360), and multiplying that result by the actual number of days elapsed.

(b)    Interest only shall be payable on the date the loan evidenced by this Note (the “ Loan ”) is funded by Holder, in advance, for the period from and including the date of funding through and including January 31, 2014 (the “ Stub Interest Period ”).

(c)    Commencing on March 1, 2014 and on the first day of each month thereafter through and including February 1, 2017, payments of interest only on the outstanding principal balance of this Note shall be due and payable in arrears.

(d)    Commencing on March 1, 2017 and on the first day of each month thereafter through and including January 1, 2029, combined payments of principal and interest shall be payable, in arrears, in the amount of $107,625.13 each (such amount representing an amount sufficient to fully amortize the original principal amount of this Note over a three hundred sixty (360) month period (the “ Amortization Period ”), if such amortization were based on a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each) at the Original Interest Rate.

(e)    The entire outstanding principal balance of this Note, together with all accrued and unpaid interest and all other sums due hereunder, shall be due and payable in full on February 1, 2029 (the “ Original Maturity Date ”).

2.     Holder’s Extension Option; Net Operating Income .

(a)    If Maker shall fail to pay the outstanding principal balance of this Note and all accrued interest and other charges due hereon at the Original Maturity Date, Holder shall have the right, at Holder’s sole option and discretion, to extend the term of the Loan for an additional period of five (5) years (the “ Extension Term ”). If both Holder and NUF elect an Extension Term, both this Note and the NUF Note shall be so extended, and neither Note may be extended without the extension of the other Note. If Holder elects to extend the term of the Loan, Maker shall pay all fees of Holder incurred in connection with such extension, including, but not limited to, attorneys’ fees and title insurance premiums. Maker shall execute all documents reasonably requested by Holder to evidence and secure the Loan, as extended, and shall obtain and provide to Holder any title insurance policy or endorsement requested by Holder.

(b)    Should Holder elect to extend the term of the Loan as provided above, Holder shall (i) reset the interest rate borne by the then‑existing principal balance of the Loan to a rate per annum (the “ New Rate ”) equal to the greater of (A) the Original Interest Rate, or (B) Holder’s (or comparable lenders’, if Holder is no longer making such loans) then‑prevailing interest rate for five (5) year loans secured by properties similar to the Property (hereinafter defined), as determined by Holder in its sole discretion; (ii) re‑amortize the then‑existing principal balance of the Loan over the remaining portion of the Amortization Period (the “ New Amortization Period ”); (iii) have the right to require Maker to enter into modifications of the non‑economic terms of the Loan Documents as Holder may request (the “ Non‑Economic Modifications ”); and (iv) notwithstanding any provision set forth in the Loan Documents to the contrary, have the right to require Maker to make monthly payments into escrow for insurance premiums and real property taxes, assessments and similar governmental charges. Hence, monthly principal and interest payments during the Extension Term shall be based upon the New Rate, and calculated to fully amortize the outstanding principal balance of the Loan over the New Amortization Period.

(c)    If Holder elects to extend the term of the Loan, Holder shall advise Maker of the New Rate within fifteen (15) days following the Original Maturity Date.

(d)    In addition to the required monthly payments of principal and interest set forth above, commencing on the first day of the second month following the Original Maturity Date and continuing on the first day of each month thereafter during the Extension Term (each an “ Additional Payment Date ”), Maker shall make monthly payments to Holder in an amount equal to all Net Operating Income (hereinafter defined) attributable to the Property for the calendar month ending on the last day of the month that is two months preceding each such Additional Payment Date. For example, assuming the Original Maturity Date is January 1, then Net Operating Income for the period from January 1 through January 31 shall be payable to Holder on March 1; Net Operating Income for the period from February 1 through February 28 shall be payable to Holder on April 1, and so on.

(e)    All such Net Operating Income received from Maker shall be held by, and in the possession of, Holder and shall be deposited into an account or accounts maintained at a financial institution chosen by Holder in its sole discretion (the “ Deposit Account ”) and all such funds shall be invested in a manner acceptable to Holder in its sole discretion. All interest, dividends and earnings credited to the Deposit Account shall be held and applied in accordance with the terms hereof.

(f)    On the third Additional Payment Date and on each third Additional Payment Date thereafter, Holder shall apply all Excess Funds (hereinafter defined), if any, to prepayment of amounts due under this Note, without premium or penalty.

(g)    As security for the repayment of the Loan and the performance of all other obligations of Maker under the Loan Documents, Maker hereby assigns, pledges, conveys, delivers, transfers and grants to Holder a first priority security interest in and to: all Maker’s right, title and interest in and to the Deposit Account; all rights to payment from the Deposit Account and the money deposited therein or credited thereto (whether then due or in the future due and whether then or in the future on deposit); all interest thereon; any certificates, instruments and securities, if any, representing the Deposit Account; all claims, demands, general intangibles, choses in action and other rights or interests of Maker in respect of the Deposit Account; any monies then or at any time thereafter deposited therein; any increases, renewals, extensions, substitutions and replacements thereof; and all proceeds of the foregoing.

(h)    From time to time, but not more frequently than monthly, Maker may request a disbursement (a “ Disbursement ”) from the Deposit Account for capital expenses, tenant improvement expenses, leasing commissions and special contingency expenses. Holder may consent to or deny any such Disbursement in its sole discretion.

(i)    Upon the occurrence of any Event of Default (hereinafter defined) (i) Maker shall not be entitled to any further Disbursement from the Deposit Account; and (ii) Holder shall be entitled to take immediate possession and control of the Deposit Account (and all funds contained therein) and to pursue all of its rights and remedies available to Holder under the Loan Documents, at law and in equity.

(j)    All of the terms and conditions of the Loan shall apply during the Extension Term, except as expressly set forth above, and except that no further extensions of the Loan shall be permitted.

(k)    For the purposes of the foregoing:

(i)    “ Excess Funds ” shall mean, on any Additional Payment Date, the amount of funds then existing in the Deposit Account (including any Net Operating Income due on the applicable Additional Payment Date), less an amount equal to the sum of three regularly scheduled payments of principal and interest due on this Note;

(ii)    “ Net Operating Income ” shall mean, for any particular period of time, Gross Revenue for the relevant period, less Operating Expenses for the relevant period; provided, however, that if such amount is equal to or less than zero (0), Net Operating Income shall equal zero (0);

(iii)    “ Gross Revenue ” shall mean all payments and other revenues (exclusive, however, of any payments attributable to sales taxes) received by or on behalf of Maker from all sources related to the ownership or operation of the Property, including, but not limited to, rents, room charges, parking fees, interest, security deposits (unless required to be held in a segregated account), business interruption insurance proceeds, operating expense pass‑through revenues and common area

maintenance charges, for the relevant period for which the calculation of Gross Revenue is being made; and

(iv)    “ Operating Expenses ” shall mean the sum of all ordinary and necessary operating expenses actually paid by Maker in connection with the operation of the Property during the relevant period for which the calculation of Operating Expenses is being made, including, but not limited to, (a) payments made by Maker for taxes and insurance required under the Loan Documents, and (b) monthly debt service payments as required under this Note.

3.     Budgets During Extension Term .

(a)    Within fifteen (15) days following the Original Maturity Date and on or before December 1 of each subsequent calendar year, Maker shall deliver to Holder a proposed revenue and expense budget for the Property for the remainder of the calendar year in which the Original Maturity Date occurs or the immediately succeeding calendar year (as applicable). Such budget shall set forth Maker’s projection of Gross Revenue and Operating Expenses for the applicable calendar year, which shall be subject to Holder’s reasonable approval. Once a proposed budget has been reviewed and approved by Holder, and Maker has made all revisions requested by Holder, if any, the revised budget shall be delivered to Holder and shall thereafter become the budget for the Property hereunder (the “ Budget ”) for the applicable calendar year. If Maker and Holder are unable to agree upon a Budget for any calendar year, the budgeted Operating Expenses (excluding extraordinary items) provided in the Budget for the Property for the preceding calendar year shall be considered the Budget for the Property for the subject calendar year until Maker and Holder agree upon a new Budget for such calendar year.

(b)    During the Extension Term, Maker shall operate the Property in accordance with the Budget for the applicable calendar year, and the total of expenditures relating to the Property exceeding one hundred and five percent (105%) of the aggregate of such expenses set forth in the Budget for the applicable time period shall not be treated as Operating Expenses for the purposes of calculating “Net Operating Income,” without the prior written consent of Holder except for emergency expenditures which, in the Maker’s good faith judgment, are reasonably necessary to protect, or avoid immediate danger to, life or property.

4.     Reports During Extension Term .

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

(b)    In addition, on or before March 1 of each calendar year during the Extension Term, Maker shall submit to Holder an annual income and expense statement for the Property which shall include the calculation of Gross Revenue, Operating Expenses and Net Operating Income for the preceding calendar year and shall be accompanied by Maker’s reconciliation of any difference between the actual aggregate amount of the Net Operating Income for such calendar year and the aggregate amount of Net Operating Income for such calendar year actually remitted to Holder. All such statements shall be certified by an executive officer of Maker or Maker’s manager, managing member or general partner (as applicable) as having been prepared in accordance with the terms hereof and to be true, accurate and complete in all material respects. If any such annual financial statement discloses any inconsistency between the calculation of Net Operating Income and the amount of Net Operating Income actually remitted to Holder, Maker shall immediately remit to Holder the amount of any underpayment of Net Operating Income for such calendar year or, in the event of an overpayment by Maker, such amount may be withheld from any subsequent payment of Net Operating Income required hereunder.

(c)    Holder may notify Maker within sixty (60) days after receipt of any statement or report required hereunder that Holder disputes any computation or item contained in any portion of such statement or report. If Holder so notifies Maker, Holder and Maker shall meet in good faith within twenty (20) days after Holder’s notice

to Maker to resolve such disputed items. If, despite such good faith efforts, the parties are unable to resolve the dispute at such meeting or within ten (10) days thereafter, the items shall be resolved by an independent certified public accountant designated by Holder within fifteen (15) days after such ten (10) day period. The determination of such accountant shall be final. All fees of such accountant shall be paid by Maker. Maker shall remit to Holder any additional amount of Net Operating Income found to be due for such periods within ten (10) days after the resolution of such dispute by the parties or the accountant’s determination, as applicable. The amount of any overpayment found to have been made for such periods may be withheld from any required future remittance of Net Operating Income.

(d)    Maker shall at all times keep and maintain full and accurate books of account and records adequate to reflect correctly all items required in order to calculate Net Operating Income.

5.     Prepayment .

(a)    Subject to Section 5(h) below, Maker shall have no right to prepay all or any part of this Note before the date (the “ Lockout Expiration Date ”) that is thirty-six (36) calendar months from and after the first day immediately following the Stub Interest Period.

(b)    At any time on or after the Lockout Expiration Date, Maker shall have the right to prepay the full principal amount of this Note and all accrued but unpaid interest hereon as of the date of prepayment, provided that (i) Maker gives not less than thirty (30) days’ prior written notice to Holder of Maker’s election to prepay this Note, (ii) Maker pays a prepayment premium to Holder equal to either (A) one percent (1%) of the outstanding principal amount of this Note, or (B) the Present Value of this Note (hereinafter defined), whichever is greater, less the amount of principal being prepaid, calculated as of the prepayment date, and (iii) Maker pays the full principal amount of the NUF Note and all accrued but unpaid interest thereon as of the date of prepayment together with any prepayment premium payable with respect thereto under the NUF Note.

(c)    Holder shall notify Maker of the amount and basis of determination of the prepayment premium. Holder shall not be obligated to accept any prepayment of the principal balance of this Note unless such prepayment is accompanied by the applicable prepayment premium and all accrued interest and other sums due under this Note. Maker may not prepay the Loan on a Friday or on any day preceding a public holiday, or the equivalent for banks generally under the laws of the State in which the Property is located (the “ State ”), or on any day that is not a Business Day (as hereinafter defined).

(d)    Except for making payments of Net Operating Income as required above, and except for the application of insurance proceeds or condemnation awards to the principal balance of this Note, as provided in the Security Instrument (as hereinafter defined), in no event shall Maker be permitted to make any partial prepayments of this Note.

(e)    If Holder accelerates this Note for any reason, then in addition to Maker’s obligation to pay the then outstanding principal balance of this Note and all accrued but unpaid interest thereon, Maker shall pay an additional amount equal to the prepayment premium that would be due to Holder if Maker were voluntarily prepaying this Note at the time that such acceleration occurred, or if under the terms hereof no voluntary prepayment would be permissible on the date of such acceleration, Maker shall pay a prepayment premium calculated as set forth in the Security Instrument together with any prepayment premium payable with respect thereto under the NUF Note.

(f)    For the purposes of the foregoing:

(i)    The “ Present Value of this Note ” with respect to any prepayment of this Note, as of any date, shall be determined by discounting all scheduled payments of principal and interest remaining to maturity of this Note, attributed to the amount being prepaid, at the Discount Rate. If prepayment occurs on a date other than a regularly scheduled payment date, the actual number of days remaining from the prepayment date to the next regularly scheduled payment date will be used to discount within such period;

(ii)    The “ Discount Rate ” is the rate which, when compounded monthly, is equivalent to the Treasury Rate, when compounded semi‑annually;

(iii)    The “ Treasury Rate ” is the semi‑annual yield on the Treasury Constant Maturity Series with maturity equal to the remaining weighted average life of this Note, for the week prior to the prepayment date, as reported in Federal Reserve Statistical Release H.15 ‑ Selected Interest Rates, conclusively determined by Holder on the prepayment date. The rate will be determined by linear interpolation between the yields reported in Release H.15, if necessary. In the event Release H.15 is no longer published, Holder shall select a comparable publication to determine the Treasury Rate.

(g)    Holder shall not be obligated actually to reinvest the amount prepaid in any treasury obligations as a condition precedent to receiving any prepayment premium.

(h)    Notwithstanding the foregoing, (i) at any time during the Extension Term, Maker shall have the right to prepay the full principal amount of this Note and all accrued but unpaid interest thereon as of the date of prepayment, without prepayment premium thereon, (ii) no prepayment premium shall be due in connection with the application by Holder of any insurance proceeds or condemnation awards to the principal balance of this Note, as provided in the Security Instrument, and (iii) Maker shall have the right to prepay the full principal amount of this Note and all accrued but unpaid interest thereon as of the date of prepayment, without prepayment premium thereon at any time during the three calendar month period immediately prior to the Original Maturity Date.

6.     Payments . Whenever any payment to be made under this Note shall be stated to be due on a Saturday, Sunday or public holiday or the equivalent for banks generally under the laws of the State (any other day being a “ Business Day ”), such payment may be made on the next succeeding Business Day.

7.     Default Rate .

(a)    The entire balance of principal, interest, and other sums due upon the maturity hereof, by acceleration or otherwise, shall bear interest from the date due until paid at the greater of (i)  a per annum rate equal to five percent (5%) over the prime rate (for corporate loans at large United States money center commercial banks) published in The Wall Street Journal on the first business day of each month, or (ii) a per annum rate equal to five percent (5%) over the Original Interest Rate or the New Rate, as applicable (the “ Default Rate ”); provided, however, that such rate shall not exceed the maximum permitted by applicable state or federal law. In the event The Wall Street Journal is no longer published or no longer publishes such prime rate, Holder shall select a comparable reference.

(b)    If any payment under this Note is not made when due, interest shall accrue on the entire principal balance on the Loan at the Default Rate from the date such payment was due until payment is actually made.

8.     Late Charges . In addition to interest as set forth herein, Maker shall pay to Holder a late charge equal to four percent (4%) of any amounts due under this Note (the “ Late Charge ”) in the event any such amount is not paid when due; provided, however, that any such Late Charge with respect to the payment due upon the Maturity Date shall only equal four percent (4%) of the two most recent full monthly combined payments of principal and interest theretofore paid by Maker and no notice from Holder shall be required.

9.     Application of Payments . All payments hereunder shall be applied first to the payment of late charges, if any, then to the payment of prepayment premiums, if any, then to the repayment of any sums advanced by Holder for the payment of any insurance premiums, taxes, assessments, or other charges against the property securing this Note, if any, and any other costs and expenses incurred by Holder in accordance with the Loan Documents (together with interest thereon at the Default Rate from the date of advance until repaid), then to the payment of accrued and unpaid interest, and then to the reduction of principal. Notwithstanding the foregoing, for so long as any Event of Default is continuing, Holder shall have the continuing exclusive right to apply any payments received by Holder from or on behalf of Maker as Holder may elect against the then due and owing obligations of Maker under this Note in such order of priority or in such allocation as Holder may deem advisable in its sole and absolute discretion.

10.     Immediately Available Funds . Except as contemplated in the Cash Collateral Agreement, payments under this Note shall be payable in immediately available funds without setoff, counterclaim or deduction of any kind, and shall be made by electronic funds transfer from a bank account established and maintained by Maker for such purpose.

11.     Security . This Note is secured by a first priority Deed of Trust, Security Agreement, Fixture Filing and Assignment of Leases and Rents (Texas) of even date herewith granted by Maker for the benefit of the named Holder hereof (the “ Security Instrument ”) encumbering certain real property and improvements thereon and as more particularly described in such Security Instrument (the “ Property ”).

12.     Certain Definitions . Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Security Instrument.

13.     Event of Default . Each of the following events will constitute an event of default (an “ Event of Default ”) under this Note, each other Loan Document, and each Portfolio Loan Document, and the occurrence of any “Event of Default” (as defined in any other Loan Document or any Portfolio Loan Documents) under any Loan Document or Portfolio Loan Document shall constitute an Event of Default hereunder and under each of the other Loan Documents and each of the Portfolio Loan Documents:

(a)    Any failure to pay when due any sum under this Note, including, without limitation, any and all amounts due on the Maturity Date; or

(b)    Any failure of Maker or Guarantor to properly perform any obligation contained in this Note (other than the obligation to make payments under this Note) and the continuance of such failure for a period of thirty (30) days following written notice thereof from Holder to Maker; provided, however, that if such failure is curable but cannot be cured within such thirty (30) day period, then, so long as Maker commences to cure such failure within such thirty (30) day period and is continually and diligently attempting to cure to completion, such failure shall not be an Event of Default unless such failure remains uncured for one hundred twenty (120) days after such written notice to Maker. For the avoidance of doubt, any “Event of Default” as defined under the Security Instrument, any other Loan Document, or any other Portfolio Loan Document is an Event of Default under this Note, and shall not be subject to the cure period set forth in this Section 13(b) (but rather, the cure period under any such other instrument or document shall govern with respect to any such other “Event of Default”).

14.     Acceleration . Upon the occurrence of any Event of Default, the entire balance of principal, accrued interest, and other sums owing hereunder and under the Other Notes shall, at the option of Holder, become at once due and payable without notice or demand. Upon the occurrence of an Event of Default described in Section 13(c) hereof, Holder shall have the option, in its sole discretion, to either (a) exercise any remedies available to it under the Loan Documents and the Portfolio Loan Documents, at law or in equity, or (b) require Maker to submit a new proposed budget for Holder’s approval. If Holder agrees to accept such new proposed budget, then such budget shall become the Budget for all purposes hereunder.

15.     Conditions Precedent . Maker hereby certifies and declares that all acts, conditions and things required to be done and performed by Maker and to have happened precedent to the creation and issuance of this Note, and to constitute this Note as the legal, valid and binding obligation of Maker, enforceable in accordance with the terms hereof, have been done and performed and happened in due and strict compliance with all applicable laws.

16.     Certain Waivers and Consents . Maker and all parties now or hereafter liable for the payment hereof, primarily or secondarily, directly or indirectly, and whether as endorser, guarantor, surety, or otherwise, hereby severally (a) waive presentment, demand, protest, notice of protest and/or dishonor, and all other demands or notices of any sort whatever with respect to this Note, (b) consent to impairment or release of collateral, extensions of time for payment, and acceptance of partial payments before, at, or after maturity, (c) waive any right to require Holder to proceed against any security for this Note before proceeding hereunder, (d) waive diligence in the collection of this Note or in filing suit on this Note, and (e) agree to pay all costs and expenses, including reasonable attorneys’ fees, which may be incurred in the collection of this Note or any part thereof or in preserving, securing possession of, and realizing upon any security for this Note.

17.     Usury Savings Clause . The provisions of this Note and of all agreements between Maker and Holder are, whether now existing or hereinafter made, hereby expressly limited so that in no contingency or event whatever, whether by reason of acceleration of the maturity hereof, prepayment, demand for payment or otherwise, shall the amount paid, or agreed to be paid, to Holder for the use, forbearance, or detention of the principal hereof or interest hereon, which remains unpaid from time to time, exceed the maximum amount permissible under applicable law, it

particularly being the intention of the parties hereto to conform strictly to the laws of the State and Federal law, whichever is applicable. If from any circumstance whatever, the performance or fulfillment of any provision hereof or of any other agreement between Maker and Holder shall, at the time performance or fulfillment of such provision is due, involve or purport to require any payment in excess of the limits prescribed by law, then the obligation to be performed or fulfilled is hereby reduced to the limit of such validity, and if from any circumstance whatever Holder should ever receive as interest an amount which would exceed the highest lawful rate, the amount which would be excessive interest shall be applied to the reduction of the principal balance owing hereunder (or, at Holder’s option, be paid over to Maker) and shall not be counted as interest. To the extent permitted by applicable law, determination of the legal maximum amount of interest shall at all times be made by amortizing, prorating, allocating and spreading in equal parts during the period of the full stated term of this Note, all interest at any time contracted for, charged, or received from Maker in connection with this Note and all other agreements between Maker and Holder, so that the actual rate of interest on account of the indebtedness represented by this Note is uniform throughout the term hereof.

18.     Non‑Recourse; Exceptions to Non‑Recourse . Nothing contained in this Note or any of the other Loan Documents shall be deemed to impair or limit Holder’s rights: in foreclosure proceedings or in any ancillary proceedings brought to facilitate Holder’s foreclosure on the Property or any portion thereof or to exercise any specific rights or remedies afforded Holder under any other provisions of the Loan Documents or the Portfolio Loan Documents, or by law or in equity, subject to the non‑recourse provisions set forth below; to recover under any guarantee given in connection with the Loan; or to pursue any personal liability of Maker or any Guarantor under the Environmental Indemnity Agreement or Section 5.10 of the Security Instrument. Except as expressly set forth in this Section 18, the recourse of Holder with respect to the Secured Obligations shall be solely to the Property, Chattels and Intangible Personalty (as defined in the Security Instrument) and any other collateral given as security for the Loan:

(a)    Notwithstanding anything to the contrary contained in this Note or in any Loan Document, nothing shall be deemed in any way to impair, limit or prejudice the rights of Holder to collect or recover from Maker and Guarantor: (i) damages or costs (including without limitation reasonable attorneys’ fees) incurred by Holder as a result of actual physical waste by Maker; (ii) any condemnation or insurance proceeds attributable to the Property which were not paid to Holder or used to restore the Property in accordance with the terms of the Security Instrument; (iii) any rents, profits, advances, rebates, prepaid rents, lease termination payments or other similar sums attributable to the Property collected by or for Maker (A) following an Event of Default (as defined in the Security Instrument) and not properly applied to the reasonable fixed and operating expenses of the Property, including payments of this Note, the Other Note, and other sums due under the Loan Documents, or (B) to the extent not deposited in the Deposit Account as and when required pursuant to the Loan Documents; (iv) any security deposits collected by or for Maker and not applied in accordance with applicable leases; (v) the amount of any accrued taxes, assessments, and/or utility charges affecting the Property (whether or not the same have been billed to Maker) that are either unpaid by Maker or advanced by Holder under the Security Instrument, except to the extent that (x) the combined gross revenues of the Property taken together with the gross revenues of the Other Properties were not sufficient to pay such taxes and expenses, and (y) of any of the foregoing accruing after the Termination Date (hereinafter defined); (vi) any sums expended by Holder in fulfilling the obligations of Maker, as lessor, under any leases affecting the Property, except to the extent that the combined gross revenues of the Property taken together with the gross revenues of the Other Properties were not sufficient to pay such expenses, and except to the extent of any of the foregoing accruing after the Termination Date; (vii) the amount of any loss suffered by Holder (that would otherwise be covered by insurance) as a result of Maker’s failure to maintain the insurance required under the terms of any Loan Document, except to the extent that the combined gross revenues of the Property taken together with the gross revenues of the Other Properties were not sufficient to pay such expenses, and except to the extent of any of the foregoing accruing after the Termination Date; (viii) the amount of losses suffered by Holder by reason of any execution, modification, assignment by the applicable tenant or other party thereto (if Maker has the right to consent to such assignment under the applicable lease), or any supplement, amendment and restatement or termination of any lease to any Required Tenant, or any tenant that leases, together with its affiliates, an aggregate of 10,000 or more rentable square feet at the Property (in each case, each such Required Tenant and each such other tenant is referred to herein as a " Major Tenant ") without the prior written consent of Holder, which consent will not be unreasonably withheld, conditioned or delayed; and (ix) damages or costs (including without limitation reasonable attorneys’ fees) incurred by Holder as a result of any breach or violation of Section 5.5 (but only if such breach or violation of said Section 5.5 arises by reason of a lien, security interest or encumbrance against Intangible Property) or Section 5.7 of the Security Instrument.

(b)    The agreement set forth in the introductory paragraph of this Section 18 to limit the personal liability of Maker shall become null and void and be of no further force and effect, and Maker and each Guarantor shall be personally liable for the obligations evidenced by this Note, in the event (i) of any breach or violation of Section 5.4 of the Security Instrument (except to the extent a sale or encumbrance results from the nonpayment of real estate taxes when the combined gross revenues generated by the Property taken together with the gross revenues of the Other Properties were not sufficient to pay such taxes); (ii) of any fraud or intentional misrepresentation by Maker in connection with the Property, the Loan Documents or the application made by Maker for the Loan; (iii) that Maker forfeits the Property or Chattels or any portion of the Property or Chattels due to criminal activity; (iv) of any attempt by Maker or GC Member, any Guarantor, or any other person directly or indirectly responsible for the management of Maker or GC Member, or liable for repayment of Maker’s obligations under the Loan (whether as maker, endorser, guarantor, surety, general partner or otherwise) to materially delay any foreclosure against the Property, Chattels and/or Intangible Personalty or any other exercise by Holder of its remedies under the Loan Documents, which attempts shall include, without limitation, (A) any claim that any Loan Document is invalid or unenforceable to an extent that would preclude any such foreclosure or other exercise of remedies, (B) Maker or GC Member filing a petition in bankruptcy, either Maker or GC Member failing to oppose in good faith the entry of an order for relief pursuant to any involuntary bankruptcy petition filed against it (other than a petition filed by Holder) or Maker or GC Member seeking any reorganization, liquidation, dissolution or similar relief under the bankruptcy laws of the United States or under any other similar federal, state or other statute relating to relief from indebtedness, or consenting to or colluding in the filing of any involuntary bankruptcy petition against Maker or GC Member, or (C) the appointment (other than by Holder) of a receiver, trustee or liquidator with respect to Maker or GC Member or the Property or any part thereof; or (v) of any termination by Maker, or acceptance by Maker of a surrender by the applicable tenant, of any lease to any Major Tenant without the prior written consent of Holder, which consent will not be unreasonably withheld, conditioned or delayed.

For the purposes of the foregoing, the " Termination Date " shall mean the earlier of (i) the date that Maker and the Other Borrowers tender to Holder or Holder's designee deeds-in-lieu of foreclosure for the Property and the Other Property, subject to no title exceptions other than real estate taxes and assessments, the Permitted Exceptions (as defined in the Security Instrument and the Other First Security Instruments) and such additional exceptions approved by Holder pursuant to the Loan Documents and the Portfolio Loan Documents or which are otherwise acceptable to Holder in its reasonable discretion, together with such ancillary conveyances, releases of Holder parties and other documentation that are customarily delivered in connection with a deed-in-lieu transaction, all in form reasonably satisfactory to Holder, and (ii) [intentionally deleted] (iii) the date Holder, its affiliate, or any other party takes title to the Property and the Other Property in connection with or pursuant to foreclosures (whether by power of sale or non-judicial foreclosure, or by judicial foreclosure) of the Security Instrument or the Other First Security Instruments. If Maker elects to deliver such deeds-in-lieu of foreclosure, Holder shall retain the right to determine whether to accept each such deed-in-lieu of foreclosure or to proceed with non-judicial or judicial foreclosure proceedings with respect to one or more of the Property, the Other Property and, upon Holder making such election, Maker shall execute and deliver to Holder an appropriate deed-in-lieu or deeds-in-lieu, as Holder shall have elected; provided however, that if Holder chooses to proceed with judicial or non-judicial (including, without limitation, by power of sale) foreclosure proceedings, the Termination Date shall nonetheless be the earlier of the date specified in (i) and (iii) above, provided further that if Maker thereafter fails to cooperate with Holder's reasonable requests and requirements in respect of Holder's exercise of any and all remedies available at law or in equity to Holder (including without limitation judicial, power of sale, or non-judicial foreclosure), then the Termination Date shall be the date specified in (iii). With respect to clause (i) above, if the Maker tenders deeds-in-lieu, ancillary conveyances, releases of Holder parties and other documentation pursuant to clause (i), Holder shall respond to Maker in writing within fifteen (15) Business Days after its receipt of the same indicating whether Holder either (A) agrees that such submission and documents satisfy the terms and conditions of such clause (i), or (B) does not agree that such submission and documents satisfy the terms and conditions of such clause (i) (in which event, Holder shall also indicate such changes to such submission and documents required to make the same satisfy the terms and conditions of such clause (i)). Holder's failure to respond within such period shall be deemed its agreement that such submission and documents satisfy the terms and conditions of such clause (i), and Maker's submission of such documents shall in any event include a statement to Holder in a cover letter submitted to Holder in bold enlarged type, that Holder's approval will be deemed given if it fails to respond within fifteen (15) Business Days after its receipt of such documents.

19.     Severability . If any provision hereof or of any other document securing or related to the indebtedness evidenced hereby is, for any reason and to any extent, invalid or unenforceable, then neither the remainder of the document in which such provision is contained, nor the application of the provision to other persons, entities, or circumstances, nor any other document referred to herein, shall be affected thereby, but instead shall be enforceable to the maximum extent permitted by law.

20.     Transfer of Note . Holder may transfer or participate out this Note or any portion thereof at any time in its sole discretion. Each provision of this Note shall be and remain in full force and effect notwithstanding any negotiation or transfer hereof and any interest herein to any other Holder or participant.

21.     Governing Law . THIS NOTE AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, MAKER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS NOTE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

22.     Time of Essence . Time is of the essence with respect to all of Maker’s obligations under this Note.

23.     Remedies Cumulative . The remedies provided to Holder in this Note, the Security Instrument and the Other Loan Documents are cumulative and concurrent and may be exercised singly, successively or together against Maker, the Property, and other security, or any guarantor of this Note, at the sole and absolute discretion of the Holder.

24.     No Waiver . Holder shall not by any act or omission be deemed to waive any of its rights or remedies hereunder unless such waiver is in writing and signed by the Holder and then only to the extent specifically set forth therein. A waiver of one event shall not be construed as continuing or as a bar to or waiver of any right or remedy granted to Holder hereunder in connection with a subsequent event.

25.     Joint and Several Obligation . If Maker is more than one person or entity, then (a) all persons or entities comprising Maker are jointly and severally liable for all of the Maker’s obligations hereunder; (b) all representations, warranties, and covenants made by Maker shall be deemed representations, warranties, and covenants of each of the persons or entities comprising Maker; (c) any breach, Default or Event of Default by any of the persons or entities comprising Maker hereunder shall be deemed to be a breach, Default, or Event of Default of Maker; and (d) any reference herein contained to the knowledge or awareness of Maker shall mean the knowledge or awareness of any of the persons or entities comprising Maker.

26.     WAIVER OF JURY TRIAL . MAKER HEREBY AGREES TO WAIVE TO THE FULLEST EXTENT NOT PROHIBITED BY LAW, ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF: (A) THE LOAN OR THE PROPERTY, (B) THIS NOTE, THE SECURITY INSTRUMENT, OR ANY OTHER LOAN DOCUMENT OR INSTRUMENT BETWEEN MAKER AND HOLDER RELATING TO THIS NOTE, THE PROPERTY OR THE LOAN, OR (C) ANY DEALINGS BETWEEN MAKER AND HOLDER RELATING TO THE SUBJECT MATTER OF THIS NOTE OR THE LOAN. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE CONTRACT CLAIMS, TORT CLAIMS, ANTITRUST CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. MAKER HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH LEGAL COUNSEL OF ITS OWN CHOOSING, OR HAS HAD AN OPPORTUNITY TO DO SO, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS HAVING HAD THE OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO THIS NOTE OR ANY OTHER LOAN

DOCUMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS WRITTEN CONSENT TO A TRIAL BY THE COURT WITHOUT A JURY TRIAL.

27.     WAIVER OF PREPAYMENT RIGHT WITHOUT PREMIUM . EXCEPT AS OTHERWISE PROVIDED IN THE LOAN DOCUMENTS, MAKER HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE UNDER APPLICABLE LAW TO PREPAY THIS NOTE, IN WHOLE OR IN PART, WITHOUT CHARGE, FEE OR PENALTY, UPON ACCELERATION OF THE MATURITY DATE OF THIS NOTE, AND AGREES THAT, IF FOR ANY REASON A PREPAYMENT OF ALL OR ANY PART OF THIS NOTE IS MADE, WHETHER VOLUNTARILY OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF THIS NOTE BY HOLDER ON ACCOUNT OF THE OCCURRENCE OF ANY EVENT OF DEFAULT ARISING FOR ANY REASON, INCLUDING, WITHOUT LIMITATION, AS A RESULT OF ANY PROHIBITED OR RESTRICTED TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION OF THE PROPERTY OR ANY PART THEREOF SECURING THIS NOTE, OR ANY PROHIBITED DIRECT OR INDIRECT INTEREST IN MAKER, THEN MAKER SHALL BE OBLIGATED TO PAY, CONCURRENTLY WITH SUCH PREPAYMENT, THE PREPAYMENT PREMIUM, IF ANY, PROVIDED FOR IN THIS NOTE (OR, IN THE EVENT OF PREPAYMENT FOLLOWING ACCELERATION OF THE MATURITY DATE HEREOF WHEN THIS NOTE IS CLOSED TO PREPAYMENT, AS PROVIDED IN THE SECURITY INSTRUMENT) AND ANY AND ALL OTHER CHARGES AND FEES DUE UNDER THE LOAN DOCUMENTS. MAKER HEREBY DECLARES THAT HOLDER’S AGREEMENT TO MAKE THE LOAN EVIDENCED BY THIS NOTE AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THIS NOTE CONSTITUTES ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY MAKER, FOR THIS WAIVER AND AGREEMENT.

28.     Attorney’s Fees and Charges . If Holder refers this Note or any of the other Loan Documents to any attorney for collection or seeks legal advice following the occurrence of an Event of Default that has not been waived by Holder expressly in writing, or if Holder is the prevailing party in any action instituted on this Note or any other Loan Document, or if any other judicial or non-judicial proceeding is instituted by Holder or any other person or entity (provided that with respect to any judicial or non-judicial proceeding instituted by any other person or entity, either (A) such person or entity shall consist of Maker or any Affiliate thereof, or (B) such proceeding shall include Maker or any Affiliate thereof as a party thereto, and the facts alleged, on the basis of which any cause of action or claim shall be asserted in such proceeding, involve the action(s) or omission(s) on the part of Maker or any Affiliate thereof under this Note or any other Loan Document), and an attorney is employed by Holder to appear in any such action or proceeding, or in any action that materially affects Holder’s interest in this Note or any Property, or to seek appointment of a receiver, to reclaim, seek relief from a judicial or statutory stay, sequester, protect, preserve or enforce Holder’s interest in the Security Instrument or any other security for this Note (including, but not limited to, proceedings under federal bankruptcy law, in eminent domain, under the probate code, on appeal (provided that for Holder to recover appeal costs from Maker hereunder, Holder shall have to be judicially determined to be a prevailing party in such appeal), in arbitration, or in connection with any municipal, state or federal tax lien), then Maker and every endorser hereof and every person who assumes the obligations evidenced by this Note or any of the other Loan Documents jointly and severally promise(s) to pay third party attorneys’ fees for services performed by Holder’s attorneys, and all costs and expenses (including, without limitation, expert witness reasonable fees, costs of exhibit preparation, document reproduction, postage, telecommunication expenses and courier charges), incurred incident to such employment (provided, however, that in any action commenced by Holder against Maker, such obligation to pay third party attorneys’ fees shall only apply if Holder is the prevailing party in such action). If such fees are not paid within five (5) Business Days after demand therefor by Holder, all such costs and expenses shall bear interest at the Default Rate and the repayment thereof shall also be secured by every instrument securing the indebtedness evidenced hereby.

29.     Successors and Assigns . The covenants, terms and conditions contained in this Note apply to and bind the heirs, successors, executors, administrators and assigns of Maker.

30.     Notices . Notices and other communications to be delivered pursuant to the provisions of this Note shall be delivered in accordance with the provisions for delivery of notices set forth in the Security Instrument. Notices and other written communications hereunder shall be sent, in the case of Maker, to the address(es) for delivery of notice to Trustor under the Security Instrument, and, in the case of Holder, to the address(es) for delivery of notice to Beneficiary under the Security Instrument.

31.     Notice of No Oral Agreements . IN ACCORDANCE WITH APPLICABLE LAW, THIS NOTE, THE SECURITY INSTRUMENT AND ALL OF THE OTHER LOAN DOCUMENTS EVIDENCING, SECURING OR PERTAINING TO ALL OR ANY PORTION OF THE INDEBTEDNESS AND THE OBLIGATIONS REPRESENT THE FINAL AGREEMENT BETWEEN MAKER AND HOLDER AS TO THE SUBJECT MATTER THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH PARTIES.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGE TO PROMISSORY NOTE (TEXAS-VALIC)]

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

MAKER :

THE GC NET LEASE (HOUSTON ENCLAVE) INVESTORS, LLC,

a Delaware limited liability company

By: The GC Net Lease (Houston Enclave) Member, LLC,

a Delaware limited liability company,

its Sole Member

By: Griffin Capital Essential Asset Operating Partnership, L.P.,

a Delaware limited partnership,

its Sole Member

By: Griffin Capital Essential Asset REIT, Inc.,

a Maryland corporation,

its General Partner

By: /s/ Joseph E. Miller            

Joseph E. Miller, Chief Financial Officer

Recording requested by:

And when recorded mail to:

Greenberg Traurig, LLP
1200 17th Street, 24th Floor
Denver, Colorado 80202
Attention: Peter C. Kelley, Esq.

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

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DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING, AND ASSIGNMENT OF LEASES AND RENTS

(TEXAS)

THIS DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING, AND ASSIGNMENT OF LEASES AND RENTS (TEXAS) (this “ Security Instrument ”) is given as of January 24, 2014, by THE GC NET LEASE (HOUSTON ENCLAVE) INVESTORS, LLC , a Delaware limited liability company (“ Grantor ”), to CHICAGO TITLE INSURANCE COMPANY (“ Trustee ”), for the use and benefit of THE VARIABLE ANNUITY LIFE INSURANCE COMPANY , a Texas corporation (“ VALIC ”), and NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA. , a Pennsylvania corporation (“ NUF ”), as co-lenders (collectively, “ Beneficiary ”).

ARTICLE 1

PARTIES, PROPERTY, AND DEFINITIONS

The following terms and references shall have the meanings indicated:

1.1      Additional Interest : As defined in Section 9.13.

1.2      Applicable Usury Laws : As defined in Section 9.13.

1.3      Arizona Notes : Collectively, that certain Promissory Note made by GC Phoenix Chandler, payable to the order of VALIC in the original principal amount referenced therein, and that certain Promissory Note made by GC Phoenix Chandler, payable to the order of NUF in the original principal amount referenced therein, each of even date herewith.

1.4      Beneficiary : The Beneficiary named in the introductory paragraph of this Security Instrument, whose legal address is c/o AIG Investments, 777 South Figueroa Street, 16 ^th Floor, Los Angeles, California 90017, together with any future holder of the Note.

1.5      Business Day : Any day that is not a Saturday, Sunday or any other day on which national banks in New York, New York are not open for business.

1.6      Cash Collateral Agreement : That certain Cash Collateral Agreement of even date herewith among Grantor and Beneficiary, and acknowledged and agreed to by the “Servicer” referenced therein, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

1.7      Certificate Concerning Governing Documents : That certain Certificate Concerning Governing Documents of even date herewith made by Grantor and Guarantor to Beneficiary.

1.8      Change in Control : means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of shares representing more than fifty percent (50%) of the aggregate ordinary voting power represented by the issued and outstanding capital stock of Guarantor; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of Guarantor by Persons who were neither (i) nominated by the board of directors of Guarantor nor (ii) appointed by directors so nominated; (c) the acquisition of direct or indirect Control of Guarantor by any Person or group; or (d) the replacement, removal or resignation of Griffin Capital Corporation or an Affiliate thereof as asset manager and advisor to the Operating Partnership and Guarantor except as hereinafter permitted, provided however , that the exercise by a Starwood Entity of its rights under the Starwood Documents to (i) elect a majority of the board of directors (as more particularly set forth in Section 3.2 of the Investor Rights Agreement referenced in clause (b) of the definition of the Starwood Documents) of the Guarantor or (ii) cause the issuance of the Series A Preferred Shares (as defined in the Starwood Documents) shall not be deemed to constitute a Change in

Control hereunder; and provided, further, however , that if the board of directors of the Guarantor decides (in accordance with their fiduciary responsibility under applicable law) to cause the Guarantor to terminate the Advisory Agreement with Griffin Capital Essential Asset Advisor, LLC (“ Advisor ”), Grantor shall provide written notice to Beneficiary of such termination and shall obtain the prior written consent of Beneficiary prior to the board selecting a successor advisor for the Guarantor, which successor advisor shall be reasonably acceptable to Beneficiary. Grantor shall submit or shall cause the Guarantor to submit a request for approval of the successor advisor within sixty (60) days of the termination of Advisor or any previously approved successor advisor to Advisor.

1.9      Chattels : All goods, fixtures, inventory, equipment, building and other materials, supplies, and other tangible personal property of every nature, whether now owned or hereafter acquired by Grantor, used, intended for use, or reasonably required in the construction, development, or operation of the Property, together with all accessions thereto, replacements and substitutions therefor, and proceeds thereof.

1.10      Controlling Persons : Collectively, (a) if Grantor is a partnership or joint venture, all general partners or joint venturers of Grantor, (b) Guarantor, (c) GC Member, (d) any other party directly or indirectly liable for payment of the Secured Obligations, whether as maker, endorser, guarantor, surety, general partner, or otherwise, and (e) any successor to any of the foregoing.

1.11      Default : Any matter which, with the giving of notice, passage of time, or both, would constitute an Event of Default.

1.12      Environmental Indemnity Agreement : That certain Environmental Indemnity Agreement of even date herewith made by Grantor and Guarantor for the benefit of Beneficiary, and the other indemnitees named therein, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

1.13      ERISA : The Employee Retirement Income Security Act of 1974, as amended, together with all rules and regulations issued thereunder.

1.14      Event of Default : As defined in Article 6.

1.15      GC Member : Shall mean The GC Net Lease (Houston Enclave) Member, LLC, a Delaware limited liability company.

1.16      Grantor : The Grantor named in the introductory paragraph of this Security Instrument (Secretary of State File No. 5316621), whose legal address is 2121 Rosecrans Avenue, Suite 3321, El Segundo, California 90245.

1.17      Guarantor : Griffin Capital Essential Asset REIT, Inc., a Maryland corporation.

1.18      Guaranty Agreement : That certain Recourse Carve Out Guaranty Agreement of even date herewith made by Guarantor for the benefit of Beneficiary, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

1.19      Highest Lawful Rate : As defined in Section 9.13.

1.20      Insurance Agreement : That certain Agreement Concerning Insurance Requirements of even date herewith executed by Grantor for the benefit of Beneficiary, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

1.21      Intangible Personalty : All of Grantor’s right, title and interest in and to the following: the right to use all trademarks and trade names and symbols or logos used in connection therewith, or any modifications or variations thereof, in connection with the operation of the improvements existing or to be constructed on the Property, together with all accounts, deposit accounts, letter of credit rights, investment property, monies in the possession of Beneficiary (including, without limitation, proceeds from insurance, retainages and deposits for taxes and insurance), Permits, contract rights (including, without limitation, rights to receive insurance proceeds) and general intangibles (whether now owned or hereafter acquired, and including proceeds thereof) relating to or arising from Grantor’s ownership, use, operation, leasing, or sale of all or any part of the Property, specifically including but in no way limited to any right which Grantor may have or acquire to transfer any development rights from the Property to other real property, and any development rights which may be so transferred.

1.22      Lease Certificate : That certain Certificate Concerning Leases and Financial Condition of even date herewith made by Grantor to Beneficiary concerning Leases and financial condition of the Property.

1.23      Leases : Any and all leases, subleases and other agreements under the terms of which any person other than Grantor has or acquires any right to occupy or use the Property, or any part thereof, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

1.24      Letter of Credit Agreement : Any Agreement Concerning Letter of Credit entered into pursuant to the Vacancy Risk Agreement, in the form attached as an exhibit to the Vacancy Risk Agreement.

1.25      Limited Recourse Secured Guaranty Agreement : That certain Limited Recourse Secured Guaranty Agreement of even date herewith, given by GC Member and the Other Holding Companies in favor of Beneficiary.

1.26      Loan : The loan from Beneficiary to Grantor evidenced by the Note.

1.27      Loan Documents : The Note, all of the deeds of trust, mortgages and other instruments and documents securing or executed and delivered in connection with the Note, including this Security Instrument, the Insurance Agreement, the Environmental Indemnity Agreement, the Guaranty Agreement, the Cash Collateral Agreement, the TI/LC Reserve Agreement, the Letter of Credit Agreement, the Partial Release Agreement, the Vacancy Risk Agreement, the Certificate Concerning Governing Documents, the Lease Certificate, the Subordination of Management Agreement, Subordination of Sub-Management Agreement, the Pledge and Security Agreement, the Limited Recourse Secured Guaranty Agreement, the Other Second Security Instruments, the Other Limited Recourse Secured Guaranty Agreements, the Receipt and Agreement, and each of the other documents executed or delivered in connection with the transaction pursuant to which the Note has been executed and delivered. The term “Loan Documents” also includes all amendments, modifications, amendments and restatements, supplements, extensions, renewals, and replacements of each document referred to above.

1.28      Maximum Amount : As defined in Section 9.13.

1.29      New Jersey Notes : Collectively, that certain Promissory Note made by GC Warren, payable to the order of VALIC in the original principal amount referenced therein, and that certain Promissory Note made by GC Warren, payable to the order of NUF in the original principal amount referenced therein, each of even date herewith.

1.30      North Carolina Notes : Collectively, that certain Promissory Note made by GC Charlotte, payable to the order of VALIC in the original principal amount referenced therein, and that certain Promissory Note made by GC Charlotte, payable to the order of NUF in the original principal amount referenced therein, each of even date herewith.

1.31      Note : Collectively, (i) Grantor’s promissory note of even date herewith, payable to the order of VALIC in the principal face amount of $20,140,200 (the “ VALIC Note ”), and (ii) Grantor’s promissory note of even date herewith, payable to the order of NUF in the principal face amount of $9,919,800 (the “ NUF Note ”) (and in the aggregate collective amount of $30,060,000), together with all renewals, extensions and modifications of such promissory notes, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time. The NUF Note and the VALIC Note are also sometimes referred collectively herein as the “ Notes .” All terms and provisions of the Notes are incorporated by this reference in this Security Instrument.

1.32      Ohio Notes : Collectively, that certain Promissory Note made by GC Beaver Creek, payable to the order of VALIC in the original principal amount referenced therein, and that certain Promissory Note made by GC Beaver Creek, payable to the order of NUF in the original principal amount referenced therein, each of even date herewith.

1.33      Operating Partnership : means Griffin Capital Essential Asset Operating Partnership, L.P., a Delaware limited partnership.

1.34      Other Borrowers : Collectively, The GC Net Lease (Warren) Investors, LLC, a Delaware limited liability company (“ GC Warren ”), The GC Net Lease (Beaver Creek) Investors, LLC, a Delaware limited liability company (“ GC Beaver Creek ”), The GC Net Lease (Phoenix Chandler) Investors, LLC, a Delaware limited liability company (“ GC Phoenix Chandler ”), and The GC Net Lease (Charlotte) Investors, LLC, a Delaware limited liability company (“ GC Charlotte ”).

1.35      Other First Security Instruments : Collectively, (i) a First Mortgage, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (New Jersey) executed by GC Warren for the benefit of Beneficiary to secure the Loan; (ii) a First Mortgage, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (Ohio) executed by GC Beaver Creek for the benefit of Beneficiary to secure the Loan (iii) a First Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (Arizona) executed by GC Phoenix Chandler for the benefit of Beneficiary to secure the Loan; and (iv) a First Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (North Carolina) executed by GC Charlotte for the benefit of Beneficiary to secure the Loan.

1.36      Other Holding Companies : Collectively, The GC Net Lease (Warren) Member, LLC, a Delaware limited liability company, The GC Net Lease (Beaver Creek) Member, LLC, a Delaware limited liability company, The GC Net Lease (Phoenix Chandler) Member, LLC, a Delaware limited liability company, and The GC Net Lease (Charlotte) Member, LLC, a Delaware limited liability company.

1.37      Other Loan Documents : Collectively, (i) the Other Notes, (ii) the Other First Security Instruments; and any and all other “Loan Documents” as such term is defined in the Other First Security Instruments.

1.38      Other Loan Guaranty Documents : Collectively, (i) Non-Recourse Secured Guaranty Agreement (Texas Property Owner as Guarantor), of even date herewith, given by Grantor, as guarantor, in favor of Beneficiary, as lender under the Other Loans,

and (ii) that certain Second Deed of Trust, Security Agreement, Fixture Filing and Assignment of Leases and Rents Securing Guaranty of even date herewith, given by Grantor in favor of Beneficiary as security for such Limited Recourse Secured Guaranty Agreement.

1.39      Other Loans : Collectively (i) the $26,160,000 loan to GC Warren New Jersey Notes, (ii) the $10,800,000 loan to GC Beaver Creek evidenced by the Ohio Notes, (iii) the $19,860,000 loan to GC Phoenix Chandler evidenced by the Arizona Notes, and (iv) the $23,760,000 loan to GC Charlotte evidenced by the North Carolina Notes.

1.40      Other Limited Recourse Secured Guaranty Agreements : Those certain Limited Recourse Secured Guaranty Agreements, of even date herewith, given by each of the Other Borrowers in favor of Beneficiary as “Lender” under the Other Loans.

1.41      Other Notes : Collectively, the New Jersey Notes, the Ohio Notes, the Arizona Notes and the North Carolina Notes.

1.42      Other Property : Shall mean the “Property” as defined in the Other First Security Instruments from time to time.

1.43      Other Second Security Instruments : Collectively, (i) a Second Mortgage, Security Agreement, Fixture Filing, and Assignment of Leases and Rents Securing Guaranty (New Jersey) executed by GC Warren for the benefit of Beneficiary to secure the Loan; (ii) a Second Mortgage, Security Agreement, Fixture Filing, and Assignment of Leases and Rents Securing Guaranty (Ohio) executed by GC beaver Creek for the benefit of Beneficiary to secure the Loan (iii) a Second Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents Securing Guaranty (Arizona) executed by GC Phoenix Chandler for the benefit of Beneficiary to secure the Loan; and (iv) a Second Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents Securing Guaranty (North Carolina) executed by GC Charlotte for the benefit of Beneficiary to secure the Loan.

1.44      Partial Release Agreement : That certain Partial Release Agreement, of even date herewith, made by Grantor, the Other Borrowers and Beneficiary.

1.45      Permits : All permits, licenses, certificates and authorizations necessary for the development, ownership, use, occupancy, operation and maintenance of the Property.

1.46      Permitted Exceptions : The matters (excluding matters of survey) set forth in Schedule B-I of the title insurance policy insuring the lien created by this Security Instrument, in form and substance satisfactory to, and accepted by, Beneficiary, that Grantor has caused to be delivered to Beneficiary in connection with the Loan.

1.47      Person : means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental authority or other entity.

1.48      Pledge and Security Agreement : Shall mean that certain Pledge and Security Agreement – Limited Liability Company Interests of even date herewith, given by GC Member and the Other Holding Companies, in favor of Beneficiary.

1.49      Property : The tract or tracts of land and easement parcels described in Exhibit A attached hereto, together with Grantor’s entire right, title and interest in and to the following:

(a)    All buildings, structures, and improvements now or hereafter located on such tract or tracts, as well as all rights-of-way, easements, and other appurtenances thereto;

(b)    All of Grantor’s right, title and interest in and to any land lying between the boundaries of such tract or tracts and the center line of any adjacent street, road, avenue, or alley, whether opened or proposed;

(c)    All of the rents, income, receipts, revenues, issues and profits of and from such tract or tracts and improvements;

(d)    All (i) water and water rights (whether decreed or undecreed, tributary, nontributary or not nontributary, surface or underground, or appropriated or unappropriated); (ii) ditches and ditch rights; (iii) spring and spring rights; (iv) reservoir and reservoir rights; and (v) shares of stock in water, ditch and canal companies and all other evidence of such rights, which are now owned or hereafter acquired by Grantor and which are appurtenant to or which have been used in connection with such tract or tracts or improvements;

(e)    All of Grantor’s right, title and interest in and to all minerals, crops, timber, trees, shrubs, flowers, and landscaping features now or hereafter located on, under or above such tract or tracts;

(f)    All machinery, apparatus, equipment, fittings, chattels, fixtures (whether actually or constructively attached, and including all trade, domestic, and ornamental fixtures) now or hereafter located in, upon, or under such tract or tracts or improvements and used or usable in connection with any present or future operation thereof, including but not limited to all heating, air-conditioning, freezing, lighting, laundry, incinerating and power equipment; engines; pipes; pumps; tanks; motors; conduits; switchboards; plumbing, lifting, cleaning, fire prevention, fire extinguishing, refrigerating,

ventilating, cooking, and communications apparatus; boilers, water heaters, ranges, furnaces, and burners; appliances; vacuum cleaning systems; elevators; escalators; shades; awnings; screens; storm doors and windows; stoves; refrigerators; attached cabinets; partitions; ducts and compressors; rugs and carpets; draperies; and all additions thereto and replacements therefor;

(g)    All development rights associated with such tract or tracts, whether previously or subsequently transferred to such tract or tracts from other real property or now or hereafter susceptible of transfer from such tract or tracts to other real property; and all rights as a “declarant”, “architectural committee” or similar party under any declaration, covenants conditions and restrictions, or similar instrument or agreement;

(h)    All awards and payments, including interest thereon, resulting from the exercise of any right of eminent domain or any other public or private taking of, injury to, or decrease in the value of, any of such property; and

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

1.50      Questioned Bidder : As defined in Section 7.7(e)(ii).

1.51      Receipt and Agreement : That certain Receipt and Agreement entered into by Grantor, Trustee and Beneficiary, dated as of the date hereof.

1.52      Schlumberger Lease : That certain Lease dated December 12, 2011, made by and between Schlumberger Technology Corporation, as tenant, and 1200 Enclave Parkway, LLC, as original landlord and predecessor in interest to Grantor, as current landlord, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

1.53      Schlumberger Tenant : Shall mean the tenant under the Schlumberger Lease.

1.54      Secured Obligations : All present and future obligations of Grantor to Beneficiary evidenced by or contained in the Note, this Security Instrument and all other Loan Documents, whether stated in the form of promises, covenants, representations, warranties, conditions, or prohibitions or in any other form. If the maturity of the Note secured by this Security Instrument is accelerated, the Secured Obligations shall include an amount equal to any prepayment premium which would be payable under the terms of the Note as if the Note were prepaid in full on the date of the acceleration. If under the terms of the Note no voluntary prepayment would be permissible on the date of such acceleration, then the prepayment fee or premium to be included in the Secured Obligations shall be equal to one hundred fifty percent (150%) of the highest prepayment fee or premium set forth in the Note, calculated as of the date of such acceleration, as if prepayment were permitted on such date. Notwithstanding anything contained herein or in the other Loan Documents to the contrary, Grantor’s obligations under the Environmental Indemnity Agreement shall not be secured by this Security Instrument and shall not constitute Secured Obligations hereunder.

1.55      Starwood Documents : means, collectively (each dated, as applicable, November 5, 2013): (a) the Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, as amended by Amendment No. 1 the Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, (b) the Investor Rights Agreement entered into between the Operating Partnership, Guarantor, Griffin Capital Essential Asset Advisor LLC, and SPT Griffin Holdings, LLC, (c) the Series A Cumulative Redeemable Exchangeable Preferred Unit Purchase Agreement entered into between the Operating Partnership, Guarantor, SPT Griffin Holdings, LLC, and Starwood Property Trust, Inc., (d) Guarantor’s Articles Supplementary Establishing and Fixing the Rights and Preferences of a Series of Preferred Stock, (e) Subordination of Second Amended and Restated Advisory Agreement entered into between Guarantor, SPT Griffin Holdings, LLC, and Griffin Capital Essential Asset Advisor, LLC, (f) Subordination of Management Agreements entered into between the Operating Partnership, various affiliates of the Operating Partnership, SPT Griffin Holdings, LLC, and Griffin Capital Essential Asset Property Management, LLC and (g) the Escrow Agreement entered into between the Operating Partnership, Guarantor, Griffin Capital Essential Asset Advisor, LLC, SPT Griffin Holdings, LLC and Sidley Austin LLP.

1.56      Starwood Entity : Starwood Property Trust, Inc., a Maryland corporation, or any wholly owned direct or indirect subsidiary thereof with SPT Griffin Holdings, LLC being a wholly owned indirect subsidiary of Starwood Property Trust, Inc.

1.60      Subordination of Management Agreement : That certain Consent, Subordination and Recognition Agreement (Management Agreement) dated as of the date hereof, by and among Grantor, Beneficiary and the Property Manager (as such term is defined in Section 4.23 hereof) of the Property.

1.61      Subordination of Sub-Management Agreement : That certain Consent, Subordination and Recognition Agreement (Sub-Management Agreement) dated as of the date hereof, by and among Grantor, Beneficiary and the Sub-Manager (as such term is defined in Section 4.23 hereof) of the Property.

1.62      TI/LC Reserve Agreement : Any Tenant Improvement Cost and Leasing Commission Reserve Agreement that is entered into pursuant to the Vacancy Risk Agreement, in the form attached as an exhibit to the Vacancy Risk Agreement.

1.63      Trustee : The Trustee named in the introductory paragraph of this Security Instrument, whose address is 2828 Routh Street, Suite 800, Dallas, Texas 75201.

1.64      Vacancy Risk Agreement : That certain Vacancy Risk Agreement, dated as of the date hereof, made by Grantor, the Other Borrowers, and Beneficiary and acknowledged and agreed to by the “Servicer” referenced therein, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

ARTICLE 2
GRANTING CLAUSE

2.1      Grant to Trustee . FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, as security for the Secured Obligations, Grantor hereby irrevocably grants, transfers, conveys and assigns the Property to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, and subject to all provisions hereof.

2.2      Security Interest to Beneficiary . As additional security for the Secured Obligations, Grantor hereby grants to Beneficiary a security interest in the Property, Chattels and Intangible Personalty. To the extent any of the Property, Chattels or Intangible Personalty may be or have been acquired with funds advanced by Beneficiary under the Loan Documents, this security interest is a purchase money security interest. This Security Instrument constitutes a security agreement under the Uniform Commercial Code of the State (the “ Code ”) with respect to any part of the Property, Chattels and Intangible Personalty that may or might now or hereafter be or be deemed to be personal property, fixtures or property other than real estate (all collectively hereinafter called “ Collateral ”); all of the terms, provisions, conditions and agreements contained in this Security Instrument pertain and apply to the Collateral as fully and to the same extent as to any other property comprising the Property, and the following provisions of this Section shall not limit the generality or applicability of any other provisions of this Security Instrument but shall be in addition thereto:

(a)    The Collateral shall be used by Grantor solely for business purposes, and all Collateral (other than the Intangible Personalty) shall be installed upon the real estate comprising part of the Property for Grantor’s own use or as the equipment and furnishings furnished by Grantor, as landlord, to tenants of the Property;

(b)    Subject to Section 5.7 below, the Collateral (other than the Intangible Personalty) shall be kept at the real estate comprising a part of the Property, and shall not be removed therefrom without the consent of Beneficiary (being the Secured Party as that term is used in the Code); and the Collateral (other than the Intangible Personalty) may be affixed to such real estate but shall not be affixed to any other real estate;

(c)    No financing statement covering any of the Collateral or any proceeds thereof is on file in any public office; and Grantor will, at its cost and expense, upon demand, furnish to Beneficiary such further information and will execute and deliver to Beneficiary such financing statements and other documents in form satisfactory to Beneficiary and will do all such acts and things as Beneficiary may at any time or from time to time reasonably request or as may be necessary or appropriate to establish and maintain a perfected first-priority security interest in the Collateral as security for the Secured Obligations, subject to no adverse liens or encumbrances; and Beneficiary is hereby authorized to execute and/or to file any such financing statements or other documents; and Grantor will pay the cost of filing the same or filing or recording such financing statements or other documents and this instrument in all public offices wherever filing or recording is deemed by Beneficiary to be necessary or desirable;

(d)    The terms and provisions contained in this Section and in Section 7.6 of this Security Instrument shall, unless the context otherwise requires, have the meanings and be construed as provided in the Code; and

(e)    This Security Instrument 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 office of the recorder of each county where any part of the Property (including said fixtures) is situated. This Security Instrument shall also be effective as a financing statement covering “As-extracted collateral” and accounts subject to Section 9-502(c) of the Texas Business and Commerce Code and is to be filed for record in the real property records. The mailing addresses of Grantor and the Beneficiary are set forth in Article 1 of this Security Instrument. A carbon, photographic or other reproduction of this Security Instrument or any financing statement relating to this Security Instrument shall be sufficient as a financing statement. The filing of this Security Instrument in the real property records of the county where the Property is located shall constitute a fixture filing

in accordance with the Code. Information concerning the security interests created hereby may be obtained at the addresses set forth in Article 1 of this Security Instrument. Grantor is the “ Debtor ” and Beneficiary is the “ Secured Party ” (as those terms are defined and used in the Code) insofar as this Security Instrument constitutes a financing statement. The filing by Beneficiary of any other financing statement relating to the Collateral shall not be construed to diminish any right or priority to the Collateral hereunder.

ARTICLE 3
GRANTOR’S REPRESENTATIONS AND WARRANTIES

3.1      Warranty of Title . Grantor represents and warrants to Beneficiary that:

(a)    Grantor has good and indefeasible fee simple title to the Property, and such fee simple title is free and clear of all liens, encumbrances, security interests and other claims whatsoever, subject only to the Permitted Exceptions;

(b)    Grantor is the sole and absolute owner of the Chattels and the Intangible Personalty, free and clear of all liens, encumbrances, security interests and other claims whatsoever, subject only to the Permitted Exceptions;

(c)    This Security Instrument is a valid and enforceable first lien and security interest on the Property, Chattels and Intangible Personalty, subject only to the Permitted Exceptions; and

(d)    Subject to the Permitted Exceptions, Trustee, for itself and its successors and assigns, hereby agrees to warrant and forever defend, all and singular all of the Property and property interests granted and conveyed pursuant to this Security Instrument, against every person whomsoever lawfully claiming, or to claim, the same or any part thereof.

The representations, warranties and covenants contained in this Section 3.1 shall survive foreclosure of this Security Instrument, and shall inure to the benefit of and be enforceable by any person who may acquire title to the Property, the Chattels, or the Intangible Personalty pursuant to any such foreclosure.

3.2      Due Authorization . If Grantor is other than a natural person, then each individual who executes this document on behalf of Grantor represents and warrants to Beneficiary that such execution has been duly authorized by all necessary corporate, partnership, limited liability company or other action on the part of Grantor. Grantor represents that Grantor has obtained all consents and approvals required in connection with the execution, delivery and performance of this Security Instrument.

3.3      Other Representations and Warranties . Grantor represents and warrants to Beneficiary as of the date hereof, as follows:

(a)    Grantor is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware. Grantor is duly authorized to transact business in and is in good standing under the laws of the State of Texas. The sole Controlling Persons of Grantor are Guarantor, and GC Member;

(b)    The execution, delivery and performance by Grantor of the Loan Documents are within Grantor’s power and authority and have been duly authorized by all necessary action;

(c)    This Security Instrument is, and each other Loan Document to which Grantor or Guarantor is a party will, when delivered hereunder, be valid and binding obligations of Grantor and Guarantor enforceable against Grantor and Guarantor in accordance with their respective terms, except as limited by equitable principles and bankruptcy, insolvency and similar laws affecting creditors’ rights;

(d)    The execution, delivery and performance by Grantor and Guarantor of the Loan Documents will not contravene any contractual or other restriction binding on or affecting Grantor or any Controlling Person and will not result in or require the creation of any lien, security interest, other charge or encumbrance (other than pursuant to the Loan Documents) upon or with respect to any of its properties;

(e)    The execution, delivery and performance by Grantor and Guarantor of the Loan Documents does not violate or contravene any applicable law;

(f)    No authorization, approval, consent or other action by, and no notice to or filing with, any court, governmental authority or regulatory body is required for the due execution, delivery and performance by Grantor and Guarantor of any of the Loan Documents or the effectiveness of any assignment of any of Grantor’s rights and interests of any kind to Beneficiary;

(g)    No part of the Property, Chattels, or Intangible Personalty is in the hands of a receiver, no application for a receiver is pending with respect to any portion of the Property, Chattels, or Intangible Personalty, and no part of the Property, Chattels, or Intangible Personalty is subject to any foreclosure or similar proceeding;

(h)    Neither Grantor nor any Controlling Person has made any assignment for the benefit of creditors, nor has Grantor or any Controlling Person filed, or had filed against it, any petition in bankruptcy;

(i)    There is no pending or, to the best of Grantor’s knowledge, threatened, litigation, action, proceeding or investigation, including, without limitation, any condemnation proceeding, against Grantor, any Controlling Person or the Property before any court, governmental or quasi-governmental, arbitrator or other authority;

(j)    Grantor is a “non-foreign person” within the meaning of Sections 1445 and 7701 of the United States Internal Revenue Code of 1986, as amended, and the regulations issued thereunder;

(k)    Access to and egress from the Property are available and provided by public streets, or valid easements appurtenant thereto and Grantor has no knowledge of any federal, state, county, municipal or other governmental plans to change the highway or road system in the vicinity of the Property or to restrict or change access from any such highway or road to the Property;

(l)    All public utility services necessary for the operation of all improvements constituting part of the Property for their intended purposes are available at the boundaries of the land constituting part of the Property, including water supply, storm and sanitary sewer facilities, and natural gas, electric, telephone and cable television facilities;

(m)    The Property is located in the City of Houston, Texas, which City does not have a Zoning Code. The development use and operation of the Property as it is currently operated. The Property complies in all respects with all zoning ordinances, regulations, requirements, conditions and restrictions, including but not limited to deed restrictions and restrictive covenants, applicable to the Property;

(n)    There are no special or other assessments for public improvements or otherwise now affecting the Property, nor does Grantor know of any pending or threatened special assessments affecting the Property or any contemplated improvements affecting the Property that may result in special assessments. There are no tax abatements or exceptions affecting the Property;

(o)    Grantor and each Controlling Person has filed all tax returns it is required to have filed, and has paid all taxes as shown on such returns or on any assessment received pertaining to the Property;

(p)    Grantor has not received any written notice from any governmental body having jurisdiction over any part of the Property as to any violation of any applicable law, or any notice from any insurance company or inspection or rating bureau setting forth any requirements as a condition to the continuation of any insurance coverage on or with respect to the Property or the continuation thereof at premium rates existing at present which have not been remedied or satisfied;

(q)    Neither Grantor nor any Controlling Person is in default, in any manner which would adversely affect its properties, assets, operations or condition (financial or otherwise), in the performance, observance or fulfillment of any of the obligations, covenants or conditions set forth in any agreement or instrument to which it is a party or by which it or any of its properties, assets or revenues are bound;

(r)    Except as set forth in the Lease Certificate, there are no occupancy rights (written or oral), Leases or tenancies presently affecting any part of the Property. The Lease Certificate contains a true and correct description of all Leases presently affecting the Property. No written or oral agreements or understandings exist between Grantor and the tenants under the Leases described in the Lease Certificate that grant such tenants any rights greater than those described in the Lease Certificate or that are in any way inconsistent with the rights described in the Lease Certificate;

(s)    There are no options to purchase, purchase contracts or other similar agreements of any type (written or oral) presently affecting any part of the Property;

(t)    There exists no brokerage agreement with respect to the purchase of any part of the Property;

(u)    Except as otherwise disclosed to Beneficiary in writing prior to the date hereof, (i) there are no contracts presently affecting the Property (“ Contracts ”) having a term in excess of one hundred eighty (180) days or not terminable by Grantor (without penalty) on thirty (30) days’ notice; (ii) Grantor has heretofore delivered to Beneficiary true and correct copies of each of the Contracts together with all amendments thereto; (iii) Grantor is not in default of any obligations under any of the Contracts; and (iv) the Contracts represent the complete agreement between Grantor and such other parties as to the services to be performed or materials to be provided thereunder and the compensation to be paid for such services or materials, as applicable, and except as otherwise disclosed herein, such other parties possess no unsatisfied claims against Grantor. Grantor is not in default under any of the Contracts and no event has occurred which, with the passing of time or the giving of notice, or both, would constitute a default under any of the Contracts;

(v)    Grantor or its tenants have obtained all Permits necessary for the operation, use, ownership, development, occupancy and maintenance of the Property as it is currently being operated. None of the Permits has been suspended or revoked, and all of the Permits are in full force and effect and are fully paid for, and Grantor has made or will make application for renewals of any of the Permits prior to the expiration thereof;

(w)    All insurance policies held by Grantor relating to or affecting the Property are in full force and effect and shall remain in full force and effect until all Secured Obligations are satisfied. Grantor has not received any notice of default or notice terminating or threatening to terminate any such insurance policies. Grantor has made or will make application for renewals of any of such insurance policies prior to the expiration thereof;

(x)    Grantor currently complies with ERISA. Neither the making of the Loan nor the exercise by Beneficiary of any of its rights under the Loan Documents constitutes or will constitute a non-exempt, prohibited transaction under ERISA; and

(y)    Grantor’s exact legal name is correctly set out in the introductory paragraph of this Security Instrument. Grantor’s Secretary of State File Number is correctly set forth in the definition of “ Grantor ” set forth in Article 1 hereof. Grantor’s location (as such term is used in Section 5.8 hereof) is the State of Delaware.

3.4      Continuing Effect . Grantor shall be liable to Beneficiary for any damage suffered by Beneficiary if any of the foregoing representations are inaccurate as of the date hereof, regardless when such inaccuracy may be discovered by, or result in harm to, Beneficiary. Grantor further represents and warrants that the foregoing representations and warranties, as well as all other representations and warranties of Grantor to Beneficiary relative to the Loan Documents shall survive termination of this Security Instrument.

ARTICLE 4
GRANTOR’S AFFIRMATIVE COVENANTS

4.1      Payment of Note . Grantor will pay all principal, interest, and other sums payable under the Note, on the date when such payments are due, without notice or demand.

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

4.3      Other Encumbrances . Grantor will promptly perform and comply with all covenants, conditions, and prohibitions required of Grantor in connection with any other encumbrance affecting the Property, the Chattels, or the Intangible Personalty, or any part thereof, or any interest therein, regardless of whether such other encumbrance is superior or subordinate to the lien hereof.

4.4      Payment of Taxes.

(a)     Property Taxes . Unless Grantor is depositing with Beneficiary the amounts required pursuant to Section 4.4(b), Grantor will (i) pay or cause to be paid, before delinquency, all taxes and assessments, general or special, which may be levied or imposed at any time against Grantor’s interest and estate in the Property, the Chattels, or the Intangible Personalty, and (ii) within thirty (30) days after each payment of any such tax or assessment, Grantor will deliver to Beneficiary, without notice or demand, an official receipt for such payment if issued by the taxing authority and if not, cancelled checks or other reasonable evidence of payment. At Beneficiary’s option, Beneficiary may retain the services of a firm to monitor the payment of all taxes and assessments relating to the Property, the cost of which shall be borne by Grantor.

(b)     Deposit for Taxes : From and after the occurrence of a Default or an Event of Default, and at such times as a Triggering Event Condition (as defined in the Cash Collateral Agreement) is otherwise continuing, with each monthly payment under the Note, Grantor shall deposit with Beneficiary an amount equal to 1/12th of the amount which Beneficiary estimates will be required to pay the next annual payment of taxes, assessments, and similar governmental charges referred to in this Section. The purpose of these provisions is to provide Beneficiary with sufficient funds on hand to pay all such taxes, assessments, and other governmental charges thirty (30) days before the date on which they become past due. If the Beneficiary, in its sole discretion, determines that the funds escrowed hereunder are, or will be, insufficient, Grantor shall upon demand pay such additional sums as Beneficiary shall determine necessary and shall pay any increased monthly charges requested by Beneficiary. Provided no Default or Event of Default exists hereunder, Beneficiary will apply the amounts so deposited to the payment of such taxes, assessments, and other charges when due, but in no event will Beneficiary be liable for any interest on any amount so deposited, and any amount so deposited may be held and commingled with Beneficiary’s own funds.

(c)     Intangible Taxes . If by reason of any statutory or constitutional amendment or judicial decision adopted or rendered after the date hereof, any tax, assessment, or similar charge is imposed against the Note or against Beneficiary, or against any interest of Beneficiary in any real or personal property encumbered hereby (but excluding any taxes in the

nature of income taxes on the overall income or profits of Beneficiary to which Beneficiary may be subject), Grantor will pay such tax, assessment, or other charge before delinquency and will pay to Beneficiary any and all costs, expenses, or diminution of income incurred by Beneficiary in connection therewith. In the event Grantor is unable to do so, either for economic reasons or because the legal provisions or decisions creating such tax, assessment or charge forbid Grantor from doing so, then the Note will, at Beneficiary’s option, become due and payable in full upon ninety (90) days’ notice to Grantor, without prepayment premium or penalty.

(d)     Right to Contest . Notwithstanding any other provision of this Section 4.4, Grantor will not be deemed to be in default solely by reason of Grantor’s failure to pay any tax, assessment or similar governmental charge so long as, in Beneficiary’s judgment, each of the following conditions is satisfied:

(i)    Grantor and/or Schlumberger Tenant is engaged in and diligently pursuing in good faith administrative or judicial proceedings appropriate to contest the validity or amount of such tax, assessment, or charge; and

(ii)    The payment of such tax, assessment, or charge would necessarily and materially prejudice Grantor’s and/or Schlumberger Tenant’s prospects for success in such proceedings; and

(iii)    Nonpayment of such tax, assessment, or charge will not result in the loss or forfeiture of any property encumbered hereby or any interest of Beneficiary therein; and

(iv)    Grantor deposits or causes to be deposited with Beneficiary, as security for such payment which may ultimately be required, a sum equal to the amount of the disputed tax, assessment or charge plus the interest, penalties, advertising charges, and other costs which Beneficiary estimates are likely to become payable if such contest is unsuccessful.

If Beneficiary determines that any one or more of such conditions is not satisfied or is no longer satisfied, Grantor will pay the tax, assessment, or charge in question, together with any interest and penalties thereon, within ten (10) days after Beneficiary gives notice of such determination.

4.5      Maintenance of Insurance.

(a)     Coverages Required . Grantor shall maintain or cause to be maintained, with insurance companies or associations satisfying the requirements of the Insurance Agreement, all insurance required under the terms of the Insurance Agreement, and shall comply with each and every covenant and agreement contained in the Insurance Agreement, the provisions of which are hereby incorporated by this reference.

(b)     Renewal Policies . Prior to the expiration date of each insurance policy required pursuant to the Insurance Agreement, Grantor will deliver to Beneficiary evidence of the renewal or replacement of such policy as required pursuant to the Insurance Agreement, with evidence satisfactory to Beneficiary that the applicable premium has been prepaid.

(c)     Deposit for Premiums . From and after the occurrence of a Default or an Event of Default, and at such times as a Triggering Event Condition (as defined in the Cash Collateral Agreement is otherwise continuing, with each monthly payment under the Note, Grantor will deposit an amount equal to 1/12th of the amount which Beneficiary estimates will be required to pay the next required annual premium for each insurance policy referred to in this Section. The purpose of these provisions is to provide Beneficiary with sufficient funds on hand, no later than thirty (30) days before the date on which the payment of such premiums will become due, so as to permit Beneficiary to pay all such premiums when due. If the Beneficiary, in its sole discretion, determines that the funds escrowed hereunder are, or will be, insufficient, Grantor shall upon demand pay such additional sums as Beneficiary shall determine necessary and shall pay any increased monthly charges requested by Beneficiary. Provided no Default or Event of Default exists hereunder, Beneficiary will apply the amounts so deposited to the payment of such insurance premiums when due, but in no event will Beneficiary be liable for any interest on any amounts so deposited, and the money so received may be held and commingled with Beneficiary’s own funds.

(d)     Application of Hazard Insurance Proceeds . Grantor shall promptly notify Beneficiary of any damage or casualty to all or any portion of the Property or Chattels. Beneficiary may participate in all negotiations and appear and participate in all judicial arbitration proceedings concerning any insurance proceeds which may be payable as a result of such casualty or damage, and may, in Beneficiary’s sole discretion, compromise or settle, in the name of Beneficiary, Grantor, or both any claim for any such insurance proceeds. Any such insurance proceeds shall be paid to Beneficiary and shall be applied first to reimburse Beneficiary for all costs and expenses, including attorneys’ fees, incurred by Beneficiary in connection with the collection of such insurance proceeds. The balance of any insurance proceeds received by Beneficiary with respect to an insured casualty may (subject to the terms of any Approved Lease or subordination, non-disturbance and attornment agreement), in Beneficiary’s sole discretion, either (i) be retained and applied by Beneficiary toward payment of

the Secured Obligations, or (ii) be paid over, in whole or in part and subject to such conditions as Beneficiary may impose, to Grantor to pay for repairs or replacements necessitated by the casualty; provided, however, that if all of the Secured Obligations have been performed or are discharged by the application of less than all of such insurance proceeds, then any remaining proceeds will be paid over to Grantor. Notwithstanding the preceding sentence, if (A) no Default or Event of Default shall exist hereunder, and (B) the proceeds received by Beneficiary (together with any other funds delivered by Grantor to Beneficiary for such purpose) shall be sufficient, in Beneficiary’s reasonable judgment, to pay for any restoration necessitated by the casualty, and (C) the cost of such restoration shall not exceed $500,000.00, and (D) such restoration can be completed, in Beneficiary’s judgment, at least ninety (90) days prior to the maturity date of the Note, then Beneficiary shall apply such proceeds as provided in clause (ii) of the preceding sentence. Beneficiary will have no obligation to see to the proper application of any insurance proceeds paid over to Grantor, nor will any such proceeds received by Beneficiary bear interest or be subject to any other charge for the benefit of Grantor. Beneficiary may, prior to the application of insurance proceeds, commingle them with Beneficiary’s own funds and otherwise act with regard to such proceeds as Beneficiary may determine in Beneficiary’s sole discretion. Notwithstanding anything to the contrary set forth in this Security Instrument, Beneficiary agrees that for so long as the Schlumberger Lease is in full force and effect, the disposition of insurance proceeds for damage or casualty to all or any portion of the Property and restoration of the Property relating thereto shall be governed by the terms and conditions set forth in the Schlumberger Lease to the extent that such Schlumberger Lease conflicts with the provisions of this Security Instrument.

(e)     Successor’s Rights . Any person who acquires title to the Property or the Chattels upon foreclosure hereunder will succeed to all of Grantor’s rights under all policies of insurance maintained pursuant to this Section.

(f)     TEXAS FINANCE CODE SECTION 307.052 COLLATERAL PROTECTION INSURANCE NOTICE . (A) GRANTOR IS REQUIRED TO (i) KEEP THE PROPERTY INSURED AGAINST DAMAGE IN THE AMOUNT SPECIFIED HEREIN; (ii) PURCHASE THE INSURANCE FROM AN INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THE STATE OF TEXAS OR AN ELIGIBLE SURPLUS LINES INSURER OR OTHERWISE AS PROVIDED HEREIN; AND (iii) NAME BENEFICIARY AS THE PERSON TO BE PAID UNDER THE POLICY IN THE EVENT OF A LOSS AS PROVIDED HEREIN; (B) SUBJECT TO THE PROVISIONS HEREOF, GRANTOR MUST, IF REQUIRED BY BENEFICIARY, DELIVER TO BENEFICIARY A COPY OF THE POLICY AND PROOF OF THE PAYMENT OF PREMIUMS; AND (C) SUBJECT TO THE PROVISIONS HEREOF, IF GRANTOR FAILS TO MEET ANY REQUIREMENT LISTED IN THE FOREGOING SUBPARTS (A) OR (B), BENEFICIARY MAY OBTAIN COLLATERAL PROTECTION INSURANCE ON BEHALF OF GRANTOR AT GRANTOR’S EXPENSE.

4.6      Maintenance and Repair of Property and Chattels . Grantor will at all times maintain or cause the maintenance of the Property and the Chattels in good condition and repair, will diligently prosecute or cause the prosecution of the completion of any building or other improvement which is at any time in the process of construction on the Property, and will (subject to the terms of the Leases) promptly repair, restore, replace, or rebuild, or cause the repair, restoration, replacement or rebuilding of, any part of the Property or the Chattels which may be affected by any casualty or any public or private taking or injury to the Property or the Chattels. All costs and expenses arising out of the foregoing shall be paid by Grantor (or Grantor shall cause the same to be so paid) whether or not the proceeds of any insurance or eminent domain shall be sufficient therefor. Grantor will comply with, or cause the compliance with (or obtain a legally enforceable variance therefrom), all statutes, ordinances, and other governmental or quasi‑governmental requirements and private covenants relating to the ownership, construction, use, or operation of the Property, including but not limited to any environmental or ecological requirements; provided, that so long as Grantor is not otherwise in default hereunder, Grantor may, upon providing Beneficiary with security reasonably satisfactory to Beneficiary, proceed diligently and in good faith to contest the validity or applicability of any such statute, ordinance, or requirement. Subject to the rights of tenants under the Leases, Beneficiary and any person authorized by Beneficiary may enter and inspect the Property at all reasonable times, and may inspect the Chattels, wherever located, at all reasonable times. Notwithstanding anything to the contrary set forth in this Security Instrument or any other Loan Document, Beneficiary agrees that for so long as the Schlumberger Lease is in full force and effect, to the extent Schlumberger Tenant is obligated to perform certain Property-related operation and maintenance obligations that Grantor is obligated to perform pursuant to the Loan Documents, then Grantor shall perform or cause Schlumberger Tenant to perform such obligations; provided, however, that the forgoing is not intended to limit Grantor’s liability to Beneficiary for any breach of or default under the Loan Documents if such obligations are not performed.

4.7      Leases . Grantor shall timely pay and perform each of its obligations under or in connection with the Leases, and shall otherwise pay such sums and take such action as shall be necessary or required in order to maintain each of the Leases in full force and effect in accordance with its terms. Grantor shall immediately furnish to Beneficiary copies of any notices given to Grantor by the lessee under any Lease, alleging the default by Grantor in the timely payment or performance of its obligations under such Lease and any subsequent communication related thereto. Grantor shall also promptly furnish to Beneficiary copies of any notices given to Grantor by the lessee under any Lease, extending the term of any Lease, requiring or demanding the expenditure of any sum by Grantor (or demanding the taking of any action by Grantor), or relating to any other material obligation of Grantor under such Lease and any subsequent communication related thereto. Grantor agrees that during the existence of any Event of Default, Beneficiary

may advance any sum or take any action which Beneficiary believes is necessary or required to maintain the Leases in full force and effect, and all such sums advanced by Beneficiary, together with all costs and expenses incurred by Beneficiary in connection with action taken by Beneficiary pursuant to this Section, shall be due and payable by Grantor to Beneficiary upon demand, shall bear interest until paid at the Default Rate (as defined in the Note), and shall be secured by this Security Instrument.

4.8      Eminent Domain; Private Damage . If all or any part of the Property is taken or damaged by eminent domain or any other public or private action, Grantor will notify Beneficiary promptly of the time and place of all meetings, hearings, trials, and other proceedings relating to such action. Beneficiary may participate in all negotiations and appear and participate in all judicial or arbitration proceedings concerning any award or payment which may be due as a result of such taking or damage, and may, in Beneficiary’s reasonable discretion, compromise or settle, in the names of both Grantor and Beneficiary, any claim for any such award or payment. Any such award or payment is to be paid to Beneficiary and will be applied first to reimburse Beneficiary for all costs and expenses, including attorneys’ fees, incurred by Beneficiary in connection with the ascertainment and collection of such award or payment. The balance, if any, of such award or payment may, in Beneficiary’s sole discretion, either (a) be retained by Beneficiary and applied toward the Secured Obligations, or (b) be paid over, in whole or in part and subject to such conditions as Beneficiary may impose, to Grantor for the purpose of restoring, repairing, or rebuilding any part of the Property affected by the taking or damage. Notwithstanding the preceding sentence, if (i) no Default or Event of Default shall have occurred and be continuing hereunder, and (ii) the proceeds received by Beneficiary (together with any other funds delivered by Grantor to Beneficiary for such purpose) shall be sufficient, in Beneficiary’s reasonable judgment, to pay for any restoration necessitated by the taking or damage, and (iii) the cost of such restoration shall not exceed $500,000.00, and (iv) such restoration can be completed, in Beneficiary’s judgment, at least ninety (90) days prior to the maturity date of the Note, and (v) the remaining Property shall constitute, in Beneficiary’s sole judgment, adequate security for the Secured Obligations, then Beneficiary shall apply such proceeds as provided in clause (b) of the preceding sentence. Grantor’s duty to pay the Note in accordance with its terms and to perform the other Secured Obligations will not be suspended by the pendency or discharged by the conclusion of any proceedings for the collection of any such award or payment, and any reduction in the Secured Obligations resulting from Beneficiary’s application of any such award or payment will take effect only when Beneficiary receives such award or payment. If this Security Instrument has been foreclosed prior to Beneficiary’s receipt of such award or payment, Beneficiary may nonetheless retain such award or payment to the extent required to reimburse Beneficiary for all costs and expenses, including attorneys’ fees, incurred in connection therewith, and to discharge any deficiency remaining with respect to the Secured Obligations. Notwithstanding anything to the contrary set forth in this Security Instrument, Beneficiary agrees that for so long as the Schlumberger Lease is in full force and effect, the disposition of awards or payments resulting from any condemnation or eminent domain taking of all or any portion of the Property and restoration of the Property relating thereto shall be governed by the terms and conditions set forth in the Schlumberger Lease to the extent that such Schlumberger Lease conflicts with the provisions of this Security Instrument.

4.9      Mechanics’ Liens . Grantor will keep (or cause others to keep) the Property free and clear of all liens and claims of liens by contractors, subcontractors, mechanics, laborers, materialmen, and other such persons, and will cause any recorded statement of any such lien to be released of record within forty-five (45) days after the recording thereof. Notwithstanding the preceding sentence, however, Grantor will not be deemed to be in default under this Section if and so long as Grantor or any tenant under a Lease (a) contests in good faith the validity or amount of any asserted lien and diligently prosecutes or defends an action appropriate to obtain a binding determination of the disputed matter, and (b) provides Beneficiary with such security as Beneficiary may require to protect Beneficiary against all loss, damage, and expense, including attorneys’ fees, which Beneficiary might incur if the asserted lien is determined to be valid.

4.10      Defense of Actions . Grantor will defend, at Grantor’s expense, any action, proceeding or claim which affects any property encumbered hereby or any interest of Beneficiary in such property or in the Secured Obligations, and will indemnify and hold Beneficiary harmless for, from and against all losses, damages, claims, liabilities, obligations, judgments, liens, demands, actions, suits, cost, or expense, including attorneys’ fees, which Beneficiary may incur in connection therewith. IT IS THE EXPRESS INTENTION OF GRANTOR AND BENEFICIARY THAT THE INDEMNITY SET FORTH IN THIS SECTION SHALL COVER ACTIONS, PROCEEDINGS OR CLAIMS THAT ARISE FROM THE NEGLIGENCE (EXCLUDING GROSS NEGLIGENCE) OF THE INDEMNIFIED PARTY.

4.11      Expenses of Enforcement . Grantor will pay all costs and expenses, including attorneys’ fees, which Beneficiary may incur in connection with any effort or action (whether or not litigation or foreclosure is involved) to enforce or defend Beneficiary’s rights and remedies under any of the Loan Documents, including but not limited to all attorneys’ fees, appraisal fees, consultants’ fees, and other expenses incurred by Beneficiary in securing title to or possession of, and realizing upon, any security for the Secured Obligations. All such costs and expenses (together with interest thereon at the Default Rate from the date incurred) shall constitute part of the Secured Obligations, and may be included in the computation of the amount owed to Beneficiary for purposes of foreclosing or otherwise enforcing this Security Instrument.

4.12      Financial Reports . During the term of the Loan, Grantor shall supply to Beneficiary (a) within fifteen (15) days following the end of each quarter, Grantor’s quarterly and annual operating statements for the Property as of the end of and for the

preceding quarter and fiscal year, as applicable, in each case prepared against the budget for such year; (b) contemporaneously with Grantor’s delivery of each of such operating statements, a certified rent roll signed and dated by Grantor detailing the names of all tenants under the Leases, the portion of the improvements on the Property occupied by each tenant, the rent and any other charges payable under each Lease, and the term of each Lease; (c) within ninety (90) days following the end of each year, an annual balance sheet and profit and loss statement of Grantor; (d) within forty-five (45) days following the end of each quarter, Guarantor’s quarterly unaudited financial statements and within ninety (90) days following the end of each fiscal year, Guarantor’s annual audited financial statements as of the end of and for the preceding quarter and fiscal year, as applicable; provided, however, for so long as Guarantor files 10Qs and 10Ks with the Securities and Exchange Commission, Grantor shall give Beneficiary written notice and weblink quarterly within forty-five (45) days of when a 10Q filing is made by Guarantor with the Securities and Exchange Commission and annually within ninety (90) days of when a 10K filing is made by Guarantor with the Securities and Exchange Commission. The financial statements and reports described in (a) and (c) above shall be in such detail as Beneficiary may require, shall be prepared in accordance with generally accepted accounting principles consistently applied, and shall be certified as true and correct by Grantor or the applicable Guarantor (or, if required by Beneficiary, by an independent certified public accountant acceptable to Beneficiary). Grantor shall also furnish to Beneficiary within thirty (30) days of Beneficiary’s request, any other financial reports or statements of Grantor as Beneficiary may reasonably request. Upon Beneficiary’s demand after any Default or Event of Default, or if Beneficiary securitizes the Loan, Grantor shall supply to Beneficiary the items required in (a) and (b) above on a monthly basis.

4.13      Priority of Leases . To the extent Grantor has the right, under the terms of any Lease, to make such Lease subordinate to the lien hereof, Grantor will, at Beneficiary’s request and Grantor’s expense, take such action as may be required to effect such subordination. Conversely, Grantor will, at Beneficiary’s request and Grantor’s expense, take such action as may be necessary to subordinate the lien hereof to any future Lease designated by Beneficiary.

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

4.15      Compliance with Laws, Etc. . Grantor shall comply in all material respects or cause compliance in all material respects with (or obtain a legally enforceable variance therefrom) all applicable laws, rules, regulations and orders, such compliance to include, without limitation, maintaining all Permits and paying before the same become delinquent all taxes, assessments and governmental charges imposed upon Grantor or the Property.

4.16      Records and Books of Account . Grantor shall keep accurate and complete records and books of account, in which complete entries will be made in accordance with generally accepted accounting principles consistently applied, reflecting all financial transactions relating to the Property, including, but not limited to, records adequate to correctly reflect all items required in order to determine all Gross Receipts (as such term is used in the Cash Collateral Agreement).

4.17      Inspection Rights . At any reasonable time, and from time to time, Grantor shall permit Beneficiary, or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and subject to the rights of tenants under the Leases, visit the Property and to discuss with Grantor the affairs, finances and accounts of Grantor.

4.18      Change of Grantor’s Address or State of Organization . Grantor shall promptly notify Beneficiary if changes are made in Grantor’s address from that set forth in Section 9.10 hereof, or if Grantor shall either change its “location” (as such term is used in Section 5.8 hereof), its state of organization or if Grantor shall organize in any state other than the State of Delaware.

4.19      Further Assurances; Estoppel Certificates . Grantor will execute and deliver to Beneficiary upon demand, and pay the costs of preparation and recording thereof, any further documents which Beneficiary may request to confirm or perfect the liens and security interests created or intended to be created hereby, or to confirm or perfect any evidence of the Secured Obligations. Grantor will also, within twenty (20) days after any request by Beneficiary, deliver to Beneficiary a signed and acknowledged statement certifying to Beneficiary, or to any proposed transferee of the Secured Obligations, (a) the balance of principal, interest, and other sums then outstanding under the Note, and (b) whether Grantor claims to have any offsets or defenses with respect to the Secured Obligations and, if so, the nature of such offsets or defenses.

4.20      Costs of Closing . Grantor shall on demand pay directly or reimburse Beneficiary for any costs or expenses pertaining to the closing of the Loan, including, but not limited to, fees of counsel for Beneficiary, costs and expenses for which invoices were not available at the closing of the Loan, or costs and expenses which are incurred by Beneficiary after such closing, including, without limitation, costs or expenses incurred to obtain originals or copies of recorded or filed Loan Documents and UCC financing statements. All such costs and expenses (together with interest thereon at the Default Rate from the date incurred by Beneficiary) shall constitute a part of the Secured Obligations, and may be included in the computation of the amount owed to Beneficiary for purposes of foreclosing or otherwise enforcing this Security Instrument.

4.21      Fund for Electronic Transfer . All monthly payments of principal and interest on the Note, and impound deposits under this Security Instrument, shall be made by Grantor by electronic funds transfer from a bank account established and maintained by Grantor for such purpose. Grantor shall establish and maintain such an account until the Note is fully paid and shall direct the depository of such account in writing to so transmit such payments on or before the respective due dates to the account of Beneficiary as shall be designated by Beneficiary in writing.

4.22      Use . Grantor shall use the Property solely for office, commercial and/or incidental or ancillary uses, and for such other uses that are permitted under Leases approved by Beneficiary in writing, and for no other use or purpose.

4.23      Management . The Property shall be managed by Griffin Capital Essential Asset Property Management, LLC, a Delaware limited liability company (“ Property Manager ”) under a management agreement previously delivered to, and approved, by Beneficiary (the “ Management Agreement ”) and sub-managed by Piedmont Office Management, LLC, a Georgia limited liability company (“ Sub-Manager ”) under a sub-management agreement previously delivered to and approved by Beneficiary (the “ Sub-Management Agreement ”). Grantor shall not permit any amendment to or modification of the Management Agreement or the Sub-Management Agreement, or management of the Property by any person or entity other than Property Manager or Sub-Manager, without the prior written consent of Beneficiary.

4.24      Intentionally Deleted.

4.25      General Indemnity . Grantor agrees that while Beneficiary has no liability to any person in tort or otherwise as lender and that Beneficiary is not an owner or operator of the Property, Grantor shall, at its sole expense, protect, defend, release, indemnify and hold harmless the Indemnified Parties (defined below) for, from and against any Losses (defined below) imposed on, incurred by, or asserted against the Indemnified Parties, directly or indirectly, arising out of or in connection with the Property, Loan, or Loan Documents; provided, however, that the foregoing shall not apply (a) to any Losses caused by the gross negligence or willful misconduct of the Indemnified Parties or (b) provided no Event of Default then exists, to any disputes among the Indemnified Parties not caused in whole or in part by a breach of Grantor’s obligations under the Loan Documents. The term “ Losses ” shall mean any claims, suits, liabilities (including strict liabilities), actions, proceedings, obligations, debts, damages, losses (including, without limitation, unrealized loss of value of the Property caused in whole or in part by a breach of any of Grantor’s obligations under the Loan Documents, or arising by reason of any third-party claim asserted against any of the Indemnified Parties, but not due to the gross negligence or willful misconduct of such Indemnified Party), demands, costs, expenses, fines, penalties, charges, fees, judgments, awards, and amounts paid in settlement of whatever kind including attorneys’ fees and all other costs of defense. The term “ Indemnified Parties ” shall mean (a) Beneficiary, (b) any prior owner or holder of the Note, (c) any existing or prior servicer of the Loan, (d) Trustee, (e) the officers, directors, shareholders, partners, members, employees and trustees of any of the foregoing, and (f) the heirs, legal representatives, successors and assigns of each of the foregoing. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO LOSSES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PARTY OR ANY STRICT LIABILITY, BUT NOT THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY.

4.26      Duty to Defend, Costs and Expenses . Upon request, whether Grantor’s obligation to indemnify Beneficiary arises under Section 4.25 above or elsewhere in the Loan Documents, Grantor shall defend the Indemnified Parties (in Grantor’s or the Indemnified Parties’ names) by attorneys and other professionals approved by the Indemnified Parties; provided, however, if and to the extent Grantor has no right to approve such counsel, counsel appointed by Grantor’s insurance carrier shall be deemed acceptable to Indemnified Parties. Notwithstanding the foregoing, the Indemnified Parties may, in their sole discretion, engage their own attorneys and professionals to defend or assist them and, at their option, their attorneys shall control the resolution of any claims or proceedings. Upon demand, Grantor shall pay or, in the sole discretion of the Indemnified Parties, reimburse the Indemnified Parties for all Losses imposed on, incurred by, or asserted against the Indemnified Parties by reason of any items set forth in Section 4.25 above and/or the enforcement or preservation of the Indemnified Parties’ rights under the Loan Documents. Any amount payable to the Indemnified Parties under this Section shall (a) be deemed a demand obligation, (b) be part of the Secured Obligations, (c) bear interest from the date of demand at the Default Rate until paid if not paid on demand, and (d) be secured by this Security Instrument.

ARTICLE 5
GRANTOR’S NEGATIVE COVENANTS

5.1      Waste and Alterations . Grantor will not commit or permit any (a) physical waste with respect to the Property or the Chattels and (b) Grantor shall not cause or permit any part of the Property, including but not limited to any building, structure, parking lot, driveway, landscape scheme, timber, or other ground improvement, to be removed, demolished, or materially altered without the prior written consent of Beneficiary, subject in each instance to the terms of the Leases.

5.2      Zoning and Private Covenants . Grantor will not initiate, join in, or consent to any change in any zoning ordinance or classification, any change in the “zone lot” or “zone lots” (or similar zoning unit or units) presently comprising the Property, any

transfer of development rights, any change in any private restrictive covenant, or any change in any other public or private restriction limiting or defining the uses which may be made of the Property or any part thereof, without the prior written consent of Beneficiary. If under applicable zoning provisions the use of all or any part of the Property is or becomes a nonconforming use, Grantor will not cause such use to be discontinued or abandoned without the prior written consent of Beneficiary, and Grantor will use commercially reasonable efforts to prevent the tenant under any Lease from discontinuing or abandoning such use.

5.3      Interference with Leases.

(a)    Grantor will neither do, nor neglect to do, anything which may cause or permit the termination of any Lease of all or any part of the Property, or cause or permit the withholding or abatement of any rent payable under any such Lease.

(b)    Without Beneficiary’s prior written consent, which may be granted or withheld in Beneficiary’s sole discretion, Grantor shall not enter into or modify (including without limitation modifications relating to the financial covenants or any financial reporting requirements) any Lease of all or any part of the Property. Any lease, lease modification, lease amendment or lease termination (“ Lease Transaction ”) for which Beneficiary’s consent is required under the Loan Documents shall be deemed approved by Beneficiary if (i) prior to finalizing negotiations for such Lease Transaction, Grantor has submitted to Beneficiary an approval request package (“ Approval Package ”) with respect to such Lease Transaction containing a letter requesting Beneficiary’s approval (and containing a signature line on which Beneficiary may evidence its approval of such Lease Transaction) and notifying Beneficiary, in bold enlarged type, that Beneficiary’s approval will be deemed given if it fails to respond within ten (10) Business Days after its receipt of such Approval Package, and Beneficiary thereafter fails to respond within ten (10) Business Days after its receipt of such Approval Package; provided , however , that Grantor shall supply Beneficiary with any other information reasonably requested by Beneficiary with respect to such proposed Lease Transaction within five (5) Business Days after Beneficiary’s receipt of the Approval Package, in which event Beneficiary’s approval shall be deemed given if Beneficiary has not disapproved or approved the Approval Package within ten (10) Business Days after the last to arrive of the proposed Approval Package and any additional information so requested by Beneficiary. Each Approval Package shall contain a description of all of the principal terms of the proposed Lease Transaction, a description of the tenant and its controlling constituents and (with respect to new leases or modifications/amendments) Grantor’s reasonably detailed analysis of the tenant’s creditworthiness (with respect to new leases or modifications/amendments), and a copy of any and all term sheets or letters of intent executed in connection with such Lease Transaction, together with the proposed forms of definitive documentation. Grantor shall deliver to Beneficiary copies of all Leases or modifications promptly upon execution and delivery thereof.

(c)    Except with the prior written consent of Beneficiary, which may be granted or withheld in Beneficiary’s sole discretion, Grantor will not (i) collect rent from all or any part of the Property for more than one month in advance, (ii) assign the rents from the Property or any part thereof, or (iii) consent to the cancellation or surrender of all or any part of any Lease, except that Grantor may in good faith terminate any Lease for nonpayment of rent or other material breach by the tenant.

(d)    Without limiting the generality of the foregoing, whether or not Beneficiary’s consent to the cancellation or surrender of any Lease is required hereunder, (i) Grantor shall notify Beneficiary in writing of any cancellation penalties or other consideration as and when received by Grantor in connection with such cancellation or surrender (the “ Termination Fees ”), which written notice must be delivered to Beneficiary within five (5) days of the payment by the applicable tenant of any such Termination Fees to Grantor, and (ii) at Beneficiary’s sole option, Beneficiary shall be entitled to (A) require that Grantor enter into the TI/LC Reserve (as defined in the Vacancy Risk Agreement) with Beneficiary and deposit such Termination Fees into the TI/LC Reserve, and (B) impose such restrictions and conditions on the timing and amount of disbursements of the Termination Fees from such reserve as Beneficiary may require in its reasonable discretion, including, without limitation the conditions described in Section 6 of the TI/LC Reserve Agreement.

(e)    Subject to Beneficiary’s approval of each Lease, in any circumstance where, pursuant to the terms of the Lease, Grantor’s consent to any action under such Lease shall not be unreasonably withheld or delayed, and such action requires the consent of Beneficiary, Beneficiary’s consent to such action shall likewise not be unreasonably withheld or delayed. In addition, Beneficiary’s consent to such action shall be subject to the deemed approval provisions described in Section 5.3(b) above.

5.4      Transfer or Further Encumbrance of Property .

(a)    Without Beneficiary’s prior written consent, which consent may be granted or withheld in Beneficiary’s sole and absolute discretion, Grantor shall not (i) sell, assign, convey, transfer or otherwise dispose of any direct or indirect legal, beneficial or equitable interest in all or any part of the Property, (ii) permit or suffer any owner, directly or indirectly, of any beneficial interest in the Property or Grantor to transfer such interest, whether by transfer of partnership, membership,

stock or other beneficial interest in any entity or otherwise, or (iii) mortgage, pledge, hypothecate or otherwise encumber or permit to be encumbered or grant or permit to be granted a security interest in all or any part of, or a direct or indirect interest in, the Property or Grantor or any beneficial or equitable interest in either the Property or Grantor. The provisions of this Section shall not prohibit transfers of title or interest under any will or testament or applicable law of descent.

(b)    Notwithstanding anything to the contrary in this Section 5.4:

(i)     Permitted Transfers Generally . Any of the following may occur without the consent of Beneficiary and shall not be deemed a violation of the due-on-sale provisions in the Loan Documents: (x) the transfer of partnership interests, or the creation or issuance of new partnership interests (including, without limitation, in connection with exchanges made pursuant to Section 721 of the Internal Revenue Code), in Operating Partnership, or (y) the transfer of shares, or the creation, issuance or sale of new shares, in Guarantor; provided, however, that as of the date that such transaction is consummated all of the following conditions shall have been satisfied:

“ Transfer Conditions ” mean all of the following: (1) no Event of Default has occurred and is continuing, (2) Grantor shall have delivered to Beneficiary prior written notice of the proposed transfer, and a final organizational chart illustrating the ownership structure both before and after the proposed change in ownership, which organizational chart shall set forth Grantor’s direct and indirect upstream ownership, percentage interests held by each upstream entity or person and type of each such entity (3) Grantor pays all reasonable third party costs, fees and expenses (including attorneys’ fees) incurred by Beneficiary in connection with reviewing the proposed transfer and verifying all Transfer Conditions and other conditions listed above have been satisfied, whether or not the transfer is consummated, and (4) Grantor pays Beneficiary an administrative review fee (not to exceed $5000 with respect to each proposed transfer), whether or not the transfer is consummated.

(ii)     Permitted Starwood Related Transactions and Matters. Beneficiary hereby (x) consents to the issuance of the Preferred Units (as defined in the Starwood Documents) and the Series A Preferred Shares (as defined in the Starwood Documents) and (y) confirm that the Starwood Documents, the issuance of the Preferred Units, and the issuance of the Series A Preferred Shares do not constitute Events of Default under the Loan Documents.

breach of the covenants or prohibitions contained in this subsection (A) shall constitute an Event of Default under this Deed of Trust.

(iii)    Notwithstanding the foregoing provisions of this Section 5.4(b) above, an immediate violation of the due-on-sale provisions, and an immediate Event of Default under the Loan Documents, shall be triggered with respect to any transfer or other transaction described in this Section 5.4(b) if the proposed transferee or pledgee (or any of its constituents or beneficiaries), at the time of the applicable transfer or pledge: (I) is then identified by the Office of Foreign Assets Control or Department of Treasury as a person subject to trade restrictions under U.S. law, including but not limited to, the International Emergency Economic Powers Act, the Trading with the Enemy Act and any Executive Orders or regulations promulgated thereunder (as any and all of such laws and regulations have been or may hereafter be, renewed, extended, amended or replaced) with the result that such proposed transferee (or any of its constituents or beneficiaries) is in violation of law and/or transaction of business with any such party is prohibited by law, or (II) is in violation of any applicable laws relating to terrorism or money laundering, including without limitation, those relating to transacting business with persons identified in clause (I) above, the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct

Terrorism Act of 2001 (as any and all of such laws and any regulations promulgated thereunder have been or may hereafter be renewed, extended, amended or replaced); provided, however , a violation of this subsection (iii) shall constitute an Event of Default under the Loan Documents, but if such violation was triggered by any transaction described in this Section 5.4(b) above through a licensed US broker dealer that was required to implement normal and customary investor screening practices mandated by applicable law or NASD regulations, then such violation shall not (I) constitute a violation of this Section 5.4 or 5.5 or 5.7 of this Deed of Trust for the purposes of Section 18(b)(i) of the Note, (II) constitute an intentional misrepresentation of any representation and warranty contained in Section 9.20 of this Deed of Trust or with respect to Section 18(b)(ii) of the Note, or (III) require Grantor to pay any prepayment premium payable under the Note or this Deed of Trust if Beneficiary accelerates the Loan by reason of such violation while no other Event of Default is continuing; provided, further, however , that neither the provisions of this subsection (iii) nor Section 9.20 of this Deed of Trust shall be breached or violated by reason of any person’s or entity’s acquiring any shares that are publicly traded on a US stock exchange through a US stock exchange (and no Default or Event of Default shall arise as a result thereof).

(iv)    For the purposes hereof, “Eligible Assignee” shall mean any one or more of the following, provided in each instance Beneficiary has received and approved all “know your customer” and other information as Beneficiary may reasonably request with respect to such entity taking title to SPT’s preferred equity rights, remedies or interests set forth in the Preferred Equity Documents: (A) (i) a commercial bank organized under the laws of the United States, or any state thereof, respectively and having total assets in excess of $600,000,000 and liquid assets in excess of $250,000,000; (ii) an investment bank, savings and loan association or savings bank organized under the laws of the United States or any state thereof, and having total assets in excess of $600,000,000 and liquid assets in excess of $250,000,000; (iii) a commercial bank organized under the laws of any other country that is a member of the OECD or has concluded special lending arrangements with the International Monetary Fund associated with its General Arrangements to Borrow, or a political subdivision of any such country, and having total assets in excess of $600,000,000 and liquid assets in excess of $250,000,000, so long as such bank is acting through a branch or agency located in the United States; (iv) the central bank of any country that is a member of the OECD; (v) a real estate investment trust, trust company, commercial credit corporation, hedge fund, opportunity fund, pension plan, pension fund or pension advisory firm, mutual fund, government entity, plan finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and having total assets in excess of $600,000,000 and liquid assets in excess of $250,000,000; (iv) an investment fund, investment company, money management firm or “qualified institutional buyer” within the meaning of Rule 144A under the securities Act of 1933, as amended, or an institutional “accredited investor” within the meaning of Regulation D under the Securities Act of 1933, as amended, and (vii) any entity described in clauses (i) through (vi) above acting as agent on behalf of another lender or group of lenders, whether or not such lenders are Eligible Assignees and (B) any entity Controlling, Controlled by or under common Control with any Person descried in clause (A).

As used herein, “Control” means (i) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise, and (ii) the ownership, direct or indirect, of no less than fifty-one percent (51%) of the voting securities of such Person, and the terms “Controlled”, “Controlling” and “Common Control” shall have correlative meanings.

5.5      Further Encumbrance of Chattels . Grantor will neither create nor permit any lien, security interest or encumbrance against the Chattels or Intangible Personalty or any part thereof or interest therein, other than the liens and security interests created by the Loan Documents, without the prior written consent of Beneficiary, which may be withheld for any reason.

5.6      Assessments Against Property . Grantor will not, without the prior written approval of Beneficiary, which may be withheld for any reason, hereafter consent to or allow the creation of any so called special districts, special improvement districts, benefit assessment districts or similar districts, or any other body or entity of any type, or allow to occur any other event, that would or might result in the imposition of any additional taxes, assessments or other monetary obligations or burdens on the Property, (other than increases in ad valorem real estate taxes from time to time imposed by applicable taxing authorities), and this provision shall serve as RECORD NOTICE to any such district or districts or any governmental entity under whose authority such district or districts exist or are being formed that, should Grantor or any other person or entity include all or any portion of the Property in such district or districts, whether formed or in the process of formation, without first obtaining Beneficiary’s express written consent, the rights of Beneficiary in the Property pursuant to this Security Instrument or following any foreclosure of this Security Instrument, and the rights of any person or entity to whom Beneficiary might transfer the Property following a foreclosure of this Security Instrument, shall be senior and superior to any taxes, charges, fees, assessments or other impositions of any kind or nature whatsoever, or liens (whether statutory, contractual or otherwise) levied or imposed, or to be levied or imposed, upon the Property or any portion thereof as a result of inclusion of the Property in such district or districts.

5.7      Transfer or Removal of Chattels . Grantor will not sell, transfer or remove from the Property all or any part of the Chattels, unless the items sold, transferred, or removed are obsolete or are simultaneously replaced with similar items of equal or greater value.

5.8      Change of Name, Organizational I.D. No. or Location . Grantor will not change its name or the name under which it does business (or adopt or begin doing business under any other name or assumed or trade name), change its organizational identification number, or change its location, without first notifying Beneficiary of its intention to do so and delivering to Beneficiary such organizational documents of Grantor and executed modifications or supplements to this Security Instrument (and to any financing statement which may be filed in connection herewith) as Beneficiary may require. For purposes of the foregoing, Grantor’s “ location ” shall mean (a) if Grantor is a registered organization, Grantor’s state of registration, (b) if Grantor is an individual, the state of Grantor’s principal residence, or (c) if Grantor is neither a registered organization nor an individual, the state in which Grantor’s place of business (or, if Grantor has more than one place of business, the Grantor’s chief executive office) is located.

5.9      Improper Use of Property or Chattels . Grantor will not use the Property or the Chattels for any purpose or in any manner which violates any applicable law, ordinance, or other governmental requirement, the requirements or conditions of any insurance policy, or any private covenant.

5.10      ERISA . Grantor shall not engage in any transaction which would cause the Note (or the exercise by Beneficiary of any of its rights under the Loan Documents) to be a non-exempt, prohibited transaction under ERISA (including for this purpose the parallel provisions of Section 4975 of the Internal Revenue Code of 1986, as amended), or otherwise result in Beneficiary being deemed in violation of any applicable provisions of ERISA. Grantor shall indemnify, protect, defend, and hold Beneficiary harmless for, from and against any and all losses, liabilities, damages, claims, demands, judgments, costs, and expenses (including, without limitation attorneys’ fees and costs incurred in the investigation, defense, and settlement of claims and in obtaining any individual ERISA exemption or state administrative exception that may be required, in Beneficiary’s sole and absolute discretion) that Beneficiary may incur, directly or indirectly, as the result of the breach by Grantor of any warranty or representation set forth in Section 3.3(x) hereof or the breach by Grantor of any covenant contained in this Section. This indemnity shall survive any termination, satisfaction or foreclosure of this Security Instrument and shall not be subject to the limitation on personal liability described in the Note. IT IS THE EXPRESS INTENTION OF GRANTOR AND BENEFICIARY THAT THE INDEMNITY SET FORTH IN THIS SECTION SHALL COVER LOSSES, LIABILITIES, DAMAGES, CLAIMS, JUDGMENTS, COSTS AND EXPENSES ARISING FROM THE NEGLIGENCE (EXCLUDING GROSS NEGLIGENCE) OF THE INDEMNIFIED PARTY.

5.11      Use of Proceeds . Grantor will not use any funds advanced by Beneficiary under the Loan Documents for household or agricultural purposes, to purchase margin stock, or for any purpose prohibited by law.

5.12      REA and Other Major Approvals . Without Beneficiary’s prior written consent, which may be granted or withheld in Beneficiary’s reasonable discretion, Grantor shall not enter into or modify any reciprocal easement agreement, declaration, covenant, condition or restriction, ground lease, operating agreement, or any document recorded against the Property.

5.13      Single Purpose Entity . Grantor shall not engage in any business other than the ownership, development, operation and disposition of the Property, and shall not incur any subordinated debt or unsecured debt except customary lease financings of non-fixture equipment in the ordinary course of Grantor’s business and except to trade creditors and service providers in the ordinary course of Grantor’s business.

ARTICLE 6

EVENTS OF DEFAULT

Each of the following events will constitute an event of default (an “ Event of Default ”) under this Security Instrument and under each of the other Loan Documents:

6.1      Failure to Pay Note . Grantor’s failure to make any payment when due under the terms of the Note or any other Loan Document.

6.2      Due on Sale or Encumbrance . The occurrence of any violation of any covenant contained in Section 5.4, 5.5 or 5.7 hereof.

6.3      Other Obligations . The failure of Grantor or Guarantor to properly perform any obligation contained herein or in any of the other Loan Documents (other than the obligation to make payments under the Note or the other Loan Documents) and the continuance of such failure for a period of thirty (30) days following written notice thereof from Beneficiary to Grantor; provided, however, that if such failure is not curable within such thirty (30) day period, then, so long as Grantor commences to cure such failure within such thirty (30) day period and is continually and diligently attempting to cure to completion, such failure shall not be an Event of Default unless such failure remains uncured for one hundred twenty (120) days after such written notice to Grantor.

6.4      Levy Against Property . The levy against any of the Property, Chattels or Intangible Personalty, of any execution, attachment, sequestration or other writ.

6.5      Liquidation . The liquidation, termination or dissolution of Grantor or any Controlling Person, at any time that Grantor is the borrower under the Loan.

6.6      Appointment of Receiver . The appointment of a trustee or receiver for the assets, or any part thereof, of Grantor, or any Controlling Person, or the appointment of a trustee or receiver for any real or personal property, or the like, or any part thereof, representing the security for the Secured Obligations.

6.7      Assignments . The making by Grantor or any Controlling Person of a transfer in fraud of creditors or an assignment for the benefit of creditors.

6.8      Order for Relief . The entry in bankruptcy of an order for relief for or against Grantor or any Controlling Person.

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

6.10      Misrepresentation . If any representation or warranty made by Grantor or any Controlling Person, or in any of the other Loan Documents or any other instrument or document modifying, renewing, extending, evidencing, securing or pertaining to the Note is false, or intentionally misleading in any material respect.

6.11      Judgments . The failure of (a) Grantor or GC Member to pay any money judgment in excess of $10,000.00 or (b) any Controlling Person to pay any money judgment in excess of $200,000.00, in either case against any such party before the expiration of thirty (30) days after such judgment becomes final and no longer appealable.

6.12      Admissions Regarding Debts . The admission of Grantor or any Controlling Person in writing, other than to Beneficiary, of any such party’s inability to pay such party’s debts as they become due.

6.13      Assertion of Priority . The assertion of any claim of priority over this Security Instrument, by title, lien, or otherwise, unless Grantor within forty-five (45) days after such assertion either causes the assertion to be withdrawn or provides Beneficiary with such security as Beneficiary may require to protect Beneficiary against all loss, damage, or expense, including attorneys’ fees, which Beneficiary may incur in the event such assertion is upheld.

6.14      Other Loan Documents . The occurrence of any default by Grantor, after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any of the Loan Documents other than this Security Instrument.

6.15      Other Liens . The occurrence of any default by Grantor, after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any other consensual lien encumbering the Property, or any part thereof or interest therein, or any document or instrument evidencing obligations secured thereby.

6.16      Other Indebtedness . The occurrence of any default by Grantor, after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any other indebtedness incurred or owing by Grantor, or any document or instrument evidencing any obligation to pay such indebtedness.

6.17      Guaranty . Guarantor’s (a) failure to make any payment in full under the terms of the Guaranty within ten (10) Business Days following written notice by Beneficiary to Guarantor demanding such payment, or (b) failure to properly perform any of Guarantor’s material obligations under the Guaranty (other than those referenced in clause (a) above) and the continuance of such failure for a period of thirty (30) days following written notice thereof from Beneficiary to Guarantor; provided, however, that if such failure is not curable within such thirty (30) day period, then so long as Guarantor commences to cure such failure within such thirty (30) day period and is continually and diligently attempting to cure to completion such failure shall not be an Event of Default unless such failure remains uncured for one hundred twenty (120) days after such written notice to Guarantor.

Grantor acknowledges that for all purposes in the Loan Documents, Beneficiary’s acceptance of any cure of an Event of Default, and/or Beneficiary’s decision to reinstate the Loan after an Event of Default has occurred, shall be made by Beneficiary in its sole and absolute discretion.

6.18      Other Loan Documents . Any “Event of Default” (as defined in the Other Loan Documents) under any of the Other Loan Documents shall constitute an Event of Default hereunder and under the other Loan Documents. Any “Event of Default” (as defined in the Other Loan Guaranty Documents) under any of the Other Loan Guaranty Documents shall constitute an Event of Default hereunder and under the Loan Documents. Grantor and Beneficiary hereby acknowledge and agree that (i) the owners of Grantor own a direct or indirect interest in the Other Borrowers; (ii) that the foregoing provisions have been made in consideration of, among other things, Beneficiary’s agreement to modify the Loan to Grantor under such terms and conditions as agreed by the parties; and (iii) that this Section 6.18 has been agreed to for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

ARTICLE 7
BENEFICIARY’S REMEDIES

Immediately upon or any time after the occurrence of any Event of Default hereunder, Beneficiary may exercise any remedy available at law or in equity, including but not limited to those listed below and those listed in the other Loan Documents, in such sequence or combination as Beneficiary may determine in Beneficiary’s sole discretion:

7.1      Performance of Defaulted Obligations . Beneficiary may make any payment or perform any other obligation under the Loan Documents or under Leases which Grantor has failed to make or perform, and Grantor hereby irrevocably appoints Beneficiary as the true and lawful attorney-in-fact for Grantor to make any such payment and perform any such obligation in the name of Grantor and such appointment is deemed coupled with an interest. All payments made and expenses (including attorneys’ fees and expenses) incurred by Beneficiary in this connection, together with interest thereon at the Default Rate from the date paid or incurred until repaid, will be part of the Secured Obligations and will be immediately due and payable by Grantor to Beneficiary. In lieu of advancing Beneficiary’s own funds for such purposes, Beneficiary may use any funds of Grantor which may be in Beneficiary’s possession, including but not limited to insurance or condemnation proceeds and amounts deposited for taxes, insurance premiums, or other purposes.

7.2      Specific Performance and Injunctive Relief . Notwithstanding the availability of legal remedies, Beneficiary will be entitled to obtain specific performance, mandatory or prohibitory injunctive relief, or other equitable relief requiring Grantor to cure or refrain from repeating any Default.

7.3      Acceleration of Secured Obligations . Beneficiary may, without notice or demand, declare all of the Secured Obligations immediately due and payable in full.

7.4      Suit for Monetary Relief . Subject to the non-recourse provisions of the Note, with or without accelerating the maturity of the Secured Obligations, Beneficiary may sue from time to time for any payment due under any of the Loan Documents, or for money damages resulting from Grantor’s default under any of the Loan Documents.

7.5      Possession of Property . To the extent permitted by law, Beneficiary may enter and take possession of the Property without seeking or obtaining the appointment of a receiver, may employ a managing agent for the Property, and may lease or rent all or any part of the Property, either in Beneficiary’s name or in the name of Grantor, and may collect the rents, issues, and profits of the Property. Any revenues collected by Beneficiary under this Section will be applied first toward payment of all expenses (including attorneys’ fees) incurred by Beneficiary, together with interest thereon at the Default Rate from the date incurred until repaid, and the balance, if any, will be applied against the Secured Obligations in such order and manner as Beneficiary may elect in its sole discretion.

7.6      Enforcement of Security Interests . Beneficiary may exercise all rights of a secured party under the Code with respect to the Chattels and the Intangible Personalty, including but not limited to taking possession of, holding, and selling the Chattels and enforcing or otherwise realizing upon any accounts and general intangibles. Any requirement for reasonable notice of the time and place of any public sale, or of the time after which any private sale or other disposition is to be made, will be satisfied by Beneficiary’s giving of such notice to Grantor at least ten (10) days prior to the time of any public sale or the time after which any private sale or other intended disposition is to be made. Without limiting the generality of the foregoing, it is the express understanding and intent of the parties that as to any personal property interests subject to Chapter 9 of the Code, Beneficiary, upon an Event of Default, may proceed under such Code or may proceed as to both real and personal property interests in accordance with the provisions of this Security Interest and its rights and remedies in respect to real property, and treat both real and personal property interests as one parcel or package of security.

7.7      Foreclosure Against Property .

(a)    Beneficiary or Trustee, upon written request of Beneficiary, may: (i) commence a judicial action to foreclose the lien of this Security Instrument as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (ii) exercise the power of sale herein contained, and deliver to Trustee a written statement of breach, notice of default and election to cause Grantor’s interest in the Property to be sold; and/or (iii) deposit with Trustee this Security Instrument and the Note and such receipts and evidence of expenditures made and secured hereby as Trustee may require.

(b)    Upon receipt of such statement and notice from Beneficiary, Trustee shall cause to be recorded, published and delivered to Grantor such notice of sale as then required by law and by this Security Instrument. Trustee shall, without other demand on Grantor, after lapse of such time as may then be required by law and after recordation of a notice of sale and after such notice of sale having been given as required by law, sell the Property at the time and place of sale fixed by it in said notice of sale and in accordance with applicable laws of the State of Texas, either as a whole or in separate lots or parcels or items as Trustee shall deem expedient, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Grantor, Trustee or Beneficiary, may purchase at such sale and Grantor hereby covenants to warrant and defend the title of such purchaser or purchasers.

(c)    After deducting all costs, fees and expenses of Trustee and of this trust, including, without limitation, Trustee’s fees and reasonable attorneys’ fees and costs of evidence of title in connection with sale, Trustee shall apply the proceeds of sale in the following priority, to payment of: (i) first, all sums expended under the terms of the Loan Documents, not then repaid, with accrued interest thereon at the Default Rate; (ii) second, all sums due under the Note; (iii) all other sums, then secured thereby; and (iv) the remainder, if any, to the person or persons legally entitled thereto.

(d)    Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement or subsequently noticed sale, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale.

(e)    Nothing in this Section dealing with foreclosure procedures or specifying particular actions to be taken by Beneficiary shall be deemed to contradict or add to the requirements and procedures now or hereafter specified by the laws of the State of Texas, and any such inconsistency shall be resolved in favor of the State’s law applicable at the time of foreclosure. In any event, all foreclosures under the power of sale which is herein conferred shall be accomplished in accordance with the following provisions:

(i)     Public Sale . Trustee is hereby authorized and empowered, and it shall be Trustee’s special duty, upon such request of Beneficiary, to sell the Property, or any part thereof, at public auction to the highest bidder for cash, with or without having taken possession of same. Any such sale (including notice thereof) shall comply with the applicable requirements, at the time of the sale, of Section 51.002 of the Texas Property Code or, if and to the extent such statute is not then in force, with the applicable requirements, at the time of the sale, of the successor statute or statutes, if any, governing sales of Texas real property under powers of sale conferred by deeds of trust. If there is no statute in force at the time of the sale governing sales of Texas real property under powers of sale conferred by deeds of trust, such sale shall comply with applicable law, at the time of the sale, governing sales of Texas real property under powers of sale conferred by deeds of trust. 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.

(ii)     Right to Require Proof of Financial Ability and/or Cash Bid . At any time during the bidding, the Trustee may require a bidding party (i) to disclose its full name, state and city of residence, occupation, and specific business office location, and the name and address of the principal the bidding party is representing (if applicable), and (ii) to demonstrate reasonable evidence of the bidding party’s financial ability (or, if applicable, the financial ability of the principal of such bidding party), as a condition to the bidding party submitting bids at the foreclosure sale. If any such bidding party (the “ Questioned Bidder ”) declines to comply with the Trustee’s requirement in this regard, or if such Questioned Bidder does respond but the Trustee, in Trustee’s sole and absolute discretion, deems the information or the evidence of the financial ability of the Questioned Bidder (or, if applicable, the principal of such bidding party) to be inadequate, then the Trustee may continue the bidding with reservation; and in such event (A) the Trustee shall be authorized to caution the Questioned Bidder concerning the legal obligations to be incurred in submitting bids, and (B) if the Questioned Bidder is not the highest bidder at the sale, or if having been

the highest bidder the Questioned Bidder fails to deliver the cash purchase price payment promptly to the Trustee, all bids by the Questioned Bidder shall be null and void. The Trustee may, in Trustee’s sole and absolute discretion, determine that a credit bid may be in the best interest of the Grantor and Beneficiary, and elect to sell the Property for credit or for a combination of cash and credit; provided, however, that the Trustee shall have no obligation to accept any bid except an all cash bid. In the event the Trustee requires a cash bid and cash is not delivered within a reasonable time after conclusion of the bidding process, as specified by the Trustee, but in no event later than 3:45 p.m. local time on the day of sale, then said contingent sale shall be null and void, the bidding process may be recommenced, and any subsequent bids or sale shall be made as if no prior bids were made or accepted.

(iii)     Sale Subject to Unmatured Debt . In addition to the rights and powers of sale granted under the preceding provisions of this subsection, if default is made in the payment of any installment of the Secured Obligations and is not cured within applicable cure periods, Beneficiary may, at Beneficiary’s option, at once or at any time thereafter while any matured installment remains unpaid, without declaring the entire Secured Obligations to be due and payable, orally or in writing direct Trustee to enforce this Security Instrument and to sell the Property subject to such unmatured Secured Obligations and to the rights, powers, liens, security interests, and assignments securing or providing recourse for payment of such unmatured Secured Obligations, in the same manner, all as provided in the preceding provisions of this subsection. Sales made without maturing the Secured Obligations may be made hereunder whenever there is an uncured default in the payment of any installment of the Secured Obligations, without exhausting the power of sale granted hereby, and without affecting in any way the power of sale granted under this subsection, the unmatured balance of the Secured Obligations or the rights, powers, liens, security interests, and assignments securing or providing recourse for payment of the Secured Obligations.

(iv)     Partial Foreclosure . Sale of a part of the Property shall not exhaust the power of sale, but sales may be made from time to time until the Secured Obligations are paid in full. It is intended by each of the foregoing provisions of this subsection that Trustee may, after any request or direction by Beneficiary, sell not only the land and the improvements, but also the equipment and other interests constituting a part of the Property or any part thereof, along with the land and the improvements or any part thereof, as a unit and as a part of a single sale, or may sell at any time or from time to time any part or parts of the Property separately from the remainder of the Property. It shall not be necessary to have present or to exhibit at any sale any of the Property. Any sale of personal property made hereunder shall be deemed to have been a public sale conducted in a commercially reasonable manner if held contemporaneously with, or as part of, and upon the same notice as required for the sale of real property under the power of sale granted herein.

(v)     Trustee’s Deeds . AFTER ANY SALE UNDER THIS SUBSECTION, TRUSTEE SHALL MAKE GOOD AND SUFFICIENT DEEDS, ASSIGNMENTS, AND OTHER CONVEYANCES TO THE PURCHASER OR PURCHASERS THEREUNDER IN THE NAME OF GRANTOR, CONVEYING THE PROPERTY OR ANY PART THEREOF SO SOLD TO THE PURCHASER OR PURCHASERS WITH GENERAL WARRANTY OF TITLE BY GRANTOR. IT IS AGREED THAT IN ANY DEEDS, ASSIGNMENTS OR OTHER CONVEYANCES GIVEN BY TRUSTEE, ABSENT FRAUD, WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, ANY AND ALL STATEMENTS OF FACT OR OTHER RECITALS THEREIN MADE AS TO THE IDENTITY OF BENEFICIARY, THE OCCURRENCE OR EXISTENCE OF ANY EVENT OF DEFAULT, THE NOTICE OF INTENTION TO ACCELERATE, OR ACCELERATION OF, THE MATURITY OF THE SECURED OBLIGATIONS, THE REQUEST TO SELL, NOTICE OF SALE, TIME, PLACE, TERMS AND MANNER OF SALE, AND RECEIPT, DISTRIBUTION, AND APPLICATION OF THE MONEY REALIZED THEREFROM, THE DUE AND PROPER APPOINTMENT OF A SUBSTITUTE TRUSTEE, AND WITHOUT BEING LIMITED BY THE FOREGOING, ANY OTHER ACT OR THING HAVING BEEN DULY DONE BY OR ON BEHALF OF BENEFICIARY OR BY OR ON BEHALF OF TRUSTEE, SHALL BE TAKEN BY ALL COURTS OF LAW AND EQUITY AS PRIMA FACIE EVIDENCE THAT SUCH STATEMENTS OR RECITALS STATE TRUE, CORRECT, AND COMPLETE FACTS AND ARE WITHOUT FURTHER QUESTION TO BE SO ACCEPTED, AND GRANTOR DOES HEREBY RATIFY AND CONFIRM ANY AND ALL ACTS THAT TRUSTEE MAY LAWFULLY DO IN THE PREMISES BY VIRTUE HEREOF.

7.8      Appointment of Receiver . To the extent permitted by law, Beneficiary shall be entitled, as a matter of absolute right and without regard to the value of any security for the Secured Obligations or the solvency of any person liable therefor, to the appointment of a receiver for the Property upon ex-parte application to any court of competent jurisdiction. Grantor waives any right to any hearing or notice of hearing prior to the appointment of a receiver. Such receiver and its agents shall be empowered, but shall not be obligated to (a) take possession of the Property and any businesses conducted by Grantor or any other person thereon and any business assets used in connection therewith, (b) exclude Grantor and Grantor’s agents, servants, and employees from the Property, (c) collect the rents, issues, profits, and income therefrom, (d) complete any construction which may be in progress, (e) do such

maintenance and make such repairs and alterations as the receiver deems necessary, (f) use all stores of materials, supplies, and maintenance equipment on the Property and replace such items at the expense of the receivership estate, (g) pay all taxes and assessments against the Property and the Chattels, all premiums for insurance thereon, all utility and other operating expenses, and all sums due under any prior or subsequent encumbrance, and (h) generally do anything which Grantor could legally do if Grantor were in possession of the Property. All expenses incurred by the receiver or its agents shall constitute a part of the Secured Obligations. Any revenues collected by the receiver shall be applied first to the expenses of the receivership, including attorneys’ fees incurred by the receiver and by Beneficiary, together with interest thereon at the Default Rate from the date incurred until repaid, and the balance shall be applied toward the Secured Obligations in such order or manner as Beneficiary may in its sole discretion elect or in such other manner as the court may direct. Unless sooner terminated with the express consent of Beneficiary, any such receivership will continue until the Secured Obligations have been discharged in full, or until title to the Property has passed after foreclosure sale and all applicable periods of redemption have expired.

7.9      Right to Make Repairs, Improvements . Should any part of the Property come into the possession of Beneficiary, whether before or after an Event of Default, Beneficiary may, but shall not be obligated to, use, operate, and/or make repairs, alterations, additions and improvements to the Property for the purpose of preserving it or its value. Grantor covenants to promptly reimburse and pay to Beneficiary, at the place where the Note is payable, or at such other place as may be designated by Beneficiary in writing, the amount of all reasonable expenses (including the cost of any insurance, taxes, or other charges) incurred by Beneficiary in connection with its custody, preservation, use or operation of the Property, together with interest thereon from the date incurred by Beneficiary at the Default Rate, and all such expenses, costs, taxes, interest, and other charges shall be a part of the Secured Obligations. It is agreed, however, that the risk of accidental loss or damage to the Property is undertaken by Grantor and Beneficiary shall have no liability whatsoever for decline in value of the Property, for failure to obtain or maintain insurance, or for failure to determine whether any insurance ever in force is adequate as to amount or as to the risks insured.

7.10      Collateral for All Obligations . Grantor acknowledges that the Property is collateral for the full amount of the Secured Obligations. Neither Beneficiary nor Trustee shall be required to marshal all or any part of the Property or proceed against all or any part of the Property in any particular sequence, and Beneficiary shall not be limited in the amount it can recover from the Property to satisfy the Secured Obligations.

7.11      Surrender of Insurance . Provided (a) Beneficiary is replacing the insurance policies maintained pursuant to the terms hereof with comparable insurance policies providing comparable insurance coverage, or (b) Beneficiary has foreclosed upon the Property, whether pursuant to judicial proceeding or by exercise or power of sale, Beneficiary may surrender the insurance policies maintained pursuant to the terms hereof, or any part thereof, and receive and apply the unearned premiums as a credit on the Secured Obligations and, in connection therewith, Grantor hereby appoints Beneficiary (or any officer of Beneficiary), as the true and lawful agent and attorney-in-fact for Grantor (with full powers of substitution), which power of attorney shall be deemed to be a power coupled with an interest and therefore irrevocable, to collect such premiums.

7.12      Indemnity of Trustee . If any suit or proceeding be brought against the Trustee or Beneficiary relating to this Security Instrument or the loan secured hereby or if any suit or proceeding be brought which may affect the value or title of the Property, Grantor shall defend, indemnify and hold harmless and on demand reimburse Trustee or Beneficiary from any loss, cost, damage or expense unless caused by Trustee’s or Beneficiary’s negligence or willful misconduct and any sums expended by Trustee or Beneficiary shall bear interest at the Default Rate and shall be due and payable on demand. IT IS THE EXPRESS INTENTION OF GRANTOR AND BENEFICIARY THAT THE INDEMNITY SET FORTH IN THIS SECTION SHALL COVER LOSSES, COSTS, DAMAGES AND EXPENSES CAUSED BY THE NEGLIGENCE (EXCLUDING GROSS NEGLIGENCE) OF THE INDEMNIFIED PARTY.

7.13      Civil Action . In the event that Trustee is named as a party to any civil action as Trustee in this Security Instrument, the Trustee shall be entitled to employ an attorney at law, including Trustee if Trustee is a licensed attorney, to represent Trustee in such action and the reasonable attorney’s fee of the Trustee in such action shall be paid by the Beneficiary and added to the principal of the Note secured by this Security Instrument and bear interest at the Default Rate provided in the Note.

7.14      Credit of Beneficiary . To the maximum extent permitted by the laws of the State of Texas, on a sale made under or by virtue of this Article, Beneficiary may bid and acquire the Property, or any part thereof, and in lieu of paying cash thereof may apply to the purchase price, all or any portion of the unpaid Secured Obligations in such order as Beneficiary may elect.

7.15      Prima Facie Evidence . Grantor agrees that, in any assignments, deeds, bills of sale, notices of sale, or postings, given by Beneficiary, any and all statements of fact or other recitals therein made as to the identity of Beneficiary, or as to the occurrence or existence of any Event of Default, or as to the acceleration of the maturity of the Secured Obligations, or as to the request to sell, posting of notice of sale, notice of sale, time, place, terms and manner of sale and receipt, distribution and application of the money realized therefrom, and without being limited by the foregoing, as to any other act or thing having been duly done by Beneficiary, shall be taken by all courts of law and equity as prima facie evidence that such statements or recitals state facts and are without further

question to be so accepted, and Grantor does hereby ratify and confirm any and all acts that Beneficiary may lawfully do by virtue hereof.

ARTICLE 8
ASSIGNMENT OF LEASES AND RENTS

8.1      Assignment of Leases and Rents . Grantor hereby unconditionally and absolutely and presently grants, transfers and assigns unto Beneficiary all rents, royalties, issues, profits and income (“Rents”) now or hereafter due or payable for the occupancy or use of the Property, and all Leases, whether written or oral, with all security therefor, including all guaranties thereof, now or hereafter affecting the Property; on the condition that Beneficiary hereby grants to Grantor, however, a license to collect and retain such Rents prior to the occurrence of any Event of Default hereunder. Such license shall be revocable by Beneficiary without notice to Grantor at any time after the occurrence of an Event of Default. Grantor represents that the Rents and the Leases have not been heretofore sold, assigned, transferred or set over by any instrument now in force and will not at any time during the life of this assignment be sold, assigned, transferred or set over by Grantor or by any person or persons whomsoever; and Grantor has good right to sell, assign, transfer and set over the same and to grant to and confer upon Beneficiary the rights, interest, powers and authorities herein granted and conferred. Failure of Beneficiary at any time or from time to time to enforce the assignment of Rents and Leases under this Section shall not in any manner prevent its subsequent enforcement, and Beneficiary is not obligated to collect anything hereunder, but is accountable only for sums actually collected.

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

8.3      Application of Rents . Beneficiary shall be entitled to deduct and retain a just and reasonable compensation from monies received hereunder for its services or that of its agents in collecting such monies. Any monies received by Beneficiary hereunder may be applied when received from time to time in payment of any taxes, assessments or other liens affecting the Property regardless of the delinquency, such application to be in such order as Beneficiary may determine. The acceptance of this Security Instrument by Beneficiary or the exercise of any rights by it hereunder shall not be, or be construed to be, an affirmation by it of any Lease nor an assumption of any liability under any Lease.

8.4      Collection of Rents . To the extent not prohibited by applicable law, upon or at any time after an Event of Default shall have occurred and be continuing, Beneficiary may declare all sums secured hereby immediately due and payable, and may, at its option, without notice, and whether or not the Secured Obligations shall have been declared due and payable, either in person or by agent, with or without bringing any action or proceeding, or by a receiver to be appointed by a court, (i) enter upon, take possession of, manage and operate the Property, or any part thereof (including without limitation making necessary repairs, alterations and improvements to the Property); (ii) make, cancel, enforce or modify Leases; (iii) obtain and evict tenants; (iv) fix or modify Rents; (v) do any acts which Beneficiary deems reasonably proper to protect the security thereof; and (vi) either with or without taking possession of the Property, in its own name sue for or otherwise collect and receive such Rents, including those past due and unpaid. In connection with the foregoing, Beneficiary shall be entitled and empowered to employ attorneys, and management, rental and other agents in and about the Property and to effect the matters which Beneficiary is empowered to do, and in the event Beneficiary shall itself effect such matters, Beneficiary shall be entitled to charge and receive reasonable management, rental and other fees therefor as may be customary in the area in which the Property is located; and the reasonable fees, charges, costs and expenses of Beneficiary or such persons shall be additional Secured Obligations. Beneficiary may apply all funds collected as aforesaid, less costs and expenses of operation and collection, including reasonable attorneys’ and agents’ fees, charges, costs and expenses, as aforesaid, upon any Secured Obligations, and in such order as Beneficiary may determine. The entering upon and taking possession of the Property, the collection of such Rents and the application thereof as aforesaid shall not cure or waive any default or waive, modify or affect notice of default under the Note or this Security Instrument or invalidate any act done pursuant to such notice.

8.5      Authority of Beneficiary . Any tenants or occupants of any part of the Property are hereby authorized to recognize the claims of Beneficiary hereunder without investigating the reason for any action taken by Beneficiary, or the validity or the amount of indebtedness owing to Beneficiary, or the existence of any default in the Note or this Security Instrument, or under or by reason of this assignment of Rents and Leases, or the application to be made by Beneficiary of any amounts to be paid to Beneficiary. The sole signature of Beneficiary shall be sufficient for the exercise of any rights under this assignment and the sole receipt of Beneficiary for any sums received shall be a full discharge and release therefor to any such tenant or occupant of the Property. Checks for all or any part of the rentals collected under this assignment of Rents and Leases shall be drawn to the exclusive order of Beneficiary.

8.6      Indemnification of Beneficiary . Nothing herein contained shall be deemed to obligate Beneficiary to perform or discharge any obligation, duty or liability of any lessor under any Lease of the Property, and Grantor shall and does hereby indemnify and hold Beneficiary harmless from any and all liability, loss or damage which Beneficiary may or might incur under any Lease of the Property or by reason of this assignment; and any and all such liability, loss or damage incurred by Beneficiary, together with the costs and expenses, including reasonable attorneys’ fees, incurred by Beneficiary in defense of any claims or demands therefor (whether

successful or not), shall be additional Secured Obligations, and Grantor shall reimburse Beneficiary therefor on demand. IT IS THE EXPRESS INTENTION OF GRANTOR AND BENEFICIARY THAT THE INDEMNITY SET FORTH IN THIS SECTION SHALL COVER LIABILITIES, LOSSES AND DAMAGES CAUSED BY THE NEGLIGENCE (EXCLUDING GROSS NEGLIGENCE) OF THE INDEMNIFIED PARTY.

8.7      Texas Assignment of Rents Act . Notwithstanding anything to the contrary in this Security Instrument, the Texas Assignment of Rents Act that was enacted in 2011 and added to the Texas Property Code as new Chapter 64 will govern enforcement of such assignment of rents, the application of proceeds, and the turnover of rents to Beneficiary.

ARTICLE 9
MISCELLANEOUS PROVISIONS

9.1      Time of the Essence . Time is of the essence with respect to all of Grantor’s obligations under the Loan Documents.

9.2      Joint and Several Obligations . If Grantor is more than one person or entity, then (a) all persons or entities comprising Grantor are jointly and severally liable for all of the Secured Obligations; (b) all representations, warranties, and covenants made by Grantor shall be deemed representations, warranties, and covenants of each of the persons or entities comprising Grantor; (c) any breach, Default or Event of Default by any persons or entities comprising Grantor hereunder shall be deemed to be a breach, Default or Event of Default of Grantor; (d) any reference herein contained to the knowledge or awareness of Grantor shall mean the knowledge or awareness of any of the persons or entities comprising Grantor; and (e) any event creating personal liability of any of the persons or entities comprising Grantor shall create personal liability for all such persons or entities.

9.3      Waiver of Homestead and Other Exemptions . To the extent permitted by law, Grantor hereby waives all rights to any homestead or other exemption to which Grantor would otherwise be entitled under any present or future constitutional, statutory, or other provision of applicable state or federal law. Grantor hereby waives any right it may have to require Beneficiary to marshal all or any portion of the security for the Secured Obligations.

9.4      Non-Recourse; Exceptions to Non-Recourse . Except as expressly set forth in the Note, the recourse of Beneficiary with respect to the obligations evidenced by the Note and the other Loan Documents shall be solely to the Property, Chattels and Intangible Personalty, and any other collateral given as security for the Note.

9.5      Rights and Remedies Cumulative . Beneficiary’s rights and remedies under each of the Loan Documents are cumulative of the right and remedies available to Beneficiary under each of the other Loan Documents and those otherwise available to Beneficiary at law or in equity. No act of Beneficiary shall be construed as an election to proceed under any particular provision of any Loan Document to the exclusion of any other provision in the same or any other Loan Document, or as an election of remedies to the exclusion of any other remedy which may then or thereafter be available to Beneficiary.

9.6      No Implied Waivers . Beneficiary shall not be deemed to have waived any provision of any Loan Document unless such waiver is in writing and is signed by Beneficiary. Without limiting the generality of the preceding sentence, neither Beneficiary’s acceptance of any payment with knowledge of a Default by Grantor, nor any failure by Beneficiary to exercise any remedy following a Default by Grantor shall be deemed a waiver of such Default, and no waiver by Beneficiary of any particular Default on the part of Grantor shall be deemed a waiver of any other Default or of any similar Default in the future.

9.7      No Third-Party Rights . No person shall be a third-party beneficiary of any provision of any of the Loan Documents. All provisions of the Loan Documents favoring Beneficiary are intended solely for the benefit of Beneficiary, and no third party shall be entitled to assume or expect that Beneficiary will waive or consent to modification of any such provision in Beneficiary’s sole discretion.

9.8      Preservation of Liability and Priority . Without affecting the liability of Grantor or of any other person (except a person expressly released in writing) for payment and performance of all of the Secured Obligations, and without affecting the rights of Beneficiary with respect to any security not expressly released in writing, and without impairing in any way the priority of this Security Instrument over the interests of any person acquired or first evidenced by recording subsequent to the recording hereof, Beneficiary may, either before or after the maturity of the Note, and without notice or consent: (a) release any person liable for payment or performance of all or any part of the Secured Obligations; (b) make any agreement altering the terms of payment or performance of all or any of the Secured Obligations; (c) exercise or refrain from exercising, or waive, any right or remedy which Beneficiary may have under any of the Loan Documents; (d) accept additional security of any kind for any of the Secured Obligations; or (e) release or otherwise deal with any real or personal property securing the Secured Obligations. Any person acquiring or recording evidence of any interest of any nature in the Property, the Chattels, or the Intangible Personalty shall be deemed, by acquiring such interest or recording any evidence thereof, to have agreed and consented to any or all such actions by Beneficiary.

9.9      Subrogation of Beneficiary . Beneficiary shall be subrogated to the lien of any previous encumbrance discharged with funds advanced by Beneficiary under the Loan Documents, regardless of whether such previous encumbrance has been released of record.

9.10      Notices . Any notice required or permitted to be given by Grantor or Beneficiary under this Security Instrument shall be in writing and will be deemed given (a) upon personal delivery, (b) on the first Business Day after receipted delivery to a courier service which guarantees next-business-day delivery, or (c) on the third Business Day after mailing, by registered or certified United States mail, postage prepaid, in any case to the appropriate party at its address set forth below:

If to Grantor:

The GC Net Lease (Houston Enclave) Investors, LLC
2121 Rosecrans Avenue, Suite 3321

El Segundo, California 90245

Attention: Mr. Joseph E. Miller

with a copy to:

Griffin Capital Corporation
790 Estate Drive, Suite 180
Deerfield, IL 60015
Attention: Mary Higgins, Esq.

If to Beneficiary:

The Variable Annuity Life Insurance Company

National Union Fire Insurance Company of Pittsburgh, PA.
c/o AIG Investments
777 S. Figueroa St., 16th Floor
Los Angeles, California 90017
Attn: Director-Mortgage Lending and Real Estate

with a copy to:

Greenberg Traurig, LLP
1200 17 ^th Street, 24 ^th Floor
Denver, Colorado 80202
Attn: Peter C. Kelley, Esq.

Either party may change such party’s address for notices or copies of notices by giving notice to the other party in accordance with this Section.

ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST GRANTOR OR BENEFICIARY ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT BENEFICIARY'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND GRANTOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. GRANTOR DOES HEREBY DESIGNATE AND APPOINT:

C T Corporation System
111 Eighth Avenue
13th Floor
New York, NY 10011

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO GRANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON GRANTOR, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. GRANTOR (I) SHALL GIVE PROMPT NOTICE TO BENEFICIARY OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED

AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR OR REFUSES TO CONSENT TO SUCH DESIGNATION AS AUTHORIZED AGENT FOR GRANTOR PURSUANT TO A WRITTEN CONSENT IN FORM AND SUBSTANCE SATISFACTORY TO BENEFICIARY.

9.11      Defeasance . Upon payment and performance in full of all of the Secured Obligations, Beneficiary will execute and deliver to Grantor such documents as may be required to release this Security Instrument of record.

9.12      Illegality . If any provision of this Security Instrument is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Security Instrument, the legality, validity, and enforceability of the remaining provisions of this Security Instrument shall not be affected thereby, and in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Security Instrument a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable. If the rights and liens created by this Security Instrument shall be invalid or unenforceable as to any part of the Secured Obligations, then the unsecured portion of the Secured Obligations shall be completely paid prior to the payment of the remaining and secured portion of the Secured Obligations, and all payments made on the Secured Obligations shall be considered to have been paid on and applied first to the complete payment of the unsecured portion of the Secured Obligations. The required payments of unsecured portions of the Secured Obligations provided for in this Section 9.12 may be deemed to be interest under applicable law.

9.13      Usury Savings Clause . It is the intention of the parties hereto to conform strictly to Applicable Usury Laws regarding the use, forbearance or detention of any indebtedness secured by this Security Instrument, whether such laws are now or hereafter in effect, including the laws of the United States of America, the State of Texas or any other jurisdiction whose laws are applicable, and including any subsequent revisions to or judicial interpretations of those Laws, in each case to the extent they are applicable to such indebtedness (the " Applicable Usury Laws "). Accordingly, if any acceleration of the maturity of any indebtedness or any payment by Grantor or any other person in connection with any indebtedness secured by this Security Instrument produces a rate in excess of the Highest Lawful Rate (defined below) or if any transaction contemplated by this Security Instrument would otherwise be usurious under any Applicable Usury Laws, then, in that event, notwithstanding anything to the contrary in this Security Instrument or any other Loan Document, it is agreed as follows: (i) the provisions of this Section 9.13 shall govern and control this Security Instrument and all other Loan Documents; (ii) the aggregate of all interest under Applicable Usury Laws that is contracted for, taken, reserved, charged, collected or received under the Loan Documents shall under no circumstances exceed the Maximum Amount (defined below), and any amount that would be excessive interest shall be applied to the reduction of the principal amount owing by Grantor in respect of the Note and the other Loan Documents and not to the payment of interest, or if such excessive amount exceeds such principal amount, any such excess shall be promptly refunded to Grantor; (iii) neither Grantor nor any other person shall be obligated to pay the amount of such interest to the extent that it is in excess of the Maximum Amount; and (iv) the provisions of this Security Instrument and the other Loan Documents immediately shall be deemed reformed, without the necessity of the execution of any new document or instrument, so as to comply with all Applicable Usury Laws. All sums paid, or agreed to be paid hereunder for the use, forbearance or detention of any indebtedness of Grantor shall, to the fullest extent permitted by the Applicable Usury Laws, be amortized, prorated, allocated and spread throughout the full term of the indebtedness secured by this Security Instrument. As used herein, the term " Maximum Amount " means the maximum nonusurious amount of interest which may be lawfully contracted for, reserved, charged, collected or received by Beneficiary under the Loan Documents, including this Security Instrument. If at any time any interest rate, together with any other fees and additional amounts payable by Grantor that are deemed to constitute interest under Applicable Usury Laws (the " Additional Interest "), exceeds the Highest Lawful Rate, then the amount of interest to accrue pursuant to the Note and the other Loan Documents shall be limited, notwithstanding anything to the contrary herein or in any other Loan Document, to the Maximum Amount. As used herein, the term " Highest Lawful Rate " means, on any day, the maximum rate of interest, if any, that may be contracted for, taken, reserved, charged, collected or received under all Applicable Usury Laws. To the extent that the laws of the State of Texas apply, pursuant to the provisions of the Texas Finance Code § 346.004, as amended, it is agreed that the provisions of Chapter 346 of the Texas Finance Code, as amended (which regulates certain revolving credit loans and revolving tri-party accounts), shall not govern or in any other manner apply hereto or to the other Loan Documents or any of the obligations under the Loan Documents, other than such § 346.004.

9.14      Obligations Binding Upon Grantor’s Successors . THE TRUSTEE MAY RESIGN OR TRUSTEE BE REMOVED BY THE BENEFICIARY AT ANY TIME WITH OR WITHOUT CAUSE IN THE MANNER PROVIDED BY LAW IN WRITING EXECUTED BY BENEFICIARY. BENEFICIARY MAY AT ANY TIME APPOINT A SUCCESSOR TRUSTEE IN THE MANNER PROVIDED BY LAW. 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 TRUSTEE AND WHICH SHALL THEREUPON SUCCEED TO, AND SHALL HOLD, POSSESS AND EXECUTE, ALL THE RIGHTS, POWERS, PRIVILEGES, IMMUNITIES AND DUTIES HEREIN CONFERRED UPON TRUSTEE. ALL REFERENCES HEREIN TO “TRUSTEE” SHALL BE DEEMED TO REFER TO TRUSTEE (INCLUDING

ANY SUCCESSOR(S) OR SUBSTITUTE(S) APPOINTED AND DESIGNATED AS HEREIN PROVIDED) FROM TIME TO TIME ACTING HEREUNDER. THE 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. THE 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 HIM HEREUNDER, BELIEVED BY HIM 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 HIM HEREUNDER. GRANTOR HEREBY RATIFIES AND CONFIRMS ANY AND ALL ACTS WHICH THE HEREIN NAMED TRUSTEE OR HIS SUCCESSOR OR SUCCESSORS, SUBSTITUTE OR SUBSTITUTES, IN THIS TRUST, SHALL DO LAWFULLY BY VIRTUE HEREOF. GRANTOR WILL REIMBURSE TRUSTEE FOR, AND SAVE HIM HARMLESS AGAINST, ANY AND ALL LIABILITY AND EXPENSES WHICH MAY BE INCURRED BY HIM IN THE PERFORMANCE OF HIS DUTIES. THE FOREGOING INDEMNITY SHALL NOT TERMINATE UPON DISCHARGE OF THE SECURED OBLIGATIONS OR FORECLOSURE, OR RELEASE OR OTHER TERMINATION, OF THIS SECURITY INSTRUMENT.

9.15      Construction . All pronouns and any variations of pronouns herein shall be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the identity of the parties may require. Whenever the terms herein are singular, the same shall be deemed to mean the plural, as the identity of the parties or the context requires.

9.16      Attorneys’ Fees . If Beneficiary refers this Security Instrument or any other Loan Document to any attorney for collection or seeks legal advice following the occurrence of an Event of Default by or with respect to Grantor that has not been waived by Beneficiary expressly in writing, or if Beneficiary is the prevailing party in any action instituted on this Security Instrument or any other Loan Document, or if any other judicial or non-judicial proceeding is instituted by Beneficiary or any other person (provided that with respect to any judicial or non-judicial action instituted by any other person, either (A) such person shall consist of Grantor or any affiliate thereof, or (B) such proceeding shall include Grantor or any affiliate thereof as a party thereto, and the facts alleged, on the basis of which any cause of action or claim shall be asserted in such proceeding, involve the action(s) or omission(s) on the part of Grantor or any affiliate thereof under this Security Instrument or other Loan Document), and an attorney is employed by Beneficiary to appear in any such action or proceeding, or in any action that materially affects Beneficiary’s interest in this Security Instrument or the Property, or to seek appointment of a receiver to reclaim, seek relief from a judicial or statutory stay, sequester, protect, preserve or enforce Beneficiary’s interest in this Security Instrument or any other security for the Note (including, but not limited to, proceedings under federal bankruptcy law, in eminent domain, under the probate code, on appeal (provided that for Beneficiary to recover appeal costs from Grantor hereunder, Beneficiary shall have to be judicially determined to be a prevailing party in such appeal), in arbitration, or in connection with any municipal, state or federal tax lien), then Grantor and every endorser hereof and every person who assumes the obligations secured by this Security Instrument or any of the other Loan Documents jointly and severally promise(s) to pay reasonable attorneys’ fees for services performed by Beneficiary’s attorneys, and all costs and expenses (including, without limitation, expert witness reasonable fees, costs of exhibit preparation, document reproduction, postage, telecommunication expenses and courier charges), incurred incident to such employment. If such fees are not paid within ten (10) Business Days after demand therefor by Beneficiary, all such costs and expenses shall bear interest at the Default Rate and the repayment thereof shall also be secured by every instrument securing the indebtedness evidenced hereby.

9.17      Waiver of Jury Trial . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, BENEFICIARY AND GRANTOR KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE, TO THE FULLEST EXTENT NOT PROHIBITED BY LAW, ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS SECURITY INSTRUMENT, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SECURITY INSTRUMENT OR ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO ANY LOAN DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BENEFICIARY AND GRANTOR TO ENTER INTO THE LOAN.

9.18      Governing Laws . The substantive, procedural and internal laws of the State of Texas shall govern the validity, construction, enforcement, and interpretation of this Security Instrument, without regard to the conflicts of laws principles of such State.

9.19      Inconsistency . In the event of any inconsistency between the terms of the Loan Documents and the terms of that certain Mortgage Loan Application between Grantor and Beneficiary, as amended, the terms of the Loan Documents shall govern and control in all respects.

9.20      Economic Sanctions, Anti-Money Laundering, Etc. . Grantor represents, warrants and covenants to Beneficiary that:

(a)    None of the Grantor, the Guarantor nor any OFAC Controlling Persons is or shall become: (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons (an “OFAC Listed Person” ) published by the Office of Foreign Assets Control, United States Department of the Treasury ( “OFAC” ), or (ii) an agent, department, or instrumentality of, or otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is the target of any sanctions programs administered and/or enforced by OFAC, or (iii) blocked by or a target of United States economic sanctions.

(b)    Neither the Grantor, the Guarantor nor any OFAC Controlling Person:  (i) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti-Money Laundering Laws” ) or any U.S. economic sanctions violations, or (ii) to Grantor’s actual knowledge after making due inquiry, is under investigation by any Governmental Authority for possible violation of Anti-Money Laundering Laws or any U.S. economic sanctions violations, or (iii) has been assessed civil penalties under any Anti-Money Laundering Laws or any U.S. economic sanctions, or (iv) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws.

(c)    None of the Grantor, Guarantor, the OFAC Controlling Persons, nor the officers and directors of any of them:  (i) are owned or controlled by the government or a national of Cuba, Iran, Sudan, Burma (Myanmar), North Korea or Syria, (ii) are located in Cuba, Iran, Sudan, Burma (Myanmar), North Korea or Syria, or (iii) does business in or with Cuba, Iran, Sudan, North Korea, Burma (Myanmar) or Syria. 

(d)    Grantor shall promptly deliver to Beneficiary any certification or other evidence reasonably requested from time to time by Beneficiary confirming Grantor’s compliance with this Section.  The representations, warranties and covenants set forth in this Section shall be deemed repeated and reaffirmed by Grantor as of each date that Grantor makes a payment to Beneficiary under the Note, this Security Instrument and the other Loan Documents or receives any payment from Beneficiary.  Grantor shall promptly notify Beneficiary in writing should Grantor become aware of any change in the information set forth in these representations, warranties and covenants.

For the purposes of the foregoing Section:

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise.

“ OFAC Controlling Person ” means any person or entity that controls either the Grantor or the Guarantor, and all holders of 25% or more of the partnership, voting stock, membership or other ownership interest of the Grantor or Guarantor (as applicable), and/or any of the foregoing Controlling Persons.

“ Governmental Authority ” means (a) the government of (i) the United States of America or any state or other political subdivision thereof, or (ii) any other jurisdiction in which the Grantor, Guarantor or Controlling Person (as applicable) conducts all or any part of its business, or which asserts jurisdiction over any properties of any of the foregoing, or (b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

9.21      Successor Trustee. Trustee may resign by an instrument in writing addressed to Beneficiary, or Trustee may be removed at any time without cause and Beneficiary may substitute a successor or successors to any Trustee named herein or acting hereunder by an instrument in writing executed and acknowledged by Beneficiary mailed to Grantor and recorded in the county in which the Property is located, and complying with all other provisions of applicable law. In case of the death, resignation, removal or disqualification of Trustee or if for any reason Beneficiary shall deem it desirable to appoint a substitute or successor trustee to act instead of the herein named Trustee or any substitute or successor trustee, then Beneficiary shall have the right and is hereby authorized and empowered to appoint a successor trustee, or a substitute trustee, without other formality than appointment and designation as set forth above and the authority hereby conferred shall extend to the appointment of other successor and substitute trustees successively until the Secured Obligations secured hereby have been paid in full or until the Property is sold hereunder. Such appointment and designation by Beneficiary shall be full evidence of the right and authority to make the same and of all facts therein recited. If Beneficiary is a corporation and such appointment is executed in its behalf by an officer of such corporation, 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. Upon the making of any such appointment and designation, all of the estate and title of Trustee in the Property shall, without conveyance form the Trustee predecessor, vest in the named successor or substitute trustee and he shall thereupon succeed to and shall hold, possess and execute all the rights, powers, privileges, immunities and duties

herein conferred upon Trustee; but nevertheless, upon the written request of Beneficiary or of the successor or substitute Trustee all of the estate and title in the Property of the Trustee so ceasing to act, together with all the rights, powers, privileges, immunities and duties herein conferred upon Trustee, and shall duly assign, transfer and deliver any of the properties and moneys held by said Trustee hereunder to said successor or substitute Trustee. All references herein to Trustee shall be deemed to refer to the trustee (including any successor or substitute appointed and designated as herein provided) from time to time acting hereunder. Grantor hereby ratifies and confirms any and all acts which the herein named Trustee or his successor or successors, substitute or substitutes, in this trust, shall do lawfully by virtue hereof.

9.22      Co-Lending.

(a)    Notwithstanding that the Loan is evidenced by the VALIC Note and the NUF Note separately, Beneficiary agrees that the Holder (as defined in the Notes) of each of the Notes shall pursue the same remedies simultaneously under the Notes and under the other Loan Documents as if the Loan were evidenced by only one promissory note.

(b)    Grantor and Guarantor shall be entitled to rely, shall be obligated to rely, and shall be fully protected in relying upon any written resolution, notice, consent, approval, waiver, certificate, affidavit, letter, telegram, facsimile, telex, e-mail, statement or other document (each a “ Communication ”) believed by it to be genuine and correct and solely to the extent that such Communication is signed, sent or made by both VALIC and NUF in connection with the Loan. Any Communication not signed or sent by or on behalf of both VALIC and NUF shall not be valid.

9.23      NO ORAL AGREEMENTS . THIS SECURITY INSTRUMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGE TO DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING, AND ASSIGNMENT OF LEASES AND RENTS (TEXAS)]

IN WITNESS WHEREOF, Grantor has executed and delivered this Security Instrument as of the date first mentioned above.

THE GC NET LEASE (HOUSTON ENCLAVE) INVESTORS, LLC,

a Delaware limited liability company

By: The GC Net Lease (Houston Enclave) Member, LLC,

a Delaware limited liability company,

its Sole Member

By: Griffin Capital Essential Asset Operating Partnership, L.P.,

a Delaware limited partnership,

its Sole Member

By: Griffin Capital Essential Asset REIT, Inc.,

a Maryland corporation,

its General Partner

By: /s/ Joseph E. Miller            

Joseph E. Miller, Chief Financial Officer

Recording requested by:

And when recorded mail to:

Greenberg Traurig, LLP
1200 17th Street, 24th Floor
Denver, Colorado 80202
Attention: Peter C. Kelley, Esq.

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

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SECOND DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING, AND ASSIGNMENT OF LEASES AND RENTS SECURING GUARANTY

(TEXAS)

THIS SECOND DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING, AND ASSIGNMENT OF LEASES AND RENTS SECURING GUARANTY (TEXAS) (this “ Security Instrument ”) is given as of January 24, 2014, by THE GC NET LEASE (HOUSTON ENCLAVE) INVESTORS, LLC , a Delaware limited liability company (“ Grantor ”), to CHICAGO TITLE INSURANCE COMPANY (“ Trustee ”), for the use and benefit of THE VARIABLE ANNUITY LIFE INSURANCE COMPANY , a Texas corporation (“ VALIC ”), and NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA. , a Pennsylvania corporation (“ NUF ”), as co-lenders (collectively, “ Beneficiary ”).

ARTICLE 1

PARTIES, PROPERTY, AND DEFINITIONS

The following terms and references shall have the meanings indicated:

1.1      Beneficiary : The Beneficiary named in the introductory paragraph of this Security Instrument, whose legal address is c/o AIG Investments, 777 South Figueroa Street, 16 ^th Floor, Los Angeles, California 90017, together with any future holder of the Note.

1.2      First Security Instrument : That certain Deed of Trust, Security Agreement Fixture Filing, and Assignment of Leases and Rents dated as of the date hereof, given by Grantor to Beneficiary, and recorded on or about the date hereof in the Official Records of Harris County, Texas, as amended, modified, amended and restated, replaced or supplemented from time to time.

1.3      Grantor : The Grantor named in the introductory paragraph of this Security Instrument (Secretary of State File No. 5316624), whose legal address is 2121 Rosecrans Avenue, Suite 3321, El Segundo, California 90245.

1.4      Loan : The loan from Beneficiary to Grantor evidenced by the Note.

1.5      Note : Collectively, (i) Grantor’s promissory note of even date herewith, payable to the order of VALIC in the principal face amount of $20,140,200 (the “ VALIC Note ”), and (ii) Grantor’s promissory note of even date herewith, payable to the order of NUF in the principal face amount of $9,919,800 (the “ NUF Note ”) (and in the aggregate collective amount of $30,060,000), together with all renewals, extensions and modifications of such promissory notes, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time. The NUF Note and the VALIC Note are also sometimes referred collectively herein as the “ Notes .” All terms and provisions of the Notes are incorporated by this reference in this Security Instrument.

1.6      Property : All of Grantor’s right, title and interest (if any) in the tract or tracts of land described in Exhibit A attached hereto, together with all of Grantor’s right, title and interest (if any) in the “Property” as described in the First Security Instrument.

1.7      Secured Guaranty : That certain Non-Recourse Secured Guaranty Agreement (Texas Property Owner as Guarantor), of even date herewith, given by Grantor, as guarantor, in favor of Beneficiary, as lender under the Other Loans.

1.8      Secured Obligations : All present and future obligations of Grantor to Beneficiary evidenced by or contained in the Secured Guaranty, whether stated in the form of promises, covenants, representations, warranties, conditions, or prohibitions or in any other form.

1.9      Trustee : The Trustee named in the introductory paragraph of this Security Instrument, whose address is 2828 Routh Street, Suite 800, Dallas, Texas 75201.

All other initially capitalized terms that are used herein but that are not otherwise defined in this Security Instrument shall have the meanings given to such terms in the First Security Instrument.

ARTICLE 2
GRANTING CLAUSE

2.1      Grant to Trustee . FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, as security for the Secured Obligations, Grantor hereby irrevocably grants, transfers, conveys and assigns the Property to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, and subject to all provisions hereof.

2.2      Security Interest to Beneficiary . As additional security for the Secured Obligations, Grantor hereby grants to Beneficiary a security interest in the Property, Chattels and Intangible Personalty. To the extent any of the Property, Chattels or Intangible Personalty may be or have been acquired with funds advanced by Beneficiary under the Loan Documents, this security interest is a purchase money security interest. This Security Instrument constitutes a security agreement under the Uniform Commercial Code of the State (the “ Code ”) with respect to any part of the Property, Chattels and Intangible Personalty that may or might now or hereafter be or be deemed to be personal property, fixtures or property other than real estate (all collectively hereinafter called “ Collateral ”); all of the terms, provisions, conditions and agreements contained in this Security Instrument pertain and apply to the Collateral as fully and to the same extent as to any other property comprising the Property, and the following provisions of this Section shall not limit the generality or applicability of any other provisions of this Security Instrument but shall be in addition thereto:

(a)    The Collateral shall be used by Grantor solely for business purposes, and all Collateral (other than the Intangible Personalty) shall be installed upon the real estate comprising part of the Property for Grantor’s own use or as the equipment and furnishings furnished by Grantor, as landlord, to tenants of the Property;

(b)    Subject to Section 5.7 below, the Collateral (other than the Intangible Personalty) shall be kept at the real estate comprising a part of the Property, and shall not be removed therefrom without the consent of Beneficiary (being the Secured Party as that term is used in the Code); and the Collateral (other than the Intangible Personalty) may be affixed to such real estate but shall not be affixed to any other real estate;

(c)    No financing statement covering any of the Collateral or any proceeds thereof is on file in any public office; and Grantor will, at its cost and expense, upon demand, furnish to Beneficiary such further information and will execute and deliver to Beneficiary such financing statements and other documents in form satisfactory to Beneficiary and will do all such acts and things as Beneficiary may at any time or from time to time reasonably request or as may be necessary or appropriate to establish and maintain a perfected first-priority security interest in the Collateral as security for the Secured Obligations, subject to no adverse liens or encumbrances; and Beneficiary is hereby authorized to execute and/or to file any such financing statements or other documents; and Grantor will pay the cost of filing the same or filing or recording such financing statements or other documents and this instrument in all public offices wherever filing or recording is deemed by Beneficiary to be necessary or desirable;

(d)    The terms and provisions contained in this Section and in Section 7.6 of this Security Instrument shall, unless the context otherwise requires, have the meanings and be construed as provided in the Code; and

(e)    This Security Instrument 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 office of the recorder of each county where any part of the Property (including said fixtures) is situated. This Security Instrument shall also be effective as a financing statement covering “As-extracted collateral” and accounts subject to Section 9-502(c) of the Texas Business and Commerce Code and is to be filed for record in the real property records. The mailing addresses of Grantor and the Beneficiary are set forth in Article 1 of this Security Instrument. A carbon, photographic or other reproduction of this Security Instrument or any financing statement relating to this Security Instrument shall be sufficient as a financing statement. The filing of this Security Instrument in the real property records of the county where the Property is located shall constitute a fixture filing in accordance with the Code. Information concerning the security interests created hereby may be obtained at the addresses set forth in Article 1 of this Security Instrument. Grantor is the “ Debtor ” and Beneficiary is the “ Secured Party ” (as those terms are defined and used in the Code) insofar as this Security Instrument constitutes a financing statement. The filing by Beneficiary of any other financing statement relating to the Collateral shall not be construed to diminish any right or priority to the Collateral hereunder.

(f)    Notwithstanding anything to the contrary contained in this Security Instrument:

(i)    This Security Instrument, and all conveyances, assignments and grants of security interests hereunder are subject and subordinate to the conveyances, assignments and grants of security interests made in the First Security Instrument;

(ii)    Beneficiary agrees that this Security Instrument shall constitute a Permitted Exception under the Security Instrument, and shall not trigger any violation of the due on encumbrance provisions of the Security Instrument;

(iii)     In the event that Grantor complies with any representation, warranty, agreement, undertaking, covenant or indemnity under the First Security Instrument, Grantor shall be deemed to have complied with the corresponding or duplicative representation, warranty, agreement, undertaking, covenant or indemnity; and

(iv)     In the event that Beneficiary gives any approval, consent or waiver with respect to any provision or matter set forth in or contemplated by the First Security Instrument, Beneficiary shall be deemed to have given such approval, consent or waiver with respect to any corresponding or duplicative provision or matter set forth in or contemplated by this Security Instrument.

ARTICLE 3
GRANTOR’S REPRESENTATIONS AND WARRANTIES

3.1      Warranty of Title . Grantor represents and warrants to Beneficiary that:

(a)    Grantor has good and indefeasible fee simple title to the Property, and such fee simple title is free and clear of all liens, encumbrances, security interests and other claims whatsoever, subject only to the Permitted Exceptions, and the First Security Instrument;

(b)    Grantor is the sole and absolute owner of the Chattels and the Intangible Personalty, free and clear of all liens, encumbrances, security interests and other claims whatsoever, subject only to the Permitted Exceptions, and the First Security Instrument;

(c)    This Security Instrument is a valid and enforceable lien and security interest on the Property, Chattels and Intangible Personalty, subject only to the Permitted Exceptions and the First Security Instrument; and

(d)    Subject to the Permitted Exceptions, Trustee, for itself and its successors and assigns, hereby agrees to warrant and forever defend, all and singular all of the Property and property interests granted and conveyed pursuant to this Security Instrument, against every person whomsoever lawfully claiming, or to claim, the same or any part thereof.

The representations, warranties and covenants contained in this Section 3.1 shall survive foreclosure of this Security Instrument, and shall inure to the benefit of and be enforceable by any person who may acquire title to the Property, the Chattels, or the Intangible Personalty pursuant to any such foreclosure.

3.2      Due Authorization . If Grantor is other than a natural person, then each individual who executes this document on behalf of Grantor represents and warrants to Beneficiary that such execution has been duly authorized by all necessary corporate, partnership, limited liability company or other action on the part of Grantor. Grantor represents that Grantor has obtained all consents and approvals required in connection with the execution, delivery and performance of this Security Instrument.

3.3      Other Representations and Warranties . Grantor represents and warrants to Beneficiary as of the date hereof, as follows:

(a)    Grantor is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware. Grantor is duly authorized to transact business in and is in good standing under the laws of the State of Texas. The sole Controlling Persons of Grantor are Guarantor, and GC Member;

(b)    The execution, delivery and performance by Grantor of this Security Instrument and the Secured Guaranty are within Grantor’s power and authority and have been duly authorized by all necessary action;

(c)    This Security Instrument is, and the Secured Guaranty will, when delivered hereunder, be valid and binding obligations of Grantor enforceable against Grantor in accordance with their respective terms, except as limited by equitable principles and bankruptcy, insolvency and similar laws affecting creditors’ rights;

(d)    The execution, delivery and performance by Grantor of the Secured Guaranty and this Security Instrument will not contravene any contractual or other restriction binding on or affecting Grantor or any Controlling Person will not constitute a default under Grantor’s operating agreement or other instrument to which Grantor is a party or by which Grantor may be bound or affected and will not result in or require the creation of any lien, security interest, other charge or encumbrance (other than pursuant hereto) upon or with respect to any of its properties;

(e)    The execution, delivery and performance by Grantor of the Secured Guaranty and this Security Instrument does not violate or contravene any applicable law;

(f)    No authorization, approval, consent or other action by, and no notice to or filing with, any court, governmental authority or regulatory body is required for the due execution, delivery and performance by Grantor of any of the Secured Guaranty and this Security Instrument or the effectiveness of any assignment of any of Grantor’s rights and interests of any kind to Beneficiary;

(g)    No part of the Property, Chattels, or Intangible Personalty is in the hands of a receiver, no application for a receiver is pending with respect to any portion of the Property, Chattels, or Intangible Personalty, and no part of the Property, Chattels, or Intangible Personalty is subject to any foreclosure or similar proceeding;

(h)    Neither Grantor nor any Controlling Person has made any assignment for the benefit of creditors, nor has Grantor or any Controlling Person filed, or had filed against it, any petition in bankruptcy;

(i)    There is no pending or, to the best of Grantor’s knowledge, threatened, litigation, action, proceeding or investigation, including, without limitation, any condemnation proceeding, against Grantor, any Controlling Person or the Property before any court, governmental or quasi-governmental, arbitrator or other authority;

(j)    Grantor is a “non-foreign person” within the meaning of Sections 1445 and 7701 of the United States Internal Revenue Code of 1986, as amended, and the regulations issued thereunder;

(k)    Access to and egress from the Property are available and provided by public streets, or valid easements appurtenant thereto and Grantor has no knowledge of any federal, state, county, municipal or other governmental plans to change the highway or road system in the vicinity of the Property or to restrict or change access from any such highway or road to the Property;

(l)    All public utility services necessary for the operation of all improvements constituting part of the Property for their intended purposes are available at the boundaries of the land constituting part of the Property, including water supply, storm and sanitary sewer facilities, and natural gas, electric, telephone and cable television facilities;

(m)    The Property is located in the City of Houston, Texas, which City does not have a Zoning Code. The development use and operation of the Property as it is currently operated. The Property complies in all respects with all zoning ordinances, regulations, requirements, conditions and restrictions, including but not limited to deed restrictions and restrictive covenants, applicable to the Property;

(n)    There are no special or other assessments for public improvements or otherwise now affecting the Property, nor does Grantor know of any pending or threatened special assessments affecting the Property or any contemplated improvements affecting the Property that may result in special assessments. There are no tax abatements or exceptions affecting the Property;

(o)    Grantor and each Controlling Person has filed all tax returns it is required to have filed, and has paid all taxes as shown on such returns or on any assessment received pertaining to the Property;

(p)    Grantor has not received any written notice from any governmental body having jurisdiction over any part of the Property as to any violation of any applicable law, or any notice from any insurance company or inspection or rating bureau setting forth any requirements as a condition to the continuation of any insurance coverage on or with respect to the Property or the continuation thereof at premium rates existing at present which have not been remedied or satisfied;

(q)    Neither Grantor nor any Controlling Person is in default, in any manner which would adversely affect its properties, assets, operations or condition (financial or otherwise), in the performance, observance or fulfillment of any of the obligations, covenants or conditions set forth in any agreement or instrument to which it is a party or by which it or any of its properties, assets or revenues are bound;

(r)    Except as set forth in the Lease Certificate, there are no occupancy rights (written or oral), Leases or tenancies presently affecting any part of the Property. The Lease Certificate contains a true and correct description of all Leases presently affecting the Property. No written or oral agreements or understandings exist between Grantor and the tenants under the Leases described in the Lease Certificate that grant such tenants any rights greater than those described in the Lease Certificate or that are in any way inconsistent with the rights described in the Lease Certificate;

(s)    There are no options to purchase, purchase contracts or other similar agreements of any type (written or oral) presently affecting any part of the Property;

(t)    There exists no brokerage agreement with respect to the purchase of any part of the Property;

(u)    Except as otherwise disclosed to Beneficiary in writing prior to the date hereof, (i) there are no contracts presently affecting the Property (“ Contracts ”) having a term in excess of one hundred eighty (180) days or not terminable by Grantor (without penalty) on thirty (30) days’ notice; (ii) Grantor has heretofore delivered to Beneficiary true and correct copies of each of the Contracts together with all amendments thereto; (iii) Grantor is not in default of any obligations under any of the

Contracts; and (iv) the Contracts represent the complete agreement between Grantor and such other parties as to the services to be performed or materials to be provided thereunder and the compensation to be paid for such services or materials, as applicable, and except as otherwise disclosed herein, such other parties possess no unsatisfied claims against Grantor. Grantor is not in default under any of the Contracts and no event has occurred which, with the passing of time or the giving of notice, or both, would constitute a default under any of the Contracts;

(v)    Grantor or its tenants have obtained all Permits necessary for the operation, use, ownership, development, occupancy and maintenance of the Property as it is currently being operated. None of the Permits has been suspended or revoked, and all of the Permits are in full force and effect and are fully paid for, and Grantor has made or will make application for renewals of any of the Permits prior to the expiration thereof;

(w)    All insurance policies held by Grantor relating to or affecting the Property are in full force and effect and shall remain in full force and effect until all Secured Obligations are satisfied. Grantor has not received any notice of default or notice terminating or threatening to terminate any such insurance policies. Grantor has made or will make application for renewals of any of such insurance policies prior to the expiration thereof;

(x)    Grantor currently complies with ERISA. Neither the making of the Loan nor the exercise by Beneficiary of any of its rights under the Loan Documents constitutes or will constitute a non-exempt, prohibited transaction under ERISA; and

(y)    Grantor’s exact legal name is correctly set out in the introductory paragraph of this Security Instrument. Grantor’s Secretary of State File Number is correctly set forth in the definition of “ Grantor ” set forth in Article 1 hereof. Grantor’s location (as such term is used in Section 5.8 hereof) is the State of Delaware.

3.4      Continuing Effect . Grantor shall be liable to Beneficiary for any damage suffered by Beneficiary if any of the foregoing representations are inaccurate as of the date hereof, regardless when such inaccuracy may be discovered by, or result in harm to, Beneficiary. Grantor further represents and warrants that the foregoing representations and warranties, as well as all other representations and warranties of Grantor to Beneficiary relative to the Loan Documents shall survive termination of this Security Instrument.

ARTICLE 4
GRANTOR’S AFFIRMATIVE COVENANTS

4.1      Intentionally Deleted .

4.2      Performance of Secured Obligations . Grantor will promptly perform and comply with all other covenants, conditions, and prohibitions required of Grantor by the terms of the Secured Guaranty.

4.3      Other Encumbrances . Grantor will promptly perform and comply with all covenants, conditions, and prohibitions required of Grantor in connection with any other encumbrance affecting the Property, the Chattels, or the Intangible Personalty, or any part thereof, or any interest therein, regardless of whether such other encumbrance is superior or subordinate to the lien hereof.

4.4      Payment of Taxes.

(a)     Property Taxes . Grantor will (i) pay or cause to be paid, before delinquency, all taxes and assessments, general or special, which may be levied or imposed at any time against Grantor’s interest and estate in the Property, the Chattels, or the Intangible Personalty, and (ii) within thirty (30) days after each payment of any such tax or assessment, Grantor will deliver to Beneficiary, without notice or demand, an official receipt for such payment if issued by the taxing authority and if not, cancelled checks or other reasonable evidence of payment. At Beneficiary’s option, Beneficiary may retain the services of a firm to monitor the payment of all taxes and assessments relating to the Property, the cost of which shall be borne by Grantor.

(b)     Intentionally Deleted .

(c)     Intangible Taxes . If by reason of any statutory or constitutional amendment or judicial decision adopted or rendered after the date hereof, any tax, assessment, or similar charge is imposed against Beneficiary, or against any interest of Beneficiary in any real or personal property encumbered hereby (but excluding any taxes in the nature of income taxes on the overall income or profits of Beneficiary to which Beneficiary may be subject), Grantor will pay such tax, assessment, or other charge before delinquency and will pay to Beneficiary any and all costs, expenses, or diminution of income incurred by Beneficiary in connection therewith. In the event Grantor is unable to do so, either for economic reasons or because the legal provisions or decisions creating such tax, assessment or charge forbid Grantor from doing so, then the Note will, at Beneficiary’s option, become due and payable in full upon ninety (90) days’ notice to Grantor, without prepayment premium or penalty.

(d)     Right to Contest . Notwithstanding any other provision of this Section 4.4, Grantor will not be deemed to be in default solely by reason of Grantor’s failure to pay any tax, assessment or similar governmental charge so long as, in Beneficiary’s judgment, each of the following conditions is satisfied:

(i)    Grantor and/or Schlumberger Tenant is engaged in and diligently pursuing in good faith administrative or judicial proceedings appropriate to contest the validity or amount of such tax, assessment, or charge; and

(ii)    The payment of such tax, assessment, or charge would necessarily and materially prejudice Grantor’s and/or Schlumberger Tenant’s prospects for success in such proceedings; and

(iii)    Nonpayment of such tax, assessment, or charge will not result in the loss or forfeiture of any property encumbered hereby or any interest of Beneficiary therein; and

(iv)    Grantor deposits or causes to be deposited with Beneficiary, as security for such payment which may ultimately be required, a sum equal to the amount of the disputed tax, assessment or charge plus the interest, penalties, advertising charges, and other costs which Beneficiary estimates are likely to become payable if such contest is unsuccessful.

If Beneficiary determines that any one or more of such conditions is not satisfied or is no longer satisfied, Grantor will pay the tax, assessment, or charge in question, together with any interest and penalties thereon, within ten (10) days after Beneficiary gives notice of such determination.

4.5      Maintenance of Insurance.

(a)     Coverages Required . Grantor shall maintain or cause to be maintained, with insurance companies or associations satisfying the requirements of the Insurance Agreement, all insurance required under the terms of the Insurance Agreement, and shall comply with each and every covenant and agreement contained in the Insurance Agreement, the provisions of which are hereby incorporated by this reference.

(b)     Intentionally Deleted .

(c)     Intentionally Deleted .

(d)     Application of Hazard Insurance Proceeds . Grantor shall promptly notify Beneficiary of any damage or casualty to all or any portion of the Property or Chattels. Beneficiary may participate in all negotiations and appear and participate in all judicial arbitration proceedings concerning any insurance proceeds which may be payable as a result of such casualty or damage, and may, in Beneficiary’s sole discretion, compromise or settle, in the name of Beneficiary, Grantor, or both any claim for any such insurance proceeds. Any such insurance proceeds shall be paid to Beneficiary and shall be applied first to reimburse Beneficiary for all costs and expenses, including attorneys’ fees, incurred by Beneficiary in connection with the collection of such insurance proceeds. The balance of any insurance proceeds received by Beneficiary with respect to an insured casualty may (subject to the terms of any Approved Lease or subordination, non-disturbance and attornment agreement), in Beneficiary’s sole discretion, either (i) be retained and applied by Beneficiary toward payment of the Secured Obligations, or (ii) be paid over, in whole or in part and subject to such conditions as Beneficiary may impose, to Grantor to pay for repairs or replacements necessitated by the casualty; provided, however, that if all of the Secured Obligations have been performed or are discharged by the application of less than all of such insurance proceeds, then any remaining proceeds will be paid over to Grantor. Notwithstanding the preceding sentence, if (A) no Default or Event of Default shall exist hereunder, and (B) the proceeds received by Beneficiary (together with any other funds delivered by Grantor to Beneficiary for such purpose) shall be sufficient, in Beneficiary’s reasonable judgment, to pay for any restoration necessitated by the casualty, and (C) the cost of such restoration shall not exceed $500,000.00, and (D) such restoration can be completed, in Beneficiary’s judgment, at least ninety (90) days prior to the maturity date of the Note, then Beneficiary shall apply such proceeds as provided in clause (ii) of the preceding sentence. Beneficiary will have no obligation to see to the proper application of any insurance proceeds paid over to Grantor, nor will any such proceeds received by Beneficiary bear interest or be subject to any other charge for the benefit of Grantor. Beneficiary may, prior to the application of insurance proceeds, commingle them with Beneficiary’s own funds and otherwise act with regard to such proceeds as Beneficiary may determine in Beneficiary’s sole discretion. Notwithstanding anything to the contrary set forth in this Security Instrument, Beneficiary agrees that for so long as the Schlumberger Lease is in full force and effect, the disposition of insurance proceeds for damage or casualty to all or any portion of the Property and restoration of the Property relating thereto shall be governed by the terms and conditions set forth in the Schlumberger Lease to the extent that such Schlumberger Lease conflicts with the provisions of this Security Instrument.

(e)     Successor’s Rights . Any person who acquires title to the Property or the Chattels upon foreclosure hereunder will succeed to all of Grantor’s rights under all policies of insurance maintained pursuant to this Section.

(f)     TEXAS FINANCE CODE SECTION 307.052 COLLATERAL PROTECTION INSURANCE NOTICE . (A) GRANTOR IS REQUIRED TO (i) KEEP THE PROPERTY INSURED AGAINST DAMAGE IN THE AMOUNT SPECIFIED HEREIN; (ii) PURCHASE THE INSURANCE FROM AN INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THE STATE OF TEXAS OR AN ELIGIBLE SURPLUS LINES INSURER OR OTHERWISE AS PROVIDED HEREIN; AND (iii) NAME BENEFICIARY AS THE PERSON TO BE PAID UNDER THE POLICY IN THE EVENT OF A LOSS AS PROVIDED

HEREIN; (B) SUBJECT TO THE PROVISIONS HEREOF, GRANTOR MUST, IF REQUIRED BY BENEFICIARY, DELIVER TO BENEFICIARY A COPY OF THE POLICY AND PROOF OF THE PAYMENT OF PREMIUMS; AND (C) SUBJECT TO THE PROVISIONS HEREOF, IF GRANTOR FAILS TO MEET ANY REQUIREMENT LISTED IN THE FOREGOING SUBPARTS (A) OR (B), BENEFICIARY MAY OBTAIN COLLATERAL PROTECTION INSURANCE ON BEHALF OF GRANTOR AT GRANTOR’S EXPENSE.

4.6      Maintenance and Repair of Property and Chattels . Grantor will at all times maintain or cause the maintenance of the Property and the Chattels in good condition and repair, will diligently prosecute or cause the prosecution of the completion of any building or other improvement which is at any time in the process of construction on the Property, and will (subject to the terms of the Leases) promptly repair, restore, replace, or rebuild, or cause the repair, restoration, replacement or rebuilding of, any part of the Property or the Chattels which may be affected by any casualty or any public or private taking or injury to the Property or the Chattels. All costs and expenses arising out of the foregoing shall be paid by Grantor (or Grantor shall cause the same to be so paid) whether or not the proceeds of any insurance or eminent domain shall be sufficient therefor. Grantor will comply with, or cause the compliance with (or obtain a legally enforceable variance therefrom), all statutes, ordinances, and other governmental or quasi‑governmental requirements and private covenants relating to the ownership, construction, use, or operation of the Property, including but not limited to any environmental or ecological requirements; provided, that so long as Grantor is not otherwise in default hereunder, Grantor may, upon providing Beneficiary with security reasonably satisfactory to Beneficiary, proceed diligently and in good faith to contest the validity or applicability of any such statute, ordinance, or requirement. Subject to the rights of tenants under the Leases, Beneficiary and any person authorized by Beneficiary may enter and inspect the Property at all reasonable times, and may inspect the Chattels, wherever located, at all reasonable times. Notwithstanding anything to the contrary set forth in this Security Instrument or any other Loan Document, Beneficiary agrees that for so long as the Schlumberger Lease is in full force and effect, to the extent Schlumberger Tenant is obligated to perform certain Property-related operation and maintenance obligations that Grantor is obligated to perform pursuant to the Loan Documents, then Grantor shall perform or cause Schlumberger Tenant to perform such obligations; provided, however, that the forgoing is not intended to limit Grantor’s liability to Beneficiary for any breach of or default under the Loan Documents if such obligations are not performed.

4.7      Leases . Grantor shall timely pay and perform each of its obligations under or in connection with the Leases, and shall otherwise pay such sums and take such action as shall be necessary or required in order to maintain each of the Leases in full force and effect in accordance with its terms. Grantor shall immediately furnish to Beneficiary copies of any notices given to Grantor by the lessee under any Lease, alleging the default by Grantor in the timely payment or performance of its obligations under such Lease and any subsequent communication related thereto. Grantor shall also promptly furnish to Beneficiary copies of any notices given to Grantor by the lessee under any Lease, extending the term of any Lease, requiring or demanding the expenditure of any sum by Grantor (or demanding the taking of any action by Grantor), or relating to any other material obligation of Grantor under such Lease and any subsequent communication related thereto. Grantor agrees that during the existence of any Event of Default, Beneficiary may advance any sum or take any action which Beneficiary believes is necessary or required to maintain the Leases in full force and effect, and all such sums advanced by Beneficiary, together with all costs and expenses incurred by Beneficiary in connection with action taken by Beneficiary pursuant to this Section, shall be due and payable by Grantor to Beneficiary upon demand, shall bear interest until paid at the Default Rate (as defined in the Note), and shall be secured by this Security Instrument.

4.8      Eminent Domain; Private Damage . If all or any part of the Property is taken or damaged by eminent domain or any other public or private action, Grantor will notify Beneficiary promptly of the time and place of all meetings, hearings, trials, and other proceedings relating to such action. Beneficiary may participate in all negotiations and appear and participate in all judicial or arbitration proceedings concerning any award or payment which may be due as a result of such taking or damage, and may, in Beneficiary’s reasonable discretion, compromise or settle, in the names of both Grantor and Beneficiary, any claim for any such award or payment. Any such award or payment is to be paid to Beneficiary and will be applied first to reimburse Beneficiary for all costs and expenses, including attorneys’ fees, incurred by Beneficiary in connection with the ascertainment and collection of such award or payment. The balance, if any, of such award or payment may, in Beneficiary’s sole discretion, either (a) be retained by Beneficiary and applied toward the Secured Obligations, or (b) be paid over, in whole or in part and subject to such conditions as Beneficiary may impose, to Grantor for the purpose of restoring, repairing, or rebuilding any part of the Property affected by the taking or damage. Notwithstanding the preceding sentence, if (i) no Default or Event of Default shall have occurred and be continuing hereunder, and (ii) the proceeds received by Beneficiary (together with any other funds delivered by Grantor to Beneficiary for such purpose) shall be sufficient, in Beneficiary’s reasonable judgment, to pay for any restoration necessitated by the taking or damage, and (iii) the cost of such restoration shall not exceed $500,000.00, and (iv) such restoration can be completed, in Beneficiary’s judgment, at least ninety (90) days prior to the maturity date of the Note, and (v) the remaining Property shall constitute, in Beneficiary’s sole judgment, adequate security for the Secured Obligations, then Beneficiary shall apply such proceeds as provided in clause (b) of the preceding sentence. Grantor’s duty to pay the Note in accordance with its terms and to perform the other Secured Obligations will not be suspended by the pendency or discharged by the conclusion of any proceedings for the collection of any such award or payment, and any reduction in the Secured Obligations resulting from Beneficiary’s application of any such award or payment will take effect only when Beneficiary receives such award or payment. If this Security Instrument has been foreclosed prior to Beneficiary’s receipt of such award or payment, Beneficiary may nonetheless retain such award or payment to the extent required to reimburse Beneficiary for all costs and expenses, including attorneys’ fees, incurred in connection therewith, and to discharge any deficiency remaining with respect to the Secured Obligations. Notwithstanding anything to the contrary

set forth in this Security Instrument, Beneficiary agrees that for so long as the Schlumberger Lease is in full force and effect, the disposition of awards or payments resulting from any condemnation or eminent domain taking of all or any portion of the Property and restoration of the Property relating thereto shall be governed by the terms and conditions set forth in the Schlumberger Lease to the extent that such Schlumberger Lease conflicts with the provisions of this Security Instrument.

4.9      Mechanics’ Liens . Grantor will keep (or cause others to keep) the Property free and clear of all liens and claims of liens by contractors, subcontractors, mechanics, laborers, materialmen, and other such persons, and will cause any recorded statement of any such lien to be released of record within forty-five (45) days after the recording thereof. Notwithstanding the preceding sentence, however, Grantor will not be deemed to be in default under this Section if and so long as Grantor or any tenant under a Lease (a) contests in good faith the validity or amount of any asserted lien and diligently prosecutes or defends an action appropriate to obtain a binding determination of the disputed matter, and (b) provides Beneficiary with such security as Beneficiary may require to protect Beneficiary against all loss, damage, and expense, including attorneys’ fees, which Beneficiary might incur if the asserted lien is determined to be valid.

4.10      Defense of Actions . Grantor will defend, at Grantor’s expense, any action, proceeding or claim which affects any property encumbered hereby or any interest of Beneficiary in such property or in the Secured Obligations, and will indemnify and hold Beneficiary harmless for, from and against all losses, damages, claims, liabilities, obligations, judgments, liens, demands, actions, suits, cost, or expense, including attorneys’ fees, which Beneficiary may incur in connection therewith. IT IS THE EXPRESS INTENTION OF GRANTOR AND BENEFICIARY THAT THE INDEMNITY SET FORTH IN THIS SECTION SHALL COVER ACTIONS, PROCEEDINGS OR CLAIMS THAT ARISE FROM THE NEGLIGENCE (EXCLUDING GROSS NEGLIGENCE) OF THE INDEMNIFIED PARTY.

4.11      Expenses of Enforcement . Grantor will pay all costs and expenses, including attorneys’ fees, which Beneficiary may incur in connection with any effort or action (whether or not litigation or foreclosure is involved) to enforce or defend Beneficiary’s rights and remedies under the Secured Guaranty, including but not limited to all attorneys’ fees, appraisal fees, consultants’ fees, and other expenses incurred by Beneficiary in securing title to or possession of, and realizing upon, any security for the Secured Obligations. All such costs and expenses (together with interest thereon at the Default Rate from the date incurred) shall constitute part of the Secured Obligations, and may be included in the computation of the amount owed to Beneficiary for purposes of foreclosing or otherwise enforcing this Security Instrument.

4.12      Financial Reports . Grantor will comply with the reporting requirements set forth in the Secured Guaranty.

4.13      Priority of Leases . To the extent Grantor has the right, under the terms of any Lease, to make such Lease subordinate to the lien hereof, Grantor will, at Beneficiary’s request and Grantor’s expense, take such action as may be required to effect such subordination. Conversely, Grantor will, at Beneficiary’s request and Grantor’s expense, take such action as may be necessary to subordinate the lien hereof to any future Lease designated by Beneficiary.

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

4.15      Compliance with Laws, Etc. . Grantor shall comply in all material respects or cause compliance in all material respects with (or obtain a legally enforceable variance therefrom) all applicable laws, rules, regulations and orders, such compliance to include, without limitation, maintaining all Permits and paying before the same become delinquent all taxes, assessments and governmental charges imposed upon Grantor or the Property.

4.16      Records and Books of Account . Grantor shall keep accurate and complete records and books of account, in which complete entries will be made in accordance with generally accepted accounting principles consistently applied, reflecting all financial transactions relating to the Property, including, but not limited to, records adequate to correctly reflect all items required in order to determine all Gross Receipts (as such term is used in the Cash Collateral Agreement).

4.17      Inspection Rights . At any reasonable time, and from time to time, Grantor shall permit Beneficiary, or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and subject to the rights of tenants under the Leases, visit the Property and to discuss with Grantor the affairs, finances and accounts of Grantor.

4.18      Change of Grantor’s Address or State of Organization . Grantor shall promptly notify Beneficiary if changes are made in Grantor’s address from that set forth in Section 9.10 hereof, or if Grantor shall either change its “location” (as such term is used in Section 5.8 hereof), its state of organization or if Grantor shall organize in any state other than the State of Delaware.

4.19      Further Assurances; Estoppel Certificates . Grantor will execute and deliver to Beneficiary upon demand, and pay the costs of preparation and recording thereof, any further documents which Beneficiary may request to confirm or perfect the liens and security interests created or intended to be created hereby, or to confirm or perfect any evidence of the Secured Obligations. Grantor will

also, within twenty (20) days after any request by Beneficiary, deliver to Beneficiary a signed and acknowledged statement certifying to Beneficiary, or to any proposed transferee of the Secured Obligations, (a) the balance of principal, interest, and other sums then outstanding under the Note, and (b) whether Grantor claims to have any offsets or defenses with respect to the Secured Obligations and, if so, the nature of such offsets or defenses.

4.20      Costs of Closing . Grantor shall on demand pay directly or reimburse Beneficiary for any costs or expenses pertaining to the closing of the Loan, including, but not limited to, fees of counsel for Beneficiary, costs and expenses for which invoices were not available at the closing of the Loan, or costs and expenses which are incurred by Beneficiary after such closing, including, without limitation, costs or expenses incurred to obtain originals or copies of recorded or filed Loan Documents and UCC financing statements. All such costs and expenses (together with interest thereon at the Default Rate from the date incurred by Beneficiary) shall constitute a part of the Secured Obligations, and may be included in the computation of the amount owed to Beneficiary for purposes of foreclosing or otherwise enforcing this Security Instrument.

4.21      Fund for Electronic Transfer . All monthly payments of principal and interest on the Note, and impound deposits under this Security Instrument, shall be made by Grantor by electronic funds transfer from a bank account established and maintained by Grantor for such purpose. Grantor shall establish and maintain such an account until the Note is fully paid and shall direct the depository of such account in writing to so transmit such payments on or before the respective due dates to the account of Beneficiary as shall be designated by Beneficiary in writing.

4.22      Use . Grantor shall use the Property solely for office, commercial and/or incidental or ancillary uses, and for such other uses that are permitted under Leases approved by Beneficiary in writing, and for no other use or purpose.

4.23      Management . The Property shall be managed by Griffin Capital Essential Asset Property Management, LLC, a Delaware limited liability company (“ Property Manager ”) under a management agreement previously delivered to, and approved, by Beneficiary (the “ Management Agreement ”) and sub-managed by Piedmont Office Management, LLC, a Georgia limited liability company (“ Sub-Manager ”) under a sub-management agreement previously delivered to and approved by Beneficiary (the “ Sub-Management Agreement ”). Grantor shall not permit any amendment to or modification of the Management Agreement or the Sub-Management Agreement, or management of the Property by any person or entity other than Property Manager or Sub-Manager, without the prior written consent of Beneficiary.

4.24      Intentionally Deleted .

4.25      General Indemnity . Grantor agrees that while Beneficiary has no liability to any person in tort or otherwise as lender and that Beneficiary is not an owner or operator of the Property, Grantor shall, at its sole expense, protect, defend, release, indemnify and hold harmless the Indemnified Parties (defined below) for, from and against any Losses (defined below) imposed on, incurred by, or asserted against the Indemnified Parties, directly or indirectly, arising out of or in connection with the Property, Loan, or Loan Documents; provided, however, that the foregoing shall not apply (a) to any Losses caused by the gross negligence or willful misconduct of the Indemnified Parties or (b) provided no Event of Default then exists, to any disputes among the Indemnified Parties not caused in whole or in part by a breach of Grantor’s obligations under the Loan Documents. The term “ Losses ” shall mean any claims, suits, liabilities (including strict liabilities), actions, proceedings, obligations, debts, damages, losses (including, without limitation, unrealized loss of value of the Property caused in whole or in part by a breach of any of Grantor’s obligations under the Loan Documents, or arising by reason of any third-party claim asserted against any of the Indemnified Parties, but not due to the gross negligence or willful misconduct of such Indemnified Party), demands, costs, expenses, fines, penalties, charges, fees, judgments, awards, and amounts paid in settlement of whatever kind including attorneys’ fees and all other costs of defense. The term “ Indemnified Parties ” shall mean (a) Beneficiary, (b) any prior owner or holder of the Note, (c) any existing or prior servicer of the Loan, (d) Trustee, (e) the officers, directors, shareholders, partners, members, employees and trustees of any of the foregoing, and (f) the heirs, legal representatives, successors and assigns of each of the foregoing. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO LOSSES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PARTY OR ANY STRICT LIABILITY, BUT NOT THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY.

4.26      Duty to Defend, Costs and Expenses . Upon request, whether Grantor’s obligation to indemnify Beneficiary arises under Section 4.25 above or elsewhere in the Loan Documents, Grantor shall defend the Indemnified Parties (in Grantor’s or the Indemnified Parties’ names) by attorneys and other professionals approved by the Indemnified Parties; provided, however, if and to the extent Grantor has no right to approve such counsel, counsel appointed by Grantor’s insurance carrier shall be deemed acceptable to Indemnified Parties. Notwithstanding the foregoing, the Indemnified Parties may, in their sole discretion, engage their own attorneys and professionals to defend or assist them and, at their option, their attorneys shall control the resolution of any claims or proceedings. Upon demand, Grantor shall pay or, in the sole discretion of the Indemnified Parties, reimburse the Indemnified Parties for all Losses imposed on, incurred by, or asserted against the Indemnified Parties by reason of any items set forth in Section 4.25 above and/or the enforcement or preservation of the Indemnified Parties’ rights under the Loan Documents. Any amount payable to the Indemnified Parties under this Section shall (a) be deemed a demand obligation, (b) be part of the Secured Obligations, (c) bear interest from the date of demand at the Default Rate until paid if not paid on demand, and (d) be secured by this Security Instrument.

ARTICLE 5
GRANTOR’S NEGATIVE COVENANTS

5.1      Waste and Alterations . Grantor will not commit or permit any (a) physical waste with respect to the Property or the Chattels and (b) Grantor shall not cause or permit any part of the Property, including but not limited to any building, structure, parking lot, driveway, landscape scheme, timber, or other ground improvement, to be removed, demolished, or materially altered without the prior written consent of Beneficiary, subject in each instance to the terms of the Leases.

5.2      Zoning and Private Covenants . Grantor will not initiate, join in, or consent to any change in any zoning ordinance or classification, any change in the “zone lot” or “zone lots” (or similar zoning unit or units) presently comprising the Property, any transfer of development rights, any change in any private restrictive covenant, or any change in any other public or private restriction limiting or defining the uses which may be made of the Property or any part thereof, without the prior written consent of Beneficiary. If under applicable zoning provisions the use of all or any part of the Property is or becomes a nonconforming use, Grantor will not cause such use to be discontinued or abandoned without the prior written consent of Beneficiary, and Grantor will use commercially reasonable efforts to prevent the tenant under any Lease from discontinuing or abandoning such use.

5.3      Interference with Leases.

(a)    Grantor will neither do, nor neglect to do, anything which may cause or permit the termination of any Lease of all or any part of the Property, or cause or permit the withholding or abatement of any rent payable under any such Lease.

(b)    Without Beneficiary’s prior written consent, which may be granted or withheld in Beneficiary’s sole discretion, Grantor shall not enter into or modify (including without limitation modifications relating to the financial covenants or any financial reporting requirements) any Lease of all or any part of the Property. Any lease, lease modification, lease amendment or lease termination (“ Lease Transaction ”) for which Beneficiary’s consent is required under the Loan Documents shall be deemed approved by Beneficiary if (i) prior to finalizing negotiations for such Lease Transaction, Grantor has submitted to Beneficiary an approval request package (“ Approval Package ”) with respect to such Lease Transaction containing a letter requesting Beneficiary’s approval (and containing a signature line on which Beneficiary may evidence its approval of such Lease Transaction) and notifying Beneficiary, in bold enlarged type, that Beneficiary’s approval will be deemed given if it fails to respond within ten (10) Business Days after its receipt of such Approval Package, and Beneficiary thereafter fails to respond within ten (10) Business Days after its receipt of such Approval Package; provided , however , that Grantor shall supply Beneficiary with any other information reasonably requested by Beneficiary with respect to such proposed Lease Transaction within five (5) Business Days after Beneficiary’s receipt of the Approval Package, in which event Beneficiary’s approval shall be deemed given if Beneficiary has not disapproved or approved the Approval Package within ten (10) Business Days after the last to arrive of the proposed Approval Package and any additional information so requested by Beneficiary. Each Approval Package shall contain a description of all of the principal terms of the proposed Lease Transaction, a description of the tenant and its controlling constituents and (with respect to new leases or modifications/amendments) Grantor’s reasonably detailed analysis of the tenant’s creditworthiness (with respect to new leases or modifications/amendments), and a copy of any and all term sheets or letters of intent executed in connection with such Lease Transaction, together with the proposed forms of definitive documentation. Grantor shall deliver to Beneficiary copies of all Leases or modifications promptly upon execution and delivery thereof.

(c)    Except with the prior written consent of Beneficiary, which may be granted or withheld in Beneficiary’s sole discretion, Grantor will not (i) collect rent from all or any part of the Property for more than one month in advance, (ii) assign the rents from the Property or any part thereof, or (iii) consent to the cancellation or surrender of all or any part of any Lease, except that Grantor may in good faith terminate any Lease for nonpayment of rent or other material breach by the tenant.

(d)    Without limiting the generality of the foregoing, whether or not Beneficiary’s consent to the cancellation or surrender of any Lease is required hereunder, (i) Grantor shall notify Beneficiary in writing of any cancellation penalties or other consideration as and when received by Grantor in connection with such cancellation or surrender (the “ Termination Fees ”), which written notice must be delivered to Beneficiary within five (5) days of the payment by the applicable tenant of any such Termination Fees to Grantor, and (ii) at Beneficiary’s sole option, Beneficiary shall be entitled to (A) require that Grantor enter into the TI/LC Reserve (as defined in the Vacancy Risk Agreement) with Beneficiary and deposit such Termination Fees into the TI/LC Reserve, and (B) impose such restrictions and conditions on the timing and amount of disbursements of the Termination Fees from such reserve as Beneficiary may require in its reasonable discretion, including, without limitation the conditions described in Section 6 of the TI/LC Reserve Agreement.

(e)    Subject to Beneficiary’s approval of each Lease, in any circumstance where, pursuant to the terms of the Lease, Grantor’s consent to any action under such Lease shall not be unreasonably withheld or delayed, and such action requires the consent of Beneficiary, Beneficiary’s consent to such action shall likewise not be unreasonably withheld or delayed. In addition, Beneficiary’s consent to such action shall be subject to the deemed approval provisions described in Section 5.3(b) above.

5.4      Tran sfer or Further Encumbrance of Property .

(a)    Except as permitted in Section 5.4 of the First Security Instrument (which provisions of Section 5.4 of the First Security Instrument are incorporated herein by reference as if set forth herein in full, and shall survive any foreclosure, reconveyance or release of the First Security Instrument as continuing provisions of this Security Instrument), without Beneficiary’s prior written consent, which consent may be granted or withheld in Beneficiary’s sole and absolute discretion, Grantor shall not (i) sell, assign, convey, transfer or otherwise dispose of any direct or indirect legal, beneficial or equitable interest in all or any part of the Property, (ii) permit or suffer any owner, directly or indirectly, of any beneficial interest in the Property or Grantor to transfer such interest, whether by transfer of partnership, membership, stock or other beneficial interest in any entity or otherwise, or (iii) mortgage, pledge, hypothecate or otherwise encumber or permit to be encumbered or grant or permit to be granted a security interest in all or any part of, or a direct or indirect interest in, the Property or Grantor or any beneficial or equitable interest in either the Property or Grantor. The provisions of this Section shall not prohibit transfers of title or interest under any will or testament or applicable law of descent. Consent to one such transfer or encumbrance by Beneficiary shall not be deemed a waiver to require such consent to further or future transfers or encumbrances, provided that Beneficiary’s consent to any such transfer or encumbrance under the First Security Instrument shall be deemed its consent to the same under this Security Instrument.

5.5      Further Encumbrance of Chattels . Grantor will neither create nor permit any lien, security interest or encumbrance against the Chattels or Intangible Personalty or any part thereof or interest therein, other than the liens and security interests created by the First Security Instrument and the Loan Documents, without the prior written consent of Beneficiary, which may be withheld for any reason.

5.6      Assessments Against Property . Grantor will not, without the prior written approval of Beneficiary, which may be withheld for any reason, hereafter consent to or allow the creation of any so called special districts, special improvement districts, benefit assessment districts or similar districts, or any other body or entity of any type, or allow to occur any other event, that would or might result in the imposition of any additional taxes, assessments or other monetary obligations or burdens on the Property, (other than increases in ad valorem real estate taxes from time to time imposed by applicable taxing authorities), and this provision shall serve as RECORD NOTICE to any such district or districts or any governmental entity under whose authority such district or districts exist or are being formed that, should Grantor or any other person or entity include all or any portion of the Property in such district or districts, whether formed or in the process of formation, without first obtaining Beneficiary’s express written consent, the rights of Beneficiary in the Property pursuant to this Security Instrument or following any foreclosure of this Security Instrument, and the rights of any person or entity to whom Beneficiary might transfer the Property following a foreclosure of this Security Instrument, shall be senior and superior to any taxes, charges, fees, assessments or other impositions of any kind or nature whatsoever, or liens (whether statutory, contractual or otherwise) levied or imposed, or to be levied or imposed, upon the Property or any portion thereof as a result of inclusion of the Property in such district or districts.

5.7      Transfer or Removal of Chattels . Grantor will not sell, transfer or remove from the Property all or any part of the Chattels, unless the items sold, transferred, or removed are obsolete or are simultaneously replaced with similar items of equal or greater value.

5.8      Change of Name, Organizational I.D. No. or Location . Grantor will not change its name or the name under which it does business (or adopt or begin doing business under any other name or assumed or trade name), change its organizational identification number, or change its location, without first notifying Beneficiary of its intention to do so and delivering to Beneficiary such organizational documents of Grantor and executed modifications or supplements to this Security Instrument (and to any financing statement which may be filed in connection herewith) as Beneficiary may require. For purposes of the foregoing, Grantor’s “ location ” shall mean (a) if Grantor is a registered organization, Grantor’s state of registration, (b) if Grantor is an individual, the state of Grantor’s principal residence, or (c) if Grantor is neither a registered organization nor an individual, the state in which Grantor’s place of business (or, if Grantor has more than one place of business, the Grantor’s chief executive office) is located.

5.9      Improper Use of Property or Chattels . Grantor will not use the Property or the Chattels for any purpose or in any manner which violates any applicable law, ordinance, or other governmental requirement, the requirements or conditions of any insurance policy, or any private covenant.

5.10      ERISA . Grantor shall not engage in any transaction which would cause the Note (or the exercise by Beneficiary of any of its rights under the Loan Documents) to be a non-exempt, prohibited transaction under ERISA (including for this purpose the parallel provisions of Section 4975 of the Internal Revenue Code of 1986, as amended), or otherwise result in Beneficiary being deemed in violation of any applicable provisions of ERISA. Grantor shall indemnify, protect, defend, and hold Beneficiary harmless for, from and against any and all losses, liabilities, damages, claims, demands, judgments, costs, and expenses (including, without limitation attorneys’ fees and costs incurred in the investigation, defense, and settlement of claims and in obtaining any individual ERISA exemption or state administrative exception that may be required, in Beneficiary’s sole and absolute discretion) that Beneficiary may incur, directly or indirectly, as the result of the breach by Grantor of any warranty or representation set forth in Section 3.3(x) hereof or the breach by Grantor of any covenant contained in this Section. This indemnity shall survive any termination, satisfaction or foreclosure of this Security

Instrument. IT IS THE EXPRESS INTENTION OF GRANTOR AND BENEFICIARY THAT THE INDEMNITY SET FORTH IN THIS SECTION SHALL COVER LOSSES, LIABILITIES, DAMAGES, CLAIMS, JUDGMENTS, COSTS AND EXPENSES ARISING FROM THE NEGLIGENCE (EXCLUDING GROSS NEGLIGENCE) OF THE INDEMNIFIED PARTY.

5.11      Intentionally Deleted .

5.12      REA and Other Major Approvals . Without Beneficiary’s prior written consent, which may be granted or withheld in Beneficiary’s reasonable discretion, Grantor shall not enter into or modify any reciprocal easement agreement, declaration, covenant, condition or restriction, ground lease, operating agreement, or any document recorded against the Property.

5.13      Intentionally Deleted .

ARTICLE 6

EVENTS OF DEFAULT

Each of the following events will constitute an event of default (an “ Event of Default ”) under this Security Instrument and under each of the other Loan Documents:

6.1      Failure to Make Payment . Grantor’s failure to make any payment when due under the Secured Guaranty or this Security Instrument.

6.2      Due on Sale or Encumbrance . The occurrence of any violation of any covenant contained in Section 5.4, 5.5 or 5.7 hereof.

6.3      Other Obligations . The failure of Grantor to properly perform any obligation contained herein or in the Secured Guaranty (other than the obligation to make payments under the Secured Guaranty or this Security Instrument) and the continuance of such failure for a period of thirty (30) days following written notice thereof from Beneficiary to Grantor; provided, however, that if such failure is not curable within such thirty (30) day period, then, so long as Grantor commences to cure such failure within such thirty (30) day period and is continually and diligently attempting to cure to completion, such failure shall not be an Event of Default unless such failure remains uncured for one hundred twenty (120) days after such written notice to Grantor.

6.4      Levy Against Property . The levy against any of the Property, Chattels or Intangible Personalty, of any execution, attachment, sequestration or other writ.

6.5      Liquidation . The liquidation, termination or dissolution of Grantor or any Controlling Person, at any time that Grantor is the borrower under the Loan.

6.6      Appointment of Receiver . The appointment of a trustee or receiver for the assets, or any part thereof, of Grantor, or any Controlling Person, or the appointment of a trustee or receiver for any real or personal property, or the like, or any part thereof, representing the security for the Secured Obligations.

6.7      Assignments . The making by Grantor or any Controlling Person of a transfer in fraud of creditors or an assignment for the benefit of creditors.

6.8      Order for Relief . The entry in bankruptcy of an order for relief for or against Grantor or any Controlling Person.

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

6.10      Misrepresentation . If any representation or warranty made by Grantor or any Controlling Person, or in any of the other Loan Documents or any other instrument or document modifying, renewing, extending, evidencing, securing or pertaining to the Note is false, or intentionally misleading in any material respect.

6.11      Judgments . The failure of (a) Grantor or GC Member to pay any money judgment in excess of $10,000.00 or (b) any Controlling Person to pay any money judgment in excess of $200,000.00, in either case against any such party before the expiration of thirty (30) days after such judgment becomes final and no longer appealable.

6.12      Admissions Regarding Debts . The admission of Grantor or any Controlling Person in writing, other than to Beneficiary, of any such party’s inability to pay such party’s debts as they become due.

6.13      Assertion of Priority . The assertion of any claim of priority over this Security Instrument, by title, lien, or otherwise, unless Grantor within forty-five (45) days after such assertion either causes the assertion to be withdrawn or provides Beneficiary with such security as Beneficiary may require to protect Beneficiary against all loss, damage, or expense, including attorneys’ fees, which Beneficiary may incur in the event such assertion is upheld.

6.14      Intentionally Deleted .

6.15      Other Liens . The occurrence of any default by Grantor, after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any other consensual lien encumbering the Property, or any part thereof or interest therein, or any document or instrument evidencing obligations secured thereby.

6.16      Other Indebtedness . The occurrence of any default by Grantor, after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any other indebtedness incurred or owing by Grantor, or any document or instrument evidencing any obligation to pay such indebtedness.

6.17      Intentionally Deleted .

6.18      Other Loan Documents . Any “Event of Default” (as defined in the Other Loan Documents) under any of the Other Loan Documents shall constitute an Event of Default hereunder and under the other Loan Documents. Any “Event of Default” (as defined in the Other Loan Guaranty Documents) under any of the Other Loan Guaranty Documents shall constitute an Event of Default hereunder and under the Loan Documents. Notwithstanding anything to the contrary contained herein, any “Event of Default” as defined in the First Security Instrument or any of the Loan Documents shall constitute an immediate Event of Default hereunder. Grantor and Beneficiary hereby acknowledge and agree that (i) the owners of Grantor own a direct or indirect interest in the Other Borrowers; (ii) that the foregoing provisions have been made in consideration of, among other things, Beneficiary’s agreement to modify the Loan to Grantor under such terms and conditions as agreed by the parties; and (iii) that this Section 6.18 has been agreed to for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

ARTICLE 7
BENEFICIARY’S REMEDIES

Immediately upon or any time after the occurrence of any Event of Default hereunder, Beneficiary may exercise any remedy available at law or in equity, including but not limited to those listed below and those listed in the other Loan Documents, in such sequence or combination as Beneficiary may determine in Beneficiary’s sole discretion:

7.1      Performance of Defaulted Obligations . Beneficiary may make any payment or perform any other obligation under the Loan Documents or under Leases which Grantor has failed to make or perform, and Grantor hereby irrevocably appoints Beneficiary as the true and lawful attorney-in-fact for Grantor to make any such payment and perform any such obligation in the name of Grantor and such appointment is deemed coupled with an interest. All payments made and expenses (including attorneys’ fees and expenses) incurred by Beneficiary in this connection, together with interest thereon at the Default Rate from the date paid or incurred until repaid, will be part of the Secured Obligations and will be immediately due and payable by Grantor to Beneficiary. In lieu of advancing Beneficiary’s own funds for such purposes, Beneficiary may use any funds of Grantor which may be in Beneficiary’s possession, including but not limited to insurance or condemnation proceeds and amounts deposited for taxes, insurance premiums, or other purposes.

7.2      Specific Performance and Injunctive Relief . Notwithstanding the availability of legal remedies, Beneficiary will be entitled to obtain specific performance, mandatory or prohibitory injunctive relief, or other equitable relief requiring Grantor to cure or refrain from repeating any Default.

7.3      Acceleration of Secured Obligations . Beneficiary may, without notice or demand, declare all of the Secured Obligations immediately due and payable in full.

7.4      Suit for Monetary Relief . With or without accelerating the maturity of the Secured Obligations, Beneficiary may sue from time to time for any payment due under the Secured Guaranty, or for money damages resulting from Grantor’s default under the Secured Guaranty or this Security Instrument.

7.5      Possession of Property . To the extent permitted by law, Beneficiary may enter and take possession of the Property without seeking or obtaining the appointment of a receiver, may employ a managing agent for the Property, and may lease or rent all or any part of the Property, either in Beneficiary’s name or in the name of Grantor, and may collect the rents, issues, and profits of the Property. Any revenues collected by Beneficiary under this Section will be applied first toward payment of all expenses (including attorneys’ fees) incurred by Beneficiary, together with interest thereon at the Default Rate from the date incurred until repaid, and the balance, if any, will be applied against the Secured Obligations in such order and manner as Beneficiary may elect in its sole discretion.

7.6      Enforcement of Security Interests . Beneficiary may exercise all rights of a secured party under the Code with respect to the Chattels and the Intangible Personalty, including but not limited to taking possession of, holding, and selling the Chattels and enforcing or otherwise realizing upon any accounts and general intangibles. Any requirement for reasonable notice of the time and place

of any public sale, or of the time after which any private sale or other disposition is to be made, will be satisfied by Beneficiary’s giving of such notice to Grantor at least ten (10) days prior to the time of any public sale or the time after which any private sale or other intended disposition is to be made. Without limiting the generality of the foregoing, it is the express understanding and intent of the parties that as to any personal property interests subject to Chapter 9 of the Code, Beneficiary, upon an Event of Default, may proceed under such Code or may proceed as to both real and personal property interests in accordance with the provisions of this Security Interest and its rights and remedies in respect to real property, and treat both real and personal property interests as one parcel or package of security.

7.7      Foreclosure Against Property .

(a)    Beneficiary or Trustee, upon written request of Beneficiary, may: (i) commence a judicial action to foreclose the lien of this Security Instrument as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (ii) exercise the power of sale herein contained, and deliver to Trustee a written statement of breach, notice of default and election to cause Grantor’s interest in the Property to be sold; and/or (iii) deposit with Trustee this Security Instrument and the Secured Guaranty and such receipts and evidence of expenditures made and secured hereby as Trustee may require.

(b)    Upon receipt of such statement and notice from Beneficiary, Trustee shall cause to be recorded, published and delivered to Grantor such notice of sale as then required by law and by this Security Instrument. Trustee shall, without other demand on Grantor, after lapse of such time as may then be required by law and after recordation of a notice of sale and after such notice of sale having been given as required by law, sell the Property at the time and place of sale fixed by it in said notice of sale and in accordance with applicable laws of the State of Texas, either as a whole or in separate lots or parcels or items as Trustee shall deem expedient, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Grantor, Trustee or Beneficiary, may purchase at such sale and Grantor hereby covenants to warrant and defend the title of such purchaser or purchasers.

(c)    After deducting all costs, fees and expenses of Trustee and of this trust, including, without limitation, Trustee’s fees and reasonable attorneys’ fees and costs of evidence of title in connection with sale, Trustee shall apply the proceeds of sale in the following priority, to payment of: (i) first, all sums expended under the terms of the Loan Documents, not then repaid, with accrued interest thereon at the Default Rate; (ii) second, all sums due under the Note; (iii) all other sums, then secured thereby; and (iv) the remainder, if any, to the person or persons legally entitled thereto.

(d)    Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement or subsequently noticed sale, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale.

(e)    Nothing in this Section dealing with foreclosure procedures or specifying particular actions to be taken by Beneficiary shall be deemed to contradict or add to the requirements and procedures now or hereafter specified by the laws of the State of Texas, and any such inconsistency shall be resolved in favor of the State’s law applicable at the time of foreclosure. In any event, all foreclosures under the power of sale which is herein conferred shall be accomplished in accordance with the following provisions:

(i)     Public Sale . Trustee is hereby authorized and empowered, and it shall be Trustee’s special duty, upon such request of Beneficiary, to sell the Property, or any part thereof, at public auction to the highest bidder for cash, with or without having taken possession of same. Any such sale (including notice thereof) shall comply with the applicable requirements, at the time of the sale, of Section 51.002 of the Texas Property Code or, if and to the extent such statute is not then in force, with the applicable requirements, at the time of the sale, of the successor statute or statutes, if any, governing sales of Texas real property under powers of sale conferred by deeds of trust. If there is no statute in force at the time of the sale governing sales of Texas real property under powers of sale conferred by deeds of trust, such sale shall comply with applicable law, at the time of the sale, governing sales of Texas real property under powers of sale conferred by deeds of trust. 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.

(ii)     Right to Require Proof of Financial Ability and/or Cash Bid . At any time during the bidding, the Trustee may require a bidding party (i) to disclose its full name, state and city of residence, occupation, and specific business office location, and the name and address of the principal the bidding party is representing (if applicable), and (ii) to demonstrate reasonable evidence of the bidding party’s financial ability (or, if applicable, the financial ability of the principal of such bidding party), as a condition to the bidding party submitting bids at the foreclosure sale. If any such bidding party (the “ Questioned Bidder ”) declines to comply with the Trustee’s requirement in this regard, or if

such Questioned Bidder does respond but the Trustee, in Trustee’s sole and absolute discretion, deems the information or the evidence of the financial ability of the Questioned Bidder (or, if applicable, the principal of such bidding party) to be inadequate, then the Trustee may continue the bidding with reservation; and in such event (A) the Trustee shall be authorized to caution the Questioned Bidder concerning the legal obligations to be incurred in submitting bids, and (B) if the Questioned Bidder is not the highest bidder at the sale, or if having been the highest bidder the Questioned Bidder fails to deliver the cash purchase price payment promptly to the Trustee, all bids by the Questioned Bidder shall be null and void. The Trustee may, in Trustee’s sole and absolute discretion, determine that a credit bid may be in the best interest of the Grantor and Beneficiary, and elect to sell the Property for credit or for a combination of cash and credit; provided, however, that the Trustee shall have no obligation to accept any bid except an all cash bid. In the event the Trustee requires a cash bid and cash is not delivered within a reasonable time after conclusion of the bidding process, as specified by the Trustee, but in no event later than 3:45 p.m. local time on the day of sale, then said contingent sale shall be null and void, the bidding process may be recommenced, and any subsequent bids or sale shall be made as if no prior bids were made or accepted.

(iii)     Sale Subject to Unmatured Debt . In addition to the rights and powers of sale granted under the preceding provisions of this subsection, if default is made in the payment of any installment of the Secured Obligations and is not cured within applicable cure periods, Beneficiary may, at Beneficiary’s option, at once or at any time thereafter while any matured installment remains unpaid, without declaring the entire Secured Obligations to be due and payable, orally or in writing direct Trustee to enforce this Security Instrument and to sell the Property subject to such unmatured Secured Obligations and to the rights, powers, liens, security interests, and assignments securing or providing recourse for payment of such unmatured Secured Obligations, in the same manner, all as provided in the preceding provisions of this subsection. Sales made without maturing the Secured Obligations may be made hereunder whenever there is an uncured default in the payment of any installment of the Secured Obligations, without exhausting the power of sale granted hereby, and without affecting in any way the power of sale granted under this subsection, the unmatured balance of the Secured Obligations or the rights, powers, liens, security interests, and assignments securing or providing recourse for payment of the Secured Obligations.

(iv)     Partial Foreclosure . Sale of a part of the Property shall not exhaust the power of sale, but sales may be made from time to time until the Secured Obligations are paid in full. It is intended by each of the foregoing provisions of this subsection that Trustee may, after any request or direction by Beneficiary, sell not only the land and the improvements, but also the equipment and other interests constituting a part of the Property or any part thereof, along with the land and the improvements or any part thereof, as a unit and as a part of a single sale, or may sell at any time or from time to time any part or parts of the Property separately from the remainder of the Property. It shall not be necessary to have present or to exhibit at any sale any of the Property. Any sale of personal property made hereunder shall be deemed to have been a public sale conducted in a commercially reasonable manner if held contemporaneously with, or as part of, and upon the same notice as required for the sale of real property under the power of sale granted herein.

(v)     Trustee’s Deeds . AFTER ANY SALE UNDER THIS SUBSECTION, TRUSTEE SHALL MAKE GOOD AND SUFFICIENT DEEDS, ASSIGNMENTS, AND OTHER CONVEYANCES TO THE PURCHASER OR PURCHASERS THEREUNDER IN THE NAME OF GRANTOR, CONVEYING THE PROPERTY OR ANY PART THEREOF SO SOLD TO THE PURCHASER OR PURCHASERS WITH GENERAL WARRANTY OF TITLE BY GRANTOR. IT IS AGREED THAT IN ANY DEEDS, ASSIGNMENTS OR OTHER CONVEYANCES GIVEN BY TRUSTEE, ABSENT FRAUD, WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, ANY AND ALL STATEMENTS OF FACT OR OTHER RECITALS THEREIN MADE AS TO THE IDENTITY OF BENEFICIARY, THE OCCURRENCE OR EXISTENCE OF ANY EVENT OF DEFAULT, THE NOTICE OF INTENTION TO ACCELERATE, OR ACCELERATION OF, THE MATURITY OF THE SECURED OBLIGATIONS, THE REQUEST TO SELL, NOTICE OF SALE, TIME, PLACE, TERMS AND MANNER OF SALE, AND RECEIPT, DISTRIBUTION, AND APPLICATION OF THE MONEY REALIZED THEREFROM, THE DUE AND PROPER APPOINTMENT OF A SUBSTITUTE TRUSTEE, AND WITHOUT BEING LIMITED BY THE FOREGOING, ANY OTHER ACT OR THING HAVING BEEN DULY DONE BY OR ON BEHALF OF BENEFICIARY OR BY OR ON BEHALF OF TRUSTEE, SHALL BE TAKEN BY ALL COURTS OF LAW AND EQUITY AS PRIMA FACIE EVIDENCE THAT SUCH STATEMENTS OR RECITALS STATE TRUE, CORRECT, AND COMPLETE FACTS AND ARE WITHOUT FURTHER QUESTION TO BE SO ACCEPTED, AND GRANTOR DOES HEREBY RATIFY AND CONFIRM ANY AND ALL ACTS THAT TRUSTEE MAY LAWFULLY DO IN THE PREMISES BY VIRTUE HEREOF.

7.8      Appointment of Receiver . To the extent permitted by law, Beneficiary shall be entitled, as a matter of absolute right and without regard to the value of any security for the Secured Obligations or the solvency of any person liable therefor, to the appointment of a receiver for the Property upon ex-parte application to any court of competent jurisdiction. Grantor waives any right to any hearing or notice of hearing prior to the appointment of a receiver. Such receiver and its agents shall be empowered, but shall not be obligated

to (a) take possession of the Property and any businesses conducted by Grantor or any other person thereon and any business assets used in connection therewith, (b) exclude Grantor and Grantor’s agents, servants, and employees from the Property, (c) collect the rents, issues, profits, and income therefrom, (d) complete any construction which may be in progress, (e) do such maintenance and make such repairs and alterations as the receiver deems necessary, (f) use all stores of materials, supplies, and maintenance equipment on the Property and replace such items at the expense of the receivership estate, (g) pay all taxes and assessments against the Property and the Chattels, all premiums for insurance thereon, all utility and other operating expenses, and all sums due under any prior or subsequent encumbrance, and (h) generally do anything which Grantor could legally do if Grantor were in possession of the Property. All expenses incurred by the receiver or its agents shall constitute a part of the Secured Obligations. Any revenues collected by the receiver shall be applied first to the expenses of the receivership, including attorneys’ fees incurred by the receiver and by Beneficiary, together with interest thereon at the Default Rate from the date incurred until repaid, and the balance shall be applied toward the Secured Obligations in such order or manner as Beneficiary may in its sole discretion elect or in such other manner as the court may direct. Unless sooner terminated with the express consent of Beneficiary, any such receivership will continue until the Secured Obligations have been discharged in full, or until title to the Property has passed after foreclosure sale and all applicable periods of redemption have expired.

7.9      Right to Make Repairs, Improvements . Should any part of the Property come into the possession of Beneficiary, whether before or after an Event of Default, Beneficiary may, but shall not be obligated to, use, operate, and/or make repairs, alterations, additions and improvements to the Property for the purpose of preserving it or its value. Grantor covenants to promptly reimburse and pay to Beneficiary, at the place where the Note is payable, or at such other place as may be designated by Beneficiary in writing, the amount of all reasonable expenses (including the cost of any insurance, taxes, or other charges) incurred by Beneficiary in connection with its custody, preservation, use or operation of the Property, together with interest thereon from the date incurred by Beneficiary at the Default Rate, and all such expenses, costs, taxes, interest, and other charges shall be a part of the Secured Obligations. It is agreed, however, that the risk of accidental loss or damage to the Property is undertaken by Grantor and Beneficiary shall have no liability whatsoever for decline in value of the Property, for failure to obtain or maintain insurance, or for failure to determine whether any insurance ever in force is adequate as to amount or as to the risks insured.

7.10      Collateral for All Obligations . Grantor acknowledges that the Property is collateral for the full amount of the Secured Obligations. Neither Beneficiary nor Trustee shall be required to marshal all or any part of the Property or proceed against all or any part of the Property in any particular sequence, and Beneficiary shall not be limited in the amount it can recover from the Property to satisfy the Secured Obligations.

7.11      Intentionally Deleted .

7.12      Indemnity of Trustee . If any suit or proceeding be brought against the Trustee or Beneficiary relating to this Security Instrument or the loan secured hereby or if any suit or proceeding be brought which may affect the value or title of the Property, Grantor shall defend, indemnify and hold harmless and on demand reimburse Trustee or Beneficiary from any loss, cost, damage or expense unless caused by Trustee’s or Beneficiary’s negligence or willful misconduct and any sums expended by Trustee or Beneficiary shall bear interest at the Default Rate and shall be due and payable on demand. IT IS THE EXPRESS INTENTION OF GRANTOR AND BENEFICIARY THAT THE INDEMNITY SET FORTH IN THIS SECTION SHALL COVER LOSSES, COSTS, DAMAGES AND EXPENSES CAUSED BY THE NEGLIGENCE (EXCLUDING GROSS NEGLIGENCE) OF THE INDEMNIFIED PARTY.

7.13      Civil Action . In the event that Trustee is named as a party to any civil action as Trustee in this Security Instrument, the Trustee shall be entitled to employ an attorney at law, including Trustee if Trustee is a licensed attorney, to represent Trustee in such action and the reasonable attorney’s fee of the Trustee in such action shall be paid by the Beneficiary and added to the principal of the Note secured by this Security Instrument and bear interest at the Default Rate provided in the Note.

7.14      Credit of Beneficiary . To the maximum extent permitted by the laws of the State of Texas, on a sale made under or by virtue of this Article, Beneficiary may bid and acquire the Property, or any part thereof, and in lieu of paying cash thereof may apply to the purchase price, all or any portion of the unpaid Secured Obligations in such order as Beneficiary may elect.

7.15      Prima Facie Evidence . Grantor agrees that, in any assignments, deeds, bills of sale, notices of sale, or postings, given by Beneficiary, any and all statements of fact or other recitals therein made as to the identity of Beneficiary, or as to the occurrence or existence of any Event of Default, or as to the acceleration of the maturity of the Secured Obligations, or as to the request to sell, posting of notice of sale, notice of sale, time, place, terms and manner of sale and receipt, distribution and application of the money realized therefrom, and without being limited by the foregoing, as to any other act or thing having been duly done by Beneficiary, shall be taken by all courts of law and equity as prima facie evidence that such statements or recitals state facts and are without further question to be so accepted, and Grantor does hereby ratify and confirm any and all acts that Beneficiary may lawfully do by virtue hereof.

ARTICLE 8
ASSIGNMENT OF LEASES AND RENTS

8.1      Assignment of Leases and Rents . Grantor hereby unconditionally and absolutely and presently grants, transfers and assigns unto Beneficiary all rents, royalties, issues, profits and income (“Rents”) now or hereafter due or payable for the occupancy or use of the Property, and all Leases, whether written or oral, with all security therefor, including all guaranties thereof, now or hereafter

affecting the Property; on the condition that Beneficiary hereby grants to Grantor, however, a license to collect and retain such Rents prior to the occurrence of any Event of Default hereunder. Such license shall be revocable by Beneficiary without notice to Grantor at any time after the occurrence of an Event of Default. Grantor represents that the Rents and the Leases have not been heretofore sold, assigned, transferred or set over by any instrument now in force and will not at any time during the life of this assignment be sold, assigned, transferred or set over by Grantor or by any person or persons whomsoever; and Grantor has good right to sell, assign, transfer and set over the same and to grant to and confer upon Beneficiary the rights, interest, powers and authorities herein granted and conferred. Failure of Beneficiary at any time or from time to time to enforce the assignment of Rents and Leases under this Section shall not in any manner prevent its subsequent enforcement, and Beneficiary is not obligated to collect anything hereunder, but is accountable only for sums actually collected.

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

8.3      Application of Rents . Beneficiary shall be entitled to deduct and retain a just and reasonable compensation from monies received hereunder for its services or that of its agents in collecting such monies. Any monies received by Beneficiary hereunder may be applied when received from time to time in payment of any taxes, assessments or other liens affecting the Property regardless of the delinquency, such application to be in such order as Beneficiary may determine. The acceptance of this Security Instrument by Beneficiary or the exercise of any rights by it hereunder shall not be, or be construed to be, an affirmation by it of any Lease nor an assumption of any liability under any Lease.

8.4      Collection of Rents . To the extent not prohibited by applicable law, upon or at any time after an Event of Default shall have occurred and be continuing, Beneficiary may declare all sums secured hereby immediately due and payable, and may, at its option, without notice, and whether or not the Secured Obligations shall have been declared due and payable, either in person or by agent, with or without bringing any action or proceeding, or by a receiver to be appointed by a court, (i) enter upon, take possession of, manage and operate the Property, or any part thereof (including without limitation making necessary repairs, alterations and improvements to the Property); (ii) make, cancel, enforce or modify Leases; (iii) obtain and evict tenants; (iv) fix or modify Rents; (v) do any acts which Beneficiary deems reasonably proper to protect the security thereof; and (vi) either with or without taking possession of the Property, in its own name sue for or otherwise collect and receive such Rents, including those past due and unpaid. In connection with the foregoing, Beneficiary shall be entitled and empowered to employ attorneys, and management, rental and other agents in and about the Property and to effect the matters which Beneficiary is empowered to do, and in the event Beneficiary shall itself effect such matters, Beneficiary shall be entitled to charge and receive reasonable management, rental and other fees therefor as may be customary in the area in which the Property is located; and the reasonable fees, charges, costs and expenses of Beneficiary or such persons shall be additional Secured Obligations. Beneficiary may apply all funds collected as aforesaid, less costs and expenses of operation and collection, including reasonable attorneys’ and agents’ fees, charges, costs and expenses, as aforesaid, upon any Secured Obligations, and in such order as Beneficiary may determine. The entering upon and taking possession of the Property, the collection of such Rents and the application thereof as aforesaid shall not cure or waive any default or waive, modify or affect notice of default under the Note or this Security Instrument or invalidate any act done pursuant to such notice.

8.5      Authority of Beneficiary . Any tenants or occupants of any part of the Property are hereby authorized to recognize the claims of Beneficiary hereunder without investigating the reason for any action taken by Beneficiary, or the validity or the amount of indebtedness owing to Beneficiary, or the existence of any default in the Note or this Security Instrument, or under or by reason of this assignment of Rents and Leases, or the application to be made by Beneficiary of any amounts to be paid to Beneficiary. The sole signature of Beneficiary shall be sufficient for the exercise of any rights under this assignment and the sole receipt of Beneficiary for any sums received shall be a full discharge and release therefor to any such tenant or occupant of the Property. Checks for all or any part of the rentals collected under this assignment of Rents and Leases shall be drawn to the exclusive order of Beneficiary.

8.6      Indemnification of Beneficiary . Nothing herein contained shall be deemed to obligate Beneficiary to perform or discharge any obligation, duty or liability of any lessor under any Lease of the Property, and Grantor shall and does hereby indemnify and hold Beneficiary harmless from any and all liability, loss or damage which Beneficiary may or might incur under any Lease of the Property or by reason of this assignment; and any and all such liability, loss or damage incurred by Beneficiary, together with the costs and expenses, including reasonable attorneys’ fees, incurred by Beneficiary in defense of any claims or demands therefor (whether successful or not), shall be additional Secured Obligations, and Grantor shall reimburse Beneficiary therefor on demand. IT IS THE EXPRESS INTENTION OF GRANTOR AND BENEFICIARY THAT THE INDEMNITY SET FORTH IN THIS SECTION SHALL COVER LIABILITIES, LOSSES AND DAMAGES CAUSED BY THE NEGLIGENCE (EXCLUDING GROSS NEGLIGENCE) OF THE INDEMNIFIED PARTY.

8.7      Texas Assignment of Rents Act . Notwithstanding anything to the contrary in this Security Instrument, the Texas Assignment of Rents Act that was enacted in 2011 and added to the Texas Property Code as new Chapter 64 will govern enforcement of such assignment of rents, the application of proceeds, and the turnover of rents to Beneficiary.

ARTICLE 9
MISCELLANEOUS PROVISIONS

9.1      Time of the Essence . Time is of the essence with respect to all of Grantor’s obligations under the Secured Guaranty and this Security Agreement.

9.2      Joint and Several Obligations . If Grantor is more than one person or entity, then (a) all persons or entities comprising Grantor are jointly and severally liable for all of the Secured Obligations; (b) all representations, warranties, and covenants made by Grantor shall be deemed representations, warranties, and covenants of each of the persons or entities comprising Grantor; (c) any breach, Default or Event of Default by any persons or entities comprising Grantor hereunder shall be deemed to be a breach, Default or Event of Default of Grantor; (d) any reference herein contained to the knowledge or awareness of Grantor shall mean the knowledge or awareness of any of the persons or entities comprising Grantor; and (e) any event creating personal liability of any of the persons or entities comprising Grantor shall create personal liability for all such persons or entities.

9.3      Waiver of Homestead and Other Exemptions . To the extent permitted by law, Grantor hereby waives all rights to any homestead or other exemption to which Grantor would otherwise be entitled under any present or future constitutional, statutory, or other provision of applicable state or federal law. Grantor hereby waives any right it may have to require Beneficiary to marshal all or any portion of the security for the Secured Obligations.

9.4      Non-Recourse; Exceptions to Non-Recourse . The recourse of Beneficiary and Trustee with respect to the Secured Obligation and Grantor’s obligations under this Security Agreement shall be solely to the Property, Chattels and Intangible Personalty.

9.5      Rights and Remedies Cumulative . Beneficiary’s rights and remedies under each of the Secured Guaranty and this Security Instrument are cumulative of the right and remedies available to Beneficiary under each of the other such documents and those otherwise available to Beneficiary at law or in equity. No act of Beneficiary shall be construed as an election to proceed under any particular provision of any such documents to the exclusion of any other provision in the same or any other such document, or as an election of remedies to the exclusion of any other remedy which may then or thereafter be available to Beneficiary.

9.6      No Implied Waivers . Beneficiary shall not be deemed to have waived any provision of any document unless such waiver is in writing and is signed by Beneficiary. Without limiting the generality of the preceding sentence, neither Beneficiary’s acceptance of any payment with knowledge of a Default by Grantor, nor any failure by Beneficiary to exercise any remedy following a Default by Grantor shall be deemed a waiver of such Default, and no waiver by Beneficiary of any particular Default on the part of Grantor shall be deemed a waiver of any other Default or of any similar Default in the future.

9.7      No Third-Party Rights . No person shall be a third-party beneficiary of any provision of the Secured Guaranty or this Security Instrument. All provisions of the Secured Guaranty or this Security Agreement favoring Beneficiary are intended solely for the benefit of Beneficiary, and no third party shall be entitled to assume or expect that Beneficiary will waive or consent to modification of any such provision in Beneficiary’s sole discretion.

9.8      Preservation of Liability and Priority . Without affecting the liability of Grantor or of any other person (except a person expressly released in writing) for payment and performance of all of the Secured Obligations, and without affecting the rights of Beneficiary with respect to any security not expressly released in writing, and without impairing in any way the priority of this Security Instrument over the interests of any person acquired or first evidenced by recording subsequent to the recording hereof, Beneficiary may, either before or after the maturity of the Note, and without notice or consent: (a) release any person liable for payment or performance of all or any part of the Secured Obligations; (b) make any agreement altering the terms of payment or performance of all or any of the Secured Obligations; (c) exercise or refrain from exercising, or waive, any right or remedy which Beneficiary may have under the Secured Guaranty or this Security Instrument; (d) accept additional security of any kind for any of the Secured Obligations; or (e) release or otherwise deal with any real or personal property securing the Secured Obligations. Any person acquiring or recording evidence of any interest of any nature in the Property, the Chattels, or the Intangible Personalty shall be deemed, by acquiring such interest or recording any evidence thereof, to have agreed and consented to any or all such actions by Beneficiary.

9.9      Intentionally Deleted .

9.10      Notices . Any notice required or permitted to be given by Grantor or Beneficiary under this Security Instrument shall be in writing and will be deemed given (a) upon personal delivery, (b) on the first Business Day after receipted delivery to a courier service which guarantees next-business-day delivery, or (c) on the third Business Day after mailing, by registered or certified United States mail, postage prepaid, in any case to the appropriate party at its address set forth below:

If to Grantor:

The GC Net Lease (Houston Enclave) Investors, LLC
2121 Rosecrans Avenue, Suite 3321

El Segundo, California 90245

Attention: Mr. Joseph E. Miller

with a copy to:

Griffin Capital Corporation
790 Estate Drive, Suite 180
Deerfield, IL 60015
Attention: Mary Higgins, Esq.

If to Beneficiary:

The Variable Annuity Life Insurance Company

National Union Fire Insurance Company of Pittsburgh, PA.
c/o AIG Investments
777 S. Figueroa St., 16th Floor
Los Angeles, California 90017
Attn: Director-Mortgage Lending and Real Estate

with a copy to:

Greenberg Traurig, LLP
1200 17 ^th Street, 24 ^th Floor
Denver, Colorado 80202
Attn: Peter C. Kelley, Esq.

Either party may change such party’s address for notices or copies of notices by giving notice to the other party in accordance with this Section.

ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST GRANTOR OR BENEFICIARY ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT BENEFICIARY'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND GRANTOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. GRANTOR DOES HEREBY DESIGNATE AND APPOINT:

C T Corporation System
111 Eighth Avenue
13th Floor
New York, NY 10011

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO GRANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON GRANTOR, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. GRANTOR (I) SHALL GIVE PROMPT NOTICE TO BENEFICIARY OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR OR REFUSES TO CONSENT TO SUCH DESIGNATION AS AUTHORIZED AGENT FOR GRANTOR PURSUANT TO A WRITTEN CONSENT IN FORM AND SUBSTANCE SATISFACTORY TO BENEFICIARY.

9.11      Defeasance . Upon payment and performance in full of all of the Secured Obligations, Beneficiary will execute and deliver to Grantor such documents as may be required to release this Security Instrument of record.

9.12      Illegality . If any provision of this Security Instrument is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Security Instrument, the legality, validity, and enforceability of the remaining provisions of this Security Instrument shall not be affected thereby, and in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Security Instrument a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable. If the rights and liens created by this Security Instrument shall be invalid or unenforceable as to any part of the Secured Obligations, then the unsecured portion of the Secured Obligations shall be completely paid prior to the payment of the remaining and secured portion of the Secured Obligations, and all payments made on the Secured Obligations

shall be considered to have been paid on and applied first to the complete payment of the unsecured portion of the Secured Obligations. The required payments of unsecured portions of the Secured Obligations provided for in this Section 9.12 may be deemed to be interest under applicable law.

9.13      Intentionally Deleted .

9.14      Obligations Binding Upon Grantor’s Successors . THE TRUSTEE MAY RESIGN OR TRUSTEE BE REMOVED BY THE BENEFICIARY AT ANY TIME WITH OR WITHOUT CAUSE IN THE MANNER PROVIDED BY LAW IN WRITING EXECUTED BY BENEFICIARY. BENEFICIARY MAY AT ANY TIME APPOINT A SUCCESSOR TRUSTEE IN THE MANNER PROVIDED BY LAW. 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 TRUSTEE AND WHICH SHALL THEREUPON SUCCEED TO, AND SHALL HOLD, POSSESS AND EXECUTE, ALL THE RIGHTS, POWERS, PRIVILEGES, IMMUNITIES AND DUTIES HEREIN CONFERRED UPON TRUSTEE. ALL REFERENCES HEREIN TO “TRUSTEE” SHALL BE DEEMED TO REFER TO TRUSTEE (INCLUDING ANY SUCCESSOR(S) OR SUBSTITUTE(S) APPOINTED AND DESIGNATED AS HEREIN PROVIDED) FROM TIME TO TIME ACTING HEREUNDER. THE 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. THE 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 HIM HEREUNDER, BELIEVED BY HIM 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 HIM HEREUNDER. GRANTOR HEREBY RATIFIES AND CONFIRMS ANY AND ALL ACTS WHICH THE HEREIN NAMED TRUSTEE OR HIS SUCCESSOR OR SUCCESSORS, SUBSTITUTE OR SUBSTITUTES, IN THIS TRUST, SHALL DO LAWFULLY BY VIRTUE HEREOF. GRANTOR WILL REIMBURSE TRUSTEE FOR, AND SAVE HIM HARMLESS AGAINST, ANY AND ALL LIABILITY AND EXPENSES WHICH MAY BE INCURRED BY HIM IN THE PERFORMANCE OF HIS DUTIES. THE FOREGOING INDEMNITY SHALL NOT TERMINATE UPON DISCHARGE OF THE SECURED OBLIGATIONS OR FORECLOSURE, OR RELEASE OR OTHER TERMINATION, OF THIS SECURITY INSTRUMENT.

9.15      Construction . All pronouns and any variations of pronouns herein shall be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the identity of the parties may require. Whenever the terms herein are singular, the same shall be deemed to mean the plural, as the identity of the parties or the context requires.

9.16      Attorneys’ Fees . If Beneficiary refers this Security Instrument or the Secured Guaranty to any attorney for collection or seeks legal advice following the occurrence of an Event of Default by or with respect to Grantor that has not been waived by Beneficiary expressly in writing, or if Beneficiary is the prevailing party in any action instituted on this Security Instrument or the Secured Guaranty, or if any other judicial or non-judicial proceeding is instituted by Beneficiary or any other person (provided that with respect to any judicial or non-judicial action instituted by any other person, either (A) such person shall consist of Grantor or any affiliate thereof, or (B) such proceeding shall include Grantor or any affiliate thereof as a party thereto, and the facts alleged, on the basis of which any cause of action or claim shall be asserted in such proceeding, involve the action(s) or omission(s) on the part of Grantor or any affiliate thereof under this Security Instrument or the Secured Guaranty), and an attorney is employed by Beneficiary to appear in any such action or proceeding, or in any action that materially affects Beneficiary’s interest in this Security Instrument or the Property, or to seek appointment of a receiver to reclaim, seek relief from a judicial or statutory stay, sequester, protect, preserve or enforce Beneficiary’s interest in this Security Instrument or any other security for the Note (including, but not limited to, proceedings under federal bankruptcy law, in eminent domain, under the probate code, on appeal (provided that for Beneficiary to recover appeal costs from Grantor hereunder, Beneficiary shall have to be judicially determined to be a prevailing party in such appeal), in arbitration, or in connection with any municipal, state or federal tax lien), then Grantor and every endorser hereof and every person who assumes the obligations secured by this Security Instrument or the Secured Guaranty jointly and severally promise(s) to pay reasonable attorneys’ fees for services performed by Beneficiary’s attorneys, and all costs and expenses (including, without limitation, expert witness reasonable fees, costs of exhibit preparation, document reproduction, postage, telecommunication expenses and courier charges), incurred incident to such employment. If such fees are not paid within ten (10) Business Days after demand therefor by Beneficiary, all such costs and expenses shall bear interest at the Default Rate and the repayment thereof shall also be secured by every instrument securing the indebtedness evidenced hereby.

9.17      Waiver of Jury Trial . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, BENEFICIARY AND GRANTOR KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE, TO THE FULLEST EXTENT NOT PROHIBITED BY LAW, ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS SECURITY INSTRUMENT, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SECURITY INSTRUMENT OR ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,

STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO ANY LOAN DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BENEFICIARY AND GRANTOR TO ENTER INTO THE LOAN.

9.18      Governing Laws . The substantive, procedural and internal laws of the State of Texas shall govern the validity, construction, enforcement, and interpretation of this Security Instrument, without regard to the conflicts of laws principles of such State.

9.19      Inconsistency . In the event of any inconsistency between the terms of the Loan Documents and the terms of that certain Mortgage Loan Application between Grantor and Beneficiary, as amended, the terms of the Loan Documents shall govern and control in all respects.

9.20      Economic Sanctions, Anti-Money Laundering, Etc. . Grantor represents, warrants and covenants to Beneficiary that:

(a)    None of the Grantor, the Guarantor nor any OFAC Controlling Persons is or shall become: (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons (an “OFAC Listed Person” ) published by the Office of Foreign Assets Control, United States Department of the Treasury ( “OFAC” ), or (ii) an agent, department, or instrumentality of, or otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is the target of any sanctions programs administered and/or enforced by OFAC, or (iii) blocked by or a target of United States economic sanctions.

(b)    Neither the Grantor, the Guarantor nor any OFAC Controlling Person:  (i) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti-Money Laundering Laws” ) or any U.S. economic sanctions violations, or (ii) to Grantor’s actual knowledge after making due inquiry, is under investigation by any Governmental Authority for possible violation of Anti-Money Laundering Laws or any U.S. economic sanctions violations, or (iii) has been assessed civil penalties under any Anti-Money Laundering Laws or any U.S. economic sanctions, or (iv) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws.

(c)    None of the Grantor, Guarantor, the OFAC Controlling Persons, nor the officers and directors of any of them:  (i) are owned or controlled by the government or a national of Cuba, Iran, Sudan, Burma (Myanmar), North Korea or Syria, (ii) are located in Cuba, Iran, Sudan, Burma (Myanmar), North Korea or Syria, or (iii) does business in or with Cuba, Iran, Sudan, North Korea, Burma (Myanmar) or Syria. 

(d)    Grantor shall promptly deliver to Beneficiary any certification or other evidence reasonably requested from time to time by Beneficiary confirming Grantor’s compliance with this Section.  The representations, warranties and covenants set forth in this Section shall be deemed repeated and reaffirmed by Grantor as of each date that Grantor makes a payment to Beneficiary under the Note, this Security Instrument and the other Loan Documents or receives any payment from Beneficiary.  Grantor shall promptly notify Beneficiary in writing should Grantor become aware of any change in the information set forth in these representations, warranties and covenants.

For the purposes of the foregoing Section:

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise.

“ OFAC Controlling Person ” means any person or entity that controls either the Grantor or the Guarantor, and all holders of 25% or more of the partnership, voting stock, membership or other ownership interest of the Grantor or Guarantor (as applicable), and/or any of the foregoing Controlling Persons.

“ Governmental Authority ” means (a) the government of (i) the United States of America or any state or other political subdivision thereof, or (ii) any other jurisdiction in which the Grantor, Guarantor or Controlling Person (as applicable) conducts all or any part of its business, or which asserts jurisdiction over any properties of any of the foregoing, or (b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

9.21      Successor Trustee. Trustee may resign by an instrument in writing addressed to Beneficiary, or Trustee may be removed at any time without cause and Beneficiary may substitute a successor or successors to any Trustee named herein or acting hereunder by an instrument in writing executed and acknowledged by Beneficiary mailed to Grantor and recorded in the county in which the Property is located, and complying with all other provisions of applicable law. In case of the death, resignation, removal or disqualification of Trustee or if for any reason Beneficiary shall deem it desirable to appoint a substitute or successor trustee to act instead of the herein named Trustee or any substitute or successor trustee, then Beneficiary shall have the right and is hereby authorized and empowered to appoint a successor trustee, or a substitute trustee, without other formality than appointment and designation as set forth above and the authority hereby conferred shall extend to the appointment of other successor and substitute trustees successively until the Secured Obligations secured hereby have been paid in full or until the Property is sold hereunder. Such appointment and designation by Beneficiary shall be full evidence of the right and authority to make the same and of all facts therein recited. If Beneficiary is a corporation and such

appointment is executed in its behalf by an officer of such corporation, 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. Upon the making of any such appointment and designation, all of the estate and title of Trustee in the Property shall, without conveyance form the Trustee predecessor, vest in the named successor or substitute trustee and he shall thereupon succeed to and shall hold, possess and execute all the rights, powers, privileges, immunities and duties herein conferred upon Trustee; but nevertheless, upon the written request of Beneficiary or of the successor or substitute Trustee all of the estate and title in the Property of the Trustee so ceasing to act, together with all the rights, powers, privileges, immunities and duties herein conferred upon Trustee, and shall duly assign, transfer and deliver any of the properties and moneys held by said Trustee hereunder to said successor or substitute Trustee. All references herein to Trustee shall be deemed to refer to the trustee (including any successor or substitute appointed and designated as herein provided) from time to time acting hereunder. Grantor hereby ratifies and confirms any and all acts which the herein named Trustee or his successor or successors, substitute or substitutes, in this trust, shall do lawfully by virtue hereof.

9.22      Co-Lending.

(a)    Notwithstanding that the Secured Guaranty guarantees the obligations of the borrower under each of the Other Loans, each of which Other Loans is evidenced by 2 separate promissory notes, Beneficiary agrees that the “Holder” (as defined in such promissory notes) of each such separate promissory notes for each Other Loan shall pursue the same remedies simultaneously under such promissory notes with respect to such Other Loan and under the Secured Guaranty and the Other Loan Documents relating to such Other Loan as if such Other Loan were evidenced by only one promissory note.

(b)    Grantor and Guarantor shall be entitled to rely, shall be obligated to rely, and shall be fully protected in relying upon any written resolution, notice, consent, approval, waiver, certificate, affidavit, letter, telegram, facsimile, telex, e-mail, statement or other document (each a “ Communication ”) believed by it to be genuine and correct and solely to the extent that such Communication is signed, sent or made by both VALIC and NUF in connection with the Loan. Any Communication not signed or sent by or on behalf of both VALIC and NUF shall not be valid.

9.23      NO ORAL AGREEMENTS . THIS SECURITY INSTRUMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGE TO SECOND DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING, AND ASSIGNMENT OF LEASES AND RENTS SECURING GUARANTY (TEXAS)]

IN WITNESS WHEREOF, Grantor has executed and delivered this Security Instrument as of the date first mentioned above.

THE GC NET LEASE (HOUSTON ENCLAVE) INVESTORS, LLC,

a Delaware limited liability company

By: The GC Net Lease (Houston Enclave) Member, LLC,

a Delaware limited liability company,

its Sole Member

By: Griffin Capital Essential Asset Operating Partnership, L.P.,

a Delaware limited partnership,

its Sole Member

By: Griffin Capital Essential Asset REIT, Inc.,

a Maryland corporation,

its General Partner

By: /s/ Joseph E. Miller            

Joseph E. Miller, Chief Financial Officer

Recording requested by:

And when recorded mail to:

Greenberg Traurig, LLP
1200 17th Street, 24th Floor
Denver, Colorado 80202
Attention: Peter C. Kelley, Esq.

---

MORTGAGE, SECURITY AGREEMENT, FIXTURE FILING, AND ASSIGNMENT OF LEASES AND RENTS

(NEW JERSEY)

THIS MORTGAGE, SECURITY AGREEMENT, FIXTURE FILING, AND ASSIGNMENT OF LEASES AND RENTS (NEW JERSEY) (this “ Security Instrument ”) is given as of January 24, 2014, by THE GC NET LEASE (WARREN) INVESTORS, LLC , a Delaware limited liability company (“ Mortgagor ”), in favor of THE VARIABLE ANNUITY LIFE INSURANCE COMPANY , a Texas corporation (“ VALIC ”), and NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA. , a Pennsylvania corporation (“ NUF ”), as co-lenders (collectively, “ Mortgagee ”).

ARTICLE 1

PARTIES, PROPERTY, AND DEFINITIONS

The following terms and references shall have the meanings indicated:

1.1      Additional Sums : As defined in Section 9.13.

1.2      Arizona Notes : Collectively, that certain Promissory Note made by GC Phoenix Chandler, payable to the order of VALIC in the original principal amount referenced therein, and that certain Promissory Note made by GC Phoenix Chandler, payable to the order of NUF in the original principal amount referenced therein, each of even date herewith.

1.3      Business Day : Any day that is not a Saturday, Sunday or any other day which national banks in New York, New York are not open for business.

1.4      Cash Collateral Agreement : That certain Cash Collateral Agreement of even date herewith among Mortgagor and Mortgagee, and acknowledged and agreed to by the “Servicer” referenced therein, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

1.5      Certificate Concerning Governing Documents : That certain Certificate Concerning Governing Documents of even date herewith made by Mortgagor and Guarantor to Mortgagee.

1.6      Change in Control : means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of shares representing more than fifty percent (50%) of the aggregate ordinary voting power represented by the issued and outstanding capital stock of Guarantor; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of Guarantor by Persons who were neither (i) nominated by the board of directors of Guarantor nor (ii) appointed by directors so nominated; (c) the acquisition of direct or indirect Control of Guarantor by any Person or group; or (d) the replacement, removal or resignation of Griffin Capital Corporation or an Affiliate thereof as asset manager and advisor to the Operating Partnership and Guarantor except as hereinafter permitted, provided however , that the exercise by a Starwood Entity of its rights under the Starwood Documents to (i) elect a majority of the board of directors (as more particularly set forth in Section 3.2 of the Investor Rights Agreement referenced in clause (b) of the definition of the Starwood Documents) of the Guarantor or (ii) cause the issuance of the Series A Preferred Shares (as defined in the Starwood Documents) shall not be deemed to constitute a Change in Control hereunder; and provided, further, however , that if the board of directors of the Guarantor decides (in accordance with their fiduciary responsibility under applicable law) to cause the Guarantor to terminate the Advisory Agreement with Griffin Capital Essential Asset Advisor, LLC (“ Advisor ”), Mortgagor shall provide written notice to Mortgage of such termination and shall obtain the prior written consent of Mortgage prior to the board selecting a successor advisor for the Guarantor, which successor advisor shall be reasonably acceptable to Mortgage. Mortgagor shall submit or shall cause the Guarantor to submit a request for approval of the successor advisor within sixty (60) days of the termination of Advisor or any previously approved successor advisor to Advisor.

1.7      Chattels : All goods, fixtures, inventory, equipment, building and other materials, supplies, and other tangible personal property of every nature, whether now owned or hereafter acquired by Mortgagor, used, intended for use, or reasonably required in the construction, development, or operation of the Property, together with all accessions thereto, replacements and substitutions therefor, and proceeds thereof.

1.8      Controlling Persons : Collectively, (a) if Mortgagor is a partnership or joint venture, all general partners or joint venturers of Mortgagor, (b) Guarantor, (c) GC Member, (d) any other party directly or indirectly liable for payment of the Secured Obligations, whether as maker, endorser, guarantor, surety, general partner, or otherwise, and (e) any successor to any of the foregoing.

1.9      Default : Any matter which, with the giving of notice, passage of time, or both, would constitute an Event of Default.

1.10      Environmental Indemnity Agreement : That certain Environmental Indemnity Agreement of even date herewith made by Mortgagor and Guarantor for the benefit of Mortgagee, and the other indemnitees named therein, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

1.11      ERISA : The Employee Retirement Income Security Act of 1974, as amended, together with all rules and regulations issued thereunder.

1.12      Event of Default : As defined in Article 6.

1.13      GC Member : Shall mean The GC Net Lease (Warren) Member, LLC, a Delaware limited liability company.

1.14      Guarantor : Griffin Capital Essential Asset REIT, Inc., a Maryland corporation.

1.15      Guaranty Agreement : That certain Recourse Carve Out Guaranty Agreement of even date herewith made by Guarantor for the benefit of Mortgagee, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

1.16      Insurance Agreement : That certain Agreement Concerning Insurance Requirements of even date herewith executed by Mortgagor for the benefit of Mortgagee, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

1.17      Intangible Personalty : All of Mortgagor’s right, title and interest in and to the following: the right to use all trademarks and trade names and symbols or logos used in connection therewith, or any modifications or variations thereof, in connection with the operation of the improvements existing or to be constructed on the Property, together with all accounts, deposit accounts, letter of credit rights, investment property, monies in the possession of Mortgagee (including, without limitation, proceeds from insurance, retainages and deposits for taxes and insurance), Permits, contract rights (including, without limitation, rights to receive insurance proceeds) and general intangibles (whether now owned or hereafter acquired, and including proceeds thereof) relating to or arising from Mortgagor’s ownership, use, operation, leasing, or sale of all or any part of the Property, specifically including but in no way limited to any right which Mortgagor may have or acquire to transfer any development rights from the Property to other real property, and any development rights which may be so transferred.

1.18      Lease Certificate : That certain Certificate Concerning Leases and Financial Condition of even date herewith made by Mortgagor to Mortgagee concerning Leases and financial condition of the Property.

1.19      Leases : Any and all leases, subleases and other agreements under the terms of which any person other than Mortgagor has or acquires any right to occupy or use the Property, or any part thereof, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

1.20      Letter of Credit Agreement : Any Agreement Concerning Letter of Credit entered into pursuant to the Vacancy Risk Agreement, in the form attached as an exhibit to the Vacancy Risk Agreement.

1.21      Limited Recourse Secured Guaranty Agreement : That certain Limited Recourse Secured Guaranty Agreement of even date herewith, given by GC Member and the Other Holding Companies in favor of Mortgagee.

1.22      Loan : The loan from Mortgagee to Mortgagor evidenced by the Note.

1.23      Loan Documents : The Note, all of the deeds of trust, mortgages and other instruments and documents securing or executed and delivered in connection with the Note, including this Security Instrument, the Insurance Agreement, the Environmental Indemnity Agreement, the Guaranty Agreement, the Cash Collateral Agreement, the TI/LC Reserve Agreement, the Letter of Credit Agreement, the Partial Release Agreement, the Vacancy Risk Agreement, the Certificate Concerning Governing Documents, the Lease Certificate, the Subordination of Management Agreement, Subordination of Sub-Management Agreement, the Pledge and Security Agreement, the Limited Recourse Secured Guaranty Agreement, the Other Second Security Instruments, the Other Limited Recourse Secured Guaranty Agreements, the Receipt and Agreement, and each of the other documents executed or delivered in connection with the transaction pursuant to which the Note has been executed and delivered. The term “ Loan Documents ” also includes all amendments, modifications, amendments and restatements, supplements, extensions, renewals, and replacements of each document referred to above.

1.24      Mortgagee : The Mortgagee named in the introductory paragraph of this Security Instrument, whose legal address is c/o AIG Investments, 777 South Figueroa Street, 16 ^th Floor, Los Angeles, California 90017, together with any future holder of the Note.

1.25      Mortgagor : The Mortgagor named in the introductory paragraph of this Security Instrument (Secretary of State File No. 5369912), whose legal address is 2121 Rosecrans Avenue, Suite 3321, El Segundo, California 90245.

1.26      North Carolina Notes : Collectively, that certain Promissory Note made by GC Charlotte, payable to the order of VALIC in the original principal amount referenced therein, and that certain Promissory Note made by GC Charlotte, payable to the order of NUF in the original principal amount referenced therein, each of even date herewith.

1.27      Note : Collectively, (i) Mortgagor’s promissory note of even date herewith, payable to the order of VALIC in the principal face amount of $17,527,200 (the “ VALIC Note ”), and (ii) Mortgagor’s promissory note of even date herewith, payable to the order of NUF in the principal face amount of $8,632,800 (the “ NUF Note ”) (and in the aggregate collective amount of $26,160,000), together with all renewals, extensions and modifications of such promissory notes, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time. The NUF Note and the VALIC Note are also sometimes referred collectively herein as the “ Notes .” All terms and provisions of the Notes are incorporated by this reference in this Security Instrument.

1.28      Ohio Notes : Collectively, that certain Promissory Note made by GC Beaver Creek, payable to the order of VALIC in the original principal amount referenced therein, and that certain Promissory Note made by GC Beaver Creek, payable to the order of NUF in the original principal amount referenced therein, each of even date herewith.

1.29      Operating Partnership : means Griffin Capital Essential Asset Operating Partnership, L.P., a Delaware limited partnership.

1.30      Other Borrowers : Collectively, The GC Net Lease (Phoenix Chandler) Investors, LLC, a Delaware limited liability company (“ GC Phoenix Chandler ”), The GC Net Lease (Beaver Creek) Investors, LLC, a Delaware limited liability company (“ GC Beaver Creek ”), The GC Net Lease (Houston Enclave) Investors, LLC, a Delaware limited liability company (“ GC Houston Enclave ”), and The GC Net Lease (Charlotte) Investors, LLC, a Delaware limited liability company (“ GC Charlotte ”).

1.31      Other First Security Instruments : Collectively, (i) a First Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (Arizona) executed by GC Phoenix Chandler for the benefit of Mortgagee to secure the Loan; (ii) a First Mortgage, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (Ohio) executed by GC Beaver Creek for the benefit of Mortgagee to secure the Loan (iii) a First Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (Texas) executed by GC Houston Enclave for the benefit of Mortgagee to secure the Loan; and (iv) a First Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (North Carolina) executed by GC Charlotte for the benefit of Mortgagee to secure the Loan.

1.32      Other Holding Companies : Collectively, The GC Net Lease (Phoenix Chandler) Member, LLC, a Delaware limited liability company, The GC Net Lease (Beaver Creek) Member, LLC, a Delaware limited liability company, The GC Net Lease (Houston Enclave) Member, LLC, a Delaware limited liability company, and The GC Net Lease (Charlotte) Member, LLC, a Delaware limited liability company.

1.33      Other Loan Documents : Collectively, (i) the Other Notes, (ii) the Other First Security Instruments; and any and all other “Loan Documents” as such term is defined in the Other First Security Instruments.

1.34      Other Loan Guaranty Documents : Collectively, (i) Non-Recourse Secured Guaranty Agreement (New Jersey Property Owner as Guarantor), of even date herewith, given by Mortgagor, as guarantor, in favor of Mortgagee, as lender under the Other Loans, and (ii) that certain Second Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rents Securing Guaranty of even date herewith, given by Mortgagor in favor of Mortgagee as security for such Limited Recourse Secured Guaranty Agreement.

1.35      Other Loans : Collectively (i) the $19,860,000 loan to GC Phoenix Chandler evidenced by the Arizona Notes, (ii) the $10,800,000 loan to GC Beaver Creek evidenced by the Ohio Notes, (iii) the $30,060,000 loan to GC Houston Enclave evidenced by the Texas Notes, and (iv) the $23,760,000 loan to GC Charlotte evidenced by the North Carolina Notes.

1.36      Other Limited Recourse Secured Guaranty Agreements : Those certain Limited Recourse Secured Guaranty Agreements, of even date herewith, given by each of the Other Borrowers in favor of Mortgagee as “Lender” under the Other Loans.

1.37      Other Notes : Collectively, the Arizona Notes, the Ohio Notes, the Texas Notes and the North Carolina Notes.

1.38      Other Property : Shall mean the “Property” as defined in the Other First Security Instruments from time to time.

1.39      Other Second Security Instruments : Collectively, (i) a Second Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents Securing Guaranty (Arizona) executed by GC Phoenix Chandler for the benefit of Mortgagee to secure the Loan; (ii) a Second Mortgage, Security Agreement, Fixture Filing, and Assignment of Leases and Rents Securing Guaranty (Ohio) executed by GC beaver Creek for the benefit of Mortgagee to secure the Loan (iii) a Second Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents Securing Guaranty (Texas) executed by GC Houston Enclave for the benefit of

Mortgagee to secure the Loan; and (iv) a Second Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Leases and Rents Securing Guaranty (North Carolina) executed by GC Charlotte for the benefit of Mortgagee to secure the Loan.

1.40      Partial Release Agreement : That certain Partial Release Agreement, of even date herewith, made by Mortgagor, the Other Borrowers and Mortgagee.

1.41      Permits : All permits, licenses, certificates and authorizations necessary for the beneficial development, ownership, use, occupancy, operation and maintenance of the Property.

1.42      Permitted Exceptions : The matters (excluding matters of survey) set forth in Schedule B-I of the title insurance policy insuring the lien created by this Security Instrument, in form and substance satisfactory to, and accepted by, Mortgagee, that Mortgagor has caused to be delivered to Mortgagee in connection with the Loan.

1.43      Person : means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental authority or other entity.

1.44      Pledge and Security Agreement : Shall mean that certain Pledge and Security Agreement – Limited Liability Company Interests of even date herewith, given by GC Member and the Other Holding Companies, in favor of Mortgagee.

1.45      Property : The tract or tracts of land and easement parcels described in Exhibit A attached hereto, together with Mortgagor’s entire right, title and interest in and to the following:

(a)    All buildings, structures, and improvements now or hereafter located on such tract or tracts, as well as all rights-of-way, easements, and other appurtenances thereto;

(b)    All of Mortgagor’s right, title and interest in and to any land lying between the boundaries of such tract or tracts and the center line of any adjacent street, road, avenue, or alley, whether opened or proposed;

(c)    All of the rents, income, receipts, revenues, issues and profits of and from such tract or tracts and improvements;

(d)    All (i) water and water rights (whether decreed or undecreed, tributary, nontributary or not nontributary, surface or underground, or appropriated or unappropriated); (ii) ditches and ditch rights; (iii) spring and spring rights; (iv) reservoir and reservoir rights; and (v) shares of stock in water, ditch and canal companies and all other evidence of such rights, which are now owned or hereafter acquired by Mortgagor and which are appurtenant to or which have been used in connection with such tract or tracts or improvements;

(e)    All of Mortgagor’s right, title and interest in and to all minerals, crops, timber, trees, shrubs, flowers, and landscaping features now or hereafter located on, under or above such tract or tracts;

(f)    All machinery, apparatus, equipment, fittings, chattels, fixtures (whether actually or constructively attached, and including all trade, domestic, and ornamental fixtures) now or hereafter located in, upon, or under such tract or tracts or improvements and used or usable in connection with any present or future operation thereof, including but not limited to all heating, air-conditioning, freezing, lighting, laundry, incinerating and power equipment; engines; pipes; pumps; tanks; motors; conduits; switchboards; plumbing, lifting, cleaning, fire prevention, fire extinguishing, refrigerating, ventilating, cooking, and communications apparatus; boilers, water heaters, ranges, furnaces, and burners; appliances; vacuum cleaning systems; elevators; escalators; shades; awnings; screens; storm doors and windows; stoves; refrigerators; attached cabinets; partitions; ducts and compressors; rugs and carpets; draperies; and all additions thereto and replacements therefor;

(g)    All development rights associated with such tract or tracts, whether previously or subsequently transferred to such tract or tracts from other real property or now or hereafter susceptible of transfer from such tract or tracts to other real property; and all rights as a “declarant”, “architectural committee” or similar party under any declaration, covenants conditions and restrictions, or similar instrument or agreement;

(h)    All awards and payments, including interest thereon, resulting from the exercise of any right of eminent domain or any other public or private taking of, injury to, or decrease in the value of, any of such property; and

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

1.46      Receipt and Agreement : That certain Receipt and Agreement entered into by Mortgagor, Chicago Title Insurance Company and Mortgagee, dated as of the date hereof.

1.47      Secured Obligations : All present and future obligations of Mortgagor to Mortgagee evidenced by or contained in the Note, this Security Instrument and all other Loan Documents, whether stated in the form of promises, covenants, representations, warranties, conditions, or prohibitions or in any other form. If the maturity of the Note secured by this Security Instrument is accelerated,

the Secured Obligations shall include an amount equal to any prepayment premium which would be payable under the terms of the Note as if the Note were prepaid in full on the date of the acceleration. If under the terms of the Note no voluntary prepayment would be permissible on the date of such acceleration, then the prepayment fee or premium to be included in the Secured Obligations shall be equal to one hundred fifty percent (150%) of the highest prepayment fee or premium set forth in the Note, calculated as of the date of such acceleration, as if prepayment were permitted on such date. Notwithstanding anything contained herein or in the other Loan Documents to the contrary, Mortgagor’s obligations under the Environmental Indemnity Agreement shall not be secured by this Security Instrument and shall not constitute Secured Obligations hereunder.

1.48      Starwood Documents : means, collectively (each dated, as applicable, November 5, 2013): (a) the Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, as amended by Amendment No. 1 the Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, (b) the Investor Rights Agreement entered into between the Operating Partnership, Guarantor, Griffin Capital Essential Asset Advisor LLC, and SPT Griffin Holdings, LLC, (c) the Series A Cumulative Redeemable Exchangeable Preferred Unit Purchase Agreement entered into between the Operating Partnership, Guarantor, SPT Griffin Holdings, LLC, and Starwood Property Trust, Inc., (d) Guarantor's Articles Supplementary Establishing and Fixing the Rights and Preferences of a Series of Preferred Stock, (e) Subordination of Second Amended and Restated Advisory Agreement entered into between Guarantor, SPT Griffin Holdings, LLC, and Griffin Capital Essential Asset Advisor, LLC, (f) Subordination of Management Agreements entered into between the Operating Partnership, various affiliates of the Operating Partnership, SPT Griffin Holdings, LLC, and Griffin Capital Essential Asset Property Management, LLC and (g) the Escrow Agreement entered into between the Operating Partnership, Guarantor, Griffin Capital Essential Asset Advisor, LLC, SPT Griffin Holdings, LLC and Sidley Austin LLP.

1.49      Starwood Entity : Starwood Property Trust, Inc., a Maryland corporation, or any wholly owned direct or indirect subsidiary thereof with SPT Griffin Holdings, LLC being a wholly owned indirect subsidiary of Starwood Property Trust, Inc.

1.53      Subordination of Management Agreement : That certain Consent, Subordination and Recognition Agreement (Management Agreement) dated as of the date hereof, by and among Mortgagor, Mortgagee and the Property Manager (as such term is defined in Section 4.23 hereof) of the Property.

1.54      Subordination of Sub-Management Agreement : That certain Consent, Subordination and Recognition Agreement (Sub-Management Agreement) dated as of the date hereof, by and among Mortgagor, Mortgagee and the Sub-Manager (as such term is defined in Section 4.23 hereof) of the Property.

1.55      Texas Notes : Collectively, that certain Promissory Note made by GC Houston Enclave, payable to the order of VALIC in the original principal amount referenced therein, and that certain Promissory Note made by GC Houston Enclave, payable to the order of NUF in the original principal amount referenced therein, each of even date herewith.

1.56      TI/LC Reserve Agreement: Any Tenant Improvement Cost and Leasing Commission Reserve Agreement that is entered into pursuant to the Vacancy Risk Agreement, in the form attached as an exhibit to the Vacancy Risk Agreement.

1.57      Vacancy Risk Agreement : That certain Vacancy Risk Agreement, dated as of the date hereof, made by Mortgagor, the Other Borrowers, and Mortgage and acknowledged and agreed to by the “Servicer” referenced therein, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

1.58      Verizon Lease : That certain Lease dated December 30, 2010, made by and between Cellco Partnership d/b/a Verizon Wireless, as tenant, and 30 Independence Boulevard One, LLC and 30 Independence Boulevard Two, LLC, collectively, as original landlord and predecessor in interest to Mortgagor, as current landlord, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time.

1.59      Verizon Tenant : Shall mean the tenant under the Verizon Lease.

ARTICLE 2
GRANTING CLAUSE

2.1      Grant to Mortgagee . As security for the Secured Obligations, Mortgagor hereby grants, bargains, sells, conveys, mortgages and warrants unto Mortgagee, the entire right, title, interest and estate of Mortgagor in and to the Property, whether now owned or hereafter acquired; TO HAVE AND TO HOLD the same, together with all and singular the rights, hereditaments, and appurtenances in anywise appertaining or belonging thereto, unto Mortgagee and Mortgagee’s successors, substitutes and assigns forever.

2.2      Security Interest to Mortgagee . As additional security for the Secured Obligations, Mortgagor hereby grants to Mortgagee a security interest in the Property, Chattels and Intangible Personalty. To the extent any of the Property, Chattels or Intangible

Personalty may be or have been acquired with funds advanced by Mortgagee under the Loan Documents, this security interest is a purchase money security interest. This Security Instrument constitutes a security agreement under the Uniform Commercial Code of the State (the “ Code ”) with respect to any part of the Property, Chattels and Intangible Personalty that may or might now or hereafter be or be deemed to be personal property, fixtures or property other than real estate (all collectively hereinafter called “ Collateral ”); all of the terms, provisions, conditions and agreements contained in this Security Instrument pertain and apply to the Collateral as fully and to the same extent as to any other property comprising the Property, and the following provisions of this Section shall not limit the generality or applicability of any other provisions of this Security Instrument but shall be in addition thereto:

(a)    The Collateral shall be used by Mortgagor solely for business purposes, and all Collateral (other than the Intangible Personalty) shall be installed upon the real estate comprising part of the Property for Mortgagor’s own use or as the equipment and furnishings furnished by Mortgagor, as landlord, to tenants of the Property;

(b)    Subject to Section 5.7 below, the Collateral (other than the Intangible Personalty) shall be kept at the real estate comprising a part of the Property, and shall not be removed therefrom without the consent of Mortgagee (being the Secured Party as that term is used in the Code); and the Collateral (other than the Intangible Personalty) may be affixed to such real estate but shall not be affixed to any other real estate;

(c)    No financing statement covering any of the Collateral or any proceeds thereof is on file in any public office; and Mortgagor will, at its cost and expense, upon demand, furnish to Mortgagee such further information and will execute and deliver to Mortgagee such financing statements and other documents in form satisfactory to Mortgagee and will do all such acts and things as Mortgagee may at any time or from time to time reasonably request or as may be necessary or appropriate to establish and maintain a perfected first-priority security interest in the Collateral as security for the Secured Obligations, subject to no adverse liens or encumbrances; and Mortgagee is hereby authorized to execute and/or to file any such financing statements or other documents; and Mortgagor will pay the cost of filing the same or filing or recording such financing statements or other documents and this instrument in all public offices wherever filing or recording is deemed by Mortgagee to be necessary or desirable;

(d)    The terms and provisions contained in this Section and in Section 7.6 of this Security Instrument shall, unless the context otherwise requires, have the meanings and be construed as provided in the Code; and

(e)    This Security Instrument 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 office of the recorder of each county where any part of the Property (including said fixtures) is situated. This Security Instrument 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 mailing addresses of Mortgagor and the Mortgagee are set forth in Article 1 of this Security Instrument. A carbon, photographic or other reproduction of this Security Instrument or any financing statement relating to this Security Instrument shall be sufficient as a financing statement. The filing of this Security Instrument in the real estate records of the county where the Property is located shall constitute a fixture filing in accordance with the Code. Information concerning the security interests created hereby may be obtained at the addresses set forth in Article 1 of this Security Instrument. Mortgagor is the “ Debtor ” and Mortgagee is the “ Secured Party ” (as those terms are defined and used in the Code) insofar as this Security Instrument constitutes a financing statement.

ARTICLE 3MORTGAGOR’S REPRESENTATIONS AND WARRANTIES

3.1      Warranty of Title . Mortgagor represents and warrants to Mortgagee that:

(a)    Mortgagor has good, marketable and indefeasible fee simple title to the Property, and such fee simple title is free and clear of all liens, encumbrances, security interests and other claims whatsoever, subject only to the Permitted Exceptions;

(b)    Mortgagor is the sole and absolute owner of the Chattels and the Intangible Personalty, free and clear of all liens, encumbrances, security interests and other claims whatsoever, subject only to the Permitted Exceptions;

(c)    This Security Instrument is a valid and enforceable first lien and security interest on the Property, Chattels and Intangible Personalty, subject only to the Permitted Exceptions; and

(d)    Subject to the Permitted Exceptions, Mortgagor, for itself and its successors and assigns, hereby agrees to warrant and forever defend, all and singular all of the Property and property interests granted and conveyed pursuant to this Security Instrument, against every person whomsoever lawfully claiming, or to claim, the same or any part thereof.

The representations, warranties and covenants contained in this Section 3.1 shall survive foreclosure of this Security Instrument, and shall inure to the benefit of and be enforceable by any person who may acquire title to the Property, the Chattels, or the Intangible Personalty pursuant to any such foreclosure.

3.2      Due Authorization . If Mortgagor is other than a natural person, then each individual who executes this document on behalf of Mortgagor represents and warrants to Mortgagee that such execution has been duly authorized by all necessary corporate,

partnership, limited liability company or other action on the part of Mortgagor. Mortgagor represents that Mortgagor has obtained all consents and approvals required in connection with the execution, delivery and performance of this Security Instrument.

3.3      Other Representations and Warranties . Mortgagor represents and warrants to Mortgagee as of the date hereof, as follows:

(a)    Mortgagor is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware. Mortgagor is duly authorized to transact business in and is in good standing under the laws of the State of New Jersey. The sole Controlling Persons of Mortgagor are Guarantor, and The GC Member;

(b)    The execution, delivery and performance by Mortgagor of the Loan Documents are within Mortgagor’s power and authority and have been duly authorized by all necessary action;

(c)    This Security Instrument is, and each other Loan Document to which Mortgagor or Guarantor is a party will, when delivered hereunder, be valid and binding obligations of Mortgagor and Guarantor enforceable against Mortgagor and Guarantor in accordance with their respective terms, except as limited by equitable principles and bankruptcy, insolvency and similar laws affecting creditors’ rights;

(d)    The execution, delivery and performance by Mortgagor and Guarantor of the Loan Documents will not contravene any contractual or other restriction binding on or affecting Mortgagor or any Controlling Person and will not result in or require the creation of any lien, security interest, other charge or encumbrance (other than pursuant to the Loan Documents) upon or with respect to any of its properties;

(e)    The execution, delivery and performance by Mortgagor and Guarantor of the Loan Documents does not violate or contravene any applicable law;

(f)    No authorization, approval, consent or other action by, and no notice to or filing with, any court, governmental authority or regulatory body is required for the due execution, delivery and performance by Mortgagor and Guarantor of any of the Loan Documents or the effectiveness of any assignment of any of Mortgagor’s rights and interests of any kind to Mortgagee;

(g)    No part of the Property, Chattels, or Intangible Personalty is in the hands of a receiver, no application for a receiver is pending with respect to any portion of the Property, Chattels, or Intangible Personalty, and no part of the Property, Chattels, or Intangible Personalty is subject to any foreclosure or similar proceeding;

(h)    Neither Mortgagor nor any Controlling Person has made any assignment for the benefit of creditors, nor has Mortgagor or any Controlling Person filed, or had filed against it, any petition in bankruptcy;

(i)    There is no pending or, to the best of Mortgagor’s knowledge, threatened, litigation, action, proceeding or investigation, including, without limitation, any condemnation proceeding, against Mortgagor, any Controlling Person or the Property before any court, governmental or quasi-governmental, arbitrator or other authority;

(j)    Mortgagor is a “non-foreign person” within the meaning of Sections 1445 and 7701 of the United States Internal Revenue Code of 1986, as amended, and the regulations issued thereunder;

(k)    Access to and egress from the Property are available and provided by public streets, or valid easements appurtenant thereto and Mortgagor has no knowledge of any federal, state, county, municipal or other governmental plans to change the highway or road system in the vicinity of the Property or to restrict or change access from any such highway or road to the Property;

(l)    All public utility services necessary for the operation of all improvements constituting part of the Property for their intended purposes are available at the boundaries of the land constituting part of the Property, including water supply, storm and sanitary sewer facilities, and natural gas, electric, telephone and cable television facilities;

(m)    The Property is located in a zoning district designated “OR” Office Research District by Warren Township, New Jersey.. Such designation permits the development, use and operation of the Property as it is currently operated as a permitted, and not as a non-conforming use. The Property complies in all respects with all zoning ordinances, regulations, requirements, conditions and restrictions, including but not limited to deed restrictions and restrictive covenants, applicable to the Property;

(n)    There are no special or other assessments for public improvements or otherwise now affecting the Property, nor does Mortgagor know of any pending or threatened special assessments affecting the Property or any contemplated improvements affecting the Property that may result in special assessments. There are no tax abatements or exceptions affecting the Property;

(o)    Mortgagor and each Controlling Person has filed all tax returns it is required to have filed, and has paid all taxes as shown on such returns or on any assessment received pertaining to the Property;

(p)    Mortgagor has not received any written notice from any governmental body having jurisdiction over any part of the Property as to any violation of any applicable law, or any notice from any insurance company or inspection or rating bureau setting forth any requirements as a condition to the continuation of any insurance coverage on or with respect to the Property or the continuation thereof at premium rates existing at present which have not been remedied or satisfied;

(q)    Neither Mortgagor nor any Controlling Person is in default, in any manner which would adversely affect its properties, assets, operations or condition (financial or otherwise), in the performance, observance or fulfillment of any of the obligations, covenants or conditions set forth in any agreement or instrument to which it is a party or by which it or any of its properties, assets or revenues are bound;

(r)    Except as set forth in the Lease Certificate, there are no occupancy rights (written or oral), Leases or tenancies presently affecting any part of the Property. The Lease Certificate contains a true and correct description of all Leases presently affecting the Property. No written or oral agreements or understandings exist between Mortgagor and the tenants under the Leases described in the Lease Certificate that grant such tenants any rights greater than those described in the Lease Certificate or that are in any way inconsistent with the rights described in the Lease Certificate;

(s)    There are no options to purchase, purchase contracts or other similar agreements of any type (written or oral) presently affecting any part of the Property;

(t)    There exists no brokerage agreement with respect to the purchase of any part of the Property;

(u)    Except as otherwise disclosed to Mortgagee in writing prior to the date hereof, (i) there are no contracts presently affecting the Property (“ Contracts ”) having a term in excess of one hundred eighty (180) days or not terminable by Mortgagor (without penalty) on thirty (30) days’ notice; (ii) Mortgagor has heretofore delivered to Mortgagee true and correct copies of each of the Contracts together with all amendments thereto; (iii) Mortgagor is not in default of any obligations under any of the Contracts; and (iv) the Contracts represent the complete agreement between Mortgagor and such other parties as to the services to be performed or materials to be provided thereunder and the compensation to be paid for such services or materials, as applicable, and except as otherwise disclosed herein, such other parties possess no unsatisfied claims against Mortgagor. Mortgagor is not in default under any of the Contracts and no event has occurred which, with the passing of time or the giving of notice, or both, would constitute a default under any of the Contracts;

(v)    Mortgagor or its tenants have obtained all Permits necessary for the operation, use, ownership, development, occupancy and maintenance of the Property as it is currently being operated. None of the Permits has been suspended or revoked, and all of the Permits are in full force and effect and are fully paid for, and Mortgagor has made or will make application for renewals of any of the Permits prior to the expiration thereof;

(w)    All insurance policies held by Mortgagor relating to or affecting the Property are in full force and effect and shall remain in full force and effect until all Secured Obligations are satisfied. Mortgagor has not received any notice of default or notice terminating or threatening to terminate any such insurance policies. Mortgagor has made or will make application for renewals of any of such insurance policies prior to the expiration thereof;

(x)    Mortgagor currently complies with ERISA. Neither the making of the Loan nor the exercise by Mortgagee of any of its rights under the Loan Documents constitutes or will constitute a non-exempt, prohibited transaction under ERISA; and

(y)    Mortgagor’s exact legal name is correctly set out in the introductory paragraph of this Security Instrument. Mortgagor’s Secretary of State File Number is correctly set forth in the definition of “ Mortgagor ” set forth in Article 1 hereof. Mortgagor’s location (as such term is used in Section 5.8 hereof) is the State of Delaware.

3.4      Continuing Effect . Mortgagor shall be liable to Mortgagee for any damage suffered by Mortgagee if any of the foregoing representations are inaccurate as of the date hereof, regardless when such inaccuracy may be discovered by, or result in harm to, Mortgagee. Mortgagor further represents and warrants that the foregoing representations and warranties, as well as all other representations and warranties of Mortgagor to Mortgagee relative to the Loan Documents, shall survive termination of this Security Instrument.

ARTICLE 4
MORTGAGOR’S AFFIRMATIVE COVENANTS

4.1      Payment of Note . Mortgagor will pay all principal, interest, and other sums payable under the Note, on the date when such payments are due, without notice or demand.

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

4.3      Other Encumbrances . Mortgagor will promptly perform and comply with all covenants, conditions, and prohibitions required of Mortgagor in connection with any other encumbrance affecting the Property, the Chattels, or the Intangible Personalty, or any part thereof, or any interest therein, regardless of whether such other encumbrance is superior or subordinate to the lien hereof.

4.4      Payment of Taxes.

(a)     Property Taxes . Unless Mortgagor is depositing with Mortgagee the amounts required pursuant to Section 4.4(b), Mortgagor will (i) pay or cause to be paid, before delinquency, all taxes and assessments, general or special, which may be levied or imposed at any time against Mortgagor’s interest and estate in the Property, the Chattels, or the Intangible Personalty, and (ii) within thirty (30) days after each payment of any such tax or assessment, Mortgagor will deliver to Mortgagee, without notice or demand, an official receipt for such payment if issued by the taxing authority and if not, cancelled checks or other reasonable evidence of payment. At Mortgagee’s option, Mortgagee may retain the services of a firm to monitor the payment of all taxes and assessments relating to the Property, the cost of which shall be borne by Mortgagor.

(b)     Deposit for Taxes : From and after the occurrence of a Default or an Event of Default, and at such times as a Triggering Event Condition (as defined in the Cash Collateral Agreement) is otherwise continuing, with each monthly payment under the Note, Mortgagor shall deposit with Mortgagee an amount equal to 1/12th of the amount which Mortgagee estimates will be required to pay the next annual payment of taxes, assessments, and similar governmental charges referred to in this Section. The purpose of these provisions is to provide Mortgagee with sufficient funds on hand to pay all such taxes, assessments, and other governmental charges thirty (30) days before the date on which they become past due. If the Mortgagee, in its sole discretion, determines that the funds escrowed hereunder are, or will be, insufficient, Mortgagor shall upon demand pay such additional sums as Mortgagee shall determine necessary and shall pay any increased monthly charges requested by Mortgagee. Provided no Default or Event of Default exists hereunder, Mortgagee will apply the amounts so deposited to the payment of such taxes, assessments, and other charges when due, but in no event will Mortgagee be liable for any interest on any amount so deposited, and any amount so deposited may be held and commingled with Mortgagee’s own funds.

(c)     Intangible Taxes . If by reason of any statutory or constitutional amendment or judicial decision adopted or rendered after the date hereof, any tax, assessment, or similar charge is imposed against the Note or against Mortgagee, or against any interest of Mortgagee in any real or personal property encumbered hereby (but excluding any taxes in the nature of income taxes on the overall income or profits of Mortgagee to which Mortgagee may be subject), Mortgagor will pay such tax, assessment, or other charge before delinquency and will pay to Mortgagee any and all costs, expenses, or diminution of income incurred by Mortgagee in connection therewith. In the event Mortgagor is unable to do so, either for economic reasons or because the legal provisions or decisions creating such tax, assessment or charge forbid Mortgagor from doing so, then the Note will, at Mortgagee’s option, become due and payable in full upon ninety (90) days’ notice to Mortgagor, without prepayment premium or penalty.

(d)     Right to Contest . Notwithstanding any other provision of this Section 4.4, Mortgagor will not be deemed to be in default solely by reason of Mortgagor’s failure to pay any tax, assessment or similar governmental charge so long as, in Mortgagee’s judgment, each of the following conditions is satisfied:

(i)    Mortgagor and/or Verizon Tenant is engaged in and diligently pursuing in good faith administrative or judicial proceedings appropriate to contest the validity or amount of such tax, assessment, or charge; and

(ii)    The payment of such tax, assessment, or charge would necessarily and materially prejudice Mortgagor’s and/or Verizon Tenant’s prospects for success in such proceedings; and

(iii)    Nonpayment of such tax, assessment, or charge will not result in the loss or forfeiture of any property encumbered hereby or any interest of Mortgagee therein; and

(iv)    Mortgagor deposits or causes to be deposited with Mortgagee, as security for such payment which may ultimately be required, a sum equal to the amount of the disputed tax, assessment or charge plus the interest, penalties, advertising charges, and other costs which Mortgagee estimates are likely to become payable if such contest is unsuccessful.

If Mortgagee determines that any one or more of such conditions is not satisfied or is no longer satisfied, Mortgagor will pay the tax, assessment, or charge in question, together with any interest and penalties thereon, within ten (10) days after Mortgagee gives notice of such determination.

4.5      Maintenance of Insurance.

(a)     Coverages Required . Mortgagor shall maintain or cause to be maintained, with insurance companies or associations satisfying the requirements of the Insurance Agreement, all insurance required under the terms of the Insurance

Agreement, and shall comply with each and every covenant and agreement contained in the Insurance Agreement, the provisions of which are hereby incorporated by this reference.

(b)     Renewal Policies . Prior to the expiration date of each insurance policy required pursuant to the Insurance Agreement, Mortgagor will deliver to Mortgagee evidence of the renewal or replacement of such policy as required pursuant to the Insurance Agreement, with evidence satisfactory to Mortgagee that the applicable premium has been prepaid.

(c)     Deposit for Premiums . From and after the occurrence of a Default or an Event of Default, and at such times as a Triggering Event Condition (as defined in the Cash Collateral Agreement is otherwise continuing, with each monthly payment under the Note, Mortgagor will deposit an amount equal to 1/12th of the amount which Mortgagee estimates will be required to pay the next required annual premium for each insurance policy referred to in this Section. The purpose of these provisions is to provide Mortgagee with sufficient funds on hand no later than thirty (30) days before the date on which the payment of such premiums will become due, so as to permit Mortgagee to pay all such premiums when due. If the Mortgagee, in its sole discretion, determines that the funds escrowed hereunder are, or will be, insufficient, Mortgagor shall upon demand pay such additional sums as Mortgagee shall determine necessary and shall pay any increased monthly charges requested by Mortgagee. Provided no Default or Event of Default exists hereunder, Mortgagee will apply the amounts so deposited to the payment of such insurance premiums when due, but in no event will Mortgagee be liable for any interest on any amounts so deposited, and the money so received may be held and commingled with Mortgagee’s own funds.

(d)     Application of Hazard Insurance Proceeds . Mortgagor shall promptly notify Mortgagee of any damage or casualty to all or any portion of the Property or Chattels. Mortgagee may participate in all negotiations and appear and participate in all judicial arbitration proceedings concerning any insurance proceeds which may be payable as a result of such casualty or damage, and may, in Mortgagee’s sole discretion, compromise or settle, in the name of Mortgagee, Mortgagor, or both any claim for any such insurance proceeds. Any such insurance proceeds shall be paid to Mortgagee and shall be applied first to reimburse Mortgagee for all costs and expenses, including attorneys’ fees, incurred by Mortgagee in connection with the collection of such insurance proceeds. The balance of any insurance proceeds received by Mortgagee with respect to an insured casualty may (subject to the terms of any Approved Lease or subordination, non-disturbance and attornment agreement), in Mortgagee’s sole discretion, either (i) be retained and applied by Mortgagee toward payment of the Secured Obligations, or (ii) be paid over, in whole or in part and subject to such conditions as Mortgagee may impose, to Mortgagor to pay for repairs or replacements necessitated by the casualty; provided, however, that if all of the Secured Obligations have been performed or are discharged by the application of less than all of such insurance proceeds, then any remaining proceeds will be paid over to Mortgagor. Notwithstanding the preceding sentence, if (A) no Default or Event of Default shall exist hereunder, and (B) the proceeds received by Mortgagee (together with any other funds delivered by Mortgagor to Mortgagee for such purpose) shall be sufficient, in Mortgagee’s reasonable judgment, to pay for any restoration necessitated by the casualty, and (C) the cost of such restoration shall not exceed $500,000.00, and (D) such restoration can be completed, in Mortgagee’s judgment, at least ninety (90) days prior to the maturity date of the Note, then Mortgagee shall apply such proceeds as provided in clause (ii) of the preceding sentence. Mortgagee will have no obligation to see to the proper application of any insurance proceeds paid over to Mortgagor, nor will any such proceeds received by Mortgagee bear interest or be subject to any other charge for the benefit of Mortgagor. Mortgagee may, prior to the application of insurance proceeds, commingle them with Mortgagee’s own funds and otherwise act with regard to such proceeds as Mortgagee may determine in Mortgagee’s sole discretion. Notwithstanding anything to the contrary set forth in this Security Instrument, Mortgagee agrees that for so long as the Verizon Lease is in full force and effect, the disposition of insurance proceeds for damage or casualty to all or any portion of the Property and restoration of the Property relating thereto shall be governed by the terms and conditions set forth in the Verizon Lease to the extent that such Verizon Lease conflicts with the provisions of this Security Instrument.

(e)     Successor’s Rights . Any person who acquires title to the Property or the Chattels upon foreclosure hereunder will succeed to all of Mortgagor’s rights under all policies of insurance maintained pursuant to this Section.

4.6      Maintenance and Repair of Property and Chattels . Mortgagor will at all times maintain or cause the maintenance of the Property and the Chattels in good condition and repair, will diligently prosecute or cause the prosecution of the completion of any building or other improvement which is at any time in the process of construction on the Property, and will (subject to the terms of the Leases) promptly repair, restore, replace, or rebuild, or cause the repair, restoration, replacement or rebuilding of, any part of the Property or the Chattels which may be affected by any casualty or any public or private taking or injury to the Property or the Chattels. All costs and expenses arising out of the foregoing shall be paid by Mortgagor (or Mortgagor shall cause the same to be so paid) whether or not the proceeds of any insurance or eminent domain shall be sufficient therefor. Mortgagor will comply with, or cause the compliance with (or obtain a legally enforceable variance therefrom), all statutes, ordinances, and other governmental or quasi‑governmental requirements and private covenants relating to the ownership, construction, use, or operation of the Property, including but not limited to any environmental or ecological requirements; provided, that so long as Mortgagor is not otherwise in default hereunder, Mortgagor may, upon providing Mortgagee with security reasonably satisfactory to Mortgagee, proceed diligently and in good faith to contest the validity or applicability of any such statute, ordinance, or requirement. Subject to the rights of tenants under the Leases, Mortgagee and any person authorized by Mortgagee may enter and inspect the Property at all reasonable times, and may inspect the Chattels, wherever

located, at all reasonable times. Notwithstanding anything to the contrary set forth in this Security Instrument or any other Loan Document, Mortgagee agrees that for so long as the Verizon Lease is in full force and effect, to the extent Verizon Tenant is obligated to perform certain Property-related operation and maintenance obligations that Mortgagor is obligated to perform pursuant to the Loan Documents, then Mortgagor shall perform or cause Verizon Tenant to perform such obligations; provided, however, that the forgoing is not intended to limit Mortgagor’s liability to Mortgagee for any breach of or default under the Loan Documents if such obligations are not performed.

4.7      Leases . Mortgagor shall timely pay and perform each of its obligations under or in connection with the Leases, and shall otherwise pay such sums and take such action as shall be necessary or required in order to maintain each of the Leases in full force and effect in accordance with its terms. Mortgagor shall immediately furnish to Mortgagee copies of any notices given to Mortgagor by the lessee under any Lease, alleging the default by Mortgagor in the timely payment or performance of its obligations under such Lease and any subsequent communication related thereto. Mortgagor shall also promptly furnish to Mortgagee copies of any notices given to Mortgagor by the lessee under any Lease, extending the term of any Lease, requiring or demanding the expenditure of any sum by Mortgagor (or demanding the taking of any action by Mortgagor), or relating to any other material obligation of Mortgagor under such Lease and any subsequent communication related thereto. Mortgagor agrees that during the existence of any Event of Default, Mortgagee may advance any sum or take any action which Mortgagee believes is necessary or required to maintain the Leases in full force and effect, and all such sums advanced by Mortgagee, together with all costs and expenses incurred by Mortgagee in connection with action taken by Mortgagee pursuant to this Section, shall be due and payable by Mortgagor to Mortgagee upon demand, shall bear interest until paid at the Default Rate (as defined in the Note), and shall be secured by this Security Instrument.

4.8      Eminent Domain; Private Damage . If all or any part of the Property is taken or damaged by eminent domain or any other public or private action, Mortgagor will notify Mortgagee promptly of the time and place of all meetings, hearings, trials, and other proceedings relating to such action. Mortgagee may participate in all negotiations and appear and participate in all judicial or arbitration proceedings concerning any award or payment which may be due as a result of such taking or damage, and may, in Mortgagee’s reasonable discretion, compromise or settle, in the names of both Mortgagor and Mortgagee, any claim for any such award or payment. Any such award or payment is to be paid to Mortgagee and will be applied first to reimburse Mortgagee for all costs and expenses, including attorneys’ fees, incurred by Mortgagee in connection with the ascertainment and collection of such award or payment. The balance, if any, of such award or payment may, in Mortgagee’s sole discretion, either (a) be retained by Mortgagee and applied toward the Secured Obligations, or (b) be paid over, in whole or in part and subject to such conditions as Mortgagee may impose, to Mortgagor for the purpose of restoring, repairing, or rebuilding any part of the Property affected by the taking or damage. Notwithstanding the preceding sentence, if (i) no Default or Event of Default shall have occurred and be continuing hereunder, and (ii) the proceeds received by Mortgagee (together with any other funds delivered by Mortgagor to Mortgagee for such purpose) shall be sufficient, in Mortgagee’s reasonable judgment, to pay for any restoration necessitated by the taking or damage, and (iii) the cost of such restoration shall not exceed $500,000.00, and (iv) such restoration can be completed, in Mortgagee’s judgment, at least ninety (90) days prior to the maturity date of the Note, and (v) the remaining Property shall constitute, in Mortgagee’s sole judgment, adequate security for the Secured Obligations, then Mortgagee shall apply such proceeds as provided in clause (b) of the preceding sentence. Mortgagor’s duty to pay the Note in accordance with its terms and to perform the other Secured Obligations will not be suspended by the pendency or discharged by the conclusion of any proceedings for the collection of any such award or payment, and any reduction in the Secured Obligations resulting from Mortgagee’s application of any such award or payment will take effect only when Mortgagee receives such award or payment. If this Security Instrument has been foreclosed prior to Mortgagee’s receipt of such award or payment, Mortgagee may nonetheless retain such award or payment to the extent required to reimburse Mortgagee for all costs and expenses, including attorneys’ fees, incurred in connection therewith, and to discharge any deficiency remaining with respect to the Secured Obligations. Notwithstanding anything to the contrary set forth in this Security Instrument, Mortgagee agrees that for so long as the Verizon Lease is in full force and effect, the disposition of awards or payments resulting from any condemnation or eminent domain taking of all or any portion of the Property and restoration of the Property relating thereto shall be governed by the terms and conditions set forth in the Verizon Lease to the extent that such Verizon Lease conflicts with the provisions of this Security Instrument.

4.9      Mechanics’ Liens . Mortgagor will keep (or cause others to keep) the Property free and clear of all liens and claims of liens by contractors, subcontractors, mechanics, laborers, materialmen, and other such persons, and will cause any recorded statement of any such lien to be released of record within forty-five (45) days after the recording thereof. Notwithstanding the preceding sentence, however, Mortgagor will not be deemed to be in default under this Section if and so long as Mortgagor or any tenant under a Lease (a) contests in good faith the validity or amount of any asserted lien and diligently prosecutes or defends an action appropriate to obtain a binding determination of the disputed matter, and (b) provides Mortgagee with such security as Mortgagee may require to protect Mortgagee against all loss, damage, and expense, including attorneys’ fees, which Mortgagee might incur if the asserted lien is determined to be valid.

4.10      Defense of Actions . Mortgagor will defend, at Mortgagor’s expense, any action, proceeding or claim which affects any property encumbered hereby or any interest of Mortgagee in such property or in the Secured Obligations, and will indemnify and hold Mortgagee harmless for, from, and all losses, damages, claims, liabilities, obligations, judgments, liens, demands, actions, suits, all loss, damage, cost, or expense, including attorneys’ fees, which Mortgagee may incur in connection therewith.

4.11      Expenses of Enforcement . Mortgagor will pay all costs and expenses, including attorneys’ fees, which Mortgagee may incur in connection with any effort or action (whether or not litigation or foreclosure is involved) to enforce or defend Mortgagee’s rights and remedies under any of the Loan Documents, including but not limited to all attorneys’ fees, appraisal fees, consultants’ fees, and other expenses incurred by Mortgagee in securing title to or possession of, and realizing upon, any security for the Secured Obligations. All such costs and expenses (together with interest thereon at the Default Rate from the date incurred) shall constitute part of the Secured Obligations, and may be included in the computation of the amount owed to Mortgagee for purposes of foreclosing or otherwise enforcing this Security Instrument.

4.12      Financial Reports . During the term of the Loan, Mortgagor shall supply to Mortgagee (a) within fifteen (15) days following the end of each quarter, Mortgagor’s quarterly and annual operating statements for the Property as of the end of and for the preceding quarter and fiscal year, as applicable, in each case prepared against the budget for such year; (b) contemporaneously with Mortgagor’s delivery of each of such operating statements, a certified rent roll signed and dated by Mortgagor detailing the names of all tenants under the Leases, the portion of the improvements on the Property occupied by each tenant, the rent and any other charges payable under each Lease, and the term of each Lease; (c) within ninety (90) days following the end of each year, an annual balance sheet and profit and loss statement of Mortgagor (d) within forty-five (45) days following the end of each quarter, Guarantor’s quarterly unaudited financial statements and within ninety (90) days following the end of each fiscal year, Guarantor’s annual audited financial statements as of the end of and for the preceding quarter and fiscal year, as applicable; provided, however, for so long as Guarantor files 10Qs and 10Ks with the Securities and Exchange Commission, Mortgagor shall give Mortgagee written notice and weblink quarterly within forty-five (45) days of when a 10Q filing is made by Guarantor with the Securities and Exchange Commission and annually within ninety (90) days of when a 10K filing is made by Guarantor with the Securities and Exchange Commission. The financial statements and reports described in (a) and (c) above shall be in such detail as Mortgagee may require, shall be prepared in accordance with generally accepted accounting principles consistently applied, and shall be certified as true and correct by Mortgagor or the applicable Guarantor (or, if required by Mortgagee, by an independent certified public accountant acceptable to Mortgagee). Mortgagor shall also furnish to Mortgagee within thirty (30) days of Mortgagee’s request, any other financial reports or statements of Mortgagor as Mortgagee may reasonably request. Upon Mortgagee’s demand after any Default or Event of Default, or if Mortgagee securitizes the Loan, Mortgagor shall supply to Mortgagee the items required in (a) and (b) above on a monthly basis.

4.13      Priority of Leases . To the extent Mortgagor has the right, under the terms of any Lease, to make such Lease subordinate to the lien hereof, Mortgagor will, at Mortgagee’s request and Mortgagor’s expense, take such action as may be required to effect such subordination. Conversely, Mortgagor will, at Mortgagee’s request and Mortgagor’s expense, take such action as may be necessary to subordinate the lien hereof to any future Lease designated by Mortgagee.

4.14      Inventories; Assembly of Chattels . Mortgagor will, from time to time at the request of Mortgagee, supply Mortgagee with a current inventory of the Chattels and the Intangible Personalty, in such detail as Mortgagee may require. Upon the occurrence of any Event of Default hereunder, Mortgagor will at Mortgagee’s request assemble the Chattels and make them available to Mortgagee at any place designated by Mortgagee which is reasonably convenient to both parties.

4.15      Compliance with Laws, Etc . Mortgagor shall comply in all material respects or cause compliance in all material respects with (or obtain a legally enforceable variance therefrom) all applicable laws, rules, regulations and orders, such compliance to include, without limitation, maintaining all Permits and paying before the same become delinquent all taxes, assessments and governmental charges imposed upon Mortgagor or the Property.

4.16      Records and Books of Account . Mortgagor shall keep accurate and complete records and books of account, in which complete entries will be made in accordance with generally accepted accounting principles consistently applied, reflecting all financial transactions relating to the Property, including, but not limited to, records adequate to correctly reflect all items required in order to determine all Gross Receipts (as such term is used in the Cash Collateral Agreement).

4.17      Inspection Rights . At any reasonable time, and from time to time, Mortgagor shall permit Mortgagee, or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and subject to the rights of tenants under the Leases, visit the Property and to discuss with Mortgagor the affairs, finances and accounts of Mortgagor.

4.18      Change of Mortgagor’s Address or State of Organization . Mortgagor shall promptly notify Mortgagee if changes are made in Mortgagor’s address from that set forth in Section 9.10 hereof, or if Mortgagor shall either change its “location” (as such term is used in Section 5.8 hereof), its state of organization or if Mortgagor shall organize in any state other than the State of Delaware.

4.19      Further Assurances; Estoppel Certificates . Mortgagor will execute and deliver to Mortgagee upon demand, and pay the costs of preparation and recording thereof, any further documents which Mortgagee may request to confirm or perfect the liens and security interests created or intended to be created hereby, or to confirm or perfect any evidence of the Secured Obligations. Mortgagor will also, within twenty (20) days after any request by Mortgagee, deliver to Mortgagee a signed and acknowledged statement certifying to Mortgagee, or to any proposed transferee of the Secured Obligations, (a) the balance of principal, interest, and other sums then outstanding under the Note, and (b) whether Mortgagor claims to have any offsets or defenses with respect to the Secured Obligations and, if so, the nature of such offsets or defenses.

4.20      Costs of Closing . Mortgagor shall on demand pay directly or reimburse Mortgagee for any costs or expenses pertaining to the closing of the Loan, including, but not limited to, fees of counsel for Mortgagee, costs and expenses for which invoices were not available at the closing of the Loan, or costs and expenses which are incurred by Mortgagee after such closing, including, without limitation, costs or expenses incurred to obtain originals or copies of recorded or filed Loan Documents and UCC financing statements. All such costs and expenses (together with interest thereon at the Default Rate from the date incurred by Mortgagee) shall constitute a part of the Secured Obligations, and may be included in the computation of the amount owed to Mortgagee for purposes of foreclosing or otherwise enforcing this Security Instrument.

4.21      Fund for Electronic Transfer . All monthly payments of principal and interest on the Note, and impound deposits under this Security Instrument, shall be made by Mortgagor by electronic funds transfer from a bank account established and maintained by Mortgagor for such purpose. Mortgagor shall establish and maintain such an account until the Note is fully paid and shall direct the depository of such account in writing to so transmit such payments on or before the respective due dates to the account of Mortgagee as shall be designated by Mortgagee in writing.

4.22      Use . Mortgagor shall use the Property solely for office, commercial and/or incidental or ancillary uses, and for such other uses that are permitted under Leases approved by Mortgagee in writing, and for no other use or purpose.

4.23      Management . The Property shall be managed by Griffin Capital Essential Asset Property Management, LLC, a Delaware limited liability company (“ Property Manager ”) under a management agreement previously delivered to, and approved, by Mortgagee (the “ Management Agreement ”) and sub-managed by Jones Lang LaSalle Americas, Inc., a Maryland corporation (“ Sub-Manager ”) under a sub-management agreement previously delivered to and approved by Mortgagee (the “ Sub-Management Agreement ”). Mortgagor shall not permit any amendment to or modification of the Management Agreement or the Sub-Management Agreement, or management of the Property by any person or entity other than Property Manager or Sub-Manager, without the prior written consent of Mortgagee.

4.24      Intentionally Deleted .

4.25      General Indemnity . Mortgagor agrees that while Mortgagee has no liability to any person in tort or otherwise as lender and that Mortgagee is not an owner or operator of the Property, Mortgagor shall, at its sole expense, protect, defend, release, indemnify and hold harmless the Indemnified Parties (defined below) for, from, and against any Losses (defined below) imposed on, incurred by, or asserted against the Indemnified Parties, directly or indirectly, arising out of or in connection with the Property, Loan, or Loan Documents; provided, however, that the foregoing shall not apply (a) to any Losses caused by the gross negligence or willful misconduct of the Indemnified Parties or (b) provided no Event of Default then exists, to any disputes among the Indemnified Parties not caused in whole or in part by a breach of Mortgagor’s obligations under the Loan Documents. The term “ Losses ” shall mean any claims, suits, liabilities (including strict liabilities), actions, proceedings, obligations, debts, damages, losses (including, without limitation, unrealized loss of value of the Property caused in whole or in part by a breach of any of Mortgagor’s obligations under the Loan Documents, or arising by reason of any third-party claim asserted against any of the Indemnified Parties, but not due to the gross negligence or willful misconduct of such Indemnified Party), demands costs, expenses, fines, penalties, charges, fees, judgments, awards, and amounts paid in settlement of whatever kind including attorneys’ fees and all other costs of defense. The term “ Indemnified Parties ” shall mean (a) Mortgagee, (b) any prior owner or holder of the Note, (c) any existing or prior servicer of the Loan, (d) the officers, directors, shareholders, partners, members, employees and trustees of any of the foregoing, and (e) the heirs, legal representatives, successors and assigns of each of the foregoing. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO LOSSES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PARTY OR ANY STRICT LIABILITY BUT NOT THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY.

4.26      Duty to Defend, Costs and Expenses . Upon request, whether Mortgagor’s obligation to indemnify Mortgagee arises under Section 4.25 above or elsewhere in the Loan Documents, Mortgagor shall defend the Indemnified Parties (in Mortgagor’s or the Indemnified Parties’ names) by attorneys and other professionals approved by the Indemnified Parties provided, however, if and to the extent Mortgagor has no right to approve such counsel, counsel appointed by Borrower’s insurance carrier shall be deemed acceptable to Indemnified Parties.. Notwithstanding the foregoing, the Indemnified Parties may, in their sole discretion, engage their own attorneys and professionals to defend or assist them and, at their option, their attorneys shall control the resolution of any claims or proceedings. Upon demand, Mortgagor shall pay or, in the sole discretion of the Indemnified Parties, reimburse the Indemnified Parties for all Losses imposed on, incurred by, or asserted against the Indemnified Parties by reason of any items set forth in Section 4.25 above and/or the enforcement or preservation of the Indemnified Parties’ rights under the Loan Documents. Any amount payable to the Indemnified Parties under this Section shall (a) be deemed a demand obligation, (b) be part of the Secured Obligations, (c) bear interest from the date of demand at the Default Rate until paid if not paid on demand, and (d) be secured by this Security Instrument.

ARTICLE 5
MORTGAGOR’S NEGATIVE COVENANTS

5.1      Waste and Alterations . Mortgagor will not commit or permit any (a) physical waste with respect to the Property or the Chattels, and (b) Mortgagor shall not cause or permit any part of the Property, including but not limited to any building, structure, parking lot, driveway, landscape scheme, timber, or other ground improvement, to be removed, demolished, or materially altered without the prior written consent of Mortgagee, subject in each instance to the terms of the Leases.

5.2      Zoning and Private Covenants . Mortgagor will not initiate, join in, or consent to any change in any zoning ordinance or classification, any change in the “zone lot” or “zone lots” (or similar zoning unit or units) presently comprising the Property, any transfer of development rights, any change in any private restrictive covenant, or any change in any other public or private restriction limiting or defining the uses which may be made of the Property or any part thereof, without the prior written consent of Mortgagee. If under applicable zoning provisions the use of all or any part of the Property is or becomes a nonconforming use, Mortgagor will not cause such use to be discontinued or abandoned without the prior written consent of Mortgagee, and Mortgagor will use commercially reasonable efforts to prevent the tenant under any Lease from discontinuing or abandoning such use.

5.3      Interference with Leases.

(a)    Mortgagor will neither do, nor neglect to do, anything which may cause or permit the termination of any Lease of all or any part of the Property, or cause or permit the withholding or abatement of any rent payable under any such Lease.

(b)    Without Mortgagee’s prior written consent, which may be granted or withheld in Mortgagee’s sole discretion, Mortgagor shall not enter into or modify (including without limitation modifications relating to the financial covenants or any financial reporting requirements) any Lease of all or any part of the Property. Any lease, lease modification, lease amendment or lease termination (“ Lease Transaction ”) for which Mortgagee’s consent is required under the Loan Documents shall be deemed approved by Mortgagee if (i) prior to finalizing negotiations for such Lease Transaction, Mortgagor has submitted to Mortgagee an approval request package (“ Approval Package ”) with respect to such Lease Transaction containing a letter requesting Mortgagee’s approval (and containing a signature line on which Mortgagee may evidence its approval of such Lease Transaction) and notifying Mortgagee, in bold enlarged type, that Mortgagee’s approval will be deemed given if it fails to respond within ten (10) Business Days after its receipt of such Approval Package, and Mortgagee thereafter fails to respond within ten (10) Business Days after its receipt of such Approval Package; provided , however , that Mortgagor shall supply Mortgagee with any other information reasonably requested by Mortgagee with respect to such proposed Lease Transaction within five (5) Business Days after Mortgagee’s receipt of the Approval Package, in which event Mortgagee’s approval shall be deemed given if Mortgagee has not disapproved or approved the Approval Package within ten (10) Business Days after the last to arrive of the proposed Approval Package and any additional information so requested by Mortgagee. Each Approval Package shall contain a description of all of the principal terms of the proposed Lease Transaction, a description of the tenant and its controlling constituents and (with respect to new leases or modifications/amendments) Mortgagor’s reasonably detailed analysis of the tenant’s creditworthiness (with respect to new leases or modifications/amendments), and a copy of any and all term sheets or letters of intent executed in connection with such Lease Transaction, together with the proposed forms of definitive documentation. Mortgagor shall deliver to Mortgagee copies of all Leases or modifications promptly upon execution and delivery thereof.

(c)    Except with the prior written consent of Mortgagee, which may be granted or withheld in Mortgagee’s sole discretion, Mortgagor will not (i) collect rent from all or any part of the Property for more than one month in advance, (ii) assign the rents from the Property or any part thereof, or (iii) consent to the cancellation or surrender of all or any part of any Lease, except that Mortgagor may in good faith terminate any Lease for nonpayment of rent or other material breach by the tenant.

(d)    Without limiting the generality of the foregoing, whether or not Mortgagee’s consent to the cancellation or surrender of any Lease is required hereunder, (i) Mortgagor shall notify Mortgagee in writing of any cancellation penalties or other consideration as and when received by Mortgagor in connection with such cancellation or surrender (the “ Termination Fees ”), which written notice must be delivered to Mortgagee within five (5) days of the payment by the applicable tenant of any such Termination Fees to Mortgagor, and (ii) at Mortgagee’s sole option, Mortgagee shall be entitled to (A) require that Mortgagor enter into the TI/LC Reserve (as defined in the Vacancy Risk Agreement) with Mortgagee and deposit such Termination Fees into the TI/LC Reserve, and (B) impose such restrictions and conditions on the timing and amount of disbursements of the Termination Fees from such reserve as Mortgagee may require in its reasonable discretion, including, without limitation, the conditions described in Section 6 of the TI/LC Reserve Agreement.

(e)    Subject to Mortgagee’s approval of each Lease, in any circumstance where, pursuant to the terms of the Lease, Mortgagor’s consent to any action under such Lease shall not be unreasonably withheld or delayed, and such action requires the consent of Mortgagee, Mortgagee’s consent to such action shall likewise not be unreasonably withheld or delayed. In addition, Mortgagee’s consent to such action shall be subject to the deemed approval provisions described in Section 5.3(b) above.

5.4      Transfer or Further Encumbrance of Property . Without Mortgagee’s prior written consent, which consent may be granted or withheld in Mortgagee’s sole and absolute discretion, Mortgagor shall not (i) sell, assign, convey, transfer or otherwise dispose of any direct or indirect legal, beneficial or equitable interest in all or any part of the Property, (ii) permit or suffer any owner, directly or indirectly, of any beneficial interest in the Property or Mortgagor to transfer such interest, whether by transfer of partnership, membership, stock or other beneficial interest in any entity or otherwise, or (iii) mortgage, pledge, hypothecate or otherwise encumber or permit to be encumbered or grant or permit to be granted a security interest in all or any part of, or a direct or indirect interest in, the Property or Mortgagor or any beneficial or equitable interest in either the Property or Mortgagor. The provisions of this Section shall not prohibit transfers of title or interest under any will or testament or applicable law of descent.

(a)    Notwithstanding anything to the contrary in this Section 5.4 :

(i)     Permitted Transfers Generally . Any of the following may occur without the consent of Mortgagee and shall not be deemed a violation of the due-on-sale provisions in the Loan Documents: (x) the transfer of partnership interests, or the creation or issuance of new partnership interests (including, without limitation, in connection with exchanges made pursuant to Section 721 of the Internal Revenue Code), in Operating Partnership, or (y) the transfer of shares, or the creation, issuance or sale of new shares, in Guarantor; provided, however, that as of the date that such transaction is consummated all of the following conditions shall have been satisfied:

“ Transfer Conditions ” mean all of the following: (1) no Event of Default has occurred and is continuing, (2) Mortgagor shall have delivered to Mortgagee prior written notice of the proposed transfer, and a final organizational chart illustrating the ownership structure both before and after the proposed change in ownership, which organizational chart shall set forth Mortgagor’s direct and indirect upstream ownership, percentage interests held by each upstream entity or person and type of each such entity (3) Mortgagor pays all reasonable third party costs, fees and expenses (including attorneys’ fees) incurred by Mortgagee in connection with reviewing the proposed transfer and verifying all Transfer Conditions and other conditions listed above have been satisfied, whether or not the transfer is consummated, and (4) Mortgagor pays Mortgagee an administrative review fee (not to exceed $5000 with respect to each proposed transfer), whether or not the transfer is consummated.

(ii)     Permitted Starwood Related Transactions and Matters . Mortgagee hereby (x) consents to the issuance of the Preferred Units (as defined in the Starwood Documents) and the Series A Preferred Shares (as defined in the Starwood Documents) and (y) confirm that the Starwood Documents, the issuance of the Preferred Units, and the issuance of the Series A Preferred Shares do not constitute Events of Default under the Loan Documents.

information regarding such transferee as Mortgagee may reasonably request. Any breach of the covenants or prohibitions contained in this subsection (A) shall constitute an Event of Default under this Deed of Trust.

(iii)    Notwithstanding the foregoing provisions of this Section 5.4(b) above, an immediate violation of the due-on-sale provisions, and an immediate Event of Default under the Loan Documents, shall be triggered with respect to any transfer or other transaction described in this Section 5.4(b) if the proposed transferee or pledgee (or any of its constituents or beneficiaries), at the time of the applicable transfer or pledge: (I) is then identified by the Office of Foreign Assets Control or Department of Treasury as a person subject to trade restrictions under U.S. law, including but not limited to, the International Emergency Economic Powers Act, the Trading with the Enemy Act and any Executive Orders or regulations promulgated thereunder (as any and all of such laws and regulations have been or may hereafter be, renewed, extended, amended or replaced) with the result that such proposed transferee (or any of its constituents or beneficiaries) is in violation of law and/or transaction of business with any such party is prohibited by law, or (II) is in violation of any applicable laws relating to terrorism or money laundering, including without limitation, those relating to transacting business with persons identified in clause (I) above, the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (as any and all of such laws and any regulations promulgated thereunder have been or may hereafter be renewed, extended,

amended or replaced); provided, however , a violation of this subsection (iii) shall constitute an Event of Default under the Loan Documents, but if such violation was triggered by any transaction described in this Section 5.4(b) above through a licensed US broker dealer that was required to implement normal and customary investor screening practices mandated by applicable law or NASD regulations, then such violation shall not (I) constitute a violation of this Section 5.4 or 5.5 or 5.7 of this Deed of Trust for the purposes of Section 18(b)(i) of the Note, (II) constitute an intentional misrepresentation of any representation and warranty contained in Section 9.20 of this Deed of Trust or with respect to Section 18(b)(ii) of the Note, or (III) require Mortgagor to pay any prepayment premium payable under the Note or this Deed of Trust if Mortgagee accelerates the Loan by reason of such violation while no other Event of Default is continuing; provided, further , however , that neither the provisions of this subsection (iii) nor Section 9.20 of this Deed of Trust shall be breached or violated by reason of any person’s or entity’s acquiring any shares that are publicly traded on a US stock exchange through a US stock exchange (and no Default or Event of Default shall arise as a result thereof).

(iv)    For the purposes hereof, “ Eligible Assignee ” shall mean any one or more of the following, provided in each instance Mortgagee has received and approved all “know your customer” and other information as Mortgagee may reasonably request with respect to such entity taking title to SPT’s preferred equity rights, remedies or interests set forth in the Preferred Equity Documents: (A) (i) a commercial bank organized under the laws of the United States, or any state thereof, respectively and having total assets in excess of $600,000,000 and liquid assets in excess of $250,000,000; (ii) an investment bank, savings and loan association or savings bank organized under the laws of the United States or any state thereof, and having total assets in excess of $600,000,000 and liquid assets in excess of $250,000,000; (iii) a commercial bank organized under the laws of any other country that is a member of the OECD or has concluded special lending arrangements with the International Monetary Fund associated with its General Arrangements to Borrow, or a political subdivision of any such country, and having total assets in excess of $600,000,000 and liquid assets in excess of $250,000,000, so long as such bank is acting through a branch or agency located in the United States; (iv) the central bank of any country that is a member of the OECD; (v) a real estate investment trust, trust company, commercial credit corporation, hedge fund, opportunity fund, pension plan, pension fund or pension advisory firm, mutual fund, government entity, plan finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and having total assets in excess of $600,000,000 and liquid assets in excess of $250,000,000; (iv) an investment fund, investment company, money management firm or “qualified institutional buyer” within the meaning of Rule 144A under the securities Act of 1933, as amended, or an institutional “accredited investor” within the meaning of Regulation D under the Securities Act of 1933, as amended, and (vii) any entity described in clauses (i) through (vi) above acting as agent on behalf of another lender or group of lenders, whether or not such lenders are Eligible Assignees and (B) any entity Controlling, Controlled by or under common Control with any Person descried in clause (A).

As used herein, “ Control ” means (i) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise, and (ii) the ownership, direct or indirect, of no less than fifty-one percent (51%) of the voting securities of such Person, and the terms “ Controlled ”, “ Controlling ” and “ Common Control ” shall have correlative meanings.

5.5      Further Encumbrance of Chattels . Mortgagor will neither create nor permit any lien, security interest or encumbrance against the Chattels or Intangible Personalty or any part thereof or interest therein, other than the liens and security interests created by the Loan Documents, without the prior written consent of Mortgagee, which may be withheld for any reason.

5.6      Assessments Against Property . Mortgagor will not, without the prior written approval of Mortgagee, which may be withheld for any reason, here after consent to or allow the creation of any so called special districts, special improvement districts, benefit assessment districts or similar districts, or any other body or entity of any type, or allow to occur any other event, that would or might result in the imposition of any additional taxes, assessments or other monetary obligations or burdens on the Property (other than increases in ad valorem real estate taxes from time to time imposed by applicable taxing authorities), and this provision shall serve as RECORD NOTICE to any such district or districts or any governmental entity under whose authority such district or districts exist or are being formed that, should Mortgagor or any other person or entity include all or any portion of the Property in such district or districts, whether formed or in the process of formation, without first obtaining Mortgagee’s express written consent, the rights of Mortgagee in the Property pursuant to this Security Instrument or following any foreclosure of this Security Instrument, and the rights of any person or entity to whom Mortgagee might transfer the Property following a foreclosure of this Security Instrument, shall be senior and superior to any taxes, charges, fees, assessments or other impositions of any kind or nature whatsoever, or liens (whether statutory, contractual or otherwise) levied or imposed, or to be levied or imposed, upon the Property or any portion thereof as a result of inclusion of the Property in such district or districts.

5.7      Transfer or Removal of Chattels . Mortgagor will not sell, transfer or remove from the Property all or any part of the Chattels, unless the items sold, transferred, or removed, are obsolete or are simultaneously replaced with similar items of equal or greater value.

5.8      Change of Name, Organizational I.D. No. or Location . Mortgagor will not change its name or the name under which it does business (or adopt or begin doing business under any other name or assumed or trade name), change its organizational identification number, or change its location, without first notifying Mortgagee of its intention to do so and delivering to Mortgagee such organizational documents of Mortgagor and executed modifications or supplements to this Security Instrument (and to any financing statement which may be filed in connection herewith) as Mortgagee may require. For purposes of the foregoing, Mortgagor’s “ location ” shall mean (a) if Mortgagor is a registered organization, Mortgagor’s state of registration, (b) if Mortgagor is an individual, the state of Mortgagor’s principal residence, or (c) if Mortgagor is neither a registered organization nor an individual, the state in which Mortgagor’s place of business (or, if Mortgagor has more than one place of business, the Mortgagor’s chief executive office) is located.

5.9      Improper Use of Property or Chattels . Mortgagor will not use the Property or the Chattels for any purpose or in any manner which violates any applicable law, ordinance, or other governmental requirement, the requirements or conditions of any insurance policy, or any private covenant.

5.10      ERISA . Mortgagor shall not engage in any transaction which would cause the Note (or the exercise by Mortgagee of any of its rights under the Loan Documents) to be a non-exempt, prohibited transaction under ERISA (including for this purpose the parallel provisions of Section 4975 of the Internal Revenue Code of 1986, as amended), or otherwise result in Mortgagee being deemed in violation of any applicable provisions of ERISA. Mortgagor shall indemnify, protect, defend, and hold Mortgagee harmless for, from and against any and all losses, liabilities, damages, claims, demands, judgments, costs, and expenses (including, without limitation attorneys’ fees and costs incurred in the investigation, defense, and settlement of claims and in obtaining any individual ERISA exemption or state administrative exception that may be required, in Mortgagee’s sole and absolute discretion) that Mortgagee may incur, directly or indirectly, as the result of the breach by Mortgagor of any warranty or representation set forth in Section 3.3(x) hereof or the breach by Mortgagor of any covenant contained in this Section. This indemnity shall survive any termination, satisfaction or foreclosure of this Security Instrument and shall not be subject to the limitation on personal liability described in the Note.

5.11      Use of Proceeds . Mortgagor will not use any funds advanced by Mortgagee under the Loan Documents for household or agricultural purposes, to purchase margin stock, or for any purpose prohibited by law.

5.12      REA and Other Major Approvals . Without Mortgagee’s prior written consent, which may be granted or withheld in Mortgagee’s reasonable discretion, Mortgagor shall not enter into or modify any reciprocal easement agreement, declaration, covenant, condition or restriction, ground lease, operating agreement, or any document recorded against the Property.

5.13      Single Purpose Entity . Mortgagor shall not engage in any business other than the ownership, development, operation and disposition of the Property, and shall not incur any subordinated debt or unsecured debt except customary lease financings of non-fixture equipment in the ordinary course of Mortgagor’s business and except to trade creditors and service providers in the ordinary course of Mortgagor’s business.

ARTICLE 6

EVENTS OF DEFAULT

Each of the following events will constitute an event of default (an “ Event of Default ”) under this Security Instrument and under each of the other Loan Documents:

6.1      Failure to Pay Note . Mortgagor’s failure to make any payment when due under the terms of the Note or any other Loan Document.

6.2      Due on Sale or Encumbrance . The occurrence of any violation of any covenant contained in Section 5.4, 5.5 or 5.7 hereof.

6.3      Other Obligations . The failure of Mortgagor or Guarantor to properly perform any obligation contained herein or in any of the other Loan Documents (other than the obligation to make payments under the Note or the other Loan Documents) and the continuance of such failure for a period of thirty (30) days following written notice thereof from Mortgagee to Mortgagor; provided, however, that if such failure is not curable within such thirty (30) day period, then, so long as Mortgagor commences to cure such failure within such thirty (30) day period and is continually and diligently attempting to cure to completion, such failure shall not be an Event of Default unless such failure remains uncured for one hundred twenty (120) days after such written notice to Mortgagor.

6.4      Levy Against Property . The levy against any of the Property, Chattels or Intangible Personalty, of any execution, attachment, sequestration or other writ.

6.5      Liquidation . The liquidation, termination or dissolution of Mortgagor or any Controlling Person, at any time that Mortgager is the borrower under the Loan.

6.6      Appointment of Receiver . The appointment of a trustee or receiver for the assets, or any part thereof, of Mortgagor, or any Controlling Person, or the appointment of a trustee or receiver for any real or personal property, or the like, or any part thereof, representing the security for the Secured Obligations.

6.7      Assignments . The making by Mortgagor or any Controlling Person of a transfer in fraud of creditors or an assignment for the benefit of creditors.

6.8      Order for Relief . The entry in bankruptcy of an order for relief for or against Mortgagor or any Controlling Person.

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

6.10      Misrepresentation . If any representation or warranty made by Mortgagor or any Controlling Person, or in any of the other Loan Documents or any other instrument or document modifying, renewing, extending, evidencing, securing or pertaining to the Note is false or intentionally misleading in any material respect.

6.11      Judgments . The failure of (a) Mortgagor or GC Member to pay any money judgment in excess of $10,000.00, or (b) any Controlling Person to pay any money judgment in excess of $200,000.00 in either case against any such party before the expiration of thirty (30) days after such judgment becomes final and no longer appealable.

6.12      Admissions Regarding Debts . The admission of Mortgagor or any Controlling Person in writing, other than to Mortgagor, of any such party’s inability to pay such party’s debts as they become due.

6.13      Assertion of Priority . The assertion of any claim of priority over this Security Instrument, by title, lien, or otherwise, unless Mortgagor within forty-five (45) days after such assertion either causes the assertion to be withdrawn or provides Mortgagee with such security as Mortgagee may require to protect Mortgagee against all loss, damage, or expense, including attorneys’ fees, which Mortgagee may incur in the event such assertion is upheld.

6.14      Other Loan Documents . The occurrence of any default by Mortgagor, after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any of the Loan Documents other than this Security Instrument.

6.15      Other Liens . The occurrence of any default by Mortgagor, after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any other consensual lien encumbering the Property, or any part thereof or interest therein, or any document or instrument evidencing obligations secured thereby.

6.16      Other Indebtedness . The occurrence of any default by Mortgagor, after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any other indebtedness incurred or owing by Mortgagor, or any document or instrument evidencing any obligation to pay such indebtedness.

6.17      Guaranty . Guarantor’s (a) failure to make any payment in full under the terms of the Guaranty within ten (10) Business Days following written notice by Mortgagee to Guarantor demanding such payment, or (b) failure to properly perform any of Guarantor’s material obligations under the Guaranty (other than those referenced in clause (a) above) and the continuance of such failure for a period of thirty (30) days following written notice thereof from Mortgagee to Guarantor; provided, however, that if such failure is not curable within such thirty (30) day period, then so long as Guarantor commences to cure such failure within such thirty (30) day period and is continually and diligently attempting to cure to completion such failure shall not be an Event of Default unless such failure remains uncured for one hundred twenty (120) days after such written notice to Guarantor.

Mortgagor acknowledges that for all purposes in the Loan Documents, Mortgagee’s acceptance of any cure of an Event of Default, and/or Mortgagee’s decision to reinstate the Loan after an Event of Default has occurred, shall be made by Mortgagee in its sole and absolute discretion.

6.18      Other Loan Documents . Any “Event of Default” (as defined in the Other Loan Documents) under any of the Other Loan Documents shall constitute an Event of Default hereunder and under the other Loan Documents. Any “Event of Default” (as defined in the Other Loan Guaranty Documents) under any of the Other Loan Guaranty Documents shall constitute an Event of Default hereunder and under the Loan Documents. Mortgagor and Mortgagee hereby acknowledge and agree that (i) the owners of Mortgagor own a direct or indirect interest in the Other Borrowers; (ii) that the foregoing provisions have been made in consideration of, among other things, Mortgagee’s agreement to modify the Loan to Mortgagor under such terms and conditions as agreed by the parties; and (iii) that this Section 6.18 has been agreed to for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

ARTICLE 7
MORTGAGEE’S REMEDIES

Immediately upon or any time after the occurrence of any Event of Default hereunder, Mortgagee may exercise any remedy available at law or in equity, including but not limited to those listed below and those listed in the other Loan Documents, in such sequence or combination as Mortgagee may determine in Mortgagee’s sole discretion:

7.1      Performance of Defaulted Obligations . Mortgagee may make any payment or perform any other obligation under the Loan Documents or under Leases which Mortgagor has failed to make or perform, and Mortgagor hereby irrevocably appoints Mortgagee as the true and lawful attorney-in-fact for Mortgagor to make any such payment and perform any such obligation in the name of Mortgagor. All payments made and expenses (including attorneys’ fees and expenses) incurred by Mortgagee in this connection, together with interest thereon at the Default Rate from the date paid or incurred until repaid, will be part of the Secured Obligations and will be immediately due and payable by Mortgagor to Mortgagee. In lieu of advancing Mortgagee’s own funds for such purposes, Mortgagee may use any funds of Mortgagor which may be in Mortgagee’s possession, including but not limited to insurance or condemnation proceeds and amounts deposited for taxes, insurance premiums, or other purposes.

7.2      Specific Performance and Injunctive Relief . Notwithstanding the availability of legal remedies, Mortgagee will be entitled to obtain specific performance, mandatory or prohibitory injunctive relief, or other equitable relief requiring Mortgagor to cure or refrain from repeating any Default.

7.3      Acceleration of Secured Obligations . Mortgagee may, without notice or demand, declare all of the Secured Obligations immediately due and payable in full.

7.4      Suit for Monetary Relief . Subject to the non-recourse provisions of the Note, with or without accelerating the maturity of the Secured Obligations, Mortgagee may sue from time to time for any payment due under any of the Loan Documents, or for money damages resulting from Mortgagor’s default under any of the Loan Documents.

7.5      Possession of Property . To the extent permitted by law, Mortgagee may enter and take possession of the Property without seeking or obtaining the appointment of a receiver, may employ a managing agent for the Property, and may lease or rent all or any part of the Property, either in Mortgagee’s name or in the name of Mortgagor, and may collect the rents, issues, and profits of the Property. Any revenues collected by Mortgagee under this Section will be applied first toward payment of all expenses (including attorneys’ fees) incurred by Mortgagee, together with interest thereon at the Default Rate from the date incurred until repaid, and the balance, if any, will be applied against the Secured Obligations in such order and manner as Mortgagee may elect in its sole discretion.

7.6      Enforcement of Security Interests . Mortgagee may exercise all rights of a secured party under the Code with respect to the Chattels and the Intangible Personalty, including but not limited to taking possession of, holding, and selling the Chattels and enforcing or otherwise realizing upon any accounts and general intangibles. Any requirement for reasonable notice of the time and place of any public sale, or of the time after which any private sale or other disposition is to be made, will be satisfied by Mortgagee’s giving of such notice to Mortgagor at least five days prior to the time of any public sale or the time after which any private sale or other intended disposition is to be made.

7.7      Foreclosure Against Property .

(a)    Mortgagee may, with or without entry, institute proceedings, judicial or otherwise, for the complete foreclosure of this Security Instrument under any applicable provision of applicable law, in which case the Property or any interest therein may be sold for cash or upon credit in one or more parcels or in several interests or portions and in any order or manner, any partial foreclosure to be subject to the continuing lien and security interest of this Security Instrument for the balance of the Secured Obligations not then due, unimpaired and without loss of priority.

(b)    Mortgagee may sell for cash or upon credit the Property or any part thereof and all estate, claim, demand, right, title and interest of Mortgagor therein and rights of redemption thereof, pursuant to power of sale, judicial decree or otherwise, at one or more sales, as an entity or in parcels, at such time and place, upon such terms and after such notice thereof as may be required or permitted by law. Under the power of sale hereby granted, Mortgagee shall have the discretionary right to cause some or all of the Property, including any Collateral, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law.

(c)    All fees, costs and expenses of any kind incurred by Mortgagee in connection with foreclosure of this Security Instrument, including, without limitation, the costs of any appraisals of the Property obtained by Mortgagee, the cost of any title reports or abstracts, all costs of any receivership for the Property advanced by Mortgagee, and all attorneys’ and consultants’ fees and expenses incurred by Mortgagee, shall constitute a part of the Secured Obligations and may be included as part of the amount owing from Mortgagor to Mortgagee at any foreclosure sale.

(d)    The proceeds of any sale under this Section shall be applied first to the fees and expenses of the officer conducting the sale, and then to the reduction or discharge of the Secured Obligations in such order and manner as Mortgagee

may elect in its sole discretion; any surplus remaining shall be paid over to Mortgagor or to such other person or persons as may be lawfully entitled to such surplus.

(e)    A sale of less than the whole of the Property or any defective or irregular sale made hereunder shall not exhaust the power of sale provided for herein; and subsequent sales may be made hereunder until all obligations secured hereby have been satisfied, or the entire Property sold, without defect or irregularity.

7.8      Appointment of Receiver . To the extent permitted by law, Mortgagee shall be entitled, as a matter of absolute right and without regard to the value of any security for the Secured Obligations or the solvency of any person liable therefor, to the appointment of a receiver for the Property upon ex-parte application to any court of competent jurisdiction. Mortgagor waives any right to any hearing or notice of hearing prior to the appointment of a receiver. Such receiver and its agents shall be empowered, but shall not be obligated to (a) take possession of the Property and any businesses conducted by Mortgagor or any other person thereon and any business assets used in connection therewith, (b) exclude Mortgagor and Mortgagor’s agents, servants, and employees from the Property, (c) collect the rents, issues, profits, and income therefrom, (d) complete any construction which may be in progress, (e) do such maintenance and make such repairs and alterations as the receiver deems necessary, (f) use all stores of materials, supplies, and maintenance equipment on the Property and replace such items at the expense of the receivership estate, (g) pay all taxes and assessments against the Property and the Chattels, all premiums for insurance thereon, all utility and other operating expenses, and all sums due under any prior or subsequent encumbrance, and (h) generally do anything which Mortgagor could legally do if Mortgagor were in possession of the Property. All expenses incurred by the receiver or its agents shall constitute a part of the Secured Obligations. Any revenues collected by the receiver shall be applied first to the expenses of the receivership, including attorneys’ fees incurred by the receiver and by Mortgagee, together with interest thereon at the Default Rate from the date incurred until repaid, and the balance shall be applied toward the Secured Obligations in such order or manner as Mortgagee may in its sole discretion elect or in such other manner as the court may direct. Unless sooner terminated with the express consent of Mortgagee, any such receivership will continue until the Secured Obligations have been discharged in full, or until title to the Property has passed after foreclosure sale and all applicable periods of redemption have expired.

7.9      Right to Make Repairs, Improvements . Should any part of the Property come into the possession of Mortgagee, whether before or after an Event of Default, Mortgagee may, but shall not be obligated to, use, operate, and/or make repairs, alterations, additions and improvements to the Property for the purpose of preserving it or its value. Mortgagor covenants to promptly reimburse and pay to Mortgagee, at the place where the Note is payable, or at such other place as may be designated by Mortgagee in writing, the amount of all reasonable expenses (including the cost of any insurance, taxes, or other charges) incurred by Mortgagee in connection with its custody, preservation, use or operation of the Property, together with interest thereon from the date incurred by Mortgagee at the Default Rate, and all such expenses, costs, taxes, interest, and other charges shall be a part of the Secured Obligations. It is agreed, however, that the risk of accidental loss or damage to the Property is undertaken by Mortgagor and Mortgagee shall have no liability whatsoever for decline in value of the Property, for failure to obtain or maintain insurance, or for failure to determine whether any insurance ever in force is adequate as to amount or as to the risks insured.

7.10      Surrender of Insurance . Mortgagee may surrender the insurance policies maintained pursuant to the terms hereof, or any part thereof, and receive and apply the unearned premiums as a credit on the Secured Obligations and, in connection therewith, Mortgagor hereby appoints Mortgagee (or any officer of Mortgagee), as the true and lawful agent and attorney-in-fact for Mortgagor (with full powers of substitution), which power of attorney shall be deemed to be a power coupled with an interest and therefore irrevocable, to collect such premiums.

7.11      Prima Facie Evidence . Mortgagor agrees that, in any assignments, deeds, bills of sale, notices of sale, or postings, given by Mortgagee, any and all statements of fact or other recitals therein made as to the identity of Mortgagee, or as to the occurrence or existence of any Event of Default, or as to the acceleration of the maturity of the Secured Obligations, or as to the request to sell, posting of notice of sale, notice of sale, time, place, terms and manner of sale and receipt, distribution and application of the money realized therefrom, and without being limited by the foregoing, as to any other act or thing having been duly done by Mortgagee, shall be taken by all courts of law and equity as prima facie evidence that such statements or recitals state facts and are without further question to be so accepted, and Mortgagor does hereby ratify and confirm any and all acts that Mortgagee may lawfully do by virtue hereof.

ARTICLE 8
ASSIGNMENT OF LEASES AND RENTS

8.1      Assignment of Leases and Rents . Mortgagor hereby unconditionally and absolutely and presently grants, transfers and assigns unto Mortgagee all rents, royalties, issues, profits and income (“Rents”) now or hereafter due or payable for the occupancy or use of the Property, and all Leases, whether written or oral, with all security therefor, including all guaranties thereof, now or hereafter affecting the Property; on the condition that Mortgagee hereby grants to Mortgagor, however, a license to collect and retain such Rents prior to the occurrence of any Event of Default hereunder. Such license shall be revocable by Mortgagee without notice to Mortgagor at any time after the occurrence of an Event of Default. Mortgagor represents that the Rents and the Leases have not been heretofore sold, assigned, transferred or set over by any instrument now in force and will not at any time during the life of this assignment be sold, assigned, transferred or set over by Mortgagor or by any person or persons whomsoever; and Mortgagor has good right to sell, assign, transfer and set over the same and to grant to and confer upon Mortgagee the rights, interest, powers and authorities herein granted and

conferred. Failure of Mortgagee at any time or from time to time to enforce the assignment of Rents and Leases under this Section shall not in any manner prevent its subsequent enforcement, and Mortgagee is not obligated to collect anything hereunder, but is accountable only for sums actually collected.

8.2      Further Assignments . Mortgagor shall give Mortgagee at any time upon demand any further or additional forms of assignment of transfer of such Rents, Leases and security as may be reasonably requested by Mortgagee, and shall deliver to Mortgagee executed copies of all such Leases and security.

8.3      Application of Rents . Mortgagee shall be entitled to deduct and retain a just and reasonable compensation from monies received hereunder for its services or that of its agents in collecting such monies. Any monies received by Mortgagee hereunder may be applied when received from time to time in payment of any taxes, assessments or other liens affecting the Property regardless of the delinquency, such application to be in such order as Mortgagee may determine. The acceptance of this Security Instrument by Mortgagee or the exercise of any rights by it hereunder shall not be, or be construed to be, an affirmation by it of any Lease nor an assumption of any liability under any Lease.

8.4      Collection of Rents . Upon or at any time after an Event of Default shall have occurred and be continuing, Mortgagee may declare all sums secured hereby immediately due and payable, and may, at its option, without notice, and whether or not the Secured Obligations shall have been declared due and payable, either in person or by agent, with or without bringing any action or proceeding, or by a receiver to be appointed by a court, (i) enter upon, take possession of, manage and operate the Property, or any part thereof (including without limitation making necessary repairs, alterations and improvements to the Property); (ii) make, cancel, enforce or modify Leases; (iii) obtain and evict tenants; (iv) fix or modify Rents; (v) do any acts which Mortgagee deems reasonably proper to protect the security thereof; and (vi) either with or without taking possession of the Property, in its own name sue for or otherwise collect and receive such Rents, including those past due and unpaid. In connection with the foregoing, Mortgagee shall be entitled and empowered to employ attorneys, and management, rental and other agents in and about the Property and to effect the matters which Mortgagee is empowered to do, and in the event Mortgagee shall itself effect such matters, Mortgagee shall be entitled to charge and receive reasonable management, rental and other fees therefor as may be customary in the area in which the Property is located; and the reasonable fees, charges, costs and expenses of Mortgagee or such persons shall be additional Secured Obligations. Mortgagee may apply all funds collected as aforesaid, less costs and expenses of operation and collection, including reasonable attorneys’ and agents’ fees, charges, costs and expenses, as aforesaid, upon any Secured Obligations, and in such order as Mortgagee may determine. The entering upon and taking possession of the Property, the collection of such Rents and the application thereof as aforesaid shall not cure or waive any default or waive, modify or affect notice of default under the Note or this Security Instrument or invalidate any act done pursuant to such notice.

8.5      Authority of Mortgagee . Any tenants or occupants of any part of the Property are hereby authorized to recognize the claims of Mortgagee hereunder without investigating the reason for any action taken by Mortgagee, or the validity or the amount of indebtedness owing to Mortgagee, or the existence of any default in the Note or this Security Instrument, or under or by reason of this assignment of Rents and Leases, or the application to be made by Mortgagee of any amounts to be paid to Mortgagee. The sole signature of Mortgagee shall be sufficient for the exercise of any rights under this assignment and the sole receipt of Mortgagee for any sums received shall be a full discharge and release therefor to any such tenant or occupant of the Property. Checks for all or any part of the rentals collected under this assignment of Rents and Leases shall be drawn to the exclusive order of Mortgagee.

8.6      Indemnification of Mortgagee . Nothing herein contained shall be deemed to obligate Mortgagee to perform or discharge any obligation, duty or liability of any lessor under any Lease of the Property, and Mortgagor shall and does hereby indemnify and hold Mortgagee harmless from any and all liability, loss or damage which Mortgagee may or might incur under any Lease of the Property or by reason of this assignment; and any and all such liability, loss or damage incurred by Mortgagee, together with the costs and expenses, including reasonable attorneys’ fees, incurred by Mortgagee in defense of any claims or demands therefor (whether successful or not), shall be additional Secured Obligations, and Mortgagor shall reimburse Mortgagee therefor on demand.

ARTICLE 9
MISCELLANEOUS PROVISIONS

9.1      Time of the Essence . Time is of the essence with respect to all of Mortgagor’s obligations under the Loan Documents.

9.2      Joint and Several Obligations . If Mortgagor is more than one person or entity, then (a) all persons or entities comprising Mortgagor are jointly and severally liable for all of the Secured Obligations; (b) all representations, warranties, and covenants made by Mortgagor shall be deemed representations, warranties, and covenants of each of the persons or entities comprising Mortgagor; (c) any breach, Default or Event of Default by any persons or entities comprising Mortgagor hereunder shall be deemed to be a breach, Default or Event of Default of Mortgagor; (d) any reference herein contained to the knowledge or awareness of Mortgagor shall mean the knowledge or awareness of any of the persons or entities comprising Mortgagor; and (e) any event creating personal liability of any of the persons or entities comprising Mortgagor shall create personal liability for all such persons or entities.

9.3      Waiver of Homestead and Other Exemptions . To the extent permitted by law, Mortgagor hereby waives all rights to any homestead or other exemption to which Mortgagor would otherwise be entitled under any present or future constitutional, statutory,

or other provision of applicable state or federal law. Mortgagor hereby waives any right it may have to require Mortgagee to marshal all or any portion of the security for the Secured Obligations.

9.4      Non-Recourse; Exceptions to Non-Recourse . Except as expressly set forth in the Note, the recourse of Mortgagee with respect to the obligations evidenced by the Note and the other Loan Documents shall be solely to the Property, Chattels and Intangible Personalty, and any other collateral given as security for the Note.

9.5      Rights and Remedies Cumulative . Mortgagee’s rights and remedies under each of the Loan Documents are cumulative of the right and remedies available to Mortgagee under each of the other Loan Documents and those otherwise available to Mortgagee at law or in equity. No act of Mortgagee shall be construed as an election to proceed under any particular provision of any Loan Document to the exclusion of any other provision in the same or any other Loan Document, or as an election of remedies to the exclusion of any other remedy which may then or thereafter be available to Mortgagee.

9.6      No Implied Waivers . Mortgagee shall not be deemed to have waived any provision of any Loan Document unless such waiver is in writing and is signed by Mortgagee. Without limiting the generality of the preceding sentence, neither Mortgagee’s acceptance of any payment with knowledge of a Default by Mortgagor, nor any failure by Mortgagee to exercise any remedy following a Default by Mortgagor shall be deemed a waiver of such Default, and no waiver by Mortgagee of any particular Default on the part of Mortgagor shall be deemed a waiver of any other Default or of any similar Default in the future.

9.7      No Third-Party Rights . No person shall be a third-party beneficiary of any provision of any of the Loan Documents. All provisions of the Loan Documents favoring Mortgagee are intended solely for the benefit of Mortgagee, and no third party shall be entitled to assume or expect that Mortgagee will waive or consent to modification of any such provision in Mortgagee’s sole discretion.

9.8      Preservation of Liability and Priority . Without affecting the liability of Mortgagor or of any other person (except a person expressly released in writing) for payment and performance of all of the Secured Obligations, and without affecting the rights of Mortgagee with respect to any security not expressly released in writing, and without impairing in any way the priority of this Security Instrument over the interests of any person acquired or first evidenced by recording subsequent to the recording hereof, Mortgagee may, either before or after the maturity of the Note, and without notice or consent: (a) release any person liable for payment or performance of all or any part of the Secured Obligations; (b) make any agreement altering the terms of payment or performance of all or any of the Secured Obligations; (c) exercise or refrain from exercising, or waive, any right or remedy which Mortgagee may have under any of the Loan Documents; (d) accept additional security of any kind for any of the Secured Obligations; or (e) release or otherwise deal with any real or personal property securing the Secured Obligations. Any person acquiring or recording evidence of any interest of any nature in the Property, the Chattels, or the Intangible Personalty shall be deemed, by acquiring such interest or recording any evidence thereof, to have agreed and consented to any or all such actions by Mortgagee.

9.9      Subrogation of Mortgagee . Mortgagee shall be subrogated to the lien of any previous encumbrance discharged with funds advanced by Mortgagee under the Loan Documents, regardless of whether such previous encumbrance has been released of record.

9.10      Notices . Any notice required or permitted to be given by Mortgagor or Mortgagee under this Security Instrument shall be in writing and will be deemed given (a) upon personal delivery, (b) on the first Business Day after receipted delivery to a courier service which guarantees next-business-day delivery, or (c) on the third Business Day after mailing, by registered or certified United States mail, postage prepaid, in any case to the appropriate party at its address set forth below:

If to Mortgagor:

The GC Net Lease (Warren) Investors, LLC
2121 Rosecrans Avenue, Suite 3321

El Segundo, California 90245

Attention: Mr. Joseph E. Miller

with a copy to:

Griffin Capital Corporation
790 Estate Drive, Suite 180
Deerfield, IL 60015
Attention: Mary Higgins, Esq.

If to Mortgagee:

The Variable Annuity Life Insurance Company

National Union Fire Insurance Company of Pittsburgh, PA.
c/o AIG Investments

777 S. Figueroa St., 16th Floor

Los Angeles, California 90017

Attn: Director-Mortgage Lending and Real Estate

with a copy to:

Greenberg Traurig, LLP
1200 17 ^th Street, 24 ^th Floor
Denver, Colorado 80202
Attn: Peter C. Kelley, Esq.

Either party may change such party’s address for notices or copies of notices by giving notice to the other party in accordance with this Section.

ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST MORTGAGER OR MORTGAGEE ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT MORTGAGEE'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND MORTGAGER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND MORTGAGER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. MORTGAGER DOES HEREBY DESIGNATE AND APPOINT:

C T Corporation System
111 Eighth Avenue
13th Floor
New York, NY 10011

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO MORTGAGER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON MORTGAGER, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. MORTGAGER (I) SHALL GIVE PROMPT NOTICE TO MORTGAGEE OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR OR REFUSES TO CONSENT TO SUCH DESIGNATION AS AUTHORIZED AGENT FOR MORTGAGER PURSUANT TO A WRITTEN CONSENT IN FORM AND SUBSTANCE SATISFACTORY TO MORTGAGEE.

9.11      Defeasance . Upon payment and performance in full of all of the Secured Obligations, Mortgagee will execute and deliver to Mortgagor such documents as may be required to reconvey this Security Instrument of record.

9.12      Illegality . If any provision of this Security Instrument is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Security Instrument, the legality, validity, and enforceability of the remaining provisions of this Security Instrument shall not be affected thereby, and in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Security Instrument a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable. If the rights and liens created by this Security Instrument shall be invalid or unenforceable as to any part of the Secured Obligations, then the unsecured portion of the Secured Obligations shall be completely paid prior to the payment of the remaining and secured portion of the Secured Obligations, and all payments made on the Secured Obligations shall be considered to have been paid on and applied first to the complete payment of the unsecured portion of the Secured Obligations.

9.13      Usury Savings Clause . It is expressly stipulated and agreed to be the intent of Mortgagee and Mortgagor at all times to comply with the applicable law governing the highest lawful interest rate. If the applicable law is ever judicially interpreted so as to render usurious any amount called for under the Note or under any of the other Loan Documents, or contracted for, charged, taken, reserved or received with respect to the Loan, or if acceleration of the maturity of the Note, any prepayment by Mortgagor, or any other circumstance whatsoever, results in Mortgagor having paid any interest in excess of that permitted by applicable law, then it is the express intent of Mortgagor and Mortgagee that all excess amounts theretofore collected by Mortgagee be credited on the principal balance of the Note (or, at Mortgagee’s option, paid over to Mortgagor), and the provisions of the Note and other Loan Documents immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder. The right to accelerate maturity of the Note does not include the right to accelerate any interest which has not

otherwise accrued on the date of such acceleration, and Mortgagee does not intend to collect any unearned interest in the event of acceleration. All sums paid or agreed to be paid to Mortgagee for the use, forbearance or detention of the Secured Obligations evidenced hereby or by the Note shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such Secured Obligations until payment in full so that the rate or amount of interest on account of such Secured Obligations does not exceed the maximum rate or amount of interest permitted under applicable law. The term “ applicable law ” as used herein shall mean any federal or state law applicable to the Loan.

9.14      Obligations Binding Upon Mortgagor’s Successors . This Security Instrument is binding upon Mortgagor and Mortgagor’s successors and assigns, and shall inure to the benefit of Mortgagee, and its successors and assigns, and the provisions hereof shall likewise be covenants running with the land. The duties, covenants, conditions obligations, and warranties of Mortgagor in this Security Instrument shall be joint and several obligations of Mortgagor and Mortgagor’s successor and assigns.

9.15      Construction . All pronouns and any variations of pronouns herein shall be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the identity of the parties may require. Whenever the terms herein are singular, the same shall be deemed to mean the plural, as the identity of the parties or the context requires.

9.16      Attorneys’ Fees . If Mortgagee refers this Security Instrument or any other Loan Document to any attorney for collection or seeks legal advice following the occurrence of an Event of Default by or with respect to Mortgagor that has not been waived by Mortgagee expressly in writing, or if Mortgagee is the prevailing party in any action instituted on this Security Instrument or any other Loan Document, or if any other judicial or non-judicial proceeding is instituted by Mortgagee or any other person (provided that with respect to any judicial or non-judicial action instituted by any other person, either (A) such person shall consist of Mortgagor or any affiliate thereof, or (B) such proceeding shall include Mortgagor or any affiliate thereof as a party thereto, and the facts alleged, on the basis of which any cause of action or claim shall be asserted in such proceeding, involve the action(s) or omission(s) on the part of Mortgagor or any affiliate thereof under this Security Instrument or other Loan Document), and an attorney is employed by Mortgagee to appear in any such action or proceeding, or in any action that materially affects Mortgagee’s interest in this Security Instrument or the Property, or to seek appointment of a receiver to reclaim, seek relief from a judicial or statutory stay, sequester, protect, preserve or enforce Mortgagee’s interest in this Security Instrument or any other security for the Note (including, but not limited to, proceedings under federal bankruptcy law, in eminent domain, under the probate code, on appeal (provided that for Mortgagee to recover appeal costs from Mortgagor hereunder, Mortgagee shall have to be judicially determined to be a prevailing party in such appeal), in arbitration, or in connection with any municipal, state or federal tax lien), then Mortgagor and every endorser hereof and every person who assumes the obligations secured by this Security Instrument or any of the other Loan Documents jointly and severally promise(s) to pay reasonable attorneys’ fees for services performed by Mortgagee’s attorneys, and all costs and expenses (including, without limitation, expert witness reasonable fees, costs of exhibit preparation, document reproduction, postage, telecommunication expenses and courier charges), incurred incident to such employment. If such fees are not paid within ten (10) Business Days after demand therefor by Mortgagee, all such costs and expenses shall bear interest at the Default Rate and the repayment thereof shall also be secured by every instrument securing the indebtedness evidenced hereby.

9.17      Waiver of Jury Trial . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, MORTGAGEE AND MORTGAGOR KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE, TO THE FULLEST EXTENT NOT PROHIBITED BY LAW, ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS SECURITY INSTRUMENT, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SECURITY INSTRUMENT OR ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO ANY LOAN DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR MORTGAGEE AND MORTGAGOR TO ENTER INTO THE LOAN.

9.18      Governing Laws . The substantive,     procedural and internal laws of the State of New Jersey shall govern the validity, construction, enforcement, and interpretation of this Security Instrument, without regard to the conflicts of laws principles of such State.

9.19      Inconsistency . In the event of any inconsistency between the terms of the Loan Documents and the terms of that certain Mortgage Loan Application between Mortgagor and Mortgagee, as amended, the terms of the Loan Documents shall govern and control in all respects.

9.20      Economic Sanctions, Anti-Money Laundering, Etc . Mortgagor represents, warrants and covenants to Mortgagee that:

(a)    None of the Borrower, the Guarantor nor any OFAC Controlling Persons is or shall become: (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons (an “OFAC Listed Person” ) published by the Office of Foreign Assets Control, United States Department of the Treasury ( “OFAC” ), or (ii) an agent, department, or instrumentality of, or otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC

Listed Person or (y) any Person, entity, organization, foreign country or regime that is the target of any sanctions programs administered and/or enforced by OFAC, or (iii) blocked by or a target of United States economic sanctions.

(b)    Neither the Borrower, the Guarantor nor any OFAC Controlling Person:  (i) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti-Money Laundering Laws” ) or any U.S. economic sanctions violations, or (ii) to Borrower’s actual knowledge after making due inquiry, is under investigation by any Governmental Authority for possible violation of Anti-Money Laundering Laws or any U.S. economic sanctions violations, or (iii) has been assessed civil penalties under any Anti-Money Laundering Laws or any U.S. economic sanctions, or (iv) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws.

(c)    None of the Mortgagor, Guarantor, the OFAC Controlling Persons, nor the officers and directors of any of them:  (i) are owned or controlled by the government or a national of Cuba, Iran, Sudan, Burma (Myanmar), North Korea or Syria, (ii) are located in Cuba, Iran, Sudan, Burma (Myanmar), North Korea or Syria, or (iii) does business in or with Cuba, Iran, Sudan, North Korea, Burma (Myanmar) or Syria. 

(d)    Mortgagor shall promptly deliver to Mortgagee any certification or other evidence reasonably requested from time to time by Mortgagee confirming Borrower’s compliance with this Section.  The representations, warranties and covenants set forth in this Section shall be deemed repeated and reaffirmed by Mortgagor as of each date that Mortgagor makes a payment to Mortgagee under the Note, this Security Instrument and the other Loan Documents or receives any payment from Mortgagee.  Mortgagor shall promptly notify Mortgagee in writing should Mortgagor become aware of any change in the information set forth in these representations, warranties and covenants.

For the purposes of the foregoing Section:

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise.

“ OFAC Controlling Person ” means any person or entity that controls either the Mortgagor or the Guarantor, and all holders of 25% or more of the partnership, voting stock, membership or other ownership interest of the Mortgagor or Guarantor (as applicable), and/or any of the foregoing Controlling Persons.

“ Governmental Authority ” means (a) the government of (i) the United States of America or any state or other political subdivision thereof, or (ii) any other jurisdiction in which the Borrower, Guarantor or Controlling Person (as applicable) conducts all or any part of its business, or which asserts jurisdiction over any properties of any of the foregoing, or (b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

9.21      Co-Lending.

(a)    Notwithstanding that the Loan is evidenced by the VALIC Note and the NUF Note separately, Mortgagee agrees that the Holder (as defined in the Notes) of each of the Notes shall pursue the same remedies simultaneously under the Notes and under the other Loan Documents as if the Loan were evidenced by only one promissory note.

(b)    Mortgager and Guarantor shall be entitled to rely, shall be obligated to rely, and shall be fully protected in relying upon any written resolution, notice, consent, approval, waiver, certificate, affidavit, letter, telegram, facsimile, telex, e-mail, statement or other document (each a “ Communication ”) believed by it to be genuine and correct and solely to the extent that such Communication is signed, sent or made by both VALIC and NUF in connection with the Loan. Any Communication not signed or sent by or on behalf of both VALIC and NUF shall not be valid.

ARTICLE 10
STATE-SPECIFIC PROVISIONS

10.1      Consistency . In the event of any conflict between the provisions of this Article 10 and any other provisions of this Mortgage or any other Loan Document, the provisions of this Article 10 shall control.

10.2      Maximum Principal Amount . The maximum principal amount secured by this Mortgage in the State of New Jersey upon recordation or upon any contingency that may be secured hereby at any time hereafter is $110,640,000.00, plus all advances made pursuant to any provisions of the Mortgage; provided that in no event shall any Mortgagee be obligated to advance in excess of the stated principal amount of the Note evidencing the indebtedness secured hereby.

10.3      Modification and Priority . This Mortgage is subject to “modification” as such term is defined in P.L. 1985 c.353 (N.J.S.A. 46:9-8.1 et seq.) and shall be subject to the priority provisions thereof.

10.4      Conflict of Laws . Mortgagee shall be entitled to all rights and remedies that a mortgagee would have under New Jersey law or in equity during the continuance of an Event of Default in addition to all rights and remedies it may have hereunder. Where any provision of this Mortgage is inconsistent with any provision of New Jersey law regulating the creation, perfection or enforcement of a lien or security interest in real or personal property, the provisions of such New Jersey law, as amended from time to time, shall take precedence over the provisions of this Mortgage, but shall not invalidate or render unenforceable any other provisions of this Mortgage that can be construed in a manner consistent with New Jersey law. Should applicable New Jersey law confer any rights or impose any duties inconsistent with or in addition to any of the provisions of this Mortgage, the affected provisions of this Mortgage shall be considered amended to conform to such applicable law, but all other provisions hereof shall remain in full force and effect without modification.

10.5      No Credit for Taxes Paid . Mortgagor waives any right it may have to a credit against interest due under the Loan secured by this Mortgage pursuant to N.J.S.A. 54:4-33.

10.6      True And Correct Copy . Mortgagor acknowledges that Mortgagor has received, without charge, a true and correct copy of this Mortgage.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGE TO MORTGAGE, SECURITY AGREEMENT, FIXTURE FILING, FINANCING STATEMENT AND ASSIGNMENT OF LEASES AND RENTS (NEW JERSEY)]

IN WITNESS WHEREOF, Mortgagor has executed and delivered this Security Instrument as of the date first mentioned above.

THE GC NET LEASE (WARREN) INVESTORS, LLC ,
a Delaware limited liability company

By: The GC Net Lease (Warren) Member, LLC

a Delaware limited liability company,

its Sole Member

By: Griffin Capital Essential Asset Operating Partnership, L.P.

a Delaware limited partnership,

its Sole Member

By: Griffin Capital Essential Asset REIT, Inc.

a Maryland corporation,

its General Partner

By: /s/ Joseph E. Miller            

Joseph E. Miller, Chief Executive Officer

Recording requested by:

And when recorded mail to:

Greenberg Traurig, LLP
1200 17th Street, 24th Floor
Denver, Colorado 80202
Attention: Peter C. Kelley, Esq.

---

SECOND MORTGAGE, SECURITY AGREEMENT, FIXTURE FILING, AND ASSIGNMENT OF LEASES AND RENTS SECURING GUARANTY

(NEW JERSEY)

THIS SECOND MORTGAGE, SECURITY AGREEMENT, FIXTURE FILING, AND ASSIGNMENT OF LEASES AND RENTS SECURING GUARANTY (NEW JERSEY) (this “ Security Instrument ”) is given as of January 24, 2014, by THE GC NET LEASE (WARREN) INVESTORS, LLC , a Delaware limited liability company (“ Mortgagor ”), in favor of THE VARIABLE ANNUITY LIFE INSURANCE COMPANY , a Texas corporation (“ VALIC ”), and NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA. , a Pennsylvania corporation (“ NUF ”), as co-lenders (collectively, “ Mortgagee ”).

ARTICLE 1

PARTIES, PROPERTY, AND DEFINITIONS

The following terms and references shall have the meanings indicated:

1.1      First Security Instrument : That certain Mortgage, Security Agreement, Fixture Filing, and Assignment of Leases and Rents (New Jersey) dated as of the date hereof, given by Mortgagor to Mortgagee, and recorded on or about the date hereof in the Official Records of Somerset County, New Jersey, as amended, modified, amended and restated, replaced or supplemented from time to time.

1.2      Loan : The loan from Mortgagee to Mortgagor evidenced by the Note.

1.3      Mortgagee : The Mortgagee named in the introductory paragraph of this Security Instrument, whose legal address is c/o AIG Investments, 777 South Figueroa Street, 16 ^th Floor, Los Angeles, California 90017, together with any future holder of the Note.

1.4      Mortgagor : The Mortgagor named in the introductory paragraph of this Security Instrument (Secretary of State File No. 5369912), whose legal address is 2121 Rosecrans Avenue, Suite 3321, El Segundo, California 90245.

1.5      Note : Collectively, (i) Mortgagor’s promissory note of even date herewith, payable to the order of VALIC in the principal face amount of $17,527,200 (the “ VALIC Note ”), and (ii) Mortgagor’s promissory note of even date herewith, payable to the order of NUF in the principal face amount of $8,632,800 (the “ NUF Note ”) (and in the aggregate collective amount of $26,160,000), together with all renewals, extensions and modifications of such promissory notes, as the same may be amended, modified, amended and restated, replaced or supplemented from time to time. The NUF Note and the VALIC Note are also sometimes referred collectively herein as the “ Notes .” All terms and provisions of the Notes are incorporated by this reference in this Security Instrument.

1.6      Property : All of Mortgagor’s right, title and interest (if any) in the tract or tracts of land described in Exhibit A attached hereto, together with all of Mortgagor’s right, title and interest (if any) in the “Property” as described in the First Security Instrument.

1.7      Secured Obligations : All present and future obligations of Mortgagor to Mortgagee evidenced by or contained in the Secured Guaranty, whether stated in the form of promises, covenants, representations, warranties, conditions, or prohibitions or in any other form.

All other initially capitalized terms that are used herein but that are not otherwise defined in this Security Instrument shall have the meanings given to such terms in the First Security Instrument.

ARTICLE 2
GRANTING CLAUSE

2.1      Grant to Mortgagee . As security for the Secured Obligations, Mortgagor hereby grants, bargains, sells, conveys, mortgages and warrants unto Mortgagee, the entire right, title, interest and estate of Mortgagor in and to the Property, whether now owned or hereafter acquired; TO HAVE AND TO HOLD the same, together with all and singular the rights, hereditaments, and appurtenances in anywise appertaining or belonging thereto, unto Mortgagee and Mortgagee’s successors, substitutes and assigns forever.

2.2      Security Interest to Mortgagee . As additional security for the Secured Obligations, Mortgagor hereby grants to Mortgagee a security interest in the Property, Chattels and Intangible Personalty. To the extent any of the Property, Chattels or Intangible Personalty may be or have been acquired with funds advanced by Mortgagee under the Loan Documents, this security interest is a purchase money security interest. This Security Instrument constitutes a security agreement under the Uniform Commercial Code of the State (the “ Code ”) with respect to any part of the Property, Chattels and Intangible Personalty that may or might now or hereafter be or be deemed to be personal property, fixtures or property other than real estate (all collectively hereinafter called “ Collateral ”); all of the terms, provisions, conditions and agreements contained in this Security Instrument pertain and apply to the Collateral as fully and to the same extent as to any other property comprising the Property, and the following provisions of this Section shall not limit the generality or applicability of any other provisions of this Security Instrument but shall be in addition thereto:

(a)    The Collateral shall be used by Mortgagor solely for business purposes, and all Collateral (other than the Intangible Personalty) shall be installed upon the real estate comprising part of the Property for Mortgagor’s own use or as the equipment and furnishings furnished by Mortgagor, as landlord, to tenants of the Property;

(b)    Subject to Section 5.7 below, the Collateral (other than the Intangible Personalty) shall be kept at the real estate comprising a part of the Property, and shall not be removed therefrom without the consent of Mortgagee (being the Secured Party as that term is used in the Code); and the Collateral (other than the Intangible Personalty) may be affixed to such real estate but shall not be affixed to any other real estate;

(c)    No financing statement covering any of the Collateral or any proceeds thereof is on file in any public office; and Mortgagor will, at its cost and expense, upon demand, furnish to Mortgagee such further information and will execute and deliver to Mortgagee such financing statements and other documents in form satisfactory to Mortgagee and will do all such acts and things as Mortgagee may at any time or from time to time reasonably request or as may be necessary or appropriate to establish and maintain a perfected first-priority security interest in the Collateral as security for the Secured Obligations, subject to no adverse liens or encumbrances; and Mortgagee is hereby authorized to execute and/or to file any such financing statements or other documents; and Mortgagor will pay the cost of filing the same or filing or recording such financing statements or other documents and this instrument in all public offices wherever filing or recording is deemed by Mortgagee to be necessary or desirable;

(d)    The terms and provisions contained in this Section and in Section 7.6 of this Security Instrument shall, unless the context otherwise requires, have the meanings and be construed as provided in the Code; and

(e)    This Security Instrument 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 office of the recorder of each county where any part of the Property (including said fixtures) is situated. This Security Instrument 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 mailing addresses of Mortgagor and the Mortgagee are set forth in Article 1 of this Security Instrument. A carbon, photographic or other reproduction of this Security Instrument or any financing statement relating to this Security Instrument shall be sufficient as a financing statement. The filing of this Security Instrument in the real estate records of the county where the Property is located shall constitute a fixture filing in accordance with the Code. Information concerning the security interests created hereby may be obtained at the addresses set forth in Article 1 of this Security Instrument. Mortgagor is the “ Debtor ” and Mortgagee is the “ Secured Party ” (as those terms are defined and used in the Code) insofar as this Security Instrument constitutes a financing statement.

(f)    Notwithstanding anything to the contrary contained in this Security Instrument:

(i)    This Security Instrument, and all conveyances, assignments and grants of security interests hereunder are subject and subordinate to the conveyances, assignments and grants of security interests made in the First Security Instrument;

(ii)    Mortgagee agrees that this Security Instrument shall constitute a Permitted Exception under the Security Instrument, and shall not trigger any violation of the due on encumbrance provisions of the Security Instrument;

(iii)    In the event that Mortgagor complies with any representation, warranty, agreement, undertaking, covenant or indemnity under the First Security Instrument, Mortgagor shall be deemed to have complied with the corresponding or duplicative representation, warranty, agreement, undertaking, covenant or indemnity; and

(iv)    In the event that Mortgagee gives any approval, consent or waiver with respect to any provision or matter set forth in or contemplated by the First Security Instrument, Mortgagee shall be deemed to have given such approval, consent or waiver with respect to any corresponding or duplicative provision or matter set forth in or contemplated by this Security Instrument.

ARTICLE 3
MORTGAGOR’S REPRESENTATIONS AND WARRANTIES

3.1      Warranty of Title . Mortgagor represents and warrants to Mortgagee that:

(a)    Mortgagor has good, marketable and indefeasible fee simple title to the Property, and such fee simple title is free and clear of all liens, encumbrances, security interests and other claims whatsoever, subject only to the Permitted Exceptions, and the First Security Instrument;

(b)    Mortgagor is the sole and absolute owner of the Chattels and the Intangible Personalty, free and clear of all liens, encumbrances, security interests and other claims whatsoever, subject only to the Permitted Exceptions, and the First Security Instrument;

(c)    This Security Instrument is a valid and enforceable lien and security interest on the Property, Chattels and Intangible Personalty, subject only to the Permitted Exceptions, and the First Security Instrument; and

(d)    Subject to the Permitted Exceptions, Mortgagor, for itself and its successors and assigns, hereby agrees to warrant and forever defend, all an d singular all of the Property and property interests granted and conveyed pursuant to this Security Instrument, against every person whomsoever lawfully claiming, or to claim, the same or any part thereof.

The representations, warranties and covenants contained in this Section 3.1 shall survive foreclosure of this Security Instrument, and shall inure to the benefit of and be enforceable by any person who may acquire title to the Property, the Chattels, or the Intangible Personalty pursuant to any such foreclosure.

3.2      Due Authorization . If Mortgagor is other than a natural person, then each individual who executes this document on behalf of Mortgagor represents and warrants to Mortgagee that such execution has been duly authorized by all necessary corporate, partnership, limited liability company or other action on the part of Mortgagor. Mortgagor represents that Mortgagor has obtained all consents and approvals required in connection with the execution, delivery and performance of this Security Instrument.

3.3      Other Representations and Warranties . Mortgagor represents and warrants to Mortgagee as of the date hereof, as follows:

(a)    Mortgagor is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware. Mortgagor is duly authorized to transact business in and is in good standing under the laws of the State of New Jersey. The sole Controlling Persons of Mortgagor are Guarantor, and The GC Member;

(b)    The execution, delivery and performance by Mortgagor of this Security Instrument and the Secured Guaranty are within Mortgagor’s power and authority and have been duly authorized by all necessary action;

(c)    This Security Instrument is, and the Secured Guaranty will, when delivered hereunder, be valid and binding obligations of Mortgagor enforceable against Mortgagor in accordance with their respective terms, except as limited by equitable principles and bankruptcy, insolvency and similar laws affecting creditors’ rights;

(d)    The execution, delivery and performance by Mortgagor of the Secured Guaranty and this Security Instrument will not contravene any contractual or other restriction binding on or affecting Mortgagor or any Controlling Person will not constitute a default under Mortgagor’s operating agreement or other instrument to which Mortgagor is a party or by which Mortgagor may be bound or affected and will not result in or require the creation of any lien, security interest, other charge or encumbrance (other than pursuant hereto) upon or with respect to any of its properties;

(e)    The execution, delivery and performance by Mortgagor of the Secured Guaranty and this Security Instrument does not violate or contravene any applicable law;

(f)    No authorization, approval, consent or other action by, and no notice to or filing with, any court, governmental authority or regulatory body is required for the due execution, delivery and performance by Mortgagor of any of the Secured Guaranty and this Security Instrument or the effectiveness of any assignment of any of Mortgagor’s rights and interests of any kind to Mortgagee;

(g)    No part of the Property, Chattels, or Intangible Personalty is in the hands of a receiver, no application for a receiver is pending with respect to any portion of the Property, Chattels, or Intangible Personalty, and no part of the Property, Chattels, or Intangible Personalty is subject to any foreclosure or similar proceeding;

(h)    Neither Mortgagor nor any Controlling Person has made any assignment for the benefit of creditors, nor has Mortgagor or any Controlling Person filed, or had filed against it, any petition in bankruptcy;

(i)    There is no pending or, to the best of Mortgagor’s knowledge, threatened, litigation, action, proceeding or investigation, including, without limitation, any condemnation proceeding, against Mortgagor, any Controlling Person or the Property before any court, governmental or quasi-governmental, arbitrator or other authority;

(j)    Mortgagor is a “non-foreign person” within the meaning of Sections 1445 and 7701 of the United States Internal Revenue Code of 1986, as amended, and the regulations issued thereunder;

(k)    Access to and egress from the Property are available and provided by public streets, or valid easements appurtenant thereto and Mortgagor has no knowledge of any federal, state, county, municipal or other governmental plans to change the highway or road system in the vicinity of the Property or to restrict or change access from any such highway or road to the Property;

(l)    All public utility services necessary for the operation of all improvements constituting part of the Property for their intended purposes are available at the boundaries of the land constituting part of the Property, including water supply, storm and sanitary sewer facilities, and natural gas, electric, telephone and cable television facilities;

(m)    The Property is located in a zoning district designated “OR” Office Research District by Warren Township, New Jersey. Such designation permits the development, use and operation of the Property as it is currently operated as a permitted, and not as a non-conforming use. The Property complies in all respects with all zoning ordinances, regulations, requirements, conditions and restrictions, including but not limited to deed restrictions and restrictive covenants, applicable to the Property;

(n)    There are no special or other assessments for public improvements or otherwise now affecting the Property, nor does Mortgagor know of any pending or threatened special assessments affecting the Property or any contemplated improvements affecting the Property that may result in special assessments. There are no tax abatements or exceptions affecting the Property;

(o)    Mortgagor and each Controlling Person has filed all tax returns it is required to have filed, and has paid all taxes as shown on such returns or on any assessment received pertaining to the Property;

(p)    Mortgagor has not received any written notice from any governmental body having jurisdiction over any part of the Property as to any violation of any applicable law, or any notice from any insurance company or inspection or rating bureau setting forth any requirements as a condition to the continuation of any insurance coverage on or with respect to the Property or the continuation thereof at premium rates existing at present which have not been remedied or satisfied;

(q)    Neither Mortgagor nor any Controlling Person is in default, in any manner which would adversely affect its properties, assets, operations or condition (financial or otherwise), in the performance, observance or fulfillment of any of the obligations, covenants or conditions set forth in any agreement or instrument to which it is a party or by which it or any of its properties, assets or revenues are bound;

(r)    Except as set forth in the Lease Certificate, there are no occupancy rights (written or oral), Leases or tenancies presently affecting any part of the Property. The Lease Certificate contains a true and correct description of all Leases presently affecting the Property. No written or oral agreements or understandings exist between Mortgagor and the tenants under the Leases described in the Lease Certificate that grant such tenants any rights greater than those described in the Lease Certificate or that are in any way inconsistent with the rights described in the Lease Certificate;

(s)    There are no options to purchase, purchase contracts or other similar agreements of any type (written or oral) presently affecting any part of the Property;

(t)    There exists no brokerage agreement with respect to the purchase of any part of the Property;

(u)    Except as otherwise disclosed to Mortgagee in writing prior to the date hereof, (i) there are no contracts presently affecting the Property (“ Contracts ”) having a term in excess of one hundred eighty (180) days or not terminable by Mortgagor (without penalty) on thirty (30) days’ notice; (ii) Mortgagor has heretofore delivered to Mortgagee true and correct copies of each of the Contracts together with all amendments thereto; (iii) Mortgagor is not in default of any obligations under any of the Contracts; and (iv) the Contracts represent the complete agreement between Mortgagor and such other parties as to the services to be performed or materials to be provided thereunder and the compensation to be paid for such services or materials, as applicable, and except as otherwise disclosed herein, such other parties possess no unsatisfied claims against Mortgagor. Mortgagor is not in default under any of the Contracts and no event has occurred which, with the passing of time or the giving of notice, or both, would constitute a default under any of the Contracts;

(v)    Mortgagor or its tenants have obtained all Permits necessary for the operation, use, ownership, development, occupancy and maintenance of the Property as it is currently being operated. None of the Permits has been suspended or revoked, and all of the Permits are in full force and effect and are fully paid for, and Mortgagor has made or will make application for renewals of any of the Permits prior to the expiration thereof;

(w)    All insurance policies held by Mortgagor relating to or affecting the Property are in full force and effect and shall remain in full force and effect until all Secured Obligations are satisfied. Mortgagor has not received any notice of default or notice terminating or threatening to terminate any such insurance policies. Mortgagor has made or will make application for renewals of any of such insurance policies prior to the expiration thereof;

(x)    Mortgagor currently complies with ERISA. Neither the making of the Loan nor the exercise by Mortgagee of any of its rights under the Loan Documents constitutes or will constitute a non-exempt, prohibited transaction under ERISA; and

(y)    Mortgagor’s exact legal name is correctly set out in the introductory paragraph of this Security Instrument. Mortgagor’s Secretary of State File Number is correctly set forth in the definition of “ Mortgagor ” set forth in Article 1 hereof. Mortgagor’s location (as such term is used in Section 5.8 hereof) is the State of Delaware.

3.4      Continuing Effect . Mortgagor shall be liable to Mortgagee for any damage suffered by Mortgagee if any of the foregoing representations are inaccurate as of the date hereof, regardless when such inaccuracy may be discovered by, or result in harm to, Mortgagee. Mortgagor further represents and warrants that the foregoing representations and warranties, as well as all other representations and warranties of Mortgagor to Mortgagee relative to the Loan Documents, shall survive termination of this Security Instrument.

ARTICLE 4
MORTGAGOR’S AFFIRMATIVE COVENANTS

4.1      Intentionally Deleted .

4.2      Performance of Secured Obligations . Mortgagor will promptly perform and comply with all other covenants, conditions, and prohibitions required of Mortgagor by the terms of the Secured Guaranty.

4.3      Other Encumbrances . Mortgagor will promptly perform and comply with all covenants, conditions, and prohibitions required of Mortgagor in connection with any other encumbrance affecting the Property, the Chattels, or the Intangible Personalty, or any part thereof, or any interest therein, regardless of whether such other encumbrance is superior or subordinate to the lien hereof.

4.4      Payment of Taxes.

(a)     Property Taxes . Mortgagor will (i) pay or cause to be paid, before delinquency, all taxes and assessments, general or special, which may be levied or imposed at any time against Mortgagor’s interest and estate in the Property, the Chattels, or the Intangible Personalty, and (ii) within thirty (30) days after each payment of any such tax or assessment, Mortgagor will deliver to Mortgagee, without notice or demand, an official receipt for such payment if issued by the taxing authority and if not, cancelled checks or other reasonable evidence of payment. At Mortgagee’s option, Mortgagee may retain the services of a firm to monitor the payment of all taxes and assessments relating to the Property, the cost of which shall be borne by Mortgagor.

(b)     Intentionally Deleted .

(c)     Intangible Taxes . If by reason of any statutory or constitutional amendment or judicial decision adopted or rendered after the date hereof, any tax, assessment, or similar charge is imposed against the Note or against Mortgagee, or against any interest of Mortgagee in any real or personal property encumbered hereby (but excluding any taxes in the nature of income taxes on the overall income or profits of Mortgagee to which Mortgagee may be subject), Mortgagor will pay such tax, assessment, or other charge before delinquency and will pay to Mortgagee any and all costs, expenses, or diminution of income incurred by Mortgagee in connection therewith. In the event Mortgagor is unable to do so, either for economic reasons or because the legal provisions or decisions creating such tax, assessment or charge forbid Mortgagor from doing so, then the Note will, at Mortgagee’s option, become due and payable in full upon ninety (90) days’ notice to Mortgagor, without prepayment premium or penalty.

(d)     Right to Contest . Notwithstanding any other provision of this Section 4.4, Mortgagor will not be deemed to be in default solely by reason of Mortgagor’s failure to pay any tax, assessment or similar governmental charge so long as, in Mortgagee’s judgment, each of the following conditions is satisfied:

(i)    Mortgagor and/or Verizon Tenant is engaged in and diligently pursuing in good faith administrative or judicial proceedings appropriate to contest the validity or amount of such tax, assessment, or charge; and

(ii)    The payment of such tax, assessment, or charge would necessarily and materially prejudice Mortgagor’s and/or Verizon Tenant’s prospects for success in such proceedings; and

(iii)    Nonpayment of such tax, assessment, or charge will not result in the loss or forfeiture of any property encumbered hereby or any interest of Mortgagee therein; and

(iv)    Mortgagor deposits or causes to be deposited with Mortgagee, as security for such payment which may ultimately be required, a sum equal to the amount of the disputed tax, assessment or charge plus the interest, penalties, advertising charges, and other costs which Mortgagee estimates are likely to become payable if such contest is unsuccessful.

If Mortgagee determines that any one or more of such conditions is not satisfied or is no longer satisfied, Mortgagor will pay the tax, assessment, or charge in question, together with any interest and penalties thereon, within ten (10) days after Mortgagee gives notice of such determination.

4.5      Maintenance of Insurance.

(a)     Coverages Required . Mortgagor shall maintain or cause to be maintained, with insurance companies or associations satisfying the requirements of the Insurance Agreement, all insurance required under the terms of the Insurance Agreement, and shall comply with each and every covenant and agreement contained in the Insurance Agreement, the provisions of which are hereby incorporated by this reference.

(b)     Intentionally Deleted .

(c)     Intentionally Deleted .

(d)     Application of Hazard Insurance Proceeds . Mortgagor shall promptly notify Mortgagee of any damage or casualty to all or any portion of the Property or Chattels. Mortgagee may participate in all negotiations and appear and participate in all judicial arbitration proceedings concerning any insurance proceeds which may be payable as a result of such casualty or damage, and may, in Mortgagee’s sole discretion, compromise or settle, in the name of Mortgagee, Mortgagor, or both any claim for any such insurance proceeds. Any such insurance proceeds shall be paid to Mortgagee and shall be applied first to reimburse Mortgagee for all costs and expenses, including attorneys’ fees, incurred by Mortgagee in connection with the collection of such insurance proceeds. The balance of any insurance proceeds received by Mortgagee with respect to an insured casualty may (subject to the terms of any Approved Lease or subordination, non-disturbance and attornment agreement), in Mortgagee’s sole discretion, either (i) be retained and applied by Mortgagee toward payment of the Secured Obligations, or (ii) be paid over, in whole or in part and subject to such conditions as Mortgagee may impose, to Mortgagor to pay for repairs or replacements necessitated by the casualty; provided, however, that if all of the Secured Obligations have been performed or are discharged by the application of less than all of such insurance proceeds, then any remaining proceeds will be paid over to Mortgagor. Notwithstanding the preceding sentence, if (A) no Default or Event of Default shall exist hereunder, and (B) the proceeds received by Mortgagee (together with any other funds delivered by Mortgagor to Mortgagee for such purpose) shall be sufficient, in Mortgagee’s reasonable judgment, to pay for any restoration necessitated by the casualty, and (C) the cost of such restoration shall not exceed $500,000.00, and (D) such restoration can be completed, in Mortgagee’s judgment, at least ninety (90) days prior to the maturity date of the Note, then Mortgagee shall apply such proceeds as provided in clause (ii) of the preceding sentence. Mortgagee will have no obligation to see to the proper application of any insurance proceeds paid over to Mortgagor, nor will any such proceeds received by Mortgagee bear interest or be subject to any other charge for the benefit of Mortgagor. Mortgagee may, prior to the application of insurance proceeds, commingle them with Mortgagee’s own funds and otherwise act with regard to such proceeds as Mortgagee may determine in Mortgagee’s sole discretion. Notwithstanding anything to the contrary set forth in this Security Instrument, Mortgagee agrees that for so long as the Verizon Lease is in full force and effect, the disposition of insurance proceeds for damage or casualty to all or any portion of the Property and restoration of the Property relating thereto shall be governed by the terms and conditions set forth in the Verizon Lease to the extent that such Verizon Lease conflicts with the provisions of this Security Instrument.

(e)     Successor’s Rights . Any person who acquires title to the Property or the Chattels upon foreclosure hereunder will succeed to all of Mortgagor’s rights under all policies of insurance maintained pursuant to this Section.

4.6      Maintenance and Repair of Property and Chattels . Mortgagor will at all times maintain or cause the maintenance of the Property and the Chattels in good condition and repair, will diligently prosecute or cause the prosecution of the completion of any building or other improvement which is at any time in the process of construction on the Property, and will (subject to the terms of the Leases) promptly repair, restore, replace, or rebuild, or cause the repair, restoration, replacement or rebuilding of, any part of the Property or the Chattels which may be affected by any casualty or any public or private taking or injury to the Property or the Chattels. All costs and expenses arising out of the foregoing shall be paid by Mortgagor (or Mortgagor shall cause the same to be so paid) whether or not the proceeds of any insurance or eminent domain shall be sufficient therefor. Mortgagor will comply with, or cause the compliance with (or obtain a legally enforceable variance therefrom), all statutes, ordinances, and other governmental or quasi‑governmental requirements and private covenants relating to the ownership, construction, use, or operation of the Property, including but not limited to any environmental or ecological requirements; provided, that so long as Mortgagor is not otherwise in default hereunder, Mortgagor may, upon providing Mortgagee with security reasonably satisfactory to Mortgagee, proceed diligently and in good faith to contest the validity or applicability of any such statute, ordinance, or requirement. Subject to the rights of tenants under the Leases, Mortgagee and any person authorized by Mortgagee may enter and inspect the Property at all reasonable times, and may inspect the Chattels, wherever

located, at all reasonable times. Notwithstanding anything to the contrary set forth in this Security Instrument or any other Loan Document, Mortgagee agrees that for so long as the Verizon Lease is in full force and effect, to the extent Verizon Tenant is obligated to perform certain Property-related operation and maintenance obligations that Mortgagor is obligated to perform pursuant to the Loan Documents, then Mortgagor shall perform or cause Verizon Tenant to perform such obligations; provided, however, that the forgoing is not intended to limit Mortgagor’s liability to Mortgagee for any breach of or default under the Loan Documents if such obligations are not performed.

4.7      Leases . Mortgagor shall timely pay and perform each of its obligations under or in connection with the Leases, and shall otherwise pay such sums and take such action as shall be necessary or required in order to maintain each of the Leases in full force and effect in accordance with its terms. Mortgagor shall immediately furnish to Mortgagee copies of any notices given to Mortgagor by the lessee under any Lease, alleging the default by Mortgagor in the timely payment or performance of its obligations under such Lease and any subsequent communication related thereto. Mortgagor shall also promptly furnish to Mortgagee copies of any notices given to Mortgagor by the lessee under any Lease, extending the term of any Lease, requiring or demanding the expenditure of any sum by Mortgagor (or demanding the taking of any action by Mortgagor), or relating to any other material obligation of Mortgagor under such Lease and any subsequent communication related thereto. Mortgagor agrees that during the existence of any Event of Default, Mortgagee may advance any sum or take any action which Mortgagee believes is necessary or required to maintain the Leases in full force and effect, and all such sums advanced by Mortgagee, together with all costs and expenses incurred by Mortgagee in connection with action taken by Mortgagee pursuant to this Section, shall be due and payable by Mortgagor to Mortgagee upon demand, shall bear interest until paid at the Default Rate (as defined in the Note), and shall be secured by this Security Instrument.

4.8      Eminent Domain; Private Damage . If all or any part of the Property is taken or damaged by eminent domain or any other public or private action, Mortgagor will notify Mortgagee promptly of the time and place of all meetings, hearings, trials, and other proceedings relating to such action. Mortgagee may participate in all negotiations and appear and participate in all judicial or arbitration proceedings concerning any award or payment which may be due as a result of such taking or damage, and may, in Mortgagee’s reasonable discretion, compromise or settle, in the names of both Mortgagor and Mortgagee, any claim for any such award or payment. Any such award or payment is to be paid to Mortgagee and will be applied first to reimburse Mortgagee for all costs and expenses, including attorneys’ fees, incurred by Mortgagee in connection with the ascertainment and collection of such award or payment. The balance, if any, of such award or payment may, in Mortgagee’s sole discretion, either (a) be retained by Mortgagee and applied toward the Secured Obligations, or (b) be paid over, in whole or in part and subject to such conditions as Mortgagee may impose, to Mortgagor for the purpose of restoring, repairing, or rebuilding any part of the Property affected by the taking or damage. Notwithstanding the preceding sentence, if (i) no Default or Event of Default shall have occurred and be continuing hereunder, and (ii) the proceeds received by Mortgagee (together with any other funds delivered by Mortgagor to Mortgagee for such purpose) shall be sufficient, in Mortgagee’s reasonable judgment, to pay for any restoration necessitated by the taking or damage, and (iii) the cost of such restoration shall not exceed $500,000.00, and (iv) such restoration can be completed, in Mortgagee’s judgment, at least ninety (90) days prior to the maturity date of the Note, and (v) the remaining Property shall constitute, in Mortgagee’s sole judgment, adequate security for the Secured Obligations, then Mortgagee shall apply such proceeds as provided in clause (b) of the preceding sentence. Mortgagor’s duty to pay the Note in accordance with its terms and to perform the other Secured Obligations will not be suspended by the pendency or discharged by the conclusion of any proceedings for the collection of any such award or payment, and any reduction in the Secured Obligations resulting from Mortgagee’s application of any such award or payment will take effect only when Mortgagee receives such award or payment. If this Security Instrument has been foreclosed prior to Mortgagee’s receipt of such award or payment, Mortgagee may nonetheless retain such award or payment to the extent required to reimburse Mortgagee for all costs and expenses, including attorneys’ fees, incurred in connection therewith, and to discharge any deficiency remaining with respect to the Secured Obligations. Notwithstanding anything to the contrary set forth in this Security Instrument, Mortgagee agrees that for so long as the Verizon Lease is in full force and effect, the disposition of awards or payments resulting from any condemnation or eminent domain taking of all or any portion of the Property and restoration of the Property relating thereto shall be governed by the terms and conditions set forth in the Verizon Lease to the extent that such Verizon Lease conflicts with the provisions of this Security Instrument.

4.9      Mechanics’ Liens . Mortgagor will keep (or cause others to keep) the Property free and clear of all liens and claims of liens by contractors, subcontractors, mechanics, laborers, materialmen, and other such persons, and will cause any recorded statement of any such lien to be released of record within forty-five (45) days after the recording thereof. Notwithstanding the preceding sentence, however, Mortgagor will not be deemed to be in default under this Section if and so long as Mortgagor or any tenant under a Lease (a) contests in good faith the validity or amount of any asserted lien and diligently prosecutes or defends an action appropriate to obtain a binding determination of the disputed matter, and (b) provides Mortgagee with such security as Mortgagee may require to protect Mortgagee against all loss, damage, and expense, including attorneys’ fees, which Mortgagee might incur if the asserted lien is determined to be valid.

4.10      Defense of Actions . Mortgagor will defend, at Mortgagor’s expense, any action, proceeding or claim which affects any property encumbered hereby or any interest of Mortgagee in such property or in the Secured Obligations, and will indemnify and hold Mortgagee harmless for, from, and all losses, damages, claims, liabilities, obligations, judgments, liens, demands, actions, suits, all loss, damage, cost, or expense, including attorneys’ fees, which Mortgagee may incur in connection therewith.

4.11      Expenses of Enforcement . Mortgagor will pay all costs and expenses, including attorneys’ fees, which Mortgagee may incur in connection with any effort or action (whether or not litigation or foreclosure is involved) to enforce or defend Mortgagee’s rights and remedies under the Secured Guaranty, including but not limited to all attorneys’ fees, appraisal fees, consultants’ fees, and other expenses incurred by Mortgagee in securing title to or possession of, and realizing upon, any security for the Secured Obligations. All such costs and expenses (together with interest thereon at the Default Rate from the date incurred) shall constitute part of the Secured Obligations, and may be included in the computation of the amount owed to Mortgagee for purposes of foreclosing or otherwise enforcing this Security Instrument.

4.12      Financial Reports . Mortgagor will comply with the reporting requirements set forth in the Secured Guaranty.

4.13      Priority of Leases . To the extent Mortgagor has the right, under the terms of any Lease, to make such Lease subordinate to the lien hereof, Mortgagor will, at Mortgagee’s request and Mortgagor’s expense, take such action as may be required to effect such subordination. Conversely, Mortgagor will, at Mortgagee’s request and Mortgagor’s expense, take such action as may be necessary to subordinate the lien hereof to any future Lease designated by Mortgagee.

4.14      Inventories; Assembly of Chattels . Mortgagor will, from time to time at the request of Mortgagee, supply Mortgagee with a current inventory of the Chattels and the Intangible Personalty, in such detail as Mortgagee may require. Upon the occurrence of any Event of Default hereunder, Mortgagor will at Mortgagee’s request assemble the Chattels and make them available to Mortgagee at any place designated by Mortgagee which is reasonably convenient to both parties.

4.15      Compliance with Laws, Etc . Mortgagor shall comply in all material respects or cause compliance in all material respects with (or obtain a legally enforceable variance therefrom) all applicable laws, rules, regulations and orders, such compliance to include, without limitation, maintaining all Permits and paying before the same become delinquent all taxes, assessments and governmental charges imposed upon Mortgagor or the Property.

4.16      Records and Books of Account . Mortgagor shall keep accurate and complete records and books of account, in which complete entries will be made in accordance with generally accepted accounting principles consistently applied, reflecting all financial transactions relating to the Property, including, but not limited to, records adequate to correctly reflect all items required in order to determine all Gross Receipts (as such term is used in the Cash Collateral Agreement).

4.17      Inspection Rights . At any reasonable time, and from time to time, Mortgagor shall permit Mortgagee, or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and subject to the rights of tenants under the Leases, visit the Property and to discuss with Mortgagor the affairs, finances and accounts of Mortgagor.

4.18      Change of Mortgagor’s Address or State of Organization . Mortgagor shall promptly notify Mortgagee if changes are made in Mortgagor’s address from that set forth in Section 9.10 hereof, or if Mortgagor shall either change its “location” (as such term is used in Section 5.8 hereof), its state of organization or if Mortgagor shall organize in any state other than the State of Delaware.

4.19      Further Assurances; Estoppel Certificates . Mortgagor will execute and deliver to Mortgagee upon demand, and pay the costs of preparation and recording thereof, any further documents which Mortgagee may request to confirm or perfect the liens and security interests created or intended to be created hereby, or to confirm or perfect any evidence of the Secured Obligations. Mortgagor will also, within twenty (20) days after any request by Mortgagee, deliver to Mortgagee a signed and acknowledged statement certifying to Mortgagee, or to any proposed transferee of the Secured Obligations, (a) the balance of principal, interest, and other sums then outstanding under the Note, and (b) whether Mortgagor claims to have any offsets or defenses with respect to the Secured Obligations and, if so, the nature of such offsets or defenses.

4.20      Costs of Closing . Mortgagor shall on demand pay directly or reimburse Mortgagee for any costs or expenses pertaining to the closing of the Loan, including, but not limited to, fees of counsel for Mortgagee, costs and expenses for which invoices were not available at the closing of the Loan, or costs and expenses which are incurred by Mortgagee after such closing, including, without limitation, costs or expenses incurred to obtain originals or copies of recorded or filed Loan Documents and UCC financing statements. All such costs and expenses (together with interest thereon at the Default Rate from the date incurred by Mortgagee) shall constitute a part of the Secured Obligations, and may be included in the computation of the amount owed to Mortgagee for purposes of foreclosing or otherwise enforcing this Security Instrument.

4.21      Fund for Electronic Transfer . All monthly payments of principal and interest on the Note, and impound deposits under this Security Instrument, shall be made by Mortgagor by electronic funds transfer from a bank account established and maintained by Mortgagor for such purpose. Mortgagor shall establish and maintain such an account until the Note is fully paid and shall direct the depository of such account in writing to so transmit such payments on or before the respective due dates to the account of Mortgagee as shall be designated by Mortgagee in writing.

4.22      Use . Mortgagor shall use the Property solely for office, commercial and/or incidental or ancillary uses, and for such other uses that are permitted under Leases approved by Mortgagee in writing, and for no other use or purpose.

4.23      Management . The Property shall be managed by Griffin Capital Essential Asset Property Management, LLC, a Delaware limited liability company (“ Property Manager ”) under a management agreement previously delivered to, and approved, by Mortgagee (the “ Management Agreement ”) and sub-managed by Jones Lang LaSalle Americas, Inc., a Maryland corporation (“ Sub-Manager ”) under a sub-management agreement previously delivered to and approved by Mortgagee (the “ Sub-Management Agreement ”). Mortgagor shall not permit any amendment to or modification of the Management Agreement or the Sub-Management Agreement, or management of the Property by any person or entity other than Property Manager or Sub-Manager, without the prior written consent of Mortgagee.

4.24      Intentionally Deleted .

4.25      General Indemnity . Mortgagor agrees that while Mortgagee has no liability to any person in tort or otherwise as lender and that Mortgagee is not an owner or operator of the Property, Mortgagor shall, at its sole expense, protect, defend, release, indemnify and hold harmless the Indemnified Parties (defined below) for, from, and against any Losses (defined below) imposed on, incurred by, or asserted against the Indemnified Parties, directly or indirectly, arising out of or in connection with the Property, Loan, or Loan Documents; provided, however, that the foregoing shall not apply (a) to any Losses caused by the gross negligence or willful misconduct of the Indemnified Parties or (b) provided no Event of Default then exists, to any disputes among the Indemnified Parties not caused in whole or in part by a breach of Mortgagor’s obligations under the Loan Documents. The term “ Losses ” shall mean any claims, suits, liabilities (including strict liabilities), actions, proceedings, obligations, debts, damages, losses (including, without limitation, unrealized loss of value of the Property caused in whole or in part by a breach of any of Mortgagor’s obligations under the Loan Documents, or arising by reason of any third-party claim asserted against any of the Indemnified Parties, but not due to the gross negligence or willful misconduct of such Indemnified Party), demands costs, expenses, fines, penalties, charges, fees, judgments, awards, and amounts paid in settlement of whatever kind including attorneys’ fees and all other costs of defense. The term “ Indemnified Parties ” shall mean (a) Mortgagee, (b) any prior owner or holder of the Note, (c) any existing or prior servicer of the Loan, (d) the officers, directors, shareholders, partners, members, employees and trustees of any of the foregoing, and (e) the heirs, legal representatives, successors and assigns of each of the foregoing. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO LOSSES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PARTY OR ANY STRICT LIABILITY BUT NOT THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY.

4.26      Duty to Defend, Costs and Expenses . Upon request, whether Mortgagor’s obligation to indemnify Mortgagee arises under Section 4.25 above or elsewhere in the Loan Documents, Mortgagor shall defend the Indemnified Parties (in Mortgagor’s or the Indemnified Parties’ names) by attorneys and other professionals approved by the Indemnified Parties provided, however, if and to the extent Mortgagor has no right to approve such counsel, counsel appointed by Borrower’s insurance carrier shall be deemed acceptable to Indemnified Parties.. Notwithstanding the foregoing, the Indemnified Parties may, in their sole discretion, engage their own attorneys and professionals to defend or assist them and, at their option, their attorneys shall control the resolution of any claims or proceedings. Upon demand, Mortgagor shall pay or, in the sole discretion of the Indemnified Parties, reimburse the Indemnified Parties for all Losses imposed on, incurred by, or asserted against the Indemnified Parties by reason of any items set forth in Section 4.25 above and/or the enforcement or preservation of the Indemnified Parties’ rights under the Loan Documents. Any amount payable to the Indemnified Parties under this Section shall (a) be deemed a demand obligation, (b) be part of the Secured Obligations, (c) bear interest from the date of demand at the Default Rate until paid if not paid on demand, and (d) be secured by this Security Instrument.

ARTICLE 5
MORTGAGOR’S NEGATIVE COVENANTS

5.1      Waste and Alterations . Mortgagor will not commit or permit any (a) physical waste with respect to the Property or the Chattels, and (b) Mortgagor shall not cause or permit any part of the Property, including but not limited to any building, structure, parking lot, driveway, landscape scheme, timber, or other ground improvement, to be removed, demolished, or materially altered without the prior written consent of Mortgagee, subject in each instance to the terms of the Leases.

5.2      Zoning and Private Covenants . Mortgagor will not initiate, join in, or consent to any change in any zoning ordinance or classification, any change in the “zone lot” or “zone lots” (or similar zoning unit or units) presently comprising the Property, any transfer of development rights, any change in any private restrictive covenant, or any change in any other public or private restriction limiting or defining the uses which may be made of the Property or any part thereof, without the prior written consent of Mortgagee. If under applicable zoning provisions the use of all or any part of the Property is or becomes a nonconforming use, Mortgagor will not cause such use to be discontinued or abandoned without the prior written consent of Mortgagee, and Mortgagor will use commercially reasonable efforts to prevent the tenant under any Lease from discontinuing or abandoning such use.

5.3      Interfer ence with Leases .

(a)     Mortgagor will neither do, nor neglect to do, anything which may cause or permit the termination of any Lease of all or any part of the Property, or cause or permit the withholding or abatement of any rent payable under any such Lease.

(b)    Without Mortgagee’s prior written consent, which may be granted or withheld in Mortgagee’s sole discretion, Mortgagor shall not enter into or modify (including without limitation modifications relating to the financial covenants or any financial reporting requirements) any Lease of all or any part of the Property. Any lease, lease modification, lease amendment or lease termination (“ Lease Transaction ”) for which Mortgagee’s consent is required under the Loan Documents shall be deemed approved by Mortgagee if (i) prior to finalizing negotiations for such Lease Transaction, Mortgagor has submitted to Mortgagee an approval request package (“ Approval Package ”) with respect to such Lease Transaction containing a letter requesting Mortgagee’s approval (and containin g a signature line on which Mortgagee may evidence its approval of such Lease Transaction) and notifying Mortgagee, in bold enlarged type, that Mortgagee’s approval will be deemed given if it fails to respond within ten (10) Business Days after its receipt of such Approval Package, and Mortgagee thereafter fails to respond within ten (10) Business Days after its receipt of such Approval Package; provided , however , that Mortgagor shall supply Mortgagee with any other information reasonably requested by Mortgagee with respect to such proposed Lease Transaction within five (5) Business Days after Mortgagee’s receipt of the Approval Package, in which event Mortgagee’s approval shall be deemed given if Mortgagee has not disapproved or approved the Approval Package within ten (10) Business Days after the last to arrive of the proposed Approval Package and any additional information so requested by Mortgagee. Each Approval Package shall contain a description of all of the principal terms of the proposed Lease Transaction, a description of the tenant and its controlling constituents and (with respect to new leases or modifications/amendments) Mortgagor’s reasonably detailed analysis of the tenant’s creditworthiness (with respect to new leases or modifications/amendments), and a copy of any and all term sheets or letters of intent executed in connection with such Lease Transaction, together with the proposed forms of definitive documentation. Mortgagor shall deliver to Mortgagee copies of all Leases or modifications promptly upon execution and delivery thereof.

(c)    Except with the prior written consent of Mortgagee, which may be granted or withheld in Mortgagee’s sole discretion, Mortgagor will not (i) collect rent from all or any part of the Property for more than one month in advance, (ii) assign the rents from the Property or any part thereof, or (iii) consent to the cancellation or surrender of all or any part of any Lease, except that Mortgagor may in good faith terminate any Lease for nonpayment of rent or other material breach by the tenant.

(d)    Without limiting the generality of the foregoing, whether or not Mortgagee’s consent to the cancellation or surrender of any Lease is required hereunder, (i) Mortgagor shall notify Mortgagee in writing of any cancellation penalties or other consideration as and when received by Mortgagor in connection with such cancellation or surrender (the “ Termination Fees ”), which written notice must be delivered to Mortgagee within five (5) days of the payment by the applicable tenant of any such Termination Fees to Mortgagor, and (ii) at Mortgagee’s sole option, Mortgagee shall be entitled to (A) require that Mortgagor enter into the TI/LC Reserve (as defined in the Vacancy Risk Agreement) with Mortgagee and deposit such Termination Fees into the TI/LC Reserve, and (B) impose such restrictions and conditions on the timing and amount of disbursements of the Termination Fees from such reserve as Mortgagee may require in its reasonable discretion, including, without limitation, the conditions described in Section 6 of the TI/LC Reserve Agreement.

(e)    Subject to Mortgagee’s approval of each Lease, in any circumstance where, pursuant to the terms of the Lease, Mortgagor’s consent to any action under such Lease shall not be unreasonably withheld or delayed, and such action requires the consent of Mortgagee, Mortgagee’s consent to such action shall likewise not be unreasonably withheld or delayed. In addition, Mortgagee’s consent to such action shall be subject to the deemed approval provisions described in Section 5.3(b) above.

5.4      Transfer or Further Encumbrance of Property . Except as permitted in Section 5.4 of the First Security Instrument (which provisions of Section 5.4 of the First Security Instrument are incorporated herein by reference as if set forth herein in full, and shall survive any foreclosure, reconveyance or release of the First Security Instrument as continuing provisions of this Security Instrument), without Mortgagee’s prior written consent, which consent may be granted or withheld in Mortgagee’s sole and absolute discretion, Mortgagor shall not (i) sell, assign, convey, transfer or otherwise dispose of any direct or indirect legal, beneficial or equitable interest in all or any part of the Property, (ii) permit or suffer any owner, directly or indirectly, of any beneficial interest in the Property or Mortgagor to transfer such interest, whether by transfer of partnership, membership, stock or other beneficial interest in any entity or otherwise, or (iii) mortgage, pledge, hypothecate or otherwise encumber or permit to be encumbered or grant or permit to be granted a security interest in all or any part of, or a direct or indirect interest in, the Property or Mortgagor or any beneficial or equitable interest in either the Property or Mortgagor. The provisions of this Section shall not prohibit transfers of title or interest under any will or testament or applicable law of descent. Consent to one such transfer or encumbrance by Mortgagee shall not be deemed a waiver to require such consent to further or future transfers or encumbrances, provided that Mortgagee’s consent to any such transfer or encumbrance under the First Security Instrument shall be deemed its consent to the same under this Security Instrument.

5.5      Further Encumbrance of Chattels . Mortgagor will neither create nor permit any lien, security interest or encumbrance against the Chattels or Intangible Personalty or any part thereof or interest therein, other than the liens and security interests created by the First Security Instrument and the Loan Documents, without the prior written consent of Mortgagee, which may be withheld for any reason.

5.6      Assessments Against Property . Mortgagor will not, without the prior written approval of Mortgagee, which may be withheld for any reason, here after consent to or allow the creation of any so called special districts, special improvement districts, benefit assessment districts or similar districts, or any other body or entity of any type, or allow to occur any other event, that would or might result in the imposition of any additional taxes, assessments or other monetary obligations or burdens on the Property (other than increases in ad valorem real estate taxes from time to time imposed by applicable taxing authorities), and this provision shall serve as RECORD

NOTICE to any such district or districts or any governmental entity under whose authority such district or districts exist or are being formed that, should Mortgagor or any other person or entity include all or any portion of the Property in such district or districts, whether formed or in the process of formation, without first obtaining Mortgagee’s express written consent, the rights of Mortgagee in the Property pursuant to this Security Instrument or following any foreclosure of this Security Instrument, and the rights of any person or entity to whom Mortgagee might transfer the Property following a foreclosure of this Security Instrument, shall be senior and superior to any taxes, charges, fees, assessments or other impositions of any kind or nature whatsoever, or liens (whether statutory, contractual or otherwise) levied or imposed, or to be levied or imposed, upon the Property or any portion thereof as a result of inclusion of the Property in such district or districts.

5.7      Transfer or Removal of Chattels . Mortgagor will not sell, transfer or remove from the Property all or any part of the Chattels, unless the items sold, transferred, or removed, are obsolete or are simultaneously replaced with similar items of equal or greater value.

5.8      Change of Name, Organizational I.D. No. or Location . Mortgagor will not change its name or the name under which it does business (or adopt or begin doing business under any other name or assumed or trade name), change its organizational identification number, or change its location, without first notifying Mortgagee of its intention to do so and delivering to Mortgagee such organizational documents of Mortgagor and executed modifications or supplements to this Security Instrument (and to any financing statement which may be filed in connection herewith) as Mortgagee may require. For purposes of the foregoing, Mortgagor’s “ location ” shall mean (a) if Mortgagor is a registered organization, Mortgagor’s state of registration, (b) if Mortgagor is an individual, the state of Mortgagor’s principal residence, or (c) if Mortgagor is neither a registered organization nor an individual, the state in which Mortgagor’s place of business (or, if Mortgagor has more than one place of business, the Mortgagor’s chief executive office) is located.

5.9      Improper Use of Property or Chattels . Mortgagor will not use the Property or the Chattels for any purpose or in any manner which violates any applicable law, ordinance, or other governmental requirement, the requirements or conditions of any insurance policy, or any private covenant.

5.10      ERISA . Mortgagor shall not engage in any transaction which would cause the Note (or the exercise by Mortgagee of any of its rights under the Loan Documents) to be a non-exempt, prohibited transaction under ERISA (including for this purpose the parallel provisions of Section 4975 of the Internal Revenue Code of 1986, as amended), or otherwise result in Mortgagee being deemed in violation of any applicable provisions of ERISA. Mortgagor shall indemnify, protect, defend, and hold Mortgagee harmless for, from and against any and all losses, liabilities, damages, claims, demands, judgments, costs, and expenses (including, without limitation attorneys’ fees and costs incurred in the investigation, defense, and settlement of claims and in obtaining any individual ERISA exemption or state administrative exception that may be required, in Mortgagee’s sole and absolute discretion) that Mortgagee may incur, directly or indirectly, as the result of the breach by Mortgagor of any warranty or representation set forth in Section 3.3(x) hereof or the breach by Mortgagor of any covenant contained in this Section. This indemnity shall survive any termination, satisfaction or foreclosure of this Security Instrument.

5.11      Intentionally Deleted .

5.12      REA and Other Major Approvals . Without Mortgagee’s prior written consent, which may be granted or withheld in Mortgagee’s reasonable discretion, Mortgagor shall not enter into or modify any reciprocal easement agreement, declaration, covenant, condition or restriction, ground lease, operating agreement, or any document recorded against the Property.

5.13      Intentionally Deleted .

ARTICLE 6

EVENTS OF DEFAULT

Each of the following events will constitute an event of default (an “ Event of Default ”) under this Security Instrument and under each of the other Loan Documents:

6.1      Failure to Make Payment . Mortgagor’s failure to make any payment when due under the terms of the Secured Guaranty or this Security Instrument.

6.2      Due on Sale or Encumbrance . The occurrence of any violation of any covenant contained in Section 5.4, 5.5 or 5.7 hereof.

6.3      Other Obligations . The failure of Mortgagor to properly perform any obligation contained herein or in the Secured Guaranty (other than the obligation to make payments under the Secured Guaranty or this Security Instrument) and the continuance of such failure for a period of thirty (30) days following written notice thereof from Mortgagee to Mortgagor; provided, however, that if such failure is not curable within such thirty (30) day period, then, so long as Mortgagor commences to cure such failure within such thirty (30) day period and is continually and diligently attempting to cure to completion, such failure shall not be an Event of Default unless such failure remains uncured for one hundred twenty (120) days after such written notice to Mortgagor.

6.4      Levy Against Property . The levy against any of the Property, Chattels or Intangible Personalty, of any execution, attachment, sequestration or other writ.

6.5      Liquidation . The liquidation, termination or dissolution of Mortgagor or any Controlling Person, at any time that Mortgager is the borrower under the Loan.

6.6      Appointment of Receiver . The appointment of a trustee or receiver for the assets, or any part thereof, of Mortgagor, or any Controlling Person, or the appointment of a trustee or receiver for any real or personal property, or the like, or any part thereof, representing the security for the Secured Obligations.

6.7      Assignments . The making by Mortgagor or any Controlling Person of a transfer in fraud of creditors or an assignment for the benefit of creditors.

6.8      Order for Relief . The entry in bankruptcy of an order for relief for or against Mortgagor or any Controlling Person.

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

6.10      Misrepresentation . If any representation or warranty made by Mortgagor or any Controlling Person, or in any of the other Loan Documents or any other instrument or document modifying, renewing, extending, evidencing, securing or pertaining to the Note is false or intentionally misleading in any material respect.

6.11      Judgments . The failure of (a) Mortgagor or GC Member to pay any money judgment in excess of $10,000.00, or (b) any Controlling Person to pay any money judgment in excess of $200,000.00 in either case against any such party before the expiration of thirty (30) days after such judgment becomes final and no longer appealable.

6.12      Admissions Regarding Debts . The admission of Mortgagor or any Controlling Person in writing, other than to Mortgagor, of any such party’s inability to pay such party’s debts as they become due.

6.13      Assertion of Priority . The assertion of any claim of priority over this Security Instrument, by title, lien, or otherwise, unless Mortgagor within forty-five (45) days after such assertion either causes the assertion to be withdrawn or provides Mortgagee with such security as Mortgagee may require to protect Mortgagee against all loss, damage, or expense, including attorneys’ fees, which Mortgagee may incur in the event such assertion is upheld.

6.14      Intentionally Deleted .

6.15      Other Liens . The occurrence of any default by Mortgagor, after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any other consensual lien encumbering the Property, or any part thereof or interest therein, or any document or instrument evidencing obligations secured thereby.

6.16      Other Indebtedness . The occurrence of any default by Mortgagor, after the lapse of any applicable grace or cure period, or the occurrence of any event or circumstance defined as an Event of Default, under any other indebtedness incurred or owing by Mortgagor, or any document or instrument evidencing any obligation to pay such indebtedness.

6.17      Intentionally Deleted .

6.18      Other Loan Documents . Any “Event of Default” (as defined in the Other Loan Documents) under any of the Other Loan Documents shall constitute an Event of Default hereunder and under the other Loan Documents. Any “Event of Default” (as defined in the Other Loan Guaranty Documents) under any of the Other Loan Guaranty Documents shall constitute an Event of Default hereunder and under the Loan Documents. Notwithstanding anything to the contrary contained herein, any “Event of Default” as defined in the First Security Instrument or any of the Loan Documents shall constitute an immediate Event of Default hereunder. Mortgagor and Mortgagee hereby acknowledge and agree that (i) the owners of Mortgagor own a direct or indirect interest in the Other Borrowers; (ii) that the foregoing provisions have been made in consideration of, among other things, Mortgagee’s agreement to modify the Loan to Mortgagor under such terms and conditions as agreed by the parties; and (iii) that this Section 6.18 has been agreed to for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

ARTICLE 7
MORTGAGEE’S REMEDIES

Immediately upon or any time after the occurrence of any Event of Default hereunder, Mortgagee may exercise any remedy available at law or in equity, including but not limited to those listed below and those listed in the other Loan Documents, in such sequence or combination as Mortgagee may determine in Mortgagee’s sole discretion:

7.1      Performance of Defaulted Obligations . Mortgagee may make any payment or perform any other obligation under the Loan Documents or under Leases which Mortgagor has failed to make or perform, and Mortgagor hereby irrevocably appoints Mortgagee as the true and lawful attorney-in-fact for Mortgagor to make any such payment and perform any such obligation in the name of Mortgagor. All payments made and expenses (including attorneys’ fees and expenses) incurred by Mortgagee in this connection, together with interest thereon at the Default Rate from the date paid or incurred until repaid, will be part of the Secured Obligations and will be immediately due and payable by Mortgagor to Mortgagee. In lieu of advancing Mortgagee’s own funds for such purposes, Mortgagee may use any funds of Mortgagor which may be in Mortgagee’s possession, including but not limited to insurance or condemnation proceeds and amounts deposited for taxes, insurance premiums, or other purposes.

7.2      Specific Performance and Injunctive Relief . Notwithstanding the availability of legal remedies, Mortgagee will be entitled to obtain specific performance, mandatory or prohibitory injunctive relief, or other equitable relief requiring Mortgagor to cure or refrain from repeating any Default.

7.3      Acceleration of Secured Obligations . Mortgagee may, without notice or demand, declare all of the Secured Obligations immediately due and payable in full.

7.4      Suit for Monetary Relief . With or without accelerating the maturity of the Secured Obligations, Mortgagee may sue from time to time for any payment due under the Secured Guaranty, or for money damages resulting from Mortgagor’s default under the Secured Guaranty or this Security Instrument.

7.5      Possession of Property . To the extent permitted by law, Mortgagee may enter and take possession of the Property without seeking or obtaining the appointment of a receiver, may employ a managing agent for the Property, and may lease or rent all or any part of the Property, either in Mortgagee’s name or in the name of Mortgagor, and may collect the rents, issues, and profits of the Property. Any revenues collected by Mortgagee under this Section will be applied first toward payment of all expenses (including attorneys’ fees) incurred by Mortgagee, together with interest thereon at the Default Rate from the date incurred until repaid, and the balance, if any, will be applied against the Secured Obligations in such order and manner as Mortgagee may elect in its sole discretion.

7.6      Enforcement of Security Interests . Mortgagee may exercise all rights of a secured party under the Code with respect to the Chattels and the Intangible Personalty, including but not limited to taking possession of, holding, and selling the Chattels and enforcing or otherwise realizing upon any accounts and general intangibles. Any requirement for reasonable notice of the time and place of any public sale, or of the time after which any private sale or other disposition is to be made, will be satisfied by Mortgagee’s giving of such notice to Mortgagor at least five days prior to the time of any public sale or the time after which any private sale or other intended disposition is to be made.

7.7      Foreclosure Against Property .

(a)    Mortgagee may, with or without entry, institute proceedings, judicial or otherwise, for the complete foreclosure of this Security Instrument under any applicable provision of applicable law, in which case the Property or any interest therein may be sold for cash or upon credit in one or more parcels or in several interests or portions and in any order or manner, any partial foreclosure to be subject to the continuing lien and security interest of this Security Instrument for the balance of the Secured Obligations not then due, unimpaired and without loss of priority.

(b)    Mortgagee may sell for cash or upon credit the Property or any part thereof and all estate, claim, demand, right, title and interest of Mortgagor therein and rights of redemption thereof, pursuant to power of sale, judicial decree or otherwise, at one or more sales, as an entity or in parcels, at such time and place, upon such terms and after such notice thereof as may be required or permitted by law. Under the power of sale hereby granted, Mortgagee shall have the discretionary right to cause some or all of the Property, including any Collateral, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law.

(c)    All fees, costs and expenses of any kind incurred by Mortgagee in connection with foreclosure of this Security Instrument, including, without limitation, the costs of any appraisals of the Property obtained by Mortgagee, the cost of any title reports or abstracts, all costs of any receivership for the Property advanced by Mortgagee, and all attorneys’ and consultants’ fees and expenses incurred by Mortgagee, shall constitute a part of the Secured Obligations and may be included as part of the amount owing from Mortgagor to Mortgagee at any foreclosure sale.

(d)    The proceeds of any sale under this Section shall be applied first to the fees and expenses of the officer conducting the sale, and then to the reduction or discharge of the Secured Obligations in such order and manner as Mortgagee

may elect in its sole discretion; any surplus remaining shall be paid over to Mortgagor or to such other person or persons as may be lawfully entitled to such surplus.

(e)    A sale of less than the whole of the Property or any defective or irregular sale made hereunder shall not exhaust the power of sale provided for herein; and subsequent sales may be made hereunder until all obligations secured hereby have been satisfied, or the entire Property sold, without defect or irregularity.

7.8      Appointment of Receiver . To the extent permitted by law, Mortgagee shall be entitled, as a matter of absolute right and without regard to the value of any security for the Secured Obligations or the solvency of any person liable therefor, to the appointment of a receiver for the Property upon ex-parte application to any court of competent jurisdiction. Mortgagor waives any right to any hearing or notice of hearing prior to the appointment of a receiver. Such receiver and its agents shall be empowered, but shall not be obligated to (a) take possession of the Property and any businesses conducted by Mortgagor or any other person thereon and any business assets used in connection therewith, (b) exclude Mortgagor and Mortgagor’s agents, servants, and employees from the Property, (c) collect the rents, issues, profits, and income therefrom, (d) complete any construction which may be in progress, (e) do such maintenance and make such repairs and alterations as the receiver deems necessary, (f) use all stores of materials, supplies, and maintenance equipment on the Property and replace such items at the expense of the receivership estate, (g) pay all taxes and assessments against the Property and the Chattels, all premiums for insurance thereon, all utility and other operating expenses, and all sums due under any prior or subsequent encumbrance, and (h) generally do anything which Mortgagor could legally do if Mortgagor were in possession of the Property. All expenses incurred by the receiver or its agents shall constitute a part of the Secured Obligations. Any revenues collected by the receiver shall be applied first to the expenses of the receivership, including attorneys’ fees incurred by the receiver and by Mortgagee, together with interest thereon at the Default Rate from the date incurred until repaid, and the balance shall be applied toward the Secured Obligations in such order or manner as Mortgagee may in its sole discretion elect or in such other manner as the court may direct. Unless sooner terminated with the express consent of Mortgagee, any such receivership will continue until the Secured Obligations have been discharged in full, or until title to the Property has passed after foreclosure sale and all applicable periods of redemption have expired.

7.9      Right to Make Repairs, Improvements . Should any part of the Property come into the possession of Mortgagee, whether before or after an Event of Default, Mortgagee may, but shall not be obligated to, use, operate, and/or make repairs, alterations, additions and improvements to the Property for the purpose of preserving it or its value. Mortgagor covenants to promptly reimburse and pay to Mortgagee, at the place where the Note is payable, or at such other place as may be designated by Mortgagee in writing, the amount of all reasonable expenses (including the cost of any insurance, taxes, or other charges) incurred by Mortgagee in connection with its custody, preservation, use or operation of the Property, together with interest thereon from the date incurred by Mortgagee at the Default Rate, and all such expenses, costs, taxes, interest, and other charges shall be a part of the Secured Obligations. It is agreed, however, that the risk of accidental loss or damage to the Property is undertaken by Mortgagor and Mortgagee shall have no liability whatsoever for decline in value of the Property, for failure to obtain or maintain insurance, or for failure to determine whether any insurance ever in force is adequate as to amount or as to the risks insured.

7.10      Intentionally Deleted .

7.11      Prima Facie Evidence . Mortgagor agrees that, in any assignments, deeds, bills of sale, notices of sale, or postings, given by Mortgagee, any and all statements of fact or other recitals therein made as to the identity of Mortgagee, or as to the occurrence or existence of any Event of Default, or as to the acceleration of the maturity of the Secured Obligations, or as to the request to sell, posting of notice of sale, notice of sale, time, place, terms and manner of sale and receipt, distribution and application of the money realized therefrom, and without being limited by the foregoing, as to any other act or thing having been duly done by Mortgagee, shall be taken by all courts of law and equity as prima facie evidence that such statements or recitals state facts and are without further question to be so accepted, and Mortgagor does hereby ratify and confirm any and all acts that Mortgagee may lawfully do by virtue hereof.

ARTICLE 8
ASSIGNMENT OF LEASES AND RENTS

8.1      Assignment of Leases and Rents . Mortgagor hereby unconditionally and absolutely and presently grants, transfers and assigns unto Mortgagee all rents, royalties, issues, profits and income (“Rents”) now or hereafter due or payable for the occupancy or use of the Property, and all Leases, whether written or oral, with all security therefor, including all guaranties thereof, now or hereafter affecting the Property; on the condition that Mortgagee hereby grants to Mortgagor, however, a license to collect and retain such Rents prior to the occurrence of any Event of Default hereunder. Such license shall be revocable by Mortgagee without notice to Mortgagor at any time after the occurrence of an Event of Default. Mortgagor represents that the Rents and the Leases have not been heretofore sold, assigned, transferred or set over by any instrument now in force and will not at any time during the life of this assignment be sold, assigned, transferred or set over by Mortgagor or by any person or persons whomsoever; and Mortgagor has good right to sell, assign, transfer and set over the same and to grant to and confer upon Mortgagee the rights, interest, powers and authorities herein granted and conferred. Failure of Mortgagee at any time or from time to time to enforce the assignment of Rents and Leases under this Section shall not in any manner prevent its subsequent enforcement, and Mortgagee is not obligated to collect anything hereunder, but is accountable only for sums actually collected.

8.2      Further Assignments . Mortgagor shall give Mortgagee at any time upon demand any further or additional forms of assignment of transfer of such Rents, Leases and security as may be reasonably requested by Mortgagee, and shall deliver to Mortgagee executed copies of all such Leases and security.

8.3      Application of Rents . Mortgagee shall be entitled to deduct and retain a just and reasonable compensation from monies received hereunder for its services or that of its agents in collecting such monies. Any monies received by Mortgagee hereunder may be applied when received from time to time in payment of any taxes, assessments or other liens affecting the Property regardless of the delinquency, such application to be in such order as Mortgagee may determine. The acceptance of this Security Instrument by Mortgagee or the exercise of any rights by it hereunder shall not be, or be construed to be, an affirmation by it of any Lease nor an assumption of any liability under any Lease.

8.4      Collection of Rents . Upon or at any time after an Event of Default shall have occurred and be continuing, Mortgagee may declare all sums secured hereby immediately due and payable, and may, at its option, without notice, and whether or not the Secured Obligations shall have been declared due and payable, either in person or by agent, with or without bringing any action or proceeding, or by a receiver to be appointed by a court, (i) enter upon, take possession of, manage and operate the Property, or any part thereof (including without limitation making necessary repairs, alterations and improvements to the Property); (ii) make, cancel, enforce or modify Leases; (iii) obtain and evict tenants; (iv) fix or modify Rents; (v) do any acts which Mortgagee deems reasonably proper to protect the security thereof; and (vi) either with or without taking possession of the Property, in its own name sue for or otherwise collect and receive such Rents, including those past due and unpaid. In connection with the foregoing, Mortgagee shall be entitled and empowered to employ attorneys, and management, rental and other agents in and about the Property and to effect the matters which Mortgagee is empowered to do, and in the event Mortgagee shall itself effect such matters, Mortgagee shall be entitled to charge and receive reasonable management, rental and other fees therefor as may be customary in the area in which the Property is located; and the reasonable fees, charges, costs and expenses of Mortgagee or such persons shall be additional Secured Obligations. Mortgagee may apply all funds collected as aforesaid, less costs and expenses of operation and collection, including reasonable attorneys’ and agents’ fees, charges, costs and expenses, as aforesaid, upon any Secured Obligations, and in such order as Mortgagee may determine. The entering upon and taking possession of the Property, the collection of such Rents and the application thereof as aforesaid shall not cure or waive any default or waive, modify or affect notice of default under the Note or this Security Instrument or invalidate any act done pursuant to such notice.

8.5      Authority of Mortgagee . Any tenants or occupants of any part of the Property are hereby authorized to recognize the claims of Mortgagee hereunder without investigating the reason for any action taken by Mortgagee, or the validity or the amount of indebtedness owing to Mortgagee, or the existence of any default in the Note or this Security Instrument, or under or by reason of this assignment of Rents and Leases, or the application to be made by Mortgagee of any amounts to be paid to Mortgagee. The sole signature of Mortgagee shall be sufficient for the exercise of any rights under this assignment and the sole receipt of Mortgagee for any sums received shall be a full discharge and release therefor to any such tenant or occupant of the Property. Checks for all or any part of the rentals collected under this assignment of Rents and Leases shall be drawn to the exclusive order of Mortgagee.

8.6      Indemnification of Mortgagee . Nothing herein contained shall be deemed to obligate Mortgagee to perform or discharge any obligation, duty or liability of any lessor under any Lease of the Property, and Mortgagor shall and does hereby indemnify and hold Mortgagee harmless from any and all liability, loss or damage which Mortgagee may or might incur under any Lease of the Property or by reason of this assignment; and any and all such liability, loss or damage incurred by Mortgagee, together with the costs and expenses, including reasonable attorneys’ fees, incurred by Mortgagee in defense of any claims or demands therefor (whether successful or not), shall be additional Secured Obligations, and Mortgagor shall reimburse Mortgagee therefor on demand.

ARTICLE 9
MISCELLANEOUS PROVISIONS

9.1      Time of the Essence . Time is of the essence with respect to all of Mortgagor’s obligations under the Secured Guaranty and this Security Instrument.

9.2      Joint and Several Obligations . If Mortgagor is more than one person or entity, then (a) all persons or entities comprising Mortgagor are jointly and severally liable for all of the Secured Obligations; (b) all representations, warranties, and covenants made by Mortgagor shall be deemed representations, warranties, and covenants of each of the persons or entities comprising Mortgagor; (c) any breach, Default or Event of Default by any persons or entities comprising Mortgagor hereunder shall be deemed to be a breach, Default or Event of Default of Mortgagor; (d) any reference herein contained to the knowledge or awareness of Mortgagor shall mean the knowledge or awareness of any of the persons or entities comprising Mortgagor; and (e) any event creating personal liability of any of the persons or entities comprising Mortgagor shall create personal liability for all such persons or entities.

9.3      Waiver of Homestead and Other Exemptions . To the extent permitted by law, Mortgagor hereby waives all rights to any homestead or other exemption to which Mortgagor would otherwise be entitled under any present or future constitutional, statutory, or other provision of applicable state or federal law. Mortgagor hereby waives any right it may have to require Mortgagee to marshal all or any portion of the security for the Secured Obligations.

9.4      Non-Recourse; Exceptions to Non-Recourse . The recourse of Mortgagee with respect to the Secured Obligations and Mortgagor’s obligations under this Security Instrument shall be solely to the Property, Chattels and Intangible Personalty.

9.5      Rights and Remedies Cumulative . Mortgagee’s rights and remedies under each of the Secured Guaranty and this Security Instrument are cumulative of the right and remedies available to Mortgagee under each of the other such documents and those otherwise available to Mortgagee at law or in equity. No act of Mortgagee shall be construed as an election to proceed under any particular provision of any such document to the exclusion of any other provision in the same or any other such document, or as an election of remedies to the exclusion of any other remedy which may then or thereafter be available to Mortgagee.

9.6      No Implied Waivers . Mortgagee shall not be deemed to have waived any provision of any document unless such waiver is in writing and is signed by Mortgagee. Without limiting the generality of the preceding sentence, neither Mortgagee’s acceptance of any payment with knowledge of a Default by Mortgagor, nor any failure by Mortgagee to exercise any remedy following a Default by Mortgagor shall be deemed a waiver of such Default, and no waiver by Mortgagee of any particular Default on the part of Mortgagor shall be deemed a waiver of any other Default or of any similar Default in the future.

9.7      No Third-Party Rights . No person shall be a third-party beneficiary of any provision of the Secured Guaranty or this Security Instrument. All provisions of the Secured Guaranty or this Security Instrument favoring Mortgagee are intended solely for the benefit of Mortgagee, and no third party shall be entitled to assume or expect that Mortgagee will waive or consent to modification of any such provision in Mortgagee’s sole discretion.

9.8      Preservation of Liability and Priority . Without affecting the liability of Mortgagor or of any other person (except a person expressly released in writing) for payment and performance of all of the Secured Obligations, and without affecting the rights of Mortgagee with respect to any security not expressly released in writing, and without impairing in any way the priority of this Security Instrument over the interests of any person acquired or first evidenced by recording subsequent to the recording hereof, Mortgagee may, either before or after the maturity of the Note, and without notice or consent: (a) release any person liable for payment or performance of all or any part of the Secured Obligations; (b) make any agreement altering the terms of payment or performance of all or any of the Secured Obligations; (c) exercise or refrain from exercising, or waive, any right or remedy which Mortgagee may have under the Secured Guaranty or this Security Instrument; (d) accept additional security of any kind for any of the Secured Obligations; or (e) release or otherwise deal with any real or personal property securing the Secured Obligations. Any person acquiring or recording evidence of any interest of any nature in the Property, the Chattels, or the Intangible Personalty shall be deemed, by acquiring such interest or recording any evidence thereof, to have agreed and consented to any or all such actions by Mortgagee.

9.9      Intentionally Deleted .

9.10      Notices . Any notice required or permitted to be given by Mortgagor or Mortgagee under this Security Instrument shall be in writing and will be deemed given (a) upon personal delivery, (b) on the first Business Day after receipted delivery to a courier service which guarantees next-business-day delivery, or (c) on the third Business Day after mailing, by registered or certified United States mail, postage prepaid, in any case to the appropriate party at its address set forth below:

If to Mortgagor:

The GC Net Lease (Warren) Investors, LLC
2121 Rosecrans Avenue, Suite 3321

El Segundo, California 90245

Attention: Mr. Joseph E. Miller

with a copy to:

Griffin Capital Corporation
790 Estate Drive, Suite 180
Deerfield, IL 60015
Attention: Mary Higgins, Esq.

If to Mortgagee:

The Variable Annuity Life Insurance Company

National Union Fire Insurance Company of Pittsburgh, PA.
c/o AIG Investments

777 S. Figueroa St., 16th Floor

Los Angeles, California 90017

Attn: Director-Mortgage Lending and Real Estate

with a copy to:

Greenberg Traurig, LLP
1200 17 ^th Street, 24 ^th Floor
Denver, Colorado 80202
Attn: Peter C. Kelley, Esq.

Either party may change such party’s address for notices or copies of notices by giving notice to the other party in accordance with this Section.

ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST MORTGAGER OR MORTGAGEE ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT MORTGAGEE’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND MORTGAGER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND MORTGAGER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. MORTGAGER DOES HEREBY DESIGNATE AND APPOINT:

C T Corporation System
111 Eighth Avenue
13th Floor
New York, NY 10011

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO MORTGAGER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON MORTGAGER, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. MORTGAGER (I) SHALL GIVE PROMPT NOTICE TO MORTGAGEE OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR OR REFUSES TO CONSENT TO SUCH DESIGNATION AS AUTHORIZED AGENT FOR MORTGAGER PURSUANT TO A WRITTEN CONSENT IN FORM AND SUBSTANCE SATISFACTORY TO MORTGAGEE.

9.11      Defeasance . Upon payment and performance in full of all of the Secured Obligations, Mortgagee will execute and deliver to Mortgagor such documents as may be required to reconvey this Security Instrument of record.

9.12      Illegality . If any provision of this Security Instrument is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Security Instrument, the legality, validity, and enforceability of the remaining provisions of this Security Instrument shall not be affected thereby, and in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Security Instrument a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable. If the rights and liens created by this Security Instrument shall be invalid or unenforceable as to any part of the Secured Obligations, then the unsecured portion of the Secured Obligations shall be completely paid prior to the payment of the remaining and secured portion of the Secured Obligations, and all payments made on the Secured Obligations shall be considered to have been paid on and applied first to the complete payment of the unsecured portion of the Secured Obligations.

9.13      Intentionally Deleted .

9.14      Obligations Binding Upon Mortgagor’s Successors . This Security Instrument is binding upon Mortgagor and Mortgagor’s successors and assigns, and shall inure to the benefit of Mortgagee, and its successors and assigns, and the provisions hereof shall likewise be covenants running with the land. The duties, covenants, conditions obligations, and warranties of Mortgagor in this Security Instrument shall be joint and several obligations of Mortgagor and Mortgagor’s successor and assigns.

9.15      Construction . All pronouns and any variations of pronouns herein shall be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the identity of the parties may require. Whenever the terms herein are singular, the same shall be deemed to mean the plural, as the identity of the parties or the context requires.

9.16      Attorneys’ Fees . If Mortgagee refers this Security Instrument or the Secured Guaranty to any attorney for collection or seeks legal advice following the occurrence of an Event of Default by or with respect to Mortgagor that has not been waived by

Mortgagee expressly in writing, or if Mortgagee is the prevailing party in any action instituted on this Security Instrument or the Secured Guaranty, or if any other judicial or non-judicial proceeding is instituted by Mortgagee or any other person (provided that with respect to any judicial or non-judicial action instituted by any other person, either (A) such person shall consist of Mortgagor or any affiliate thereof, or (B) such proceeding shall include Mortgagor or any affiliate thereof as a party thereto, and the facts alleged, on the basis of which any cause of action or claim shall be asserted in such proceeding, involve the action(s) or omission(s) on the part of Mortgagor or any affiliate thereof under this Security Instrument or other Loan Document), and an attorney is employed by Mortgagee to appear in any such action or proceeding, or in any action that materially affects Mortgagee’s interest in this Security Instrument or the Property, or to seek appointment of a receiver to reclaim, seek relief from a judicial or statutory stay, sequester, protect, preserve or enforce Mortgagee’s interest in this Security Instrument or any other security for the Note (including, but not limited to, proceedings under federal bankruptcy law, in eminent domain, under the probate code, on appeal (provided that for Mortgagee to recover appeal costs from Mortgagor hereunder, Mortgagee shall have to be judicially determined to be a prevailing party in such appeal), in arbitration, or in connection with any municipal, state or federal tax lien), then Mortgagor and every endorser hereof and every person who assumes the obligations secured by this Security Instrument or the Secured Guaranty jointly and severally promise(s) to pay reasonable attorneys’ fees for services performed by Mortgagee’s attorneys, and all costs and expenses (including, without limitation, expert witness reasonable fees, costs of exhibit preparation, document reproduction, postage, telecommunication expenses and courier charges), incurred incident to such employment. If such fees are not paid within ten (10) Business Days after demand therefor by Mortgagee, all such costs and expenses shall bear interest at the Default Rate and the repayment thereof shall also be secured by every instrument securing the indebtedness evidenced hereby.

9.17      Waiver of Jury Trial . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, MORTGAGEE AND MORTGAGOR KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE, TO THE FULLEST EXTENT NOT PROHIBITED BY LAW, ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS SECURITY INSTRUMENT, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SECURITY INSTRUMENT OR ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO ANY LOAN DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR MORTGAGEE AND MORTGAGOR TO ENTER INTO THE LOAN.

9.18      Governing Laws . The substantive, procedural and internal laws of the State of New Jersey shall govern the validity, construction, enforcement, and interpretation of this Security Instrument, without regard to the conflicts of laws principles of such State.

9.19      Inconsistency . In the event of any inconsistency between the terms of the Loan Documents and the terms of that certain Mortgage Loan Application between Mortgagor and Mortgagee, as amended, the terms of the Loan Documents shall govern and control in all respects.

9.20      Economic Sanctions, Anti-Money Laundering, Etc . Mortgagor represents, warrants and covenants to Mortgagee that:

(a)    None of the Borrower, the Guarantor nor any OFAC Controlling Persons is or shall become: (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons (an “OFAC Listed Person” ) published by the Office of Foreign Assets Control, United States Department of the Treasury ( “OFAC” ), or (ii) an agent, department, or instrumentality of, or otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is the target of any sanctions programs administered and/or enforced by OFAC, or (iii) blocked by or a target of United States economic sanctions.

(b)    Neither the Borrower, the Guarantor nor any OFAC Controlling Person:  (i) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti-Money Laundering Laws” ) or any U.S. economic sanctions violations, or (ii) to Borrower’s actual knowledge after making due inquiry, is under investigation by any Governmental Authority for possible violation of Anti-Money Laundering Laws or any U.S. economic sanctions violations, or (iii) has been assessed civil penalties under any Anti-Money Laundering Laws or any U.S. economic sanctions, or (iv) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws.

(c)    None of the Mortgagor, Guarantor, the OFAC Controlling Persons, nor the officers and directors of any of them:  (i) are owned or controlled by the government or a national of Cuba, Iran, Sudan, Burma (Myanmar), North Korea or Syria, (ii) are located in Cuba, Iran, Sudan, Burma (Myanmar), North Korea or Syria, or (iii) does business in or with Cuba, Iran, Sudan, North Korea, Burma (Myanmar) or Syria. 

(d)    Mortgagor shall promptly deliver to Mortgagee any certification or other evidence reasonably requested from time to time by Mortgagee confirming Borrower’s compliance with this Section.  The representations, warranties and covenants set forth in this Section shall be deemed repeated and reaffirmed by Mortgagor as of each date that Mortgagor makes a payment

to Mortgagee under the Note, this Security Instrument and the other Loan Documents or receives any payment from Mortgagee.  Mortgagor shall promptly notify Mortgagee in writing should Mortgagor become aware of any change in the information set forth in these representations, warranties and covenants.

For the purposes of the foregoing Section:

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise.

“ OFAC Controlling Person ” means any person or entity that controls either the Mortgagor or the Guarantor, and all holders of 25% or more of the partnership, voting stock, membership or other ownership interest of the Mortgagor or Guarantor (as applicable), and/or any of the foregoing Controlling Persons.

“ Governmental Authority ” means (a) the government of (i) the United States of America or any state or other political subdivision thereof, or (ii) any other jurisdiction in which the Borrower, Guarantor or Controlling Person (as applicable) conducts all or any part of its business, or which asserts jurisdiction over any properties of any of the foregoing, or (b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

9.21      Co-Lending.

(a)    Notwithstanding that the Secured Guaranty guarantees the obligations of the borrower under each of the Other Loans, each of which Other Loans is evidenced by 2 separate promissory notes, Mortgagee agrees that the “Holder” (as defined in such promissory notes) of each such separate promissory notes for each Other Loan shall pursue the same remedies simultaneously under such promissory notes with respect to such Other Loan and under the Secured Guaranty and the Other Loan Documents relating to such Other Loan as if such Other Loan were evidenced by only one promissory note.

(b)    Mortgager and Guarantor shall be entitled to rely, shall be obligated to rely, and shall be fully protected in relying upon any written resolution, notice, consent, approval, waiver, certificate, affidavit, letter, telegram, facsimile, telex, e-mail, statement or other document (each a “ Communication ”) believed by it to be genuine and correct and solely to the extent that such Communication is signed, sent or made by both VALIC and NUF in connection with the Loan. Any Communication not signed or sent by or on behalf of both VALIC and NUF shall not be valid.

ARTICLE 10
STATE-SPECIFIC PROVISIONS

10.1      Consistency . In the event of any conflict between the provisions of this Article 10 and any other provisions of this Mortgage or any other Loan Document, the provisions of this Article 10 shall control.

10.2      Maximum Principal Amount . The maximum principal amount secured by this Mortgage in the State of New Jersey upon recordation or upon any contingency that may be secured hereby at any time hereafter is $110,640,000.00, plus all advances made pursuant to any provisions of the Mortgage; provided that in no event shall any Mortgagee be obligated to advance in excess of the stated principal amount of the Note evidencing the indebtedness secured hereby.

10.3      Modification and Priority . This Mortgage is subject to “modification” as such term is defined in P.L. 1985 c.353 (N.J.S.A. 46:9-8.1 et seq.) and shall be subject to the priority provisions thereof.

10.4      Conflict of Laws . Mortgagee shall be entitled to all rights and remedies that a mortgagee would have under New Jersey law or in equity during the continuance of an Event of Default in addition to all rights and remedies it may have hereunder. Where any provision of this Mortgage is inconsistent with any provision of New Jersey law regulating the creation, perfection or enforcement of a lien or security interest in real or personal property, the provisions of such New Jersey law, as amended from time to time, shall take precedence over the provisions of this Mortgage, but shall not invalidate or render unenforceable any other provisions of this Mortgage that can be construed in a manner consistent with New Jersey law. Should applicable New Jersey law confer any rights or impose any duties inconsistent with or in addition to any of the provisions of this Mortgage, the affected provisions of this Mortgage shall be considered amended to conform to such applicable law, but all other provisions hereof shall remain in full force and effect without modification.

10.5      No Credit for Taxes Paid . Mortgagor waives any right it may have to a credit against interest due under the Loan secured by this Mortgage pursuant to N.J.S.A. 54:4-33.

10.6      True And Correct Copy . Mortgagor acknowledges that Mortgagor has received, without charge, a true and correct copy of this Mortgage.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGE TO SECOND MORTGAGE, SECURITY AGREEMENT, FIXTURE FILING, FINANCING STATEMENT AND ASSIGNMENT OF LEASES AND RENTS SECURING GUARANTY (NEW JERSEY)]

IN WITNESS WHEREOF, Mortgagor has executed and delivered this Security Instrument as of the date first mentioned above.

THE GC NET LEASE (WARREN) INVESTORS, LLC,

a Delaware limited liability company

By: The GC Net Lease (Warren) Member, LLC,

a Delaware limited liability company,

its Sole Member

By: Griffin Capital Essential Asset Operating Partnership, L.P.,

a Delaware limited partnership,

its Sole Member

By: Griffin Capital Essential Asset REIT, Inc.,

a Maryland corporation,

its General Partner

by: /s/ Joseph E. Miller             

Joseph E. Miller, Chief Executive Officer