Exhibit 10.2

 

Prepared by and after recording return to:

Diana R. Palecek, Esq.

Smith Moore Leatherwood LLP

101 North Tryon Street, Suite 1300

Charlotte, NC 28246

 

DEED OF TRUST AND SECURITY AGREEMENT

AND FIXTURE FILING

 

(Collateral is or includes fixtures.)

 

Cover Sheet

 

Date: November 22, 2013     Borrower: AR I BORROWER, LLC, a Delaware limited
liability company     Borrower's Notice Address: 880 Glenwood Avenue, S.E.,
Suite H   Atlanta, Georgia 30307       With a copy to:       David Katz   H Katz
Capital Group, Inc.   928 Jaymor Road   Suite A100   Southampton, PA 18966    
Trustee: Chicago Title Insurance Company, a Nebraska corporation, and all
successors and assigns for the benefit of Lender (as determined below).    
Trustee's Notice Address: 200 South Tryon Street, Suite 800   Charlotte, NC
28202     Lender: Sun Life Assurance Company of Canada, a Canadian corporation,
together with other holders from time to time of the Note (as herein defined).

 

 

 

 

Lender's Notice Address: c/o Sun Life Assurance Company of Canada One Sun Life
Executive Park Wellesley Hills, Massachusetts 02481 Attention:  Mortgage
Investments Group     Note Amount: $31,900,000.00     State: North Carolina

 

Record Owner of the Land (as defined herein):   AR I Borrower, LLC, a Delaware
limited liability company

 

Exhibit A hereto is incorporated herein by reference.

 

(ii)

 

 

Table of Contents

 

1. DEFINITION OF TERMS 1       2. GRANTING CLAUSES 4       3. REPRESENTATIONS
AND WARRANTIES 5       3.1 Due Organization; Authority 5 3.2 Execution, Delivery
and Effect of Loan Documents 5 3.3 Other Obligations 5 3.4 Construction and
Completion of Improvements 6 3.5 Legal Actions 6 3.6 Financial Statements 6 3.7
Adverse Change to Property 7 3.8 Title to Property 7 3.9 Compliance with Laws
and Private Covenants 7 3.10 Independence of the Property 7 3.11 Contamination 7
3.12 Anti-Terrorism Laws 7 3.13 Related Parties 8       4. COVENANTS 9       4.1
Payments 9   (a) Secured Debt 9   (b) Property Taxes and Charges 9   (c) Escrow
9   (d) Taxes on Trustee or Lender 9   (e) Liabilities 9   (f) Right to Contest
10   (g) Expenses 10 4.2 Operation of the Property 10   (a) Maintenance;
Alterations 10   (b) Liens 11   (c) Compliance with Laws and Private Covenants
11   (d) Use 11   (e) Inspection 11   (f) Notification of Contamination;
Clean-Up 11 4.3 Insurance 12 4.4 Sales and Encumbrances 13 4.5 Financial Records
and Statements 16 4.6 Indemnity 16 4.7 Notices 17 4.8 Estoppel Certificates 17
4.9 Legal Existence 17 4.10 Defense and Notice of Actions 17 4.11 Lost Note 17
4.12 Personalty 17 4.13 Further Assurances 17

 

(iii)

 

 

5 . CASUALTIES AND TAKINGS 18       5.1 Notice to Lender 18 5.2 Repair and
Replacement 19 5.3 Insurance and Taking Proceeds 19   (a) Collection 19  
(b) Assignment to Lender 19 5.4 Disbursement of Insurance Proceeds to Borrower
20       6. CONCERNING TRUSTEE 22       6.1 Trustee's Covenants 22 6.2
Resignation of Trustee 22 6.3 Substitution of Trustee 22 6.4 Reconveyance and
Agreements 22 6.5 Release of Lien 23 6.6 Exculpation and Indemnification of
Trustee 23       7. LEGAL PROCEEDINGS 23       8 . DEFAULTS; REMEDIES OF LENDER
23       8.1 Events of Default 23   (a) Breach of Named Covenants 23  
(b) Breach of Other Covenants 24   (c) Misrepresentations 24   (d) Bankruptcy 24
  (e) Adverse Court Action 25 8.2 Remedies 25   (a) Acceleration 25  
(b) Foreclosure 25   (c) Offset Rights 26   (d) Cure Rights 26   (e) Possession
of Property 27   (f) Receiver 27   (g) Uniform Commercial Code Remedies 27  
(h) Judicial Actions 28   (i) Subrogation 28   (j) Sale 28   (k) Other 28 8.3
Holding Over 29 8.4 General Provisions 29   (a) Multiple Sales 29  
(b) Cumulative Remedies 29   (c) Right to Purchase 29   (d) Right to Terminate
Proceedings 29   (e) No Waiver or Release 29   (f) Waivers and Agreements
Regarding Remedies 30   (g) Waiver of Jury Trial 31

 

(iv)

 

 

  (h) Lender's Discretion 31   (i) Sales 31       9. POSSESSION AND DEFEASANCE
31       9.1 Possession 31 9.2 Defeasance 31       10. GENERAL 32       10.1
Lender's Right to Waive, Consent or Release 32 10.2 No Impairment 32 10.3
Amendments 32 10.4 No Usury 32 10.5 Notices 33 10.6 Successors and Assigns 33
10.7 Severability 33 10.8 Gender and Construction 33 10 9 Joint and Several
Liability 34 10.10 Modifications 34 10.11 Governing Law 34 10.12 Captions 34
10.13 Nonrecourse 34 10.14 Sale, Assignment or Conversion of Secured Debt 34
10.15 Acknowledgment of Receipt 35 10.16 Time of the Essence 35 10.17 Exhibits
35       EXHIBIT A - Property Description  

 

(v)

 

 

1.DEFlNlTlON OF TERMS. As used herein, the terms defined on the cover sheet
hereof shall have the meanings given on such sheet, and the following terms
shall have the following meanings:

 

1.1Commitment: a certain mortgage loan commitment issued by Lender and accepted
by Borrower for the loan secured by this Deed of Trust.

 

1.2Casualty: as defined in Paragraph 5.1.

 

1.3Clean-Up: removal and/or remediation of Contamination in accordance with Laws
and good commercial practice.

 

1.4Contamination: the presence of, use, generation, manufacture, storage,
treatment, disposal, discharge or release on, from or to the Property of
Hazardous Substances.

 

1.5Contested Sum: as defined in clause (f) of Paragraph 4.1.

 

1.6Deed of Trust: this Deed of Trust and Security Agreement and Fixture Filing
and all modifications or amendments thereto or extensions thereof.

 

1.7Environmental Actions or Claims: any claim, action or proceeding brought by a
governmental authority in connection with Contamination or any claim or action
brought by a third party relating to Contamination.

 

1.8Event of Default: as defined in Paragraph 8.1.

 

1.9Guaranty: a certain Guaranty of Non-Recourse Carve-Outs of even date
herewith, made by the Guarantor(s) named in the Note.

 

1.10Hazardous Substances: all substances and compounds prohibited or regulated
under any Laws; materials containing asbestos or urea formaldehyde; gasoline and
other petroleum products; flammable explosives; radon and other natural gases;
radioactive materials; and polychlorinated biphenyls and similar solvents.

 

1.11Improvements: all buildings, structures and other improvements now or
hereafter existing, erected or placed on or under the Land, or in any way used
in connection with the use, enjoyment, occupancy or operation of the Land or any
portion thereof; all fixtures of every kind and nature whatsoever now or
hereafter owned by Borrower and used or procured for use in connection with the
Realty.

 

1.12In its sole unfettered discretion: as defined in Paragraph 10.8.

 

1.13Insurance Premiums: as defined in Paragraph 4.3.

 

1.14Insurance Proceeds: as defined in clause (a) of Paragraph 5.3.

 

1

 

 

1.15Land: the land described in Exhibit A attached hereto, together with all
estate, title, interests, title reversion rights, rents, increases, issues,
profits, rights of way or uses, additions, accretions, servitudes, gaps, gores,
liberties, privileges, water rights, water courses, alleys, streets, passages,
ways, vaults, adjoining strips of ground, licenses, tenements, franchises,
hereditaments, rights, appurtenances and easements, declarant’s rights, now or
hereafter owned by Borrower and existing, belonging or appertaining to the Land,
all claims or demands whatsoever of Borrower therein or thereto, either at law
or in equity, in possession or in expectancy and all estate, right, title and
interest of Borrower in and to all streets, roads and public places, opened or
proposed, now or hereafter used in connection with, existing, belonging or
appertaining to the Land.

 

1.16Laws: any and all Federal, regional, state or local laws, ordinances, rules,
regulations, statutes, decisions, orders, judgments, directives or decrees of
any governmental or regulatory authority, court or arbitrator whether now in
force or as amended or enacted in the future, including, without limitation, the
Americans with Disabilities Act of 1990, the Water Pollution Control Act, the
Toxic Substances Control Act, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 as amended by the Superfund Amendment
and Reauthorization Act of 1986, the Resource Conservation and Recovery Act of
1976, and all regulations thereunder.

 

1.17Leases: all leases, license agreements and other occupancy or use agreements
(whether oral or written), now or hereafter existing, which cover or relate to
all or any portion of the Property, together with all options therefor,
amendments thereto and renewals, modifications and guarantees thereof, and all
rents, royalties, issues, profits, revenues, income and other benefits of the
Property arising at any time (including, without limitation, after the filing of
any petition under any present or future Federal or state bankruptcy or similar
law) from the use or enjoyment thereof, including, without limitation, cash or
securities deposited thereunder to secure performance by the tenants of their
obligations thereunder, whether said cash or securities are to be held until the
expiration of the terms of the Leases or applied to one or more of the
installments of rent coming due, additional, percentage, participation and other
rentals, fees and deposits.

 

1.18Lease Assignment: a certain Assignment of Leases and Rents of even date
herewith from Borrower to Lender and all replacements, substitutions,
modifications or amendments thereto or extensions thereof .

 

1.19Loan Documents: this Deed of Trust, the Note, the Lease Assignment, the
Guaranty, and any and all other documents or instruments related thereto or to
the Secured Debt now or hereafter given by or on behalf of Borrower and the
Guarantor(s) to or for the benefit of Lender.

 

1.20Net Proceeds: as defined in Paragraph 5.3.

 

1.21Note: a certain Promissory Note of even date herewith made by Borrower in
favor of Lender in the Note Amount and all replacements, substitutions,
modifications, renewals and extensions thereof, which Note is payable in Monthly
Payments, until the Maturity Date (as each term is defined in the Note).

 

1.22Parties in Interest: as defined in clause (d) of Paragraph 8.1.

 

2

 

 

1.23Permitted Encumbrances: matters set forth or referred to in Schedule B Part
1 of Lender's title insurance policy issued in connection with the execution and
recording of this Deed of Trust.

 

1.24Personalty: all of Borrower's interest in personal property of any kind or
nature whatsoever, whether tangible or intangible, which is used or will be used
in the construction of, or is or will be placed upon, or is derived from or used
in connection with, the maintenance, use, occupancy, or enjoyment of the Realty,
including, without limitation, all accounts, documents, instruments, chattel
paper, furniture, appliances, equipment, general intangibles and inventory (as
those terms are defined in the Uniform Commercial Code of the State), all plans
and specifications, contracts and subcontracts for the construction,
reconstruction or repair of the Improvements, bonds, permits, licenses,
guarantees, warranties, causes of action, judgments, claims, profits, security
deposits, utility deposits, refunds of fees, Insurance Premiums, deposits paid
to any governmental authority, letters of credit, insurance policies, Insurance
Proceeds, Taking Proceeds, and escrowed funds together with all present and
future attachments, accretions, accessions, replacements, and additions thereto
and products and proceeds thereof.

 

1.25Property: the Realty and Personalty or any portion thereof or interest
therein, except as the context otherwise requires.

 

1.26Property Liabilities: as defined in clause (e) of Paragraph 4.1.

 

1.27Property Taxes and Charges: all real estate taxes, personal property taxes,
betterments, assessments (general and special), imposts, levies, water, utility
and sewage charges, any and all income, franchise, withholding, profits and
gross receipts taxes, all other taxes and public charges, imposed upon or
assessed against Borrower or the Property or upon the revenues, rents, issues,
income and profits of use or possession thereof, and any stamp or other taxes
which may be required to be paid with respect to any of the Loan Documents, any
of which might, if unpaid, result in a lien on the Property, regardless to whom
paid or assessed.

 

The term "real estate taxes" in the foregoing sentence shall include any form of
assessment, license fee, license tax, business license fee or tax, commercial
rental tax, levy, charge, penalty, tax or similar imposition, imposed by any
authority having the direct power to tax, including any city, county, state or
Federal government, or any school, architectural, lighting, drainage or other
improvement or special assessment district thereof, against any legal or
equitable interest in the Property, except general business taxes imposed on
Lender other than taxes or other amounts referred to in Paragraph 4.1(d).

 

1.28Realty: the Land and Improvements or any portion thereof or interest
therein, as the context requires.

 

1.29Restoration: as defined in clause (b)(i) of Paragraph 5.4.

 

3

 

 

1.30Secured Debt: to the extent not prohibited by Laws, all principal, interest,
late charges and other sums, charges, premiums, prepayment and other
indemnification amounts or other amounts due or to become due under the Loan
Documents, together with any other sums expended or advanced by or on behalf of
Lender under the Loan Documents or otherwise with respect to the care,
maintenance or preservation of the Property or the enforcement of the Loan
Documents to the extent permitted under the Loan Documents.

 

1.31Taking: as defined in Paragraph 5.1.

 

1.32Taking Proceeds: as defined in clause (a) of Paragraph 5.3.

 

1.33Trustee: as defined on the cover sheet hereof.

 

2.GRANTING CLAUSES. For valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower has executed and delivered the Loan
Documents and hereby irrevocably and absolutely grants, transfers, assigns,
mortgages, bargains, sells and conveys to Trustee and Trustee’s successors and
assigns in trust for the benefit of Lender with all POWERS OF SALE AND STATUTORY
RIGHTS AND COVENANTS in the State, all of Borrower's estate, right, title and
interest in, to and under the Realty, and grants to Lender a first and prior
security interest in the Personalty and any and all of the following, whether
now owned or held or hereafter acquired or owned by Borrower:

 

(a)all Leases;

 

(b)all profits and sales proceeds including, without limitation, earnest money
and other deposits, now or hereafter becoming due by virtue of any contract or
contracts for the sale of Borrower's interest in the Property; and

 

(c)all proceeds (including claims thereto or demands therefore) of the
conversion, voluntary or involuntary, permitted or otherwise, of any of the
foregoing into cash or liquidated claims.

 

TO HAVE AND TO HOLD the Realty, together with all privileges, hereditaments,
easements, rights of way and appurtenances thereunto belonging and the rents,
issues, royalties and profits thereof to said Trustee, and the Trustee’s
successors and assigns forever, upon the trusts, terms and conditions, and for
the uses, hereinafter set forth.

 

FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS OF BORROWER TO LENDER, in
such order of priority as Lender may elect:

 

(1)payment of the Secured Debt;

 

(2)payment of such additional sums with interest thereon which may hereafter be
loaned to Borrower by Lender pursuant to the Loan Documents, even if the sum of
the amounts outstanding at any time exceeds the Note Amount;

 

(3)due, prompt and complete observance, performance, fulfillment and discharge
of each and every obligation, covenant, condition, warranty, agreement and
representation contained in the Loan Documents; and

 

4

 

 

(4)any additional loans as well as any and all present or future advances,
readvances and other future obligations incurred under the Loan Documents made
by Lender to or for the benefit of Borrower or the Property, to the fullest
extent permitted by applicable law, including, without limitation:
(a) principal, interest, late charges, fees and other amounts due under the Note
or this Deed of Trust; (b) all advances by Lender to Borrower or any other
person to pay costs of erection, construction, alteration, repair, restoration,
maintenance and completion of any improvements on the Property; (c) all advances
made or costs incurred by Lender for the payment of real estate taxes,
assessments or other governmental charges, maintenance charges, insurance
premiums, appraisal charges, environmental inspection, audit, testing or
compliance costs, and costs incurred by Lender for the enforcement and
protection of the Property or the lien of this Deed of Trust; (d) all legal
fees, costs and other expenses incurred by Lender by reason of any default or
otherwise in connection with the Loan; and (e) as otherwise permitted pursuant
to Article 7 of Chapter 45 of the North Carolina General Statutes. The maximum
principal amount, including present and future loans, which may be secured
hereby at any one time shall not exceed FORTY MILLION AND 00/100 Dollars
($40,000,000.00). The time period within which such future Loan may be incurred
and such future advances may be made shall not extend for more than thirty (30)
years from the date of this Deed of Trust. Borrower and Lender agree that such
future advances or loans shall be secured by this Deed of Trust regardless of
whether such future advances or loans are evidenced by a written instrument
stipulating that such obligation is secured hereby.

 

This Deed of Trust is also intended to be a security agreement under the Uniform
Commercial Code as in force from time to time in the State.

 

3.REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants to
Lender that the following are true, correct and complete as of the date of this
Deed of Trust.

 

3.1Due Organization; Authority. Borrower is duly organized and validly existing
and in good standing under the laws of the State and has power adequate to carry
on its business as presently conducted, to own the Property, to make and enter
into the Loan Documents and to carry out the transactions contemplated therein.

 

3.2Execution, Delivery and Effect of Loan Documents. The Loan Documents have
each been duly authorized, executed and delivered by Borrower, and each is a
legal, valid and binding obligation of Borrower, enforceable in accordance with
its terms, except to the extent that the enforceability thereof may be limited
by bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and subject to the exercise of judicial discretion in accordance with
general principles of equity.

 

3.3Other Obligations. Borrower is not in violation of any material term or
provision of any document governing its organization or existence or in to the
best of Borrower’s knowledge, in default under any material instruments or
obligations relating to Borrower's business, Borrower's assets or the Property.
No party has asserted any material claim or default relating to any of
Borrower's assets or the Property. The execution and performance of the Loan
Documents and the consummation of the transactions contemplated thereby will not
materially violate or contravene or constitute a material default under any
charter, certificate, by-laws, partnership agreement, trust declaration,
contract, agreement, document or other instrument to which Borrower is a party
or by which Borrower may be bound or affected, and do not and will not violate
or contravene any Laws to which Borrower is subject; nor do any such instruments
impose or contemplate any obligations which are or will be materially
inconsistent with the Loan Documents. Borrower has filed all Federal, state,
county and municipal income tax returns required to have been filed by Borrower
and has paid all taxes which have become due pursuant to such returns or
pursuant to any assessments received by Borrower. Borrower does not know of any
basis for additional assessment with regard to any such tax. No approval by,
authorization of, or filing with any Federal, state or municipal or other
governmental authority is necessary in connection with the authorization,
execution and delivery of the Loan Documents.

 

5

 

 

3.4Construction and Completion of Improvements. The presently existing
Improvements have been completed and installed in a good and workmanlike manner,
and to the best of Borrower’s knowledge in compliance with Laws and any plans
and specifications previously delivered to Lender. To the best of Borrower’s
knowledge, the Improvements do not contain any urea formaldehyde or asbestos.
The Improvements are served by electric, gas, sewer, water, telephone and other
utilities required for the present and contemplated uses and operation thereof.
Any and all streets, utility lines and off-site improvements, which provide
access to the Property or are necessary for its present and contemplated uses,
have been completed, are serviceable and have been accepted or approved by
appropriate governmental bodies.

 

3.5Legal Actions. There are no material actions suits or proceedings including,
without limitation, any Environmental Actions or Claims (whether or not
material), condemnation, insolvency or bankruptcy proceedings, pending or, to
the best of Borrower's knowledge and belief, threatened against or affecting
Borrower, its business or the Property; or investigations, at law or in equity
before or by any court or governmental authority pending or, to the best of
Borrower's knowledge and belief, threatened against or affecting Borrower,
Borrower's business or the Property, except actions, suits and proceedings fully
covered by insurance and heretofore fully disclosed in writing to Lender or,
which if resolved adversely to Borrower, would not have a material, adverse
effect on Borrower or the Property. Borrower is not in default with respect to
any order, writ, injunction, decree or demand of any court or any governmental
authority affecting Borrower or the Property. Furthermore, to the best knowledge
and belief of Borrower, except as disclosed to Lender in writing, there is no
basis for any unfavorable decision, ruling or finding by any court or
governmental authority which would in any material respect adversely affect the
validity or enforceability of the Loan Documents, or the condition of Borrower
(financial or otherwise) or the ability of Borrower to meet Borrower's
obligations under the Loan Documents.

 

3.6Financial Statements. All statements, financial or otherwise, submitted to
Lender in connection with the Commitment are true, correct and complete in all
material respects, and such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
(or other basis of accounting practices permitted by Lender) and fairly present
the financial condition of the parties or entities covered by such statements as
of the date thereof. Since the date thereof, neither Borrower nor any such party
or entity has experienced any material adverse change in its finances, business,
operations, affairs or prospects.

 

6

 

 

3.7Adverse Change to Property. No event or series of events has occurred since
the date of the Commitment which would, either individually or collectively,
materially and adversely affect the Property.

 

3.8Title to Property. Borrower has good and clear record and marketable title to
the Realty and good and merchantable title to the Personalty, free of all liens,
claims, encumbrances or restrictions other than the Permitted Encumbrances.

 

3.9Compliance with Laws and Private Covenants. The Property complies in all
material respects with all Laws. Borrower has examined and is familiar with all
private covenants affecting the Property, including, without limitation, private
covenants contained in the Permitted Encumbrances and there now exists, to the
best of Borrower’s knowledge, no material violation thereof. Borrower has no
notice that any of the Improvements encroach upon any easement over the Land or
encroach upon adjacent property or that buildings or other structures on
adjacent property encroach upon the Land.

 

3.10Independence of the Property. The Land is a separate and distinct parcel for
tax purposes and is not subject to Property Taxes and Charges against any other
land. Borrower has not by act or omission permitted any building or other
improvements on property not covered by this Deed of Trust to rely on the
Property or any part thereof or any interest therein to fulfill any municipal or
governmental requirement for the existence of such property, building or
improvement, and no Improvement on the Property relies on any property not
covered by this Deed of Trust or any interest therein to fulfill any
governmental or municipal requirement. Borrower has not by act or omission
impaired the integrity of the Property as a single, separate, subdivided zoning
lot separate and apart from all other property.

 

3.11Contamination. To the best of Borrower's knowledge and belief, after due
investigation and inquiry, except as disclosed by that certain Phase I
Environmental Site Assessment Report prepared by Partner Engineering North
Carolina, PLLC, and dated October 25, 2013, a copy of which has been delivered
by Borrower to Lender (the “Phase I Report”), no Contamination has occurred at
the Property.

 

3.12Anti-Terrorism Laws. Borrower (in section 3.12, “Borrower” includes
Borrower’s officers, directors, shareholders, partners, indirect equity interest
holders, members, and affiliates) has complied and will comply with
Anti-Terrorism Laws.

 

Borrower is not and shall not be a Prohibited Person.

Borrower: (a) shall not conduct business, transactions, or dealings with a
Prohibited Person; and (b) shall not engage in or conspire to engage in
transactions violative of prohibitions of EO13224.

 

Upon Lender’s request, Borrower shall promptly deliver to Lender certification
or evidence confirming that Borrower: (a) is not a Prohibited Person; and (b)
has not engaged in business, transactions, or dealings with a Prohibited Person,
including contributing or receiving funds, goods, or services, to or for the
benefit of a Prohibited Person.

7

 

 

Borrower has established policies and procedures to prevent and detect money
laundering, including processes to meet all applicable anti-money laundering
requirements of the USA Patriot Act.

 

“Anti-Terrorism Laws” are laws and regulations related to terrorism or money
laundering, including Executive Order 13224 and the USA Patriot Act.

 

“Executive Order 13224” is Executive Order Number 13224 on Terrorism Financing,
effective September 24, 2001.

 

“Prohibited Person” is any person (a) listed in the Annex to or subject to the
provisions of Executive Order 13224; (b) whose name appears on the United States
Treasury Department’s Office of Foreign Assets Control’s (“OFAC”) current list
of “Specifically Designated National and Blocked Persons” (published in various
media, including on the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf); (c)
who commits, threatens, or supports “terrorism,” as defined in EO 13224; (iv)
who violates laws and regulations related to terrorism or money laundering,
including EO 13224 and the USA Patriot Act; or (d) who affiliates with any
entity or person described above.

 

“USA Patriot Act” is the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, H.R.
3162, Public Law 107-56.

 

3.13Related Parties. Neither Borrower nor any beneficial owner of the Property
securing the Loan is a Related Party of Lender. “Related Party” means an
officer, director, employee, significant shareholder, or such person’s spouse or
minor child.

 

3.14Investment Activities in Iran Energy Sector. Borrower (in Section 3.14
"Borrower" includes any successor, subunit, parent, subsidiary, or entity under
common ownership or control with Borrower) shall not use any proceeds of the
loan from Lender to provide goods or services in the Energy Sector in Iran. Upon
Lender’s request, Borrower shall deliver to Lender within five (5) business days
certification or evidence confirming that Borrower: (a) is not providing goods
or services in the Energy Section in Iran; and (b) has not been placed on a list
(or notified that it may be placed on a list) by any state or governmental
authority as providing goods or services in the Energy Sector in Iran.

 

Borrower has established policies and procedures to prevent it from providing
goods or services in the Energy Sector in Iran,

 

"Energy Sector" shall mean activities to develop petroleum or natural gas
resources or nuclear power in Iran, including, but not limited to, providing oil
or liquefied natural gas tankers or products used to construct or maintain
pipelines used to transport oil or liquefied natural gas for the energy sector
in Iran.

 

"Iran" means the Government of Iran and any agency or instrumentality of the
Government of Iran.

 

8

 

 

4.COVENANTS.

 

4.1Payments.

 

(a)Secured Debt. Borrower shall pay to Lender the Secured Debt at the times and
in the manner provided in the Note and the other Loan Documents.

 

(b)Property Taxes and Charges. Except as provided in Paragraph 4.1(f), Borrower
shall pay, prior to delinquency, all Property Taxes and Charges. Upon Lender's
written request, Borrower shall furnish to Lender, within 30 days after the date
on which any such Property Taxes and Charges are due and payable, official
receipts from the appropriate taxing authority, or other proof satisfactory to
Lender, evidencing the payment thereof.

 

(c)Escrow. Borrower shall pay to Lender monthly, on each date on which a Monthly
Payment (as defined in the Note) is due, 1/12 of such amount as Lender from time
to time estimates will be required to pay all Property Taxes and Charges when
due. If the Property Taxes and Charges are due in less than twelve months from
the First Payment Date (as defined in the Note), Borrower shall make equal
monthly payments in amounts sufficient to pay the Property Taxes and Charges
when due. Borrower shall also pay to Lender monthly, on each date on which a
Monthly Payment is due under the Note, 1/12 of such amount as Lender from time
to time estimates will be required to pay Insurance Premiums. If the Insurance
Premiums are due in less than twelve months from the date of the first Monthly
Payment, Borrower shall make equal monthly payments in amounts sufficient to pay
the Insurance Premiums when due. Lender's estimates shall be based on the
amounts actually payable or, if unknown, on the amounts actually paid for the
year preceding that for which such payments are being made. Borrower shall
transmit to Lender bills for the Property Taxes and Charges and Insurance
Premiums as soon as received. When Lender has received funds sufficient to pay
the same, Lender shall, except as provided in Paragraph 8.2, pay such bills in a
timely fashion so as to avoid penalty or delinquency. (Borrower shall have no
liability for Lender’s failure to timely pay Property Taxes and Charges to the
extent Borrower has paid Lender the amounts set forth in this Section 4.1). If
the amount paid by Borrower in any year exceeds the aggregate required, such
excess shall be applied to escrow payments for the succeeding year. Any
deficiencies shall be paid by Borrower to Lender on demand. Payments for such
purposes may be made by Lender at its discretion even though subsequent owners
of the Property may benefit thereby. Lender shall not be a trustee of such funds
and may commingle them with its general assets without any obligation to pay
interest thereon or account for any earnings, income or interest on such funds.

 

(d)Taxes on Trustee or Lender. If any Law imposes upon Trustee or Lender the
obligation to pay the whole or any part of the Property Taxes and Charges or
changes in any way Laws for the taxation of deeds of trust or debts secured by
mortgages or the manner of collection of any such taxes, so as to affect
adversely this Deed of Trust or the Secured Debt, then Borrower shall pay such
Property Taxes and Charges or reimburse Trustee and Lender immediately therefor,
unless in the opinion of counsel to either Trustee or Lender, it might be
unlawful to require Borrower to pay the same or such payment might result in the
imposition of interest prohibited by Laws. In such case, an Event of Default
shall exist, but if Lender accelerates the Secured Debt solely because of such
Event of Default, the Secured Debt shall not include the prepayment
indemnification provided for in Paragraph 10 of the Note.

 

(e)Liabilities. Except as provided in Paragraph 4.1(f), Borrower shall pay,
prior to delinquency, all debts and liabilities incurred in the construction,
operation, development, use, enjoyment, repair, maintenance, replacement,
restoration, management and Clean-Up of the Property ("Property Liabilities")
including without limitation, utility charges, sums due to mechanics and
materialmen and other sums secured or which might be secured by liens on the
Property.

 

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(f)Right to Contest. Borrower may, in good faith and by appropriate proceedings,
contest the validity, applicability or amount of any asserted Property Taxes and
Charges, Property Liabilities or liens, charges, attachments or lis pendens
under Paragraph 4.2(b) ("Contested Sum") after written notice of the same to
Lender. During such contest, Borrower shall not be deemed in default hereunder
if: (i) prior to delinquency of the Contested Sum, Borrower deposits with Lender
or Lender's nominee cash or other security, in form reasonably satisfactory to
Lender, adequate to cover the payment of such Contested Sum and any obligation,
whether matured or contingent, of Borrower, Trustee or Lender therefor, together
with interest, costs and penalties thereon; and (ii) Borrower promptly pays any
amounts adjudged to be due, together with all costs, penalties and interest
thereon, on or before such judgment becomes final. Each such contest shall be
concluded and the Contested Sum, interest, costs and penalties thereon shall be
paid prior to the date such judgment becomes final and before any writ or order
is issued under which the Property could be sold pursuant to such judgment.

 

(g)Expenses. To the extent allowed by Laws, Borrower shall pay, on demand, but
without counterclaim, setoff, deduction, defense, abatement, suspension,
deferment, discrimination or reduction all fees (including, without limitation,
reasonable attorneys' fees and disbursements) taxes, recording fees, commissions
and other liabilities, costs and expenses incurred by Lender or Trustee in
connection with: (i) the making or enforcement of the Loan Documents; (ii)
Trustee's or Lender's exercise and enforcement of its rights and remedies under
Paragraphs 7 and 8; (iii) Trustee's or Lender's protection of the Property and
its interest therein in accordance with the Loan Documents; and (iv) any
amendments, consents, releases, or waivers if granted by Lender under the Loan
Documents

 

Borrower shall not be entitled to any credit on the Secured Debt by reason of
its payment of any sums required to be paid under Paragraph 4.1(b) through (f)
unless such sums are paid to reimburse Lender for amounts paid by Lender and
added by Lender to the Secured Debt.

 

4.2Operation of the Property.

 

(a)Maintenance; Alterations. Borrower shall maintain and preserve the Property
in good repair and condition (normal wear and tear, casualty and condemnation
excepted) and shall correct any defects or faults in the Property. Borrower
shall not commit, permit or suffer any demolition or waste of the Property or
any use or occupancy which constitutes a public or private nuisance. Borrower
shall not do, permit or suffer to be done any act whereby the value of the
Property may be materially decreased. Borrower shall not make any material
alterations, improvements, additions, utility installments or the like to the
Property without the prior written consent of Lender in each instance; provided,
however, Borrower may make replacements or substitutions of any item of the
Personalty if the replacement or substitution is of a quality, utility, value,
condition and character similar to or better than the replaced or substituted
item and is free and clear of any lien, charge, security interest or
encumbrance, except as created or permitted by this Deed of Trust. For avoidance
of doubt, this Section 4.2 shall not operate to preclude non-structural routine
maintenance and repair of the Property so long a such maintenance or repair does
not reduce the value of the Property or change the use of the Property.

 

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(b)Liens. Except as provided in Paragraph 4.1(f) Borrower shall promptly
discharge any mechanics, laborers', materialmens' or similar lien or any other
lien, charge, attachment, or lis pendens filed or recorded against the Property
which relates to Borrower, the Property or any Contamination.

 

(c)Compliance with Laws and Private Covenants. Borrower shall keep, observe, and
satisfy, and not suffer violations of, Laws and private covenants (whether or
not listed as Permitted Encumbrances) materially affecting the Property.

 

(d)Use. Borrower shall not permit the use or occupancy of the Property other
than for multi-family for rental apartment uses pursuant to Leases which shall
have been approved in advance and in writing by Lender pursuant to the Lease
Assignment or which require no approval thereunder. Borrower shall not use or
permit the use or occupancy of the Property in a manner which will result in
Contamination and Borrower shall take all steps reasonably necessary under the
circumstances including, without limitation, periodic inspections and
assessments of the Property, to determine whether Contamination has occurred.

 

(e)Inspection. Whether or not an Event of Default (as defined in Paragraph 8.1)
has occurred and exists, Lender and its agents and contractors, shall have the
right, but not the duty or obligation, to enter upon the Property at reasonable
times without delay, hindrance or restriction, in order to conduct appraisals
and inspections of the Property, including, but not limited to environmental
inspections. If, in the reasonable belief of Lender, Contamination has occurred
or is likely to occur Lender shall have the right, but not the duty or
obligation to conduct, or cause to be conducted, testing, including, but not
limited to, soil, air and groundwater sampling, regarding such Contamination.
Any environmental inspections or testing shall be paid for by Borrower. Lender
shall have the right, but not the duty or obligation, to disclose the results of
such inspections and testing as required by Laws or as deemed appropriate by
Lender.

 

(f)Notification of Contamination; Clean-Up. Borrower shall notify Lender
immediately upon discovery of any Contamination. Borrower shall not, without
Lender's prior consent, initiate Clean-Up of any Contamination, or enter into
any settlement agreement, consent decree or other compromise with respect to any
violation or alleged violation of any Laws concerning Hazardous Substances, if
such Clean-up, settlement agreement, consent decree or other compromise might,
in Lender's judgment, impair the value of Lender's security hereunder; provided,
however, that Lender's prior consent shall not be required in the event the
Contamination either poses an immediate threat to the health, safety or welfare
of any individual or is of such a nature that an immediate remedial response is
necessary, such that it is impossible to obtain Lender's consent before taking
such remedial action; provided further, however, that in such event, Borrower
shall notify Lender as soon as practicable of any remedial action so taken.

 

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4.3Insurance. Borrower shall obtain and keep in force, with one or more insurers
with a Best's Rating of A-/VII or higher, such insurance as Lender may from time
to time specify by notice to Borrower, including, as a minimum insurance
providing: (i) commercial general liability and property damage coverage with a
broad form coverage endorsement, with limits of liability determined to be
acceptable by Lender from time to time; (ii) protection against fire, "extended
coverage" and other "All Risk" perils, including, if specifically required by
Lender, earthquake, to the full replacement cost of the Improvements and
Personalty; (iii) rent loss insurance in an amount of not less than a sum equal
to 12 months of rental income from all Leases; and (iv) flood insurance if the
Property is located in an area identified by FEMA or any successor as an area
having special flood hazards or in which flood insurance has been made available
under applicable Laws. All property insurance policies shall include the
standard mortgagee clause in the State naming Lender as the first mortgagee with
all losses payable to Lender, and shall also include an agreed-amount
endorsement sufficient to prevent Borrower from becoming a co-insurer. All
liability policies shall name Lender as an additional insured. All insurance
policies shall provide that the policy may not be cancelled without 30 days
prior written notice to Lender or otherwise modified without 10 days prior
written notice to Lender, and that no act or thing done by Borrower shall
invalidate the policy as against Lender, and that the deductible for any single
Casualty shall not be more than $25,000. At least 30 days prior to the
expiration date of any policy required hereunder, Borrower shall provide Lender
or Lender's designee with evidence of compliance with this Paragraph 4.3, in
such form as required from time to time by Lender. Such form shall bear
notations evidencing the prior payment of premiums ("Insurance Premiums") or
shall be accompanied by other evidence satisfactory to Lender that such payment
has been made.

 

All property insurers shall agree not to acquire any rights of recovery against
Lender by subrogation. Borrower, to the full extent permitted by Laws and to the
full extent permitted without invalidating the insurance policies required
above, shall obtain endorsements by all insurers waiving any right of
subrogation against tenants under any Leases and shall require the same of such
tenants. Lender shall not because of accepting, rejecting, approving or
obtaining insurance, incur any liability for the existence, nonexistence,
continuation, form or legal sufficiency of any insurance, the solvency of any
insurer, or the payment of losses.

 

Borrower shall furnish to Lender or Lender's designee an original of all
policies of insurance required under this Deed of Trust, provided, however, that
if Lender consents to Borrower providing any of the insurance required under
this Deed of Trust through blanket policies carried by Borrower and covering
more than one location, Borrower shall furnish Lender or Lender's designee with
a certificate of insurance for each such policy, setting forth the coverage, the
limits of liability as to the Property, the name of the insurer, the policy
number and the expiration date, or with a certified true copy of the original of
each such policy.

 

Borrower shall keep, observe and satisfy, and not suffer violations of the
requirements, including those requirements pertaining to acts committed or
conditions existing on the Property, of insurance companies and any bureau or
agency which establishes standards of insurability affecting the Property.
Borrower shall not carry separate or additional insurance concurrent in form or
contributing in the event of loss with that required by this Deed of Trust.

 

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Upon foreclosure of this Deed of Trust or other transfer of title or assignment
of the Property in discharge, in whole or part, of the Secured Debt, all right,
title and interest of Borrower in and to all policies of insurance required by
this Paragraph 4.3 shall inure to the benefit of and pass to Lender.

 

4.4Sales and Encumbrances.

 

A.Except as herein expressly provided, Borrower shall not, without the prior
written consent of Lender, which consent, if given in Lender's sole unfettered
discretion, may be conditioned upon a change in the interest rate under the
Note, payment of a fee or change in the term of the Note, adjustment of the
Maturity Date (as defined in the Note) or amortization period or one or more of
the foregoing or other requirements of Lender:

 

(a)convey, assign, sell, mortgage, encumber, pledge, dispose of, hypothecate,
grant a security interest in, grant options with respect to, or otherwise
dispose of (directly or indirectly or by operation of law or otherwise, of
record or not) all or any part of any legal or beneficial interest in any part
or all of the Property or the Leases, or any interest therein; or

 

(b)directly or indirectly sell, assign or otherwise dispose of (whether or not
of record or for consideration), or permit the sale, assignment or other
disposition of; (i) any legal or beneficial interest in the stock of any
corporation which is either Borrower or is a beneficial owner of all or part of
Borrower or the Property; or (ii) any legal or beneficial interest in Borrower
(or any trust of which Borrower is a trustee) if Borrower is a limited or
general partnership, limited liability company, joint venture, trust, nominee
trust, tenancy in common or other unincorporated form of business association or
form of ownership, except limited partnership interests if Borrower is a limited
partnership.

 

B.Permitted Property Transfers. Notwithstanding the foregoing, the Borrower
shall have the right to sell the Property in its entirety in an arms-length
transaction to a third party independent of the Borrower, provided that the
following conditions are satisfied: (i) the proposed buyer is acceptable to the
Lender as measured and judged by normal and ordinary standards of financial
strength, credit history, real estate management ability and experience and
professional character, as determined by the Lender in its sole discretion, and
(ii) such buyer agrees to assume all of the obligations of the Borrower under
the Loan Documents and the Secured Debt, and (iii) in the case of the first
transfer of the Property, Borrower shall pay Lender a fee equal to 1% of the
then outstanding principal balance of the Note and shall pay all costs of Lender
in connection with such transfer, including legal fees, and (iv) in the case of
the second transfer of the Property, Borrower shall pay Lender a fee equal to 2%
of the then outstanding principal balance of the Note and shall pay all costs of
Lender in connection with such transfer, including legal fees. No more than two
sales of the Property shall be permitted during the term of the Secured Debt.
Borrower shall give Lender no less than thirty (30) days notice of any proposed
transfer of the Property, such notice to be accompanied by documentation
suitable to show the financial strength, credit history, real estate management
ability and experience and professional character of the proposed buyer.
Additionally, the Borrower shall furnish to the Lender upon request additional
information concerning the proposed buyer as determined by Lender as necessary
or helpful to measure and judge the financial strength, credit history, real
estate management ability and experience and professional character of the
proposed buyer.

 

13

 

 

Upon the transfer of the Property by AR Borrower I, LLC (“Original Borrower”)
pursuant to the foregoing with the consent of the Lender and provided that the
Original Borrower has provided to Lender a “Phase I” environmental assessment
report which is satisfactory to Lender in Lender’s sole discretion, then upon
the foregoing, the Lender will agree to release the Original Borrower, Robert G.
Meyer, Mark Mechlowitz, Jorge Sardinas, Robert Fishel, and Harold Katz
(collectively, the “Original Obligors”) from any further obligations or
liabilities under the Loan Documents as of the date of the assumption of the
Loan Documents by the buyer of the Property (the “Assumption Date”), except as
expressly set forth in the remaining section of this Paragraph. Notwithstanding
the foregoing, Original Obligors will not be released from any obligations under
the Loan Documents relating to (a) Hazardous Substances, or any Contamination or
Clean-Up of Hazardous Substances on, at or under the Property during the period
up to the Assumption Date, notwithstanding when any such obligation may be
learned of, discovered or made evident, or (b) any obligation arising under the
Loan Documents for periods prior to the Assumption Date, but which obligation
may be learned of, discovered or made evident on or after the Assumption Date
(collectively, the “Continuing Obligations”). In the event of any default by
Original Obligors in the performance of any Continuing Obligations, which
continues after written notice thereof from Lender to Original Obligors, Lender
may exercise all remedies against Original Obligors available to it under the
terms of the Loan Documents or this Agreement or applicable law as if the
release of the Original Obligors had not been entered into by Lender.

 

C.Right of First Refusal. In the event that Borrower desires to obtain permanent
financing for Phase II of the Property (“Phase II”), then the Borrower agrees to
notify Lender in writing prior to Borrower seeking financing from any other
lender. Borrower agrees to provide Lender with a reasonable time and opportunity
review Borrower’s notice of intent to finance, but no more than ten (10)
business days, prior to submitting a mortgage loan application to another
institutional lender. Lender shall have the option during the ten (10) business
day period to notify Borrower either that Lender would entertain a loan
application for such financing or that Lender is not interested receiving an
application for the financing of Phase II. Borrower acknowledges that Lender has
no obligation to offer to Borrower a loan for Phase II, to respond to Borrower
within the time period set forth above, or to offer to Borrower any particular
loan terms. In the event that Lender does not respond to Borrower’s notice of
intent, then Borrower shall have the unfettered right to seek permanent
financing for Phase II from any source whatsoever.

 

14

 

 

D.Family Transfers. Notwithstanding the foregoing restrictions, transfers of
ownership interests among Family Members (as hereafter defined) for, or to
entities created for Family Members for, estate planning purposes will be
permitted without a transfer fee, provided Borrower receives Lender’s prior
written approval and subject to Lender’s then current standard requirements for
such transfers. Additionally, in connection with any of the transfers
contemplated in this paragraph, the following conditions shall be satisfied: (i)
Borrower shall give Lender no less than thirty (30) days notice prior to any
such transfer, such notice to be accompanied by evidence reasonably satisfactory
to Lender in its sole discretion that the proposed transferee is a permitted
transferee under this paragraph, and (ii) Borrower shall pay all costs of Lender
in connection with such transfer, including legal fees. As used herein, the
“Family Member” shall mean for each of Robert Meyer, Jorge Sardinas, Mark
Mechlowitz, Robert Fishel and Harold Katz, the spouse, parents, children and
grandchildren of said person.

 

E.Internal Transfers. As of the date hereof, the Borrower is a single member
Delaware limited liability company, with its sole member being AR Owner, LLC, a
Delaware limited liability company comprised of multiple members (the “Venture
Entity”). Notwithstanding the foregoing restrictions, the following transfers
shall be permitted subject to Borrower’s compliance with the conditions set
forth below:

 

(1)Transfers of ownership interests in the Venture Entity among the members of
the Venture Entity pursuant to the buy/sell provisions set forth in the Venture
Entity operating agreement in the form approved by Lender as of the date hereof;

(2)Provided that the Venture Entity is managed directly or indirectly by all of
Rob Meyer, Jorge Sardinas, Mark Mechlowitz and Robert Fischel, then direct and
indirect interests in Borrower may be transferred among the members of the
Venture Entity; and

(3)Transfer of all or a portion of HKCG Realty Associates Limited’s interest in
the Venture Entity to an affiliated entity (an entity owned or controlled, in
whole or in part, by Harold Katz), provided that Harold Katz continues to
maintain at least a 25% direct or indirect interest in the Borrower following
such transfer.

 

Additionally, in connection with any of the transfers contemplated in this
paragraph, the following conditions shall be satisfied: (i) Borrower shall give
Lender no less than thirty (30) days notice prior to any such transfer, such
notice to be accompanied by evidence reasonably satisfactory to Lender in its
sole discretion that the proposed transferee is a permitted transferee under
this paragraph, and (ii) Borrower shall pay all costs of Lender in connection
with such transfer, including legal fees.

 

F.Roadway Dedication. By plat recorded in Map Book 53 at Page 886 the prior
owner of the Property dedicated for public use the areas labeled on said plat as
Prosser Way and Skinner Lane (collectively, the “Public Roads”). As of the date
hereof, the acceptance of the Public Roads by the North Carolina Department of
Transportation is in process but not completed. The final acceptance of the
Public Roads by the North Carolina Department of Transportation, and any deed of
conveyance required thereby (if any), shall not constitute a transfer of the
Property in violation of this Section 4.4.

 

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4.5Financial Records and Statements. Borrower shall keep accurate books and
records in accordance with generally accepted accounting principles consistently
applied (or other basis of accounting practices prescribed or permitted by
Lender) in which full, true and correct entries shall be promptly made as to all
operations of the Property and shall permit all such books and records to be
inspected and copied by Lender, its designees or its representatives during
customary business hours. Borrower shall deliver to Lender within 90 days after
the close of its financial year, and upon request by Lender at any time during
the term of the loan secured by the Loan Documents, a statement of condition or
balance sheet of Borrower relating solely to the Property as of the end of such
year and an annual operating statement showing in reasonable detail all income
and expenses of Borrower with respect to the Property, both certified as to
accuracy by either an independent certified public accountant acceptable to
Lender (if requested by Lender) or the senior financial officer or partner of
Borrower. Borrower shall also deliver to Lender simultaneously with its delivery
of the financial statements required above and upon request by Lender at any
time during the year a current list of all persons then occupying portions of
the Property under Leases, the rentals payable by such tenants and the unexpired
terms of their Leases, certified to the best of Borrower’s knowledge, as to
their accuracy by a representative of Borrower acceptable to Lender, and in form
and substance reasonably satisfactory to Lender.

 

4.6Indemnity. Borrower shall indemnify, defend and hold harmless Trustee and
Lender, its agents, employees and contractors from and against, and upon demand,
reimburse Trustee and Lender for all claims, demands, liabilities, losses,
damages, judgments, penalties, costs and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, which may be imposed
upon, asserted against or incurred or paid by either Trustee or Lender by reason
of, on account of or in connection with:

 

(a)any violation of Laws;

 

(b)any bodily injury or death or property damage occurring in, upon or in the
vicinity of the Property through any cause whatsoever;

 

(c)any Contamination, any Clean-Up, any Environmental Actions or Claims, or the
imposition or recording of a lien against the Property due to any Contamination;

 

(d)any act performed or omitted to be performed under the Loan Documents or on
account of any transaction arising out of or in any way connected with the
Property or the Loan Documents;

 

(e)any expenditures or amounts advanced (other than advances of principal under
the Note) by Lender at any time under the Loan Documents; and

 

(f)any act or omission of Lender under any Lease or under the Loan Documents as
a result of Lender's exercise of rights or remedies under Paragraph 8.2 or under
any of the other Loan Documents.

 

The foregoing indemnification shall apply in all instances, unless the claim was
directly caused by the gross negligence or intentional misconduct of Lender.

 

Borrower shall have the right to control any action for which an indemnity is
required pursuant to this Paragraph 4.6 through counsel of its choice, subject
to Lender's consent; however, at Lender's option, Lender may participate in such
action through its own counsel at Borrower's expense. If Borrower does not
notify Lender of its intent to control such action within the earlier of 30 days
of notice of such claim or 5 days prior to the time required by Law to respond
to such claims, Lender may control and settle such action, including a
settlement for non-monetary relief such as Clean-Up, without Borrower's consent
and at Borrower's expense.

 

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If Borrower is a general or limited partnership, Borrower waives any rights it
may have to require Lender to proceed against the assets of the partnership
before proceeding against the assets of individual general partners in the
exercise of its rights under this Paragraph 4.6.

 

4.7Notices. Borrower shall deliver to Lender at Lender's Notice Address promptly
upon receipt of the same, copies of all notices, certificates, documents and
instruments received by Borrower which materially and adversely affect Borrower,
the Property or the Leases, including, without limitation, those given in
connection with Contamination or Environmental Actions or Claims.

 

4.8Estoppel Certificates. Borrower shall promptly furnish to Lender from time to
time, on the request of Lender, written certifications signed and, if so
requested, acknowledged setting forth the then unpaid principal and interest
under the Note and specifying any claims, offsets or defenses which Borrower
asserts against the Secured Debt or any obligations to be paid or performed by
Borrower under the Loan Documents, together with any other information
reasonably requested by Lender.

 

4.9Subordination, Non-Disturbance and Attornment Agreements. Should a Tenant,
under any present or future Lease at the Property, require Borrower to secure a
Subordination, Non-Disturbance and Attornment Agreement from Lender, the
document shall be satisfactory to Lender in its sole discretion.

 

4.10Legal Existence. Borrower shall continuously maintain its existence as a
legal entity and its right to own the Property and to do business in the State.

 

4.11Defense and Notice of Actions. Borrower shall, without liability, cost or
expense to Trustee or Lender protect, preserve and defend title to the Property,
the security hereof and the rights or powers of Trustee or Lender, against all
adverse claimants to title or any possessory or non-possessory interests
therein, whether or not such claimants or encumbrancers assert title paramount
to that of Borrower, Trustee or Lender or claim their interest on the basis of
events or conditions arising subsequent to the date hereof.

 

4.12Lost Note. Borrower shall, if the Note is mutilated, destroyed, lost, or
stolen, deliver to Lender a new promissory note containing the same terms and
conditions as the Note with a notation thereon of the unpaid principal and
accrued and unpaid interest, whereupon the prior note shall be void and of no
further force and effect. Any such new note shall be secured hereby and shall be
deemed to be the "Note" referred to herein.

 

4.13Personalty. Borrower shall use the Personalty primarily for business
purposes and keep it at the Land, subject to Borrower’s right to replace the
same in the due course of business. Borrower shall immediately notify Lender in
writing of any change in its place of business and, as of the execution hereof
and hereafter from time to time when requested by Lender, upon any acquisition
of items of property constituting Personalty, Borrower shall provide Lender with
a current, accurate inventory of the Personalty.

 

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4.14Further Assurances. Borrower shall promptly upon request of Lender or
Trustee: (a) correct any defect, error or omission which may be discovered in
the contents of any Loan Document or in the execution or acknowledgement
thereof; (b) execute, acknowledge, deliver and record or file such further
instruments (including, without limitation, mortgages, deeds of trust, security
agreements, financing statements and specific assignments of rents or leases);
and (c) do such further acts as may be necessary, desirable or proper in
Trustee's or Lender's reasonable opinion to: (i) protect and preserve the first
and valid lien, title and security interest of this Deed of Trust on the
Property or subject thereto any property intended by the terms thereof to be
covered thereby, including, without limitation, any renewals, additions,
substitutions or replacements thereto; or (ii) protect the interest and security
interest of Trustee or Lender in the Property against the rights or interests of
third parties. Notwithstanding the foregoing, Borrower shall not be required to
do any further act that has the effect of changing the economic terms of the
Loan initially set forth in the Loan Documents or in the commitment letter for
the Loan, or imposing on Borrower greater personal liability under the Loan
Documents than that initially set forth in the Loan Documents or in the
commitment letter for the Loan, except to correct computational errors and
omissions to the extent discernible from the Loan Documents or the commitment
letter for the Loan.

 

Borrower hereby appoints each of Trustee and Lender as its attorney-in-fact,
coupled with an interest, to take the above actions and to perform such
obligations on behalf of Borrower, at Borrower's sole expense, if Borrower fails
to comply with this Paragraph 4.14.

 

4.15.Replacement Guarantor. For so long as the Borrower is the Original
Borrower, within ninety (90) days after the death of either Harold Katz or
Robert Fishel, Borrower shall secure a replacement guarantor or indemnitor,
satisfactory to Lender in its sole discretion, who, within the 90 day period,
shall sign all documents required by lender to effectuate this intent. In the
event that the Original Borrower has transferred the Property pursuant to
Section 4.4(B) hereof, then within ninety (90) days after the death of any
guarantor or any indemnitor of the Borrower’s obligations under the Loan
Documents, Borrower shall secure a replacement guarantor or indemnitor,
satisfactory to Lender in its sole discretion, who, within the ninety (90) day
period, shall sign all documents required by Lender to effectuate this intent.

 

4.16.Investment Activities in Iran Energy Sector. Borrower (i) shall not provide
goods or services in the Energy Section in Iran and (ii) shall promptly notify
Lender if it has been placed on a list (or has been notified that it may be
placed on a list) by any state or governmental authority as a party providing
goods or services in the Energy Sector in Iran.

 

5.CASUALTIES AND TAKINGS.

 

5.1Notice to Lender. In the case of any act or occurrence of any kind or nature
which results in damage, loss or destruction to the Property ("Casualty"), or
commencement of any proceedings or actions which might result in a condemnation
or other taking for public or private use of the Property or which relates to
injury, damage, benefit or betterment thereto ("Taking"), Borrower shall
immediately notify Lender describing the nature and the extent of the Taking or
the Casualty, as the case may be. Borrower shall promptly furnish to Lender
copies of all notices, pleadings, determinations and other papers in any such
proceedings or negotiations.

 

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5.2Repair and Replacement. In case of a Casualty or Taking, Borrower shall
promptly (at Borrower's sole cost and expense and regardless of whether the
Insurance Proceeds or the Taking Proceeds, if any, shall be sufficient or made
available by Lender for the purpose) restore, repair, replace and rebuild the
Property as nearly as possible to its quality, utility, value, condition, and
character immediately prior to the Casualty or the Taking, as the case may be.
However, upon a Casualty or Taking resulting in a restoration cost that exceeds
25% of the then replacement value of the Improvements or a Taking of more than
25% of the area of the Land, and application by Lender of the Insurance Proceeds
or the Taking Proceeds to reduction of the Secured Debt in accordance with this
Deed of Trust, Borrower shall be obligated only to remove any debris from the
Property and take such actions as are necessary to make the undamaged or
non-taken portion of the Property into a functional economic unit insofar as it
is possible under the circumstances.

 

5.3Insurance Proceeds and Taking Proceeds.

 

(a)Collection. Borrower shall use its best commercially reasonable efforts to
collect the maximum amount of insurance proceeds payable on account of any
Casualty ("Insurance Proceeds"), and the maximum award, payment or compensation
payable on account of any Taking ("Taking Proceeds"). In the case of a Casualty,
Lender may, in its sole unfettered discretion, make proof of loss to the
insurer, if not made promptly by Borrower. Borrower shall not settle or
otherwise compromise any claim for Insurance Proceeds or Taking Proceeds without
Lender's prior written consent.

 

(b)Assignment to Lender. Borrower hereby assigns, sets over and transfers to
Lender all Insurance Proceeds and Taking Proceeds and authorizes payment of such
Insurance Proceeds and Taking Proceeds to be made directly to Lender. Lender
shall apply the Insurance Proceeds and Taking Proceeds first to pay all expenses
incurred by Lender in connection with the Casualty or Taking, including, without
limitation, attorney's fees and title fees.

 

(c)Application of Proceeds. Unless the conditions set forth in Paragraph 5.4 for
the application of Insurance Proceeds to Restoration are satisfied, Lender may,
in its sole unfettered discretion, apply the balance of the Insurance Proceeds
or Taking Proceeds ("Net Proceeds") to either of the following, or any
combination thereof:

 

(i)to the payment of the Secured Debt, either in whole or in part, in any order
determined by Lender in its sole unfettered discretion; or

 

(ii)to repair or replacement, either partly or entirely, of any part of the
Property so destroyed, damaged or taken, in which case Lender may impose such
terms, conditions and requirements for the disbursement of the Insurance
Proceeds or Taking Proceeds as it, in its sole unfettered discretion, deems
advisable. Lender shall not be a trustee with respect to any Insurance Proceeds
or Taking Proceeds, and may commingle Insurance Proceeds or Taking Proceeds with
its funds without obligation to pay interest thereon.

 

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If any portion of the Secured Debt shall thereafter be unpaid, Borrower shall
not be excused from the payment thereof in accordance with the terms of the Loan
Documents. Lender shall not, in any event or circumstance, be liable or
responsible for failure to collect or exercise diligence in the collection of
any Insurance Proceeds or Taking Proceeds.

 

5.4Disbursement of Insurance Proceeds to Borrower. Lender will disburse the
Insurance Proceeds to Borrower, subject to and in accordance with the terms and
conditions of this Paragraph 5.4, provided that: (1) there exists no Event of
Default or occurrence or facts which with the passage of time, the giving of
notice, or both, will be an Event of Default which remains uncured at any time
before or during the Restoration; (2) the Casualty does not occur within nine
months of the Maturity Date (as defined in the Note); (3) Lender estimates that
the loss or damage can be repaired for less than 75% of the then-existing
Secured Debt; and (4) Borrower has submitted evidence satisfactory to Lender
that Restoration can be completed within 270 days after the Casualty, subject to
delay beyond Borrower's control, other than lack of funds.

 

(a)As to any loss or damage which Lender estimates can be repaired for less than
Three Hundred Thousand Dollars ($300,000.00), Lender shall disburse to Borrower
from the Net Proceeds the amount which it determines is necessary to repair the
damage, which amounts shall be used by Borrower to restore the damage to the
Property caused by the Casualty.

 

(b)As to all other Casualties, Lender shall disburse the Net Proceeds related
thereto to Borrower on the following terms and conditions:

 

(i)Prior to the first and each subsequent disbursement, Borrower shall give
proof satisfactory to Lender that:

 

(1)Lender is holding a fund comprised of the Net Proceeds and, if necessary,
additional deposits made by Borrower or tenants of the Property, sufficient to
restore the Property to its condition and use immediately prior to such loss or
damage ("Restoration"), together with a fund comprised of Net Proceeds or funds
deposited by Borrower, sufficient to pay operating expenses, Property Taxes and
Charges, the Monthly Payments (as defined in the Note) and other so-called
"carrying costs" of the Property during the period of Restoration;

 

(2)       there are no Laws preventing Restoration of the Property;

 

(3)immediately after Restoration, the Leases on the Property will produce
sufficient income to provide a debt coverage ratio of at least 1.1 : 1. The debt
coverage ratio shall be calculated by dividing the operating income (less
operating expenses [but excluding therefrom, extraordinary non-recurring
operating expenses] and Property Taxes and Charges) obtained from the Leases
during the twelve month period immediately after the Restoration by the total
principal and interest payments due on all indebtedness secured by the Property
during the same period;

 

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(4)the Restoration will be conducted under the supervision of an architect,
engineer and/or a general contractor selected by and paid by Borrower and
approved by Lender;

 

(5)the Restoration will be performed pursuant to plans and specifications
approved by Lender and by a contractor or contractors approved by Lender; and

 

(6)the Property, after such Restoration, shall be in compliance with Laws.

 

(ii)With respect to each disbursement and accompanying each request therefor,
there shall be delivered to Lender:

 

(1)a certificate addressed to Lender and executed by Borrower and by the
architect, engineer or general contractor supervising the Restoration that such
disbursement is to pay for costs of the Restoration not paid previously by any
other prior disbursement, that the amount of such disbursement does not exceed
the aggregate of such costs incurred or paid on account of work, labor or
services performed and materials installed in or stored upon the Property at the
date of such certificate and that the disbursement requested, together with the
disbursements made prior thereto, collectively, as a percentage of the total Net
Proceeds, do not exceed the percentage of completion of the Restoration; and

 

(2)a report of title through the date of disbursement showing no new matters of
title including no notices of mechanics liens.

 

(iii)Each disbursement shall be in the amount not greater than 90% of the costs
described in the certificate referred to in Paragraph 5.4(b)(i). Disbursement of
the final balance of the Net Proceeds, constituting not less than ten percent
(10%) thereof, shall be disbursed only upon delivery to Lender of the following,
in addition to the foregoing:

 

(1)evidence satisfactory to Lender that all claims then existing for labor,
services and materials enforceable by lien upon the Property have been paid in
full or provision acceptable to Lender has been made therefor;

 

(2)a certificate of such architect, engineer or general contractor that the
Restoration of the Property has been completed in a good workmanlike manner and
in accordance with all Laws;

 

(3)an estoppel affidavit in form satisfactory to Lender from each tenant
occupying or leasing space in the Property affected by the Casualty; and

 

(4)an as-built survey of the Improvements certified to Lender and in form
satisfactory to Lender.

 

21

 

 

(iv)If the quality of the Restoration is at least equal to the quality of the
Improvements before the Casualty, any Net Proceeds in excess of the amount used
in payment of the Restoration shall be distributed to Borrower.

 

Lender shall not be a trustee with respect to any Insurance Proceeds, and may
mingle Insurance Proceeds with its funds without obligation to pay interest
thereon. Lender shall in no event be liable for the performance or observance of
any covenant or condition arising under any Lease in connection with the
Property nor obligated to take any action to restore the Property.

 

6.CONCERNING TRUSTEE.

 

6.1Trustee's Covenants. Trustee, by its acceptance hereof, covenants faithfully
to perform and fulfill the trusts herein created, being liable, however, only
for gross negligence or willful misconduct, and hereby waives any statutory fee
and agrees to accept reasonable compensation, in lieu thereof, for any services
rendered by it in accordance with the terms hereof.

 

6.2Resignation of Trustee. Trustee may resign at any time upon giving 30 days
notice in writing to Borrower and to Lender.

 

6.3Substitution of Trustee. In the event of the death, removal, resignation,
refusal to act, or the inability to act of Trustee, or in Lender's sole
unfettered discretion for any reason whatsoever, Lender may, at any time or from
time to time without notice and without specifying any reason therefor and
without applying to any court, select and appoint a successor trustee, and all
powers, rights, duties and authority of Trustee, as aforesaid, shall thereupon
become vested in such successor without conveyance from the predecessor trustee.
Such substitute trustee shall not be required to give bond for the faithful
performance of its duties unless required by Lender. Such substitute trustee
shall be appointed by written instrument duly recorded in the county where the
Realty is located, which appointment may be executed by an authorized agent of
Lender, and 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 and any superior officer of Lender. Borrower hereby ratifies
and confirms any and all acts which the herein-named Trustee or its successors
or assigns in this trust shall do in accordance with the Loan Documents,
relevant North Carolina General Statutes, and lawfully by virtue hereof.
Borrower hereby agrees, on behalf of itself and its heirs, executors,
administrators, legal representatives and assigns, that the recitals contained
in any deed or deeds executed in due form by Trustee or any substitute trustee,
acting under the provisions of this Deed of Trust, shall be prima facie evidence
of the facts recited therein, and that it should not be necessary to prove in
any court, otherwise than by such recitals, the existence of the facts essential
to authorize the execution and delivery of such deed or deeds and the passing of
title thereby.

 

6.4Reconveyance and Agreements. At any time, or from time to time, without
liability therefor and without notice, upon written request of Lender and
presentation of this Deed of Trust and the Note or notes secured hereby for
endorsement, and without affecting the personal liability of any person for the
payment of the Secured Debt or the effect of this Deed of Trust upon the
remainder of the Property, Trustee may reconvey any part of the Property,
consent in writing to the making of any map or plat thereof, join in granting
any easement thereon, or join in any extension agreement or any agreement
subordinating the lien or charge hereof.

 

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6.5Release of Lien. Upon written request of Lender stating that the Secured Debt
has been paid and upon surrender to Trustee of this Deed of Trust and the Note
or notes secured hereby for cancellation and retention and payment of its fees,
Trustee shall reconvey, without warranty, the Property then held hereunder. The
recitals in such reconveyance of any matters or facts shall be conclusive proof
of the truthfulness thereof. The grantee in such reconveyance may be described
as "the person or persons legally entitled thereto."

 

6.6Exculpation and Indemnification of Trustee. Trustee shall not be liable for
any error of judgment or act done by Trustee in good faith, or be otherwise
responsible or accountable under any circumstances whatsoever, except for
Trustee's gross negligence or willful misconduct. Trustee shall have the right
to rely on any instrument, document or signature authorizing or supporting any
action taken or proposed to be taken by it hereunder, believed by Trustee in
good faith to be genuine. All monies received by Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated in any manner from any other moneys
(except to the extent required by law), and Trustee shall be under no liability
for interest on any moneys received by it hereunder (except to the extent
required by Law). Borrower will reimburse Trustee for, and indemnify, save
harmless and defend Trustee against, any and all liability and expenses
(including, without limitation, reasonable attorneys' fees and expenses) which
Trustee may incur in the performance of its duties under the Loan Documents.

 

7.LEGAL PROCEEDINGS. Whether or not an Event of Default (as defined in Paragraph
8.1) has occurred and exists, Lender shall have the right, but not the duty or
obligation, to intervene or otherwise participate in, prosecute or defend at any
time any legal or equitable proceedings including, without limitation, any
eminent domain proceedings which affect the Property, the Leases or any of the
rights created by the Loan Documents, but only after notice to Borrower and if
permitted by Laws.

 

8.DEFAULTS; REMEDIES OF LENDER.

 

8.1Events of Default. Any of the following shall constitute an "Event of
Default" hereunder:

 

(a)Breach of Named Covenants. Any breach by Borrower of the covenants in
Paragraph 4.1(a) (Secured Debt), Paragraph 4.1(b) (Property Taxes and Charges),
Paragraph 4.2(f) (Clean-Up) or Paragraph 4.3 (Insurance); provided, however,
that a breach of the covenant in Paragraph 4.1(a) to pay the Secured Debt as and
when due under the Note and the other Loan Documents shall not constitute an
Event of Default unless it shall continue for 5 days after the date such payment
is due; provided further, however, that such 5-day grace period shall not apply
more than twice in any one period of 12 consecutive months, the third such
breach in such 12-month period constituting an Event of Default without
expiration of any grace period. With regard to breaches under Section 4.1(b),
Lender’s failure to pay Property Taxes and Charges prior to delinquency, to the
extent Lender has received funds sufficient to pay the same pursuant to Section
4.1(c), shall not constitute a default hereunder.

 

23

 

 

(b)Breach of Other Covenants. Any breach by Borrower of any other covenant,
agreement, condition, term or provision of any of the Loan Documents or any
certificate or side letter delivered in connection with the Loan Documents,
which continues for 30 days after written notice thereof by Lender to Borrower;
provided, however, that if the nature of Borrower's breach is such that more
than 30 days is reasonably required to cure the same, then Borrower shall not be
deemed to be in default if Borrower commences such cure as promptly as
reasonably possible within such 30-day period, diligently prosecutes such cure
to completion, and completes such cure within 90 days from the date of Lender's
aforesaid notice to Borrower.

 

(c)Misrepresentations. Any representation or warranty made by Borrower in the
Loan Documents or any certificate or side letter delivered in connection with
the Loan Documents proves to be untrue, misleading or is not fulfilled, in any
material way; provided, however, in the event that the nature of the
representation or warranty is such that Borrower can take actions to make the
representation or warranty true and correct as and when made, then Borrower
shall not be deemed to be in default hereunder if Borrower takes such action and
cures said misrepresentation or warranty within ten (10) days of receiving
notice of the same from Lender. Notwithstanding anything that may be interpreted
to the contrary, the Borrower’s ability to cure said default, and the cure of
said default, shall not operate to release Borrower from any liability to Lender
arising from said misrepresentation or warranty arising under Section 12 of the
Note.

 

(d)Bankruptcy. Immediately upon the occurrence of any of the following: (i) any
one or more of the then legal or beneficial owners of the Property, or any
individual or entity then personally liable on the Secured Debt (including,
without limitation, any guarantor or indemnitor pursuant to any guaranty or
indemnity) or, if Borrower is a partnership, any general partner or joint
venturer (collectively "Parties in Interest") becomes insolvent, makes a
transfer in fraud of, or an assignment for the benefit of, creditors, or admits
in writing its inability, or is unable, to pay debts as they become due; or (ii)
a receiver, custodian, liquidator or trustee is appointed for all or
substantially all of the assets of a Party in Interest or for the Property in
any proceeding brought by a Party in Interest, or any such receiver or trustee
is appointed in any proceeding brought against a Party in Interest or the
Property and such appointment is not promptly contested or is not dismissed or
discharged within 120 days after such appointment, or a Party in Interest
consents or acquiesces in such appointment, or (iii) a Party in Interest files a
petition under the Bankruptcy Code, as amended, or under any similar law or
statute of the United States or any state thereof; or (iv) a petition against a
Party in Interest is filed commencing an involuntary case under any present or
future Federal or state bankruptcy or similar law and a Party in Interest
consents to or otherwise acquiesces to the same; or (v) any composition,
rearrangement, liquidation, extension, reorganization or other relief of debtors
now or hereafter existing is requested by a Party in Interest.

 

24

 

 

(e)Adverse Court Action. A court of competent jurisdiction enters a stay order
with respect to, assumes custody of or sequesters all or a substantial part of
the Property or the Property is taken on execution or by other process of law.

 

8.2Remedies. In case of an Event of Default, Lender and, to the extent
authorized by Lender, Trustee may, at any time thereafter, at its option,
without notice, and without bringing any legal action or proceeding unless
expressly required by law, exercise any or all of the following remedies:

 

(a)Acceleration. Declare the entire Secured Debt due and payable, and it shall
thereupon be immediately due and payable.

 

(b)Foreclosure. Foreclose the lien of this Deed of Trust pursuant to the power
of sale hereby granted or by judicial proceeding. It shall be lawful for, and
the duty of, Trustee to sell all or any portion of the Property at public
auction for cash after having first given such notice as to commencement of
foreclosure proceedings and having obtained such findings and leave of court as
may then be required by law and having given such notice and having advertised
the time and place of such sale in such manner as may then be required by law,
and upon such sale and any resale to convey title to the purchaser. Trustee
shall have the right to designate the place of sale in compliance with
applicable law and the sale shall be held at the place designated by the notice
of sale. Trustee may require the successful bidder at any sale to deposit
immediately with Trustee cash or certified check or cashier’s check in an amount
up to five percent (5%) of the bid provided notice of such deposit requirement
is published as required by law. The bid may be rejected if the deposit is not
immediately made. Such deposit shall be refunded in case of a sale to another
purchaser pursuant to an upset bid or if Trustee is unable to convey the portion
of the Property so sold to the bidder because the power of sale has been
terminated in accordance with applicable law. If the purchaser fails to comply
with its bid, the deposit may, at the option of Trustee, be retained and applied
to the expenses of the sale and any resales and to any damages and expenses
incurred by reason of such default (including the amount that such bid exceeds
the final sales price), or may be deposited with the Clerk of Superior Court. In
all other cases, the deposit shall be applied to the purchase price. Pursuant to
Section 25-9-604 of the North Carolina General Statutes (or any amendment
thereto), Trustee is expressly authorized and empowered to expose to sale and
sell, together with the real estate, any portion of the Property which
constitutes Personalty. If Personalty is sold hereunder, it need not be at the
place of sale.

 

Trustee, having retained a commercially reasonable sum (but in no event more
than five percent (5%)) from the gross proceeds of such sale (“Commission”) as
compensation for the Trustee’s services and having retained also all advertising
and other expenses incurred by Trustee, including a reasonable attorneys’ fee
for legal services actually performed by an attorney employed by Trustee, shall
apply the residue first to the payment of any taxes or assessments which may be
a lien against the Property, unless Trustee advertised and sold the same subject
to such taxes or assessments; and apply the remainder to the sums secured by
this Deed of Trust with the balance to the account of Borrower or other party
entitled thereto, as their interests may appear. Lender shall have the absolute
right to determine the order in which the property will be sold and the order in
which the indebtedness secured hereby will be satisfied from any proceeds of
sale.

 

25

 

 

In case foreclosure is commenced, but not completed, Borrower shall pay to
Trustee all expenses incurred by Trustee and a partial commission in accordance
with the following schedule: one percent (1%) of the principal balance of the
Note if foreclosure is terminated before Trustee issues a notice of hearing on
the right to foreclose; two percent (2%) of the principal balance of the Note if
foreclosure is terminated after issuance of said notice; three percent (3%) if
foreclosure is terminated after such hearing; and the full commission after the
initial sale.

 

At such sale Lender may bid for and acquire any part of the Property and in lieu
of paying cash therefor may take settlement of the purchase price by a credit
upon the sums due and payable under and secured by this Deed of Trust the net
sales price which shall be the proceeds of sale after deducting therefrom the
expenses referred to above. If there be any sale of the Property herein
conveyed, Borrower or any person in possession of the Property, as tenant or
otherwise, shall become a tenant at will of the purchaser at such sale and may
be removed by writ of ejectment, summary ejectment, writ of possession or other
lawful statutory or common law remedy. If at the time of sale Trustee deems it
best for any reason to postpone or continue the same from time to time, Trustee
may do so, and no failure or failures of Lender or Trustee to exercise the
rights hereinabove granted, nor any acts or omission, nor any lapse of time
shall be construed to be a waiver of any right hereunder, if the rights shall
have once accrued. The power of sale above granted may be exercised at different
times as to different portions of the Property. Any recital of fact by Trustee
in its deed relative to default of Borrower or to notice, advertisement and sale
in accordance with law shall be received as prima facie evidence of such fact.

 

(c)Offset Rights. Apply in satisfaction of the Secured Debt or any amount at any
time to become due or payable in connection with the ownership occupancy, use,
restoration or repair of the Property, any deposits or other sums credited by or
due from Lender to Borrower, including without limitation, Insurance Proceeds,
Taking Proceeds and funds held in the escrow account referred to in Paragraph
4.1(c).

 

(d)Cure Rights. Whether or not an Event of Default has occurred and without
releasing Borrower from any obligation hereunder or under the Loan Documents,
Lender may perform any of Borrower's obligations. In connection therewith,
Lender may enter upon the Property and do such acts and things as Lender deems
necessary or desirable to protect the Property or the Leases, including, without
limitation: (i) paying, purchasing, contesting or compromising any encumbrance
(including, without limitation, any junior debt outstanding), charge, lien,
claim of lien, Property Taxes and Charges or Property Liabilities; (ii) paying
any Insurance Premiums; (iii) employing counsel, accountants, contractors and
other persons to assist Lender in the foregoing; and (iv) undertaking the
Clean-Up of any Contamination.

 

26

 

 

(e)Possession of Property. Take physical possession of the Property and of all
books, records, and documents and accounts relating thereto and exercise,
without interference from Borrower, any and all rights which Borrower has with
respect to the Property, including, without limitation, the right at Borrower's
expense to rent and lease the Property, to collect rents, issues and profits, to
hire a professional property manager for the Property, to Clean-Up any
Contamination and to make from time to time all alterations, renovations,
repairs and replacements to the Property as may seem proper to Lender. Nothing
in this Paragraph 8.2 shall impose any duty, obligation or responsibility upon
Lender for the control, care, management, repair or Clean-Up of the Property. If
necessary to obtain possession as provided for above, Lender may, without
exposure to liability from Borrower or other persons, invoke any and all legal
remedies to dispossess Borrower, including, without limitation, one or more
actions for forcible entry and detainer, trespass and restitution. Lender shall
not be deemed a mortgagee in possession unless and until Lender enters into
actual possession of the Property.

 

(f)Receiver. Secure the appointment of a receiver or receivers, as a matter of
right for the Property whether such receivership be incident to a proposed sale
of such Property or otherwise, and without regard to the value of the Property
or the solvency of Borrower. Borrower hereby consents to the appointment of such
receiver or receivers, waives any and all defenses to such appointment and
agrees not to oppose any application therefor by Lender. The appointment of such
receiver, trustee or other appointee by virtue of any court order or Laws shall
not impair or in any manner prejudice the rights of Lender to receive payment of
the rents and income pursuant to the Lease Assignment.

 

(g)Uniform Commercial Code Remedies. Exercise any and all rights of a secured
party with respect to the Personalty under the Uniform Commercial Code of the
State and in conjunction with, in addition to or in substitution for, those
rights and remedies:

 

(i)take possession of, assemble and collect the Personalty or render it unusable
by Borrower; and

 

(ii)require Borrower to assemble the Personalty and make it available at any
place Lender may designate so as to allow Lender to take possession of or
dispose of the Personalty.

 

Written notice mailed to Borrower, as provided herein, 15 days prior to the date
of public sale of the Personalty or prior to the date after which private sale
of the Personalty will be made, shall constitute reasonable notice. Any sale
made pursuant to the provisions of this Paragraph 8.2(g) shall be deemed to have
been a public sale conducted in a commercially reasonable manner, if held
contemporaneously with the sale of the Property as provided in Paragraph 8.2(j)
of this Deed of Trust. In the event of a foreclosure sale, whether made by
Lender under the terms hereof, or under judgment of a court, the Personalty and
the other parts of the Property may, at the option of Lender, be sold in parts
or as a whole. It shall not be necessary that Lender take possession of the
Personalty prior to the time that any sale pursuant to the provisions of this
Paragraph 8.2(g) is conducted and it shall not be necessary that the Personalty
be present at the location of such sale.

 

27

 

 

A CARBON, PHOTOGRAPHIC OR OTHER REPRODUCTION OF THIS DEED OF TRUST OR ANY
FINANCING STATEMENT RELATING TO THIS DEED OF TRUST SHALL BE SUFFICIENT AS A
FINANCING STATEMENT. THIS DEED OF TRUST IS EFFECTIVE AND SHALL BE EFFECTIVE AS A
FINANCING STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO ALL GOODS WHICH
ARE OR ARE TO BECOME FIXTURES INCLUDED WITHIN THE PROPERTY AND IS TO BE FILED
FOR RECORD IN THE REAL ESTATE RECORDS OF THE LOCATION IN THE STATE WHERE THE
PROPERTY IS SITUATED. THE MAILING ADDRESS OF LENDER AND THE ADDRESS OF BORROWER
FROM WHICH INFORMATION CONCERNING THE SECURITY INTEREST MAY BE OBTAINED, ARE SET
FORTH ON THE COVER SHEET HEREOF.

 

(h)Judicial Actions. Commence and maintain an action or actions in any court of
competent jurisdiction to foreclose this Deed of Trust pursuant to the Laws of
the State or to obtain specific enforcement of the covenants of Borrower
hereunder. Borrower agrees that such covenants shall be specifically enforceable
by injunction or any other appropriate equitable remedy.

 

(i)Subrogation. Have and exercise all rights and remedies of any person, entity
or body politic to whom Lender renders payment or performance in connection with
the exercise of its rights and remedies under the Loan Documents, including,
without limitation, any rights or remedies under any mechanic's or vendor's lien
or liens, superior titles, mortgages, deeds of trust liens encumbrances, rights,
equities and charges of all kinds heretofore or hereafter existing on the
Property to the extent that the same are paid or discharged from the proceeds of
the Note whether or not released of record.

 

(j)Sale. Sell the Property in accordance with Laws.

 

(k)Other. Take such other actions or commence such other proceedings as Lender
deems necessary or advisable to protect its interest in the Property and its
ability to collect the Secured Debt as are available under Laws.

 

Any sums advanced by Lender under this Paragraph 8.2 shall bear interest at the
lesser of (i) the Default Rate specified in the Note or (ii) the maximum
nonusurious interest rate permitted by applicable law, and shall be payable by
Borrower on demand. Such sums together with such interest shall constitute a
part of the Secured Debt.

 

All sums realized by Lender under this Paragraph 8.2, less all costs and
expenses incurred by Lender under this Paragraph 8.2, including, without
limitation, reasonable attorneys fees and disbursements, property management
fees, costs of title commitments, inspections, environmental site assessments
and testing, engineering reports, alterations, renovations, repairs and
replacements made or authorized by Lender and all expenses incident to Lender
taking possession of the Property, and such sums as Lender deems appropriate as
a reserve to meet future expenses of the Property, shall be applied to the
Secured Debt in such order as Lender shall determine. Thereafter, any balance
shall be paid to the person or persons legally entitled thereto. In all
instances under the Loan Documents, all references to attorney’s fees and costs
shall mean reasonable and actual attorney’s fees, at standard hourly rates and
without regard for any statutory presumption of attorney’s fee, including,
without limitation, the provisions of N.C. Gen. Stat. Section 6-21.2.

 

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8.3Holding Over. Should Borrower, after Lender has obtained title to the
Property, continue in possession of any part of the Property, either lawfully or
unlawfully, Borrower shall be a tenant from day to day, terminable at the will
of either Borrower or Lender, at a reasonable rental per diem, such rental to be
due and payable daily to Lender.

 

8.4General Provisions.

 

(a)Multiple Sales. Several sales may be made pursuant to Paragraph 8.2 without
exhausting Lender's right to such remedy for any unsatisfied part of the Secured
Debt and without exhausting the power to exercise such remedy for any other part
of the Secured Debt, whether matured at the time or subsequently maturing. If a
part of the Property is sold pursuant to Paragraph 8.2, and the proceeds thereof
do not fully pay and satisfy the Secured Debt, such sale, if so made, shall not
in any manner affect the unpaid and unsatisfied part of the Secured Debt, but as
to such unpaid and unsatisfied part, the Loan Documents shall remain in full
force and effect as though no such sale had been made.

 

(b)Cumulative Remedies. All of the rights, remedies and options set forth in
Paragraph 8.2 or otherwise available at law or in equity, are cumulative and may
be exercised without regard to the adequacy of or exclusion of any other right,
remedy, option or security held by Lender.

 

(c)Right to Purchase. At any sale of the Property pursuant to Paragraph 8.2,
Lender shall have the right to purchase the Property being sold, and in such
case the right to credit against the amount of the bid made therefor (to the
extent necessary) all or any of the Secured Debt then due.

 

(d)Right to Terminate Proceedings. Lender may, in its sole unfettered
discretion, at any time before conclusion of any proceeding or other action
brought in connection with its exercise of the remedies provided for in
Paragraph 8.2, terminate, without prejudice to Lender, such proceedings or
actions.

 

(e)No Waiver or Release. Lender may resort to any remedies and the security
given by the Loan Documents in whole or in part, and in such portions and in
such order as may seem best to Lender in its sole unfettered discretion, and any
such action shall not in any way be considered as a waiver of any of the rights,
benefits or remedies evidenced by the Loan Documents. The failure of Lender to
exercise any right, remedy or option provided for in the Loan Documents shall
not be deemed to be a waiver of any of the covenants or obligations secured by
the Loan Documents. No sale of all or any of the Property, no forbearance on the
part of Lender and no extension of the time for the payment of the whole or any
part of the Secured Debt or any other indulgence given by Lender to Borrower or
any other person or entity, shall operate to release or in any manner affect
Lender's interest in the Property, or the liability of Borrower to pay the
Secured Debt, except to the extent that such liability shall be reduced by
proceeds of sale of all or any of the Property received by Lender.

 

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(f)Waivers and Agreements Regarding Remedies. To the full extent Borrower may do
so and with respect to Lender's exercise of its remedies hereunder, Borrower
hereby:

 

(i)agrees that Borrower will not at any time insist upon, plead, claim or take
the benefit or advantage of any Laws now or hereafter in force providing for any
appraisal or appraisement, valuation, stay, extension or redemption, and waives
and releases all rights of redemption, valuation, appraisal or appraisement,
stay of execution, extension and notice of election to mature or declare due the
whole of the Secured Debt;

 

(ii)waives all rights to marshalling of the assets of Borrower, Borrower's
partners, members and shareholders, and others with interests in Borrower,
including the Property, or to a sale in inverse order of alienation in the event
of foreclosure of the interests hereby created, and agrees not to assert any
right under any Laws pertaining to the marshalling of assets, the sale in
inverse order of alienation, the exemption of homestead, the administration of
estates of decedents, or other matters whatsoever to defeat, reduce or affect
the right of Lender under the terms of the Loan Documents to sale of the
Property for the collection of the Secured Debt without any prior or different
resort for collection, or the right of Lender to the payment of the Secured Debt
out of the proceeds of sale of the Property in preference to every other
claimant whatsoever;

 

(iii)waives any right to bring or utilize any defense, counterclaim or setoff,
other than one in good faith which denies the existence or sufficiency of the
facts upon which the foreclosure action is grounded or which is based on
Lender's wrongful actions. If any defense, counterclaim or setoff (other than
one permitted by the preceding sentence) is timely raised in such foreclosure
action, such defense, counterclaim or setoff shall be dismissed. If such
defense, counterclaim or setoff is based on a claim which could be tried in an
action for money damages, the foregoing waiver shall not bar a separate action
for such damages (unless such claim is required by Laws or applicable rules of
procedure to be pleaded in or consolidated with the action initiated by Lender)
but such separate action shall not thereafter be consolidated with Lender's
foreclosure action. The bringing of such separate action for money damages shall
not be deemed to afford any grounds for staying Lender's foreclosure action;

 

(iv)waives and relinquishes any and all rights and remedies which Borrower may
have or be able to assert by reason of the provisions of any Laws pertaining to
the rights and remedies of sureties;

 

(v)waives the defense of laches and any applicable statutes of limitation; and

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(vi)waives any rights or remedies on account of any extensions of time, releases
granted or other dealings between Lender and any subsequent owner of the Realty
as said activities are contemplated or otherwise addressed in North Carolina
General Statute, Section 45-45.1 or similar or subsequent law.

 

(g)Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
Borrower and Lender hereby waive trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other, on or in
respect of any matter whatsoever arising out of, or in any way connected with,
this Deed of Trust or any of the other Loan Documents, or the relationship of
Borrower and Lender hereunder or thereunder.

 

(h)Lender's Discretion. Unless specifically stated otherwise, Lender may
exercise its options and remedies under any of the Loan Documents in its sole
unfettered discretion.

 

(i)Sales. In the event of the sale or other disposition of the Property pursuant
to Paragraph 8.2 and the execution of a deed or other conveyance pursuant
thereto, the recitals therein of facts (such as default, the giving of notice of
default and notice of sale, demand that such sale should be made, postponement
of sale, terms of sale, sale, purchase, payment of purchase price and other
facts affecting the regularity or validity of such sale or disposition) shall be
conclusive proof of the truth of such facts. Any such deed or conveyance shall
be conclusive against all persons as to such facts recited therein.

 

The acknowledgment of the receipt of the purchase money, contained in any deed
or conveyance executed as aforesaid, shall be sufficient to discharge the
grantee of all obligations to see to the proper application of the consideration
therefor as herein provided. The purchaser at any trustee's or foreclosure sale
hereunder may disaffirm any easement granted or rental agreement or Lease made
in violation of any provision of the Loan Documents, and may take immediate
possession of the Property free from, and despite the terms of, such grant of
easement, rental agreement or Lease.

 

9.POSSESSION AND DEFEASANCE.

 

9.1Possession. Until the occurrence of an Event of Default and except as
otherwise expressly provided to the contrary in any of the Loan Documents,
Borrower shall retain full possession of the Property with full right to use the
Property and to collect the rents, issues and profits therefrom, subject,
however, to all of the terms and provisions of the Loan Documents.

 

9.2Defeasance. If the Secured Debt is paid in full, then, in that event only,
all rights under the Loan Documents shall terminate and the Property shall
become wholly clear of the liens, grants, security interests, conveyances and
assignments evidenced hereby, and Lender shall release or cause to be released,
such liens, grants, assignments, conveyances and security interests in due form
at Borrower's cost, and this Deed of Trust shall be void.

 

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To the extent permitted by Laws such an instrument may describe the grantee as
"the person or persons legally entitled thereto." Lender shall not have any duty
to determine the rights of persons claiming to be rightful grantees of any of
the Property. When the Property has been fully released, such release shall
operate as a reassignment of all future rents, issues and profits of the
Property to the person or persons legally entitled thereto, unless such release
expressly provides to the contrary.

 

Notwithstanding the foregoing, Borrower's obligation under Paragraph 4.6(c)
(environmental indemnity) shall not terminate and shall survive the discharge of
the Loan Documents, whether through full payment of the Secured Debt,
foreclosure, deed in lieu of foreclosure or otherwise, for the benefit of Lender
and its successors and assigns, including without limitation, any purchaser at a
foreclosure sale.

 

10.GENERAL.

 

10.1Lender's Right to Waive, Consent or Release. Lender may at any time and from
time to time, in writing: (a) waive compliance by Borrower with any covenant
herein made by Borrower to the extent and in the manner specified in such
writing; (b) consent to Borrower doing any act which Borrower is prohibited
hereunder from doing, or consent to Borrower's failing to do any act which
Borrower is required hereunder to do, to the extent and in the manner specified
in such writing; or (c) release any part of the Property, or any interest
therein from this Deed of Trust and the lien of the Loan Documents. No such act
shall in any way impair the rights hereunder of Lender except to the extent
specifically agreed to by Lender in such writing.

 

10.2No Impairment. The interests and rights of Lender under the Loan Documents
shall not be impaired by any indulgence, including, without limitation: (a) any
renewal, extension or modification which Lender may grant with respect to any of
the Secured Debt; (b) any surrender, compromise, release, renewal, extension,
exchange or substitution which Lender may grant in respect of the Property or
any interest therein; or (c) any release or indulgence granted to any maker,
endorser, guarantor, indemnitor or surety of any of the Secured Debt.

 

10.3Amendments. The Loan Documents may not be waived, changed or discharged
orally, but only by an agreement in writing and signed by Lender in Canada,
based on prior approval by the Canadian Mortgages Senior Managing Director or
his/her designee. Any oral waiver, change or discharge of any provision of the
Loan Documents shall be without authority and of no force and effect. Any
waiver, change or discharge shall be effective only in the specific instances
and for the purposes for which given and to the extent therein specified.

 

10.4No Usury. Any provision contained in any of the Loan Documents
notwithstanding, Lender shall not be entitled to receive or collect, nor shall
Borrower be obligated to pay interest on any of the Secured Debt in excess of
the maximum rate of interest permitted by Laws, and if any provisions of the
Loan Documents shall ever be construed or held to permit the collection or to
require the payment of any amount of interest in excess of that permitted by
such Laws, the provisions of this Paragraph 10.4 shall control unless contrary
or inconsistent with any provisions of the Note, in which case the provisions of
the Note shall control. Borrower and Lender intend to conform strictly to the
usury Laws now in force, and the Loan Documents evidencing or relating to any of
the Secured Debt shall be held subject to modification to conform to said Laws
as now or hereafter construed.

 

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10.5Notices. Any notice, request, demand or other communication required or
permitted under the Loan Documents (unless otherwise expressly provided therein)
shall be given in writing by delivering the same in person to the intended
addressee, by overnight courier service with guaranteed next day delivery or by
certified United States Mail postage prepaid sent to the intended addressee at
the applicable Notice Address or to such different address as either Borrower or
Lender shall have designated by written notice to the other sent in accordance
herewith. Such notices shall be deemed given when received or, if earlier, in
the case of delivery by courier service with guaranteed next day delivery, the
next day or the day designated for delivery, or in the case of delivery by
certified United States Mail, 2 days after deposit therein. No notice to or
demand on Borrower in any case shall of itself entitle Borrower to any other or
further notice or demand in similar or other circumstances.

 

10.6Successors and Assigns. The terms, provisions, covenants and conditions
hereof shall be binding upon Borrower, and any permitted successors and assigns
of Borrower, and shall inure to the benefit of Lender and its successors,
substitutes and assigns, and shall constitute covenants running with the Land.
All references in this Deed of Trust to Borrower, Lender or Trustee shall be
deemed to include all such successors, substitutes and assigns.

 

If in contravention of the provisions of this Deed of Trust or otherwise,
ownership of the Property or any portion thereof becomes vested in a person
other than Borrower, Lender may, without notice to Borrower, whether or not
Lender has given written consent to such change in ownership, deal with such
successor or successors in interest with reference to the Loan Documents and the
Secured Debt in the same manner as with Borrower, without in any way vitiating
or discharging Lender's remedies or Borrower's liability under the Loan
Documents or on the Secured Debt.

 

10.7Severability. A determination that any provision of the Loan Documents is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision, and any determination that the application of any provision of
the Loan Documents to any person or circumstances is illegal or unenforceable
shall not affect the enforceability or validity of such provision as it may
apply to any other persons or circumstances.

 

10.8Gender and Construction. Within this Deed of Trust, words of any gender
shall be held and construed to include any other gender, and words in the
singular number shall be held and construed to include the plural, unless the
context otherwise requires. References in this Deed of Trust to "herein",
"hereunder" or "hereby" shall refer to this entire Deed of Trust, unless the
context otherwise requires. When the phrase "in its sole unfettered discretion"
is used in the Loan Documents with respect to Lender, it shall permit Lender to
evaluate such criteria (without allowance for reasonableness) as it chooses in
approving or disapproving the requested or pending action.

 

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10.9Joint and Several Liability. If Borrower is composed of more than one party,
the obligations, covenants, agreements, representations and warranties contained
in the Loan Documents, as well as the obligations arising thereunder, are and
shall be joint and several as to each such party.

 

10.10Modifications. References to any of the Loan Documents in this Deed of
Trust shall include all amendments, modifications, extensions and renewals
thereof.

 

10.11Governing Law. This Deed of Trust shall be construed according to and
governed by the laws of the State.

 

10.12Captions. All paragraph and subparagraph captions are for convenience of
reference only and shall not affect the construction of any provision herein.

 

10.13Nonrecourse. Borrower shall be liable upon the indebtedness evidenced by
the Note, for all sums to accrue or to become payable thereon and for
performance of all covenants contained in the Note or in any of the other Loan
Documents, to the extent, but only to the extent, of Lender's security for the
same, including, without limitation, all properties, rights, estates and
interests covered by this Deed of Trust and the other Loan Documents. No
attachment, execution or other writ or process shall be sought, issued or levied
upon any assets, properties or funds of Borrower other than the properties,
rights, estates and interests described in this Deed of Trust and the other Loan
Documents. In the event of foreclosure of such liens, mortgages or security
interests, by private power of sale or otherwise, no judgment for any deficiency
upon such indebtedness, sums and amounts shall be sought or obtained by Lender
against Borrower. Subject to the foregoing, nothing herein contained shall be
construed to prevent Lender from exercising and enforcing any other remedy
relating to the Property allowed at law or in equity or by any statute or by the
terms of any of the Loan Documents.

 

Notwithstanding the foregoing, Borrower shall be personally liable to Lender as
set forth in Paragraph 12 of the Note.

 

10.14Sale, Assignment or Conversion of Secured Debt. Borrower hereby agrees that
Lender may (i) sell all or any portion of the Secured Debt or securitize all or
a portion of the Secured Debt in one or more transactions through the issuance
of pass-through certificates or other securities evidencing ownership of a
portion of the Secured Debt or beneficial interest therein, in one or more rated
or unrated public or private transactions; (ii) assign servicing rights with
respect to the Secured Debt; or (iii) convert the Note and this Deed of Trust to
registered form (each such transaction as described in the preceding clauses
(i), (ii) and (iii) being referred to as a "Covered Transaction"), without the
consent of or notice to Borrower. Borrower hereby agrees that, if requested, it
will, at Lender's expense, reasonably cooperate with Lender and use its best
efforts to facilitate the consummation of a Covered Transaction, including,
without limitation, by: (a) delivering estoppels, opinions, tax certificates or
any other documents, each in form and substance reasonably acceptable to Lender
or any rating agency; (b) providing such additional information as may
reasonably be required by Lender, or granting reasonable access to Lender in
order to obtain such information, including, without limitation, updated
environmental information and appraisals; and (c) appointing as its agent a
registrar and transfer agent, which agent shall maintain, subject to such
reasonable regulations as such agent shall provide, such books and records as
may be necessary for the registration and transfer of the Note and this Deed of
Trust, all in a manner acceptable to Lender in its sole unfettered discretion.
Borrower hereby agrees that Lender may forward to each potential purchaser,
transferee, assignee, service, trustee, participant or investor in any Covered
Transaction, or to any rating agency, all documents and information which Lender
now has or may hereafter acquire relating to the Secured Debt, the Property,
Borrower or any guarantor or indemnitor of the Secured Debt that has been
furnished by Borrower or any other party in connection with the Secured Debt, as
Lender may, in its sole unfettered discretion, determine is necessary or
desirable. Nothing in this Section 10.14 shall require Borrower to do any
further act that has the effect of changing the economic terms of the Note or
the Loan Documents or imposing on Borrower any greater personal liability under
than Loan Documents than is set forth herein or in the Other Loan Documents.

 

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10.15Acknowledgment of Receipt. Borrower hereby acknowledges receipt, without
charge, of a true and complete copy of this Deed of Trust.

 

10.16.Time of the Essence. Time is of the essence of each and every payment
and/or performance obligation of Borrower and the Guarantor(s) under this Deed
of Trust or any of the other Loan Documents.

 

10.17Exhibits. The following are the Exhibits referred to in this Deed of Trust,
which are hereby incorporated by reference herein:

 

Exhibit A - Property Description

 

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IN WITNESS WHEREOF, this Deed of Trust has been executed and delivered under
seal as of the date first above written.

 

  BORROWER:       AR I Borrower, LLC         By: /s/ Rob Meyer           Name:  
Rob Meyer           Title:     President

 

STATE OF GEORGIA – COUNTY OF COBB

 

I certify that the following person personally appeared before me this day
acknowledging to me that he signed the foregoing document: Rob Meyer.

 

Today's Date: 11.15, 2013 Sheronda Davis   [Notary's signature as name appears
on seal]        Sheronda Davis   [Notary's printed name as name appears on seal]
      My commission expires: 8.21, 2015

 

[Affix Notary Stamp/Seal in Space Above]

 

 

 

 

EXHIBIT A

 

Property Description

 

Being all of Parcels 1, 2 and the areas shown as the sixty-six (66) foot public
right-of-way (“Prosser Way”) and the fifty (50) foot public right of way
(“Skinner Lane”), as shown on a plat recorded in Map Book 53, page 886, and
Parcel 3A as shown on a plat recorded in Map Book 55, page 355, Mecklenburg
County Register of Deeds, reference to which is hereby made for a more
particular description.

 

TOGETHER WITH the rights and easements conferred by that Sewer Easement
Agreement recorded in Book 18053, at page 845, Mecklenburg County Register of
Deeds, as amended by First Amendment to Sewer Agreement recorded in Book 20732,
at page 68, and Second Amendment to Sewer Easement Agreement recorded in Book
22541, at page 189.

 

TOGETHER WITH easements contained in that Declaration of Easements, Covenants
and Restrictions recorded in Book 28849, at page 615, Mecklenburg County
Register of Deeds.