Exhibit 10.10

 

DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS

AND SECURITY AGREEMENT AND FIXTURE FILING

 

(COLLATERAL INCLUDES FIXTURES)

 

WAKE FOREST APARTMENTS LLC, a Delaware limited liability company,

 

Grantor

 

to

 

THE FIDELITY COMPANY, a North Carolina corporation,

Trustee

 

for the benefit of

 

NEW YORK LIFE INSURANCE COMPANY,

Beneficiary

 

Dated as of: January 21, 2014

 

Premises:              Estates at Wake Forest Apartments

1524 Woodfield Creek Drive, Wake Forest, North Carolina 27587

 

Drafted by and Record And Return To:

 

Womble Carlyle Sandridge & Rice, LLP

One West Fourth Street

Winston-Salem, NC 27101

Attn: Hardin G. Halsey, Esq. 

 

WCSR 31792892 Deed of Trust
Loan No. 374-0551

 

 

TABLE OF CONTENTS

 

DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT AND FIXTURE
FILING 1     GRANTING CLAUSES 1     DEFINITIONS AND INTERPRETATION 5     ARTICLE
I COVENANTS AND AGREEMENTS 10         1.01 Payment, Performance and Security 10
      1.02 Payment of Taxes, Assessments, etc. 10           A.  Impositions 10  
        B. Installments 11           C. Receipts 11           D. Evidence of
Payment 11           E. Payment by Beneficiary 11           F. Change in Law 11
          G. Joint Assessment 12           H. Permitted Contests 12           I.
No Lease Default 12         1.03 Insurance   13           A. All Risk Coverage
13           B. Additional Coverage 13           C. Separate Insurance 14      
    D. Insurers; Policies 14           E. Beneficiary's Right to Secure Coverage
15           F. Damage or Destruction 15           G. Transfer of Interest in
Policies 16           H. Grantor's Use of Proceeds 16         1.04 Escrow
Payments 18         1.05 Care and Use of the Premises 18           A.
Maintenance and Repairs 18

 

WCSR 31792892iDeed of Trust
Loan No. 374-0551

 

 

  B. Standard of Repairs 19           C. Removal of Equipment 19           D.
Compliance With Laws and Insurance 19           E. Hazardous Materials 19      
    F. Compliance With Instruments of Record 22           G. Alteration of
Secured Property 22           H.  Parking 22           I. Entry on Secured
Property 22           J. No Consent to Alterations or Repairs 22           K.
Preservation of Lien; Mechanic's Liens 23           L. Use of Secured Property
by Grantor 23           M. Use of Secured Property by Public 23           N.
 Management 23           O. Permitted Contests 23         1.06 Financial
Information 24           A. Financial Statements 24           B. Right to
Inspect Books and Records 24         1.07 Condemnation 25           A.
Beneficiary's Right to Participate in Proceedings 25           B. Application of
Condemnation Award 25           C. Reimbursement of Costs 26           D.
Existing Obligations 26         1.08 Leases 27           A. Performance of
Lessor's Covenants 27           B. Notice of Default 27           C.
Representations Regarding Leases 27           D. Covenants Regarding Leases 28  
        E. Application of Rents 29           F. Indemnity Against Unapproved
Lease Modifications and Amendment 29         1.09 Assignment of Leases, Rents,
Income, Profits and Cash Collateral 30           A. Assignment; Discharge of
Obligations 30           B. Entry Onto Secured Property; Lease of Secured
Property 30           C. License to Manage Secured Property 30           D.
Delivery of Assignments 31

 

WCSR 31792892iiDeed of Trust
Loan No. 374-0551

 

 

  E. Indemnity 31         1.10. Further Assurances   31           A. General;
Appointment of Attorney-in-Fact 31           B. Statement Regarding Obligations
31           C. Additional Security Instruments 32           D. Security
Agreement 32           E. Preservation of Grantor's Existence 33           F.
Further Indemnities 33           G. Absence of Insurance 34         1.11
Prohibition on Transfers, Liens or Further Encumbrances 34           A.
Continuing Ownership and Management 34           B. Prohibition on Transfers,
Liens or Further Encumbrances 34           C. Acceleration of Obligations 35    
    1.12 Expenses   35         ARTICLE II REPRESENTATIONS AND WARRANTIES 36    
    2.01 Warranty of Title 36       2.02 Ownership Of Additional or Replacement
Improvements and Personal Property 36         2.03 No Pending Material
Litigation or Proceeding; No Hazardous Materials 36           A. Proceedings
Affecting Grantor 36           B. Proceedings Affecting Secured Property 37    
      C. No Hazardous Material 37           D. No Litigation Regarding Hazardous
Material 37         2.04 Valid Organization, Good Standing and Qualification of
Grantor; Other Organizational Information 38       2.05 Authorization; No Legal
Restrictions on Performance 38       2.06 Compliance With Laws 39       2.07 Tax
Status 39       2.08 Absence of Foreign or Enemy Status; Absence of Blocked
Persons; Foreign Corrupt Practices Act 39       2.09 Federal Reserve Board
Regulations 40       2.10 Investment Company Act and Public Utility Holding
Company Act 40       2.11 Exempt Status of Transactions Under Securities Act and
Representations Relating Thereto 40       2.12 ERISA 40

 

WCSR 31792892iiiDeed of Trust
Loan No. 374-0551

 

 

ARTICLE III  DEFAULTS 41         3.01 Events of Default 41

 

ARTICLE IV REMEDIES 43       4.01 Acceleration, Foreclosure, etc. 43          
A. Foreclosure 43           B. Partial Foreclosure 43           C. Entry 44    
      D. Collection of Rents, etc. 44           E. Receivership 44           F.
Specific Performance 44           G. Recovery of Sums Required To Be Paid 45    
      H. Other Remedies 45           I. State Specific Remedies 45         4.02
No Election of Remedies 45       4.03 Beneficiary's Right to Release, etc. 45  
    4.04 Beneficiary's Right to Remedy Defaults, etc. 46       4.05 Waivers 46  
    4.06 Prepayment 47         ARTICLE V MISCELLANEOUS 48       5.01 Non-Waiver
48       5.02 Sole Discretion of Beneficiary 48       5.03 Legal Tender 48      
5.04 No Merger or Termination 48       5.05 Discontinuance of Actions 49      
5.06 Headings 49       5.07 Notice to Parties 49       5.08 Successors and
Assigns Included In Parties 50       5.09 Changes and Modifications 50      
5.10 Applicable Law 50       5.11 Invalid Provisions to Affect No Others 50    
  5.12 Usury Savings Clause 50       5.13 No Statute of Limitations 51      
5.14 Late Charges 51

 

WCSR 31792892ivDeed of Trust
Loan No. 374-0551

 

 

5.15 Waiver of Jury Trial 51       5.16 Continuing Effectiveness 51       5.17
Time of Essence 51       5.18 Non-Recourse 51       5.19 Non-Business Days 54  
    5.20 Single Purpose Entity 54       ARTICLE VI SPECIAL STATE PROVISIONS 59  
      6.01 Maturity Date 59       6.02 Attorneys’ Fees 60       6.03 Interest
Before and After Judgment 60       6.04 Power of Sale 60       6.05
Environmental Laws 61       6.06 Substitution of Trustee 61       6.07 Waiver 61
      6.08 Deed of Trust as Financing Statement 62       6.09 Security Agreement
62

 

WCSR 31792892vDeed of Trust
Loan No. 374-0551

 

 

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

 

(Collateral Includes Fixtures)

 

DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT AND FIXTURE
FILING ("Deed of Trust"), dated as of the date set forth on the cover page
hereof, from WAKE FOREST APARTMENTS LLC ("Grantor"), a Delaware limited
liability company, having an office at 19950 West Country Club Drive, Suite 800,
Aventura, Florida 33180, Attn: Richard Ross, to THE FIDELITY COMPANY, a North
Carolina corporation, having its principal place of business at One West Fourth
Street, Winston-Salem, North Carolina 27101 (“Trustee”), as trustee for the
benefit of NEW YORK LIFE INSURANCE COMPANY ("Beneficiary"), a New York mutual
insurance company, having an office at 51 Madison Avenue, New York, New York
10010-1603.

 

Grantor has executed and delivered to Beneficiary a Promissory Note (the
promissory note, together with all extensions, renewals or modifications
thereof, being hereinafter collectively called the "Note"), dated as of even
date herewith, payable to the order of Beneficiary in the original principal sum
of Eighteen Million Six Hundred Twenty-Five Thousand and No/100 Dollars
($18,625,000.00), lawful money of the United States of America. The Note is
secured by this Deed of Trust and the terms, covenants and conditions of the
Note are hereby incorporated herein and made a part hereof.

 

In consideration of the sum of Ten Dollars ($10.00) paid and other good and
lawful consideration, the receipt and sufficiency of which are hereby
acknowledged and in order to secure the Obligations (as hereinafter defined),
Grantor hereby irrevocably grants, bargains, sells, assigns, transfers and
conveys to Trustee, its successors and assigns, in fee simple forever, IN TRUST,
WITH POWER OF SALE, the following property and rights, whether now owned or held
or hereafter acquired and Grantor further grants to Trustee a security interest
in the following property:

 

GRANTING CLAUSE ONE

 

All that tract or parcel of land ("Land") more particularly described in Exhibit
A hereto.

 

GRANTING CLAUSE TWO

 

WCSR 317928921Deed of Trust
Loan No. 374-0551

 

 

All buildings, structures and improvements (collectively, "Improvements") now or
hereafter located on the Land, including, but not limited to, all of Grantor’s
right, title and interest in and to all machinery, apparatus, equipment and
fixtures attached to, or used or procured for use in connection with the
operation or maintenance of, any Improvement, all refrigerators, shades,
awnings, venetian blinds, screens, screen doors, storm doors, storm windows,
stoves, ranges, dishwashers, curtain fixtures, partitions, attached floor
coverings and fixtures, apparatus, equipment or articles used to supply
sprinkler protection and waste removal, laundry equipment, furniture,
furnishings, appliances, office equipment, elevators, escalators, tanks,
dynamos, motors, generators, switchboards, communication equipment, electrical
equipment, television and radio systems, heating, plumbing, lifting and
ventilating apparatus, air-cooling and air conditioning apparatus, gas and
electric fixtures, fittings and machinery and all other personal property and
equipment of every kind and description, excluding trade fixtures and personal
property of any Lessee (as hereinafter defined), unless such trade fixtures or
personal property become the property of Grantor upon expiration or termination
of the term of the Lease in question, and all accessions, renewals and
replacements thereof and all articles in substitution therefor. Whether or not
any of the foregoing are attached to the Land or any of the Improvements in any
manner, all such items shall be deemed to be fixtures, part of the real estate
and security for the Obligations. The Land and Improvements are herein
collectively called "Premises". To the extent any of the Improvements are not
deemed real estate under the laws of the State, they shall be deemed personal
property and this grant shall include all of Grantor's right, title and interest
in, under and to such personal property and all other personal property now or
hereafter attached to or located upon the Premises or used or useable in the
management, maintenance or operation of the Improvements or the activities
conducted on the Premises, including, but not limited to, all computer hardware
and software, but excluding trade fixtures and personal property of any Lessee,
unless such personal property becomes the property of Grantor upon expiration or
termination of the Lease in question, and all accessions, renewals and
replacements thereof and all articles in substitution therefor (collectively,
“Personal Property”).

 

GRANTING CLAUSE THREE

 

All now or hereafter existing easements and rights-of-way and all right, title
and interest of Grantor, in and to any land lying within the right-of-way of any
street, opened or proposed, adjoining the Premises, any and all sidewalks,
alleys and strips and gores of land, streets, ways, passages, sewer rights,
waters, water courses, water rights and powers, estates, rights, titles,
interests, privileges, liberties, tenements, hereditaments, air rights,
development rights, covenants, conditions, restrictions, credits and
appurtenances of any nature whatsoever, in any way belonging, relating or
pertaining to, or above or below the Premises, whether now or hereafter
existing.

 

GRANTING CLAUSE FOUR

 

All intangible rights, interests and properties of Grantor relating to the
Premises or any part thereof, and necessary or desirable for the continued
ownership, use, operation, leasing or management thereof, whether now or
hereafter existing, including, but not limited to, any trademarks, servicemarks,
logos or trade names relating to the Premises or by which the Premises or any
part thereof may be known and any other franchises or other agreements relating
to services in connection with the use, occupancy, or maintenance of the
Premises, instruments, actions or rights in action and all intangible property
and rights relating to the Premises.

 

GRANTING CLAUSE FIVE

 

All accounts receivable, insurance policies, contract rights, interests, rights
under all oil, gas and mineral leases and agreements and all benefits arising
therefrom, and all other claims, both at law and in equity, relating to the
Premises, which Grantor now has or may hereafter acquire.

 

WCSR 317928922Deed of Trust
Loan No. 374-0551

 

 

GRANTING CLAUSE SIX

 

All estate, interest, right, title and other claim or demand which Grantor now
has or may hereafter acquire in any and all awards or payments relating to the
taking by eminent domain, or by any proceeding or purchase in lieu thereof, of
the whole or any part of the Premises, including, but not limited to, all awards
resulting from a change of grade of any street and awards for severance damages,
together, in all cases, with all interest thereon.

 

GRANTING CLAUSE SEVEN

 

All proceeds of, and any unearned premiums on, insurance policies covering all
or any part of the Premises, including, but not limited to, the right to receive
and apply the proceeds of all insurance or judgments related to the Premises, or
settlements made in lieu thereof.

 

GRANTING CLAUSE EIGHT

 

All estate, interest, right, title and other claim or demand which Grantor now
has or may hereafter acquire against anyone with respect to any damage to all or
any part of the Premises, including, but not limited to, damage arising or
resulting from any defect in or with respect to the design or construction of
all or any part of the Improvements.

 

GRANTING CLAUSE NINE

 

All deposits or other security or advance payments, including, but not limited
to, rental payments, made by or on behalf of Grantor to others in connection
with the Obligations or the ownership or operation of all or any part of the
Premises, including, but not limited to, any such deposits or payments made with
respect to (a) Impositions (as hereinafter defined),(b) insurance policies, (c)
utility service, (d) cleaning, maintenance, repair or similar services, (e)
refuse removal or sewer service, (f) rental of equipment, if any, used by or on
behalf of Grantor, and (g) parking or similar services or rights.

 

GRANTING CLAUSE TEN

 

All remainders, reversions or other estates in the Premises or any part thereof.

 

GRANTING CLAUSE ELEVEN

 

All management contracts, permits, certificates, licenses, approvals, contracts,
entitlements and authorizations, however characterized, now or hereafter issued
or in any way furnished for the acquisition, construction, development,
operation and/or use of the Land, the Improvements or the Leases, including, but
not limited to, building permits, environmental certificates, licenses,
certificates of operation or occupancy, warranties and guaranties, except, in
each case, to the extent that such mortgage, grant, assignment, transfer or
pledge is restricted by the terms of such management contract, permit,
certificate, license, approval, contract, entitlement or authorization and such
restriction is enforceable under applicable law.

 

WCSR 317928923Deed of Trust
Loan No. 374-0551

 

 

GRANTING CLAUSE TWELVE

 

All right, title and interest of Grantor in and to (1) all Leases and all other
tenancies, occupancies, subleases, franchises and concessions of the Land or
Improvements or which in any way affect the use or occupancy of all or any part
of the Land or Improvements, and any other agreements affecting the use and
occupancy of all or any part of the Land or Improvements, in each case, whether
now or hereafter existing, and all right, title and interest of Grantor
thereunder, including all rights to all security or other deposits, (2) all
guarantees of the obligations of any lessee, licensee or other similar party
under any of the foregoing, whether now or hereafter existing, and (3) the
Rents, regardless of whether the Rents accrue before or after foreclosure or
during the full period of redemption.

 

GRANTING CLAUSE THIRTEEN

 

All right, title and interest of Grantor in and to all options to purchase the
Premises or any portion thereof or interest therein or in and to any greater
estate in the Premises owned or hereafter acquired by Grantor and the right to
exercise the benefits of any options or rights of first refusal, to give
consents and to receive monies payable to Grantor thereunder and in connection
therewith.

 

GRANTING CLAUSE FOURTEEN

 

All right, title and interest of Grantor in and to all easements, roads,
streets, ways, sidewalks, alleys, passages, sewer rights, other utility rights,
encroachment rights, and all estates, rights, titles, interests, privileges,
liberties, tenements, hereditaments, air rights, and appurtenances of any nature
whatsoever, in any way belonging, relating or pertaining to, or arising under
easement agreements, declarations, reciprocal easement agreements or other
instruments, benefitting the Land or Improvements whether now or hereafter
existing.

 

GRANTING CLAUSE FIFTEEN

 

All proceeds, products, replacements, additions, substitutions, renewals and
accessions of any of the foregoing, including, but not limited to, personal
property acquired with cash proceeds.

 

WITH RESPECT to any portion of the Secured Property (as hereinafter defined)
which is not real estate under the laws of the State in which the Secured
Property is located, Grantor hereby grants a security interest in the same to
Beneficiary for the purposes set forth hereunder and the references above to
Trustee shall be deemed to also include Beneficiary with respect to such portion
of the Secured Property and Beneficiary shall also be vested with all rights,
power and authority granted hereunder or by law to Trustee with respect thereto.

 

TO HAVE AND TO HOLD the above granted and described Secured Property unto and to
the use and benefit of Trustee and its successors and assigns in fee simple
forever for the benefit of Beneficiary and the successors and assigns of
Beneficiary forever.

WCSR 317928924Deed of Trust
Loan No. 374-0551

 

 

IN TRUST, WITH POWER OF SALE, to secure the payment and performance to
Beneficiary of the Obligations at the time and in the manner provided for its
payment and performance in the Note, this Deed of Trust and in the other
Obligations;

 

PROVIDED, HOWEVER, these presents are upon the express condition, if Grantor
shall well and truly pay and perform to Beneficiary the Obligations at the time
and in the manner provided in the Note, this Deed of Trust and in the other
Obligations and shall well and truly abide by and comply with each and every
covenant and condition set forth herein, in the Note, the Obligations and in the
other Loan Instruments, then this Deed of Trust shall be released and cancelled
of record;

 

DEFINITIONS AND INTERPRETATION

 

As used in this Deed of Trust, the following terms shall have the meanings
specified below:

 

“Acceptable Delaware LLC” means a limited liability company formed under
Delaware law which (a) has at least one springing member, which, upon the
dissolution of all of the members of the limited liability company or the
withdrawal or the disassociation of all of the members from the limited
liability company, shall immediately become the sole member of such limited
liability company, and (b) otherwise meets Beneficiary’s criteria applicable to
such entities.

 

"Assignment" shall mean the Assignment of Leases, Rents, Income and Cash
Collateral, dated as of the date hereof, from Grantor, as assignor, to
Beneficiary, as assignee.

 

"Beneficiary's Architect" shall mean a licensed architect or registered engineer
approved by Beneficiary.

 

"Code" shall mean the Uniform Commercial Code of the State.

 

"Condemnation Proceedings" shall have the meaning set forth in Section 1.07A.

 

"Debt Coverage Ratio" shall mean, for any period, a fraction, the numerator of
which shall equal the projected net operating income of the Secured Property for
such period less a replacement reserve amount equal to $250 per unit per year,
and the denominator of which shall equal the aggregate of the principal and
interest for such period utilizing a thirty (30) year amortization schedule.
Such calculation shall be as determined by Beneficiary.

 

“Environmental Claim” shall mean any asserted claim or demand, of any kind or
nature, by any Person, for any actual or alleged Environmental Damage, whether
based in contract, tort, implied or express warranty, strict liability, criminal
or civil statute, ordinance or regulation, common law or otherwise.

 

"Environmental Damage" shall mean any and all claims, judgments, damages
(including consequential and punitive damages), losses, penalties, interest,
fines, liabilities (including strict liability), obligations, responsibilities,
encumbrances, liens, costs and expenses, of whatever kind or nature, contingent
or otherwise, matured or unmatured, foreseeable or unforeseeable, including
attorneys’, experts’ and consultants’ fees and disbursements, including:

 

WCSR 317928925Deed of Trust
Loan No. 374-0551

 

 

(a)those relating to any investigation, defense or settlement of any claim,
suit, administrative proceeding or investigation of any kind or any directive of
any Governmental Agency (as hereinafter defined);

 

(b)those relating to damages for personal injury, or injury to property
including natural resources, occurring in, on, under or about the Secured
Property, including lost profits and the cost of demolition and rebuilding of
any improvements on real property;

 

(c)diminution in the value of the Secured Property, and damages for the loss, or
restriction on the use or adverse impact on the marketing, of the Secured
Property or any part thereof;

 

(d)loss of the priority of the lien of this Deed of Trust due to the imposition
of a lien against the Secured Property; and

 

(e)those incurred in connection with the investigation, cleanup, remediation,
removal, abatement, containment, closure, restoration, monitoring work or other
cure of any violation of an Environmental Requirement required by any
Governmental Agency or reasonably necessary to make full economic use of the
Secured Property or in connection with any other property, including the
performance of any pre-remedial studies and investigations and post remedial
monitoring and cure, or any action to prevent a Release or threat of Release or
to minimize the further Release of any Hazardous Material so it does not migrate
or endanger or threaten to endanger public health or the environment.

 

“Environmental Requirements” shall mean any and all Legal Requirements (as
hereinafter defined) relating to the protection of the environment, health or
safety, including:

 

(a)all Legal Requirements pertaining to reporting, licensing, permitting,
investigation, remediation or removal of, or pertaining to Releases or
threatened Releases of, Hazardous Materials, chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials or wastes, whether
solid, liquid or gaseous in nature, including Releases or threatened Releases
into the air, soil, surface water, ground water or land;

 

(b)all Legal Requirements pertaining to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, chemical substances, pollutants, contaminants or hazardous
or toxic substances, materials or wastes, whether solid, liquid or gaseous in
nature; and

 

WCSR 317928926Deed of Trust
Loan No. 374-0551

 

 

(c)all Legal Requirements pertaining to industrial hygiene or the protection of
the health and safety of employees or the public.

 

"ERISA" shall have the meaning set forth in Section 2.12.

 

"Event of Default" shall have the meaning set forth in Section 3.01.

 

"Governmental Agency" shall mean any government, quasi-governmental or
government sponsored enterprise, legislative body, commission, board, regulatory
authority, bureau, administrative or other agency, court, arbitrator, grand jury
or any other public body or entity or instrumentality, whether domestic,
foreign, federal, state, county or municipal.

 

"Guarantor," shall mean any guarantor of all or any portion of the Obligations
and any indemnitor (other than Grantor) under the Environmental Indemnity
Agreement of even date herewith, executed by Grantor and such indemnitor in
favor of Beneficiary or any subsequent Environmental Indemnity Agreement or
similar agreement executed by Grantor and an indemnitor in favor of Beneficiary
and such term shall include, without limitation, the Limited Guarantor (as
hereinafter defined).

 

"Hazardous Materials" shall mean any substance:

 

(a)the presence of which requires notification, investigation or remediation
under any Environmental Requirement;

 

(b)which is or becomes designated, defined, classified or regulated as
"hazardous", "toxic", "noxious", "waste", "pollutant", "contaminant" or other
similar term, or which requires remediation or is regulated under any present or
future Environmental Requirement, including the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.),
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), Federal
Clean Air Act (42 U.S.C. Section 7401 et seq.), Federal Hazardous Materials
Transportation Act (49 U.S.C. Section 5101 et seq.), Federal Clean Water Act (33
U.S.C. Section 1251 et seq.), Federal Environmental Pesticide Control Act (7
U.S.C. Section 136 et seq.), Federal Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.), Federal Safe Drinking Water Act (42 U.S.C. Sections
300(f), et seq.), and the State Environmental Laws described in the Special
State Provisions of Article VI below;

 

(c)which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is or becomes regulated by
any Governmental Agency;

 

WCSR 317928927Deed of Trust
Loan No. 374-0551

 

 

(d)the presence of which on the Secured Property causes or threatens to cause a
nuisance relating to the Secured Property or adjacent properties or poses or
threatens to pose a hazard relating to the Secured Property or adjacent
properties or to the health or safety of Persons on or about the Secured
Property or adjacent properties;

 

(e)which contains asbestos, gasoline, diesel fuel or other petroleum
hydrocarbons, volatile organic compounds, polychlorinated biphenyls (PCBs) or
urea formaldehyde foam insulation;

 

(f)which contains or emits radioactive particles, waves or material, including
radon gas;

 

(g)which is or constitutes a part of an underground storage tank; or

 

(h)which is or contains mold, mildew, fungi, bacteria or other microbial matter
which poses a threat to human health or the environment.

 

"Hazardous Material Claims" shall have the meaning set forth in Section
1.05E(4).

 

"Impositions" shall have the meaning set forth in Section 1.02A.

 

"Improvements" shall have the meaning set forth in Granting Clause Two.

 

"Increased Rate" shall have the meaning set forth in the Note.

 

“Indemnified Claims” shall have the meaning set forth in Section 1.05E(1).

 

"Land" shall have the meaning set forth in Granting Clause One.

 

"Lease" and "Leases" shall have the respective meanings set forth in Section
1.08A.

 

"Legal Requirements" shall mean all present or future laws, statutes, permits,
approvals, plans, authorizations, guidelines, franchises, ordinances,
restrictions, orders, rules, codes, regulations, judgments, decrees, injunctions
or requirements of all Governmental Agencies or any officers thereof, including
any Board of Fire Underwriters.

 

"Lessee" shall have the meaning set forth in Section 1.08A.

 

“Limited Guarantor” shall mean collectively, Trade Street Operating Partnership,
LP and Trade Street Residential, Inc.

 

"Loan" shall mean the mortgage loan evidenced by the Note and secured by this
Deed of Trust.

 

WCSR 317928928Deed of Trust
Loan No. 374-0551

 

 

"Loan Instruments" shall mean the Note, this Deed of Trust, the Assignment and
each other instrument now or hereafter given to evidence, secure, indemnify,
guaranty or otherwise assure or provide for the payment or performance of the
Obligations or otherwise executed in connection with the Loan by Grantor,
Guarantor or any other Person liable for any of the Obligations.

 

“Make-Whole Amount” shall have the meaning set forth in the Note.

 

"Maturity Date" shall have the meaning set forth in the Note and which is also
reflected in Article VI hereof.

 

“Non-Recourse Exceptions” shall have the meaning set forth in Section 5.18.

 

"Note" shall have the meaning set forth in the second introductory paragraph of
this Deed of Trust.

 

"Obligations" shall mean and include all indebtedness, obligations, covenants,
agreements and liabilities of Grantor to Beneficiary, including all obligations
to pay interest, the Make-Whole Amount and all charges and advances, whether
direct or indirect, existing, future, contingent or otherwise, due or to become
due, pursuant to or arising out of or in connection with the Note, this Deed of
Trust, the Assignment or any other Loan Instrument, all modifications,
extensions and renewals of any of the foregoing and all expenses and costs of
collection or enforcement, including reasonable attorneys' fees and
disbursements incurred by Beneficiary in the collection or enforcement of any of
the Loan Instruments or in the exercise of any rights or remedies pursuant to
the Loan Instruments or applicable law.

 

"Partial Foreclosure" shall have the meaning set forth in Section 4.01B.

 

"Person" shall mean a corporation, a limited or general partnership, a limited
liability company or partnership, a joint stock company, a joint venture, a
trust, an unincorporated association, a Governmental Agency, an individual or
any other entity similar to any of the foregoing.

 

"Personal Property" shall have the meaning set forth in Granting Clause Two.

 

"Premises" shall have the meaning set forth in Granting Clause Two.

 

"Proceeds" shall have the meaning set forth in Section 1.03F(2).

 

"Rents" shall mean all rents, issues, profits, cash collateral, royalties,
income and other benefits derived from the Secured Property or any part thereof,
including, without limitation, benefits accruing from all present and future
leases and agreements, including, without limitation, oil, gas and mineral
leases and agreements.

 

"Rent Roll" shall mean the rent roll for the Secured Property attached to the
Rent Roll Certification.

 

WCSR 317928929Deed of Trust
Loan No. 374-0551

 

 

"Rent Roll Certification" shall mean the certification dated of even date
executed by Grantor in favor of Beneficiary certifying facts with respect to the
Rent Roll.

 

“Release” shall mean any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the
environment.

 

"Reserve Deposit Agreement" shall mean that certain Reserve Deposit Agreement of
even date herewith between Beneficiary and Grantor, as amended from time to
time.

 

"Secured Property" shall mean the Premises, the Personal Property and all other
rights and interests described in the Granting Clauses of this Deed of Trust.

 

"State" shall mean the State, Commonwealth or territory in which the Land is
located.

 

"Transfer" shall have the meaning set forth in Section 1.11B.

 

As used in this Deed of Trust (a) words such as "herein", "hereof", "hereto",
"hereunder" and "hereby" or similar terms refer to this Deed of Trust as a whole
and not to any specific Section or provision hereof; (b) wherever the singular
or plural number or the masculine, feminine or neuter gender is used, it shall
include each other number or gender; and (c) the word "including" shall mean
"including, without limitation," and the word "includes" shall mean "includes,
without limitation.”

 

ARTICLE I

COVENANTS AND AGREEMENTS

 

Grantor hereby covenants and agrees as follows:

 

1.01       Payment, Performance and Security. Grantor shall pay when due the
amount of, and otherwise timely perform, all Obligations.

 

This Deed of Trust shall secure all Obligations.

 

1.02       Payment of Taxes, Assessments, etc.

 

1.02A.   Impositions. Grantor shall pay prior to delinquency, before any fine,
penalty, interest or cost for the nonpayment thereof may be added thereto, and
without any right of offset or credit against any interest or other amounts
payable to Beneficiary pursuant to this Deed of Trust or on the Note, all taxes,
assessments, water and sewer rents, rates and charges, transit taxes, charges
for public utilities, excises, levies, vault taxes or charges, license and
permit fees and other governmental charges, general and special, ordinary and
extraordinary, unforeseen and foreseen, of any kind and nature whatsoever
(including penalties, interest costs and charges accrued or accumulated
thereon), which at any time may be assessed, levied, confirmed, imposed upon, or
become due and payable out of or in respect to, or become a lien on, the Secured
Property or any part thereof, or any appurtenance thereto (all of the foregoing
collectively, "Impositions" and individually, an "Imposition").

 

WCSR 3179289210Deed of Trust
Loan No. 374-0551

 

 

1.02B.   Installments. Notwithstanding anything to the contrary contained in
Section 1.02A , if by law any Imposition, at the option of the taxpayer, may be
paid in installments, and provided interest shall not accrue on the unpaid
balance of such Impositions, Grantor may exercise the option to pay the same in
installments and, in such event, shall pay such installments as the same become
due and before any fine, penalty, interest or cost may be added thereto.

 

1.02C.  Receipts. Grantor, upon request of Beneficiary, will furnish to
Beneficiary within ten (10) days before the date when any Imposition would
become delinquent, official receipts of the appropriate taxing authority, or
other evidence reasonably satisfactory to Beneficiary, evidencing the payment
thereof.

 

1.02D.   Evidence of Payment. The bill, certificate or advice of nonpayment,
issued by the appropriate official (designated by law either to make or issue
the same or to receive payment of any Imposition), of the nonpayment of an
Imposition shall be prima facie evidence that such Imposition is due and unpaid
at the time of the making or issuance of such certificate, advice or bill.
Grantor shall pay Beneficiary, on demand, all charges, costs and expenses of
every kind including each tax service search fee or charge incurred by
Beneficiary at any time or times during the term of this Deed of Trust in
connection with obtaining evidence satisfactory to Beneficiary that the payment
of all Impositions is current and that there is no Imposition due and owing or
which has become or given rise to a lien on the Secured Property or any part
thereof or any appurtenance thereto.

 

1.02E.   Payment by Beneficiary. If Grantor shall fail to pay any Imposition in
accordance with the provisions of this Section 1.02, Beneficiary, at its option
and at such time as it may elect, may pay such Imposition, but shall be under no
obligation to do so. Grantor will repay to Beneficiary, on demand, any amount so
paid by Beneficiary, with interest thereon at the Increased Rate from the date
of such payment by Beneficiary to the date of repayment by Grantor. This Deed of
Trust shall secure each such amount and such interest.

 

1.02F.   Change in Law. In the event of the passage after the date of this Deed
of Trust of any law deducting the Obligations from the value of the Secured
Property or any part thereof for the purpose of taxation or resulting in any
lien thereon, or changing in any way the laws now in force for the taxation of
this Deed of Trust or the Obligations for state or local purposes, or the manner
of the operation of any such taxes so as to affect the interest of Beneficiary,
then, and in such event, Grantor shall bear and pay the full amount of such
taxes, provided that if for any reason payment by Grantor of any such new or
additional taxes would be unlawful or if the payment thereof would constitute
usury or render the Loan or the Obligations wholly or partially usurious under
any of the terms or provisions of the Note, this Deed of Trust or otherwise,
Beneficiary may, at its option, declare all Obligations secured by this Deed of
Trust, with interest thereon, to be immediately due and payable, or Beneficiary
may, at its option, pay that amount or portion of such taxes as renders the Loan
or the Obligations unlawful or usurious, in which event Grantor shall
concurrently therewith pay the remaining lawful and non-usurious portion or
balance of such taxes.

 

WCSR 3179289211Deed of Trust
Loan No. 374-0551

 

 

1.02G. Joint Assessment. Grantor shall not suffer, permit or initiate the joint
assessment of the Premises and the Personal Property, or any other procedure
whereby personal property taxes and real property taxes shall be assessed,
levied or charged to the Secured Property as a single lien.

 

1.02H. Permitted Contests. Notwithstanding anything herein to the contrary, if,
and for so long as, Grantor is not in default pursuant to any of the Loan
Instruments, Grantor shall have the right to contest the amount or the validity,
in whole or in part, of any Imposition, by appropriate proceedings diligently
conducted in good faith and without cost or expense to Beneficiary. Subject to
the provisions of Section 1.02I and provided Grantor is in compliance with the
provisions of the next sentence, Grantor may postpone or defer payment of such
Imposition if Grantor, on or before the due date thereof, shall (1) deposit or
cause to be deposited with Beneficiary a surety bond issued by a surety company
of recognized responsibility acceptable to Beneficiary, guaranteeing and
securing the payment in full of such Imposition, pending the determination of
such contest, (2) deposit or cause to be deposited with Beneficiary an amount
equal to one hundred (100%) percent of such Imposition or any balance thereof
remaining unpaid, and from time to time, but not more frequently than quarterly,
deposit amounts in order to keep on deposit at all such times an amount equal to
one hundred (100%) percent of the Imposition remaining unpaid, or (3) furnish or
cause to be furnished to Beneficiary other security reasonably satisfactory to
Beneficiary. If such deposit is made or such security furnished and Grantor
continues in good faith to contest the validity of such Imposition by
appropriate legal proceedings which shall operate to prevent the collection of
such Imposition so contested, the imposition of interest, fines or other
penalties with respect to such Imposition and the sale of the Secured Property
or any part thereof to satisfy such Imposition, Grantor shall have no obligation
to pay such Imposition until such time as it has been finally determined to be a
valid, due and payable Imposition. Upon termination of any such proceeding, or
at any earlier time that Grantor shall have been adjudicated liable for the
payment of such Imposition, Grantor shall pay in full the amount of such
Imposition or part thereof as shall have been finally determined in such
proceeding, together with all liabilities in connection therewith. Beneficiary
shall have the full power and authority to apply or require the application of
any amounts that may have been deposited pursuant to this Section 1.02H to
payment of any unpaid Imposition. However, Beneficiary shall not have any
liability for application of, or failure to apply, any amount so deposited,
except for Beneficiary’s intentional and willful failure to apply a deposited
amount after Grantor shall have notified Beneficiary of such final decision and
Grantor or the Person making such deposit shall have requested in writing the
application of such amount to the payment of the particular Imposition with
respect to which it was deposited. Beneficiary shall repay to Grantor, or as
directed by Grantor, the remainder of any such deposit after payment in full of
the related Imposition, unless Grantor shall be in default pursuant to any of
the Loan Instruments. If a default then exists, Beneficiary may, in its
discretion, apply all or any part of such remainder to the curing of such
default. After the curing of all such defaults (and the payment in full of all
then due and payable Impositions), Beneficiary shall pay the remainder of such
surplus, if any, to Grantor.

 

1.02I.  No Lease Default. If contesting the validity or amount of any Imposition
shall cause a breach of any of the terms, conditions or covenants required to be
performed by Grantor as lessor under any Lease, Grantor shall not have the right
to contest the same as provided in Section 1.02H, and Grantor shall pay such
Imposition pursuant to Section 1.02A.

 

WCSR 3179289212Deed of Trust
Loan No. 374-0551

 

  

1.03       Insurance.

 

1.03A. All Risk Coverage.

 

(1) Grantor, at its sole cost and expense, shall keep the Improvements and the
Personal Property insured against loss or damage by fire and against loss or
damage by other risks now covered by All Risk" or “Special Perils insurance, in
form and substance satisfactory to Beneficiary. Such All Risk or Special Perils
insurance shall cover acts of terrorism (both foreign and domestic) (“Terrorism
Insurance”). If any of the Terrorism Insurance is obtained through a separate
insurance policy rather than as part of an All Risk or Special Perils policy,
the requirements set forth herein with respect to All Risk or Special Perils
insurance, nevertheless, shall be deemed to apply to any such insurance provided
in a separate policy.

 

(2) The All Risk or Special Perils insurance shall be in an amount equal to at
least one hundred percent (100%) of the full replacement cost of the
Improvements and the Personal Property, including work performed for tenants,
without deduction for depreciation. The "All Risk" or “Special Perils insurance”
shall include coverage for law and ordinance, demolition and increased cost of
construction and an agreed amount endorsement for the estimated replacement
cost.

 

(3) The All Risk or Special Perils insurance shall include rent and/or business
income interruption insurance coverage, including coverage for rental loss (a)
of not less than twenty-four (24) months of aggregate rentals or (b) Actual Loss
Sustained, with no time element restrictions, and in the case of the coverage
described in the preceding clause (a) or clause (b), an Extended Period of
Indemnity of not less than twelve (12) months. The rental loss coverage with
respect to each Lease shall include all Rent payable thereunder, including
minimum rent, escalation charges, percentage rent and all other additional rent
of every kind and any other amounts payable by tenants or other occupants, from
time to time, at the Secured Property pursuant to Leases or otherwise.

 

1.03B. Additional Coverage. Grantor, at its sole cost and expense, shall at all
times also maintain:

 

(1) Commercial general liability insurance against claims for bodily injury,
personal injury or property damage, occurring in, on, under or about the Secured
Property or in, on, under or about the adjoining streets, sidewalks and
passageways; such insurance to be in amounts and in form and substance
satisfactory to Beneficiary;

 

(2) If the Improvements are located in a flood hazard area, flood insurance on
the Improvements and the Personal Property, in an amount equal to one hundred
percent (100%) of the full replacement cost of the Improvements and the Personal
Property, including work performed for tenants, without deduction for
depreciation;

 

(3) Insurance, in such amounts as Beneficiary shall from time to time require,
against loss or damage from leakage or explosion of steam boilers, air
conditioning equipment, pressure vessels or similar apparatus, now or hereafter
installed in or on the Secured Property; and

 

WCSR 3179289213Deed of Trust
Loan No. 374-0551

 

  

(4) Such other insurance and any replacements, substitutions or additions
thereto as shall at any time be required by Beneficiary against other insurable
hazards, including war risk, terrorism, nuclear reaction or radioactive
contamination, each in such amount as Beneficiary shall determine.

 

1.03C. Separate Insurance. Grantor shall not carry separate insurance,
concurrent in kind or form and contributing in the event of loss with any
insurance required hereunder. Grantor may, however, effect for its own account
any insurance not required pursuant to the provisions of this Deed of Trust, but
any such insurance effected by Grantor on the Secured Property, whether or not
required pursuant to this Section 1.03, shall be for the mutual benefit of
Grantor and Beneficiary, as their respective interests may appear, and shall be
subject to all other provisions of this Section 1.03.

 

1.03D. Insurers; Policies.

 

(1)       All insurance provided for in this Section 1.03 shall be effected
under valid and enforceable policies issued by financially responsible insurers,
rated by A.M. Best as “A” or better and as having a class size of at least
“X(10)” and authorized to do business in the State, with deductibles acceptable
to Beneficiary and otherwise in form and substance acceptable to Beneficiary. An
original copy of all such policies shall be deposited with and held by
Beneficiary and shall contain the standard non-contributory mortgagee clause in
favor of Beneficiary and a waiver of subrogation endorsement, all in form and
content satisfactory to Beneficiary. All such policies shall contain a provision
that such policies will not be cancelled or materially amended (including any
reduction in the scope or limits of coverage), without at least thirty (30)
days' prior written notice to Beneficiary. Not less than fifteen (15) days prior
to the expiration dates of the expiring policies theretofore furnished pursuant
to this Section 1.03, originals of the policies bearing notations evidencing the
full payment of the annual premium or accompanied by other evidence satisfactory
to Beneficiary of such payment shall be delivered by Grantor to Beneficiary.

 

(2)      Grantor’s insurance policies may be part of a blanket insurance policy
provided that (a) such blanket policy specifically lists the Secured Property as
covered and includes the per occurrence and aggregate limits (if any) for the
Secured Property, which limits must be acceptable to Beneficiary, (b)
Beneficiary receives the documentation reasonably required to determine the
adequacy of the shared blanket limits among the properties insured by the
blanket policy, which documentation shall include, a list of the properties
covered by the blanket policy, including the Secured Property, and their
respective locations and a statement of insurable values for all Special Perils,
for each of such properties, and (c) the blanket policy includes an endorsement
naming Beneficiary, with respect to any property insurance, as a certificate
holder, mortgagee and lender loss payee and with respect to any liability
insurance, as an additional insured.

 

WCSR 3179289214Deed of Trust
Loan No. 374-0551

 

 

1.03E. Beneficiary's Right to Secure Coverage. If Grantor fails to furnish to
Beneficiary and keep in force the original policies of insurance required by
this Section 1.03, Beneficiary, at its option, may procure such insurance, which
procurement, at Beneficiary's further option, may be by the purchase of
insurance policies or by the addition of the Secured Property to Beneficiary's
blanket policy. In the event that Beneficiary has exercised either of such
options, promptly upon demand by Beneficiary, Grantor (i) will reimburse
Beneficiary for all premiums on the policies purchased by Beneficiary or (ii) in
the event Beneficiary has added the Secured Property to its blanket policy, will
pay to Beneficiary an amount equal to the estimated cost of the insurance
coverage which Beneficiary has added to its blanket policy had such coverage
been obtained under a separate policy and not under a blanket policy, in either
case, with interest thereon at the Increased Rate from the date Beneficiary pays
such premiums to the date Grantor repays such premiums to Beneficiary in full.
Until they are so repaid, this Deed of Trust shall secure the amount of such
premiums and interest.

 

1.03F. Damage or Destruction. Upon the occurrence of any damage or casualty to
the Secured Property or any part thereof, the following shall apply:

 

(1)        Grantor shall give Beneficiary written notice of such damage or
casualty as soon as possible, but not later than ten (10) days from the date
such damage or casualty occurs.

 

(2)        All proceeds of insurance ("Proceeds") paid or to be paid pursuant to
any of the policies maintained pursuant to this Deed of Trust shall be payable
to Beneficiary. Grantor hereby authorizes and directs any affected insurer to
make payment of the Proceeds directly to Beneficiary. Beneficiary may commingle,
with other monies in Beneficiary's possession, all Proceeds received by
Beneficiary. All such Proceeds shall constitute additional security for the
Obligations and Grantor shall not be entitled to the payment of interest
thereon. Beneficiary may settle, adjust or compromise all claims for loss,
damage or destruction pursuant to any policy or policies of insurance; provided,
however, that (i) if no Event of Default has occurred which continues beyond any
applicable grace or cure period, (ii) Grantor complies with all other
restoration requirements set forth in this Deed of Trust, and (iii) the proceeds
of insurance are less than $200,000.00, then Grantor shall be entitled to
settle, adjust or compromise such claim and such insurance proceeds shall be
disbursed directly to Grantor for purposes of application to the restoration
instead of being held by Beneficiary for disbursement, and Grantor covenants and
agrees promptly to commence and complete such restoration, and use such proceeds
to pay for such restoration.

 

(3)        Subject to the terms of Section 1.03H, Beneficiary shall have the
option, in its discretion, and without regard to the adequacy of its security
hereunder, of applying all or part of the Proceeds to (a) the Obligations,
whether or not then due, in such order as Beneficiary shall determine, (b) the
repair or restoration of the Secured Property, (c) reimburse Beneficiary for its
costs and expenses in connection with the recovery of the Proceeds, or (d) any
combination of the foregoing, subject, however, to the limitations on charging
the Make-Whole Amount upon the application of insurance proceeds (and applicable
deductible) and condemnation awards as set forth in the paragraph of the Note
which commences with the phrase “Notwithstanding the foregoing, in the event of
a casualty or condemnation . . .”.

 

WCSR 3179289215Deed of Trust
Loan No. 374-0551

 

 

(4)        Nothing herein contained shall be deemed to excuse Grantor from
repairing or maintaining the Secured Property as provided in Section 1.05 or
restoring all damage or destruction to the Secured Property, regardless of
whether there are Proceeds available or whether the Proceeds are sufficient in
amount, and the application or release by Beneficiary of any Proceeds shall not
cure or waive any Event of Default or notice of default pursuant to this Deed of
Trust or invalidate any act done pursuant to such notice.

 

1.03G. Transfer of Interest in Policies. In the event of the foreclosure of this
Deed of Trust or other transfer of title or assignment of the Secured Property
in payment and performance, in whole or in part, of the Obligations, all right,
title and interest of Grantor in and to all policies of insurance required by
this Section 1.03 shall inure to the benefit of, and pass to the purchaser or
grantee of the Secured Property. If, prior to Beneficiary’s receipt of the
Proceeds, the Secured Property shall have been sold through the foreclosure of
this Deed of Trust or other similar proceeding, Beneficiary shall have the right
to receive the Proceeds to the extent that any portion of the Obligations are
still unpaid after application of the proceeds of the foreclosure sale or
similar proceeding, together with interest thereon at the Increased Rate, plus
attorney’s fees and other costs and disbursements incurred by Beneficiary in
connection with the collection of the Proceeds and in establishing the amount of
and collecting the deficiency. Grantor hereby assigns, transfers and sets over
to Beneficiary all of the Grantor's right, title and interest in and to said
sum. The balance, if any, shall be paid to Grantor, or as otherwise required by
law.

 

1.03H. Grantor's Use of Proceeds.

 

(1) Notwithstanding any provision herein to the contrary, but subject to the
provisions of Section 1.03(H)(4), in the event of any destruction to the Secured
Property by fire or other casualty of not more than seventeen (17) apartment
units contained in the Improvements, the Proceeds shall be made available to
Grantor for repair and restoration, after deducting therefrom and payment to
Beneficiary of an amount equal to Beneficiary's costs in connection with
collection, review and disbursement of the Proceeds of such damage or casualty,
provided that:

 

(a) The Proceeds are deposited with Beneficiary;

 

(b) No Event of Default shall have occurred and be continuing under the terms of
any of the Loan Instruments;

 

(c) The insurer does not deny liability to any named insured;

 

(d) Beneficiary is furnished with, and has approved (i) a complete, final set of
plans and specifications for the work to be performed in connection with the
repair or restoration, (ii) an estimate of the cost of repair and restoration,
and (iii) a certificate of Beneficiary's Architect as to such costs;

 

(e) The value, quality and condition of the Secured Property so repaired or
restored shall be at least equal to that of the Secured Property prior to such
damage or casualty;

 

WCSR 3179289216Deed of Trust
Loan No. 374-0551

 

 

(f) Grantor furnishes Beneficiary with evidence reasonably satisfactory to
Beneficiary that all Improvements so repaired or restored and their use shall
fully comply with all applicable (i) easements, covenants, conditions,
restrictions or other private agreements or instruments of record affecting the
Secured Property and (ii) Legal Requirements;

 

(g) If the estimated cost of such repair or restoration exceeds the Proceeds
available, Grantor shall (i) furnish a bond of completion or provide other
evidence satisfactory to Beneficiary of Grantor's ability to pay such excess
costs, or (ii) deposit with Beneficiary additional funds equal to such excess;

 

(h) Beneficiary shall have received written notice of damage or casualty from
Grantor within ten (10) business days from the date of such damage or casualty,
which notice shall state the date of such damage or casualty, and shall contain
a request to Beneficiary to make the Proceeds available to Grantor;

 

(i) Beneficiary shall have received a report or proof of claim from the insurer
describing the damage or casualty and the insurer’s payment therefor;

 

(j) During and after the repair and restoration period, the aggregate monthly
net income pursuant to rent and/or business income interruption insurance
coverage and/or pursuant to all Leases remaining in full force and effect shall
be in an amount sufficient to pay the monthly installments of principal and
interest required to be paid on the Obligations, as well as all payments for
taxes and insurance required pursuant to Section 1.04 and all Secured Property
operating expenses, as estimated by Beneficiary; and

 

(k)the Debt Coverage Ratio is not less than 1.20x.

 

(2)         Beneficiary shall disburse the Proceeds during the course of repair
or restoration upon (a) the certification of Beneficiary's Architect as to the
cost of the work done, (b) the conformity, as determined by Beneficiary, of the
work to plans and specifications approved by Beneficiary, and (c) receipt of
evidence of a title insurance company acceptable to Beneficiary that there are
no liens arising out of the repair or restoration or otherwise. Notwithstanding
the above, a portion of the Proceeds may be released prior to the commencement
of repair or restoration to pay for items approved by Beneficiary in its
discretion. Subject to satisfaction of the foregoing conditions, Beneficiary
shall make such disbursements within ten (10) business days after a written
request by Grantor. No payment made prior to the final completion of work shall
exceed ninety percent (90%) of the value of the work performed from time to
time, and at all times the undisbursed balance of the Proceeds remaining with
Beneficiary must be at least sufficient to pay for the cost of completion of the
work (as estimated by Beneficiary in its discretion), free and clear of liens.
Beneficiary shall make final payment after receipt of a certification of
Beneficiary's Architect confirming the completion of the work in accordance with
plans and specifications approved by Beneficiary.

 

(3)         At its option, Beneficiary shall (a) return to Grantor the balance
of the Proceeds after full disbursement in accordance with Sections 1.03H(1) and
(2), or (b) apply such balance to the Obligations, whether or not then due, in
such order as Beneficiary shall determine, subject, however, to the limitations
on charging the Make-Whole Amount upon the application of insurance proceeds
(and applicable deductible) and condemnation awards as set forth in the
paragraph of the Note which commences with the phrase “Notwithstanding the
foregoing, in the event of a casualty or condemnation . . .”.

 

WCSR 3179289217Deed of Trust
Loan No. 374-0551

 

 

(4)        In all cases in which any destruction of the Secured Property by fire
or other casualty occurs during the last twelve (12) months prior to the
Maturity Date, or in Beneficiary's judgment, Grantor is not proceeding with the
repair or restoration in a manner that would entitle Grantor to have the
Proceeds disbursed to it, or for any other reason Beneficiary determines in its
judgment that Grantor shall not be entitled to the Proceeds pursuant to the
terms of this Deed of Trust, Beneficiary shall have the options set forth in
Section 1.03 F(3).

 

(5)        Under no circumstances shall Beneficiary become personally liable for
the fulfillment of the terms, covenants and conditions contained in any of the
Leases or obligated to take any action to repair or restore the Secured
Property.

 

1.04        Escrow Payments. To further secure the Obligations as to payment of
the Impositions (as set forth in Section 1.02) and premiums for insurance (as
set forth in Section 1.03), Grantor will pay to Beneficiary, or its designee, on
the due date of each monthly installment of principal and/or interest pursuant
to the Note, a sum equal to the Impositions and insurance premiums next due on
the Secured Property, all as estimated by Beneficiary, less all sums already
paid with respect to the Impositions and insurance premiums for such period,
divided by the number of months to elapse before one month prior to the date
when such Impositions and insurance premiums shall become due and payable.
Beneficiary or its designee shall hold all payments without any obligation for
the payment of interest thereon to Grantor and free of all liens or claims on
the part of creditors of Grantor and as a part of the Secured Property.
Beneficiary or its designee shall use such payments to pay current Impositions
and insurance premiums, as the same accrue and are payable. Such payments shall
not be, nor be deemed to be, trust funds, but may be commingled with the general
funds of Beneficiary, or its designee. If at any time and for any reason
Beneficiary determines that such payments are insufficient to pay the
Impositions and insurance premiums in full as they become payable, Grantor will
pay to Beneficiary or its designee, within ten (10) days after demand therefor,
such additional sum or sums as may be required in order for Beneficiary or its
designee to so pay such Impositions and insurance premiums in full. Grantor
shall furnish Beneficiary with the bills therefor within sufficient time to
enable Beneficiary or its designee to pay the Impositions and insurance premiums
before any penalty attaches and before any policy lapses. Upon any default in
the provisions of any Loan Instrument, Beneficiary may, at its discretion and
without regard to the adequacy of its security hereunder, apply any unused
portion of such payments to the payment of the Obligations in such manner as it
may elect. Transfer of legal title to the Secured Property shall automatically
transfer to the new owner any then remaining rights of Grantor in all sums held
by Beneficiary pursuant to this Section 1.04.

 

1.05        Care and Use of the Premises.

 

1.05A. Maintenance and Repairs. Grantor, at its sole cost and expense, shall (1)
take good care of the Secured Property and the sidewalks and curbs adjoining the
Secured Property and keep the same in good order and condition, (2) make all
necessary repairs thereto, interior and exterior, structural and nonstructural,
ordinary and extraordinary, foreseen and unforeseen, (3) not commit or suffer to
be committed any waste of the Secured Property, and (4) not do or suffer to be
done anything which will increase the risk of fire or other hazard to the
Secured Property or any part thereof.

 

WCSR 3179289218Deed of Trust
Loan No. 374-0551

 

 

1.05B. Standard of Repairs. The necessity for and adequacy of repairs to the
Secured Property pursuant to Section 1.05A shall be measured by the standard
which is appropriate for a first class apartment complex and related facilities
of similar construction and type located in the Wake Forest, North Carolina
area. Further, Grantor shall make all repairs necessary to avoid any structural
damage to the Improvements and to keep the Secured Property in a proper
condition for its intended use. When used in this Section 1.05, the terms
"repair" and "repairs" shall include all necessary renewals and replacements.
Grantor shall make all repairs with new, first-class materials and in a good,
substantial and workerlike manner which shall be equal or better in quality and
class to the original work.

 

1.05C. Removal of Equipment. Grantor shall have the right, at any time and from
time to time, to remove and dispose of equipment which may have become obsolete
or unfit for use or which is no longer useful in the operation of the Secured
Property. Grantor will promptly replace all equipment so disposed of or removed
with other equipment of a value and serviceability equal to or greater than the
original value and serviceability of the equipment so removed or disposed of,
free of all liens, claims or other encumbrances. If by reason of technological
or other developments in the operation and maintenance of buildings of the
general character of the Improvements, no replacement of the building equipment
so removed or disposed of is necessary or desirable in the proper operation or
maintenance of the Improvements, Grantor shall not be required to replace same.
The security interest of this Deed of Trust shall cover all such replacement
equipment.

 

1.05D. Compliance With Laws and Insurance. Grantor shall promptly comply with
any and all applicable Legal Requirements including maintaining the Secured
Property in compliance with all Legal Requirements. Grantor shall not bring or
keep any article upon the Secured Property or cause or permit any condition to
exist thereon which would be prohibited by or could invalidate any insurance
coverage maintained, or required hereunder to be maintained, by Grantor on or
with respect to any part of the Secured Property. Grantor shall do all other
acts, which from the character or use of the Secured Property may be necessary
to protect the Secured Property. Upon request of Beneficiary, Grantor shall
furnish to Beneficiary a copy of any license, permit or approval required by any
Governmental Agency with respect to the Secured Property and/or the operations
conducted thereon.

 

1.05E.    Hazardous Materials.

 

(1)                 Grantor hereby unconditionally and irrevocably agrees to
indemnify, reimburse, defend, exonerate, pay and hold harmless Beneficiary, and
its directors, officers, policyholders, shareholders, employees, successors
(including any successor to Beneficiary’s interest in the chain of title),
assigns, agents, attorneys, contractors, subcontractors, experts, licensees,
visitors, affiliates, lessees, mortgagees, trustees and invitees, from and
against any and all of the following (referred to collectively as the
“Indemnified Claims”): all Environmental Damages and Environmental Claims that
may be incurred by, imposed upon, or asserted against, any Person indemnified
hereunder, arising out of, related to, or in connection with:

 

WCSR 3179289219Deed of Trust
Loan No. 374-0551

 

 

(a)        the presence of Hazardous Materials in, on, under or about or the
Release or threatened Release of any Hazardous Materials to or from (i) the
Secured Property or (ii) any other property legally or beneficially owned (or
any interest or estate which is owned) by Grantor, regardless of whether or not
the presence of such Hazardous Materials arose prior to the present ownership or
operation of the property in question or as a result of the acts or omissions of
Grantor or any other Person,

 

(b)        the violation or alleged violation of any Environmental Requirement
affecting or applicable to the Secured Property or any activities thereon,
regardless of whether or not the violation of such Environmental Requirement
arose prior to the present ownership or operation of the property in question or
as a result of the acts or omissions of Grantor or any other Person,

 

(c)        the breach of any warranty or covenant or the inaccuracy of any
representation contained in the Loan Instruments pertaining to Hazardous
Materials or other environmental matters, including the covenants contained in
Sections 1.05E(2), (3), (4) and (5) and the representations and warranties
contained in Sections 1.05E(4) and 2.03C and D,

 

(d)        the transport, treatment, recycling, storage or disposal or
arrangement therefor, of any Hazardous Material to, at or from the Secured
Property, or

 

(e)         the enforcement or attempted enforcement of this indemnity.

 

Grantor’s obligations pursuant to the foregoing indemnity shall include the
burden and expense of (x) defending against all Indemnified Claims, even if such
Indemnified Claims are groundless, false or fraudulent, (y) conducting all
negotiations of any description with respect to the Indemnified Claims, and (z)
paying and discharging any and all Indemnified Claims, when and as the same
become due, against or from Beneficiary or any other Person indemnified pursuant
to this Section 1.05E(1). Grantor’s obligations under this Section 1.05E(1)
shall survive (i) the repayment of all sums due under the Note; (ii) the release
of the Secured Property or any portion thereof from the lien of this Deed of
Trust; (iii) the reconveyance of or foreclosure under this Deed of Trust
(notwithstanding that all or a portion of the obligations secured by this Deed
of Trust shall have been discharged thereby); (iv) the acquisition of the
Secured Property by Beneficiary; and/or (v) the transfer of all of Beneficiary’s
rights in and to the Note and/or the Secured Property.

 

(2) Grantor shall maintain the Secured Property in compliance with, and shall
not cause or permit the Secured Property to be in violation of, any applicable
Environmental Requirements. Grantor shall not, and shall not permit any lessee
or occupant of the Secured Property to, use, generate, manufacture, store,
maintain, dispose of or permit to exist in, on, under or about the Secured
Property any Hazardous Materials, except for the use, storage and disposal (such
use, storage and disposal to be in all cases in accordance with all applicable
Legal Requirements) of de minimis amounts of janitorial and cleaning supplies
and other Hazardous Materials typically used in (A) the ordinary course of
operating and maintaining a first class apartment complex and/or (B) the
ordinary course of tenants’ use of the Secured Property for residential
purposes. Grantor shall, at all times, comply fully and in a timely manner, and
cause all of its employees, agents, contractors and subcontractors and any other
Persons occupying or present on the Secured Property to so comply, with all
applicable Environmental Requirements.

 

WCSR 3179289220Deed of Trust
Loan No. 374-0551

 

 

(3) Promptly, upon the written request of Beneficiary, but not more frequently
than once per year, Grantor shall provide Beneficiary, at Grantor's expense,
with an environmental site assessment or environmental audit report prepared by
an environmental engineering firm acceptable to Beneficiary and in a form
acceptable to Beneficiary, assessing the presence or absence of any Hazardous
Materials and the potential costs in connection with the abatement, cleanup or
removal of any Hazardous Materials found in, on, under or about the Secured
Property. Grantor shall cooperate in the conduct of such site assessment or
environmental audit.

 

(4) Grantor represents and warrants that, except as may be described in that
certain Phase I Environmental Site Assessment Report prepared by SES
Environmental, Inc., Project #133856, dated January 3, 2014 (the “Environmental
Report”), (a) no enforcement, cleanup, removal or other governmental or
regulatory action has, at any time, been instituted, contemplated or threatened
against Grantor, or to its best knowledge, the Secured Property, pursuant to any
Environmental Requirements; (b) to the best of its knowledge, no violation or
noncompliance with any Environmental Requirements has occurred with respect to
the Secured Property at any time; (c) to the best of its knowledge, no claims
have, at any time, been made or threatened by any third party against the
Secured Property or against Grantor with respect to the Secured Property,
relating to damage, contribution, cost recovery, compensation, loss or injury
resulting from any Hazardous Materials (the matters set forth in this Section
1.05E(4) (a), (b) and (c) are herein referred to as "Hazardous Materials
Claims"). Grantor shall promptly advise Beneficiary, in writing, if any
Hazardous Materials Claims are hereafter asserted, or if Grantor obtains
knowledge of any Release of any Hazardous Materials in, on, under or about the
Secured Property.

 

(5) Without Beneficiary's prior written consent, Grantor shall not (a) take any
remedial action in response to the presence of any Hazardous Materials in, on,
under or about the Secured Property, or (b) enter into any settlement agreement,
consent decree or other compromise in respect of any such Hazardous Materials or
any Hazardous Material Claims. However, Beneficiary's prior consent shall not be
necessary in the event that the presence of any Hazardous Materials in, on,
under or about the Secured Property 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 and it is not possible to obtain
Beneficiary's consent before taking such action. In such event, Grantor shall
notify Beneficiary as soon as practical of any action so taken. Beneficiary
shall not withhold its consent, where such consent is required hereunder, if
either (a) a particular remedial action is ordered by a court of competent
jurisdiction, or (b) Grantor establishes to the satisfaction of Beneficiary that
there is no reasonable alternative to such remedial action which would result in
less impairment to the Secured Property, or (c) Grantor establishes to the
reasonable satisfaction of Beneficiary that such remedial action is required by
Environmental Requirements.

 

WCSR 3179289221Deed of Trust
Loan No. 374-0551

 

 

(6) Beneficiary, if it so elects, shall have the right to join and participate
as a party in any legal proceedings or actions initiated by any Person in
connection with any Hazardous Materials Claim and, in such case, Grantor shall
pay all of Beneficiary's attorneys' fees and expenses incurred in connection
therewith.

 

1.05F. Compliance With Instruments of Record. Grantor shall promptly perform and
observe, or cause to be performed and observed, all terms, covenants and
conditions of all instruments of record affecting the Secured Property,
non-compliance with which may affect the priority of the lien of this Deed of
Trust, or which may impose any duty or obligation upon Grantor or any lessee or
other occupant of the Secured Property or any part thereof. Grantor shall do or
cause to be done all things necessary to preserve intact and unimpaired all
easements, appurtenances and other interests and rights in favor, or
constituting any part, of the Secured Property.

 

1.05G. Alteration of Secured Property. Grantor shall not demolish, remove,
construct, restore, add to or alter any portion of the Secured Property or any
extension thereof, or consent to or permit any such demolition, removal,
construction, restoration, addition or alteration in an amount greater than
$100,000.00 in any calendar year, without Beneficiary’s prior written consent,
except for (1) initial tenant improvement work provided for in any Lease in
effect on the date hereof and in any other Lease approved by Beneficiary in
writing, and (2) ordinary, non-structural maintenance work.

 

1.05H. Parking. Grantor shall comply with all Legal Requirements for parking and
shall grant no parking rights in the Secured Property other than those provided
for in existing Leases or in Leases for residential apartment use entered into
after the date hereof as permitted by the Loan Instruments, except with
Beneficiary's prior written consent, not to be unreasonably withheld. The
Secured Property shall contain at all times not less than the greater of (i) the
number of parking spaces required to comply with all covenants, restrictions,
easements, Leases and other applicable agreements affecting the Secured Property
or (ii) the number of parking spaces required to comply with all Legal
Requirements. If any part of the automobile parking areas included within the
Secured Property is taken by condemnation or such areas are otherwise reduced,
Grantor shall provide parking facilities in kind, size and location as required
to comply with all Leases and with the parking requirements set forth herein and
all applicable Legal Requirements. Any lease or other contract for such
additional parking facilities, if required, must be assignable and must be
otherwise in form and substance satisfactory to Beneficiary. Before entering
into any such lease or other contract for additional parking, Grantor will
furnish to Beneficiary satisfactory assurance of the completion of such
facilities free of all liens and in conformity with all Legal Requirements.

 

1.05I. Entry on Secured Property. Beneficiary or its representatives may enter
upon and inspect the Secured Property at all reasonable times; provided that as
long as no Event of Default or emergency then exists, any such inspection shall
only occur after reasonable notice has been given to Grantor (which notice may
be given by telephone or email).

 

1.05J. No Consent to Alterations or Repairs. Nothing contained in this Deed of
Trust shall in any way constitute the consent or request of Beneficiary,
expressed or implied, by inference or otherwise, to any contractor,
subcontractor, laborer or materialman for the performance of any labor or the
furnishing of any materials for any specific improvement, alteration or repair
of the Secured Property or any part thereof.

 

WCSR 3179289222Deed of Trust
Loan No. 374-0551

 

 

1.05K. Preservation of Lien; Mechanic's Liens. Grantor shall do or cause to be
done everything necessary so that the lien of this Deed of Trust shall be fully
preserved, at the sole cost of Grantor. Grantor shall discharge, pay or bond, or
cause to be discharged, paid or bonded, from time to time when the same shall
become due, all lawful claims and demands of mechanics, materialmen, laborers
and others which, if unpaid, might result in, or permit the creation of, a lien
on the Secured Property or any part thereof, or on the revenues, rents, issues,
income or profits arising therefrom.

 

1.05L. Use of Secured Property by Grantor. Grantor shall use, or cause to be
used, the Secured Property principally and continuously as and for a first-class
apartment complex. Grantor shall not use, or permit the use of, the Secured
Property or any part thereof, for any other principal use without the prior
written consent of Beneficiary. Grantor shall not initiate or acquiesce to any
change in any zoning or other land use classification now or hereafter in effect
and affecting the Secured Property or any part thereof without in each case
obtaining Beneficiary’s prior written consent thereto.

 

1.05M. Use of Secured Property by Public. Grantor shall not suffer or permit the
Secured Property, or any part thereof, to be used by the public as such, without
restriction or in such manner as might impair Grantor's title to the Secured
Property or any part thereof, or in such manner as might make possible a claim
or claims of adverse usage or adverse possession, or of any implied dedication
to the public of the Secured Property or any part thereof.

 

1.05N. Management. Management of the Premises shall be satisfactory to
Beneficiary and shall be performed by Grantor or a management company approved
in writing by Beneficiary and under a management contract satisfactory to
Beneficiary, which management contract shall be subject and subordinate to the
rights and title of Beneficiary under this instrument.

 

1.05O. Permitted Contests. If, and for so long as, Grantor is not in default
pursuant to any of the Loan Instruments, Grantor shall have the right, after
prior notice to Beneficiary, to contest, by appropriate legal proceedings,
diligently conducted in good faith and without cost or expense to Beneficiary,
the validity or application of any Legal Requirement, subject to the following:

 

(1) Such contest shall not subject Beneficiary or Grantor to any civil or
criminal liability;

 

(2) By the terms of any such Legal Requirement, compliance therewith pending the
prosecution of any such legal proceedings may legally be delayed without
incurring (or increasing the risk of incurring) any damage or injury of any kind
to the Secured Property or any Person or property and without incurring any lien
or charge of any kind against the Secured Property or any fine or penalty
against Grantor, Grantor may delay compliance therewith until the final
determination of such legal proceedings; and

 

WCSR 3179289223Deed of Trust
Loan No. 374-0551

 

 

(3) Such contest shall not cause a breach of any of the terms, conditions or
covenants of any Lease or other agreement on Grantor’s part to be performed.

 

1.06       Financial Information.

 

1.06A. Financial Statements. Grantor shall keep and maintain complete and
accurate books and records of the earnings and expenses of the Secured Property.
Grantor shall furnish to Beneficiary, at its own expense, within one hundred
twenty (120) days after the end of each fiscal year of Grantor and within thirty
(30) days after the end of each fiscal quarter of Grantor, including the fiscal
year during which the Loan is closed, annual or quarterly audited financial
statements, as applicable, prepared and certified by an independent certified
public accountant reasonably satisfactory to Beneficiary, in accordance with
generally accepted accounting principles relating to real estate consistently
applied. Notwithstanding the foregoing, if Grantor is not then in default of any
of the Obligations, the quarterly financial statements may be prepared and
certified by any officer or other authorized party of Grantor. The annual and
quarterly financial statements required hereunder shall include with respect to
the Secured Property: (1) a balance sheet, (2) a statement of cash flows, (3) a
detailed summary of operations, including, all rents and other income derived
from and all operating and capital expenses paid or incurred in connection with
the Secured Property and (4) a certified rent roll and other pertinent
information regarding the leasing as may be reasonably required by Beneficiary.
In addition to such annual financial statements, Grantor shall furnish to
Beneficiary such interim statements of financial position and cash flows and
such interim summaries of operations and interim rent rolls, including any of
the information described in the foregoing clauses (1) through (4), as
Beneficiary shall require. As to any Guarantor, and without any expense to
Beneficiary, Grantor shall furnish, or cause to be furnished, to Beneficiary,
within one hundred twenty (120) days after the end of each fiscal year of each
Guarantor and within thirty (30) days after the end of each fiscal quarter of
each Guarantor, if any, including the fiscal year during which the Loan is
closed, annual or quarterly audited financial statements, (as applicable), for
each Guarantor, prepared and certified by an independent, certified public
accountant, reasonably satisfactory to Beneficiary, in accordance with generally
accepted accounting principles, consistently applied. Notwithstanding the
foregoing, if Grantor is not then in default of any of the Obligations, the
quarterly financial statements may be prepared and certified by any officer or
other authorized party of Guarantor. The annual and quarterly financial
statements required hereunder shall include a balance sheet, a statement of cash
flows and a statement of profit and loss. Within forty-five (45) days after the
end of each fiscal quarter of Grantor, Grantor shall also deliver the
certifications required by Section 5.20 of this Deed of Trust.

 

1.06B. Right to Inspect Books and Records. Beneficiary or its representatives
shall have the right to examine and make copies of all books and records and all
supporting vouchers and data related to the Secured Property at reasonable times
upon reasonable written notice to Grantor. Such examination may occur at the
Secured Property or at Grantor's principal place of business and shall be at
Grantor's sole cost and expense at reasonable times upon reasonable written
notice to Grantor.

 

WCSR 3179289224Deed of Trust
Loan No. 374-0551

 

 

1.07       Condemnation.

 

1.07A. Beneficiary's Right to Participate in Proceedings. If the Secured
Property, or any part thereof, shall be taken in condemnation proceedings or by
exercise of any right of eminent domain (collectively, "Condemnation
Proceedings"), Beneficiary shall have the right to participate in any such
Condemnation Proceedings and all awards or payments (collectively, "Award") that
may be made in any such Condemnation Proceedings are hereby assigned to
Beneficiary, and shall be deposited with Beneficiary and applied in the manner
set forth in this Section 1.07. Grantor shall give Beneficiary immediate notice
of the actual or threatened (in writing) commencement of any Condemnation
Proceedings affecting all or any part of the Secured Property, including all
such Condemnation Proceedings as to severance and consequential damage and
change in grade in streets, and will deliver to Beneficiary copies of any and
all papers served or received in connection with any Condemnation Proceedings.
Notwithstanding the foregoing, Beneficiary is hereby authorized, at its option,
to commence, appear in and prosecute in its own or Grantor's name any action or
proceeding relating to any Condemnation Proceedings and to settle or compromise
any claim in connection therewith. No settlement for the damages sustained in
connection with any Condemnation Proceedings shall be made by Grantor without
Beneficiary's prior written approval, not to be unreasonably withheld. Grantor
shall execute any and all further documents that may be required in order to
facilitate the collection of each Award.

 

1.07B. Application of Condemnation Award. (1) If at any time title or temporary
possession of the whole or any part of the Secured Property shall be taken in
any Condemnation Proceeding or pursuant to any agreement among Grantor,
Beneficiary and/or those authorized to exercise the right of condemnation,
Beneficiary, in its discretion and without regard to the adequacy of its
security hereunder, shall have the right to apply any Award received to payment
of the Obligations whether or not due, in such order as Beneficiary shall
determine, subject, however, to the limitations on charging the Make-Whole
Amount upon the application of insurance proceeds and condemnation awards as set
forth in the paragraph of the Note which commences with the phrase
“Notwithstanding the foregoing, in the event of a casualty or condemnation . .
.”. If all or substantially all of the Secured Property is taken and the amount
of the Award received by Beneficiary is not sufficient to pay the then unpaid
balance of the Obligations, the balance of the Obligations shall, at the option
of Beneficiary, become immediately due and payable and Grantor shall, within ten
(10) days after written notice to Grantor that Beneficiary has so applied the
Award, pay the difference between such balance and the amount of the Award.
"Substantially all of the Secured Property" shall be deemed to have been taken
if the balance of the Secured Property, in the reasonable opinion of
Beneficiary,(a) cannot be restored to a self-contained and architecturally
complete unit or units or (b) the balance of the Secured Property as restored
will not be economically viable and capable of supporting all carrying charges
and operating and maintenance expenses.

 

WCSR 3179289225Deed of Trust
Loan No. 374-0551

 

 

(2) Notwithstanding any provision contained herein to the contrary, but subject
to the provisions of Section 1.07B(3), if less than Substantially All of the
Secured Property shall be taken in a Condemnation Proceeding (except for a
taking (a) of more than seventeen (17) apartment units contained in the
Improvements, (b) of an amount of parking spaces which would cause the Secured
Property to be in violation of zoning or other applicable law or Legal
Requirements or to be in violation of any covenants, restrictions, easements,
Leases and other applicable agreements affecting the Secured Property, and/or
(c) that affects access to the Premises or any part thereof from a public right
of way), Beneficiary shall, after deducting Beneficiary's costs in connection
with collection, review and disbursement related to the Award and the
Condemnation Proceeding, apply the balance of the Award to the cost of
restoring, repairing or altering the remaining portion of the Secured Property,
subject to the provisions of Section 1.03(H) (which provisions shall apply in
all respects except that any reference therein to Proceeds shall be deemed to
refer to the Award), and Grantor will promptly restore, repair or alter the
remaining Secured Property, subject to the provisions of Section 1.03(H). The
provisions of this Section 1.07(B)(2) shall not apply unless Grantor shall
furnish to Beneficiary evidence satisfactory to Beneficiary that the Secured
Property, as so restored, reconstructed or altered, and its use would fully
comply with all Legal Requirements. The balance of the Award so deposited with
Beneficiary, after disbursement in accordance with this Section 1.07(B)(2),
shall be applied to the payment of the Obligations, whether or not due, in such
order as Beneficiary shall determine, subject, however, to the limitations on
charging the Make-Whole Amount upon the application of insurance proceeds (and
applicable deductible) and condemnation awards as set forth in the paragraph of
the Note which commences with the phrase “Notwithstanding the foregoing, in the
event of a casualty or condemnation . . .”. The Award and other sums deposited
with Beneficiary, until disbursed or applied as provided in this Section
1.07)B)(2), may be commingled with the general funds of Beneficiary, shall
constitute additional security for the Obligations, and shall not bear interest.

 

(3) In all cases in which any taking occurs during the last twelve (12) months
prior to the Maturity Date, or in Beneficiary's judgment, Grantor is not
proceeding with the repair or restoration in a manner that would entitle Grantor
to have the Award disbursed to it, or for any other reason Beneficiary
determines, in its judgment, that Grantor shall not be entitled to the Award
pursuant to the terms of this Deed of Trust, Beneficiary, without regard to the
adequacy of its security hereunder, shall have the right to apply the Award to
payment of the Obligations, whether or not due, in such order as Beneficiary
shall determine, subject, however, to the limitations on charging the Make-Whole
Amount upon the application of insurance proceeds (and applicable deductible)
and condemnation awards as set forth in the paragraph of the Note which
commences with the phrase “Notwithstanding the foregoing, in the event of a
casualty or condemnation . . .”.

 

1.07C. Reimbursement of Costs. In the case of any taking covered by the
provisions of this Section 1.07, Beneficiary (to the extent that Beneficiary has
not been reimbursed therefor by Grantor) shall be entitled, as a first priority,
to reimbursement out of any Award for all reasonable costs, fees, and expenses
incurred in the determination and collection of the Award.

 

1.07D. Existing Obligations. Notwithstanding any taking by Condemnation
Proceedings or any application of the Award to the Obligations, Grantor shall
continue to pay the monthly installments due pursuant to the Note, as well as
all other sums secured by this Deed of Trust. If prior to Beneficiary's receipt
of the Award, the Secured Property shall have been sold through foreclosure of
this Deed of Trust or other similar proceeding, Beneficiary shall have the right
to receive the Award to the extent that any portion of the Obligations are still
unpaid after application of the proceeds of the foreclosure sale or similar
proceeding, with interest thereon at the Increased Rate, plus attorneys' fees
and other costs and disbursements incurred by Beneficiary in connection with the
collection of the Award and in establishing the amount of, and collecting, any
deficiency. The application of the Award to the Obligations, whether or not then
due or payable, shall not postpone, abate or reduce any of the periodic
installments of interest or principal thereafter to become due pursuant to the
Note or this Deed of Trust until the Obligations are paid and performed in full.

 

WCSR 3179289226Deed of Trust
Loan No. 374-0551

 

 

1.08       Leases.

 

1.08A. Performance of Lessor's Covenants. Grantor, as lessor, has entered and
will enter into leases or licenses with tenants, as lessees or licensees,
respectively, for parts or all of the Secured Property (all such leases and
licenses are hereinafter referred to individually as a "Lease" and collectively
as "Leases" and the lessees or licensees under such Leases are hereinafter
referred to individually as a "Lessee" and collectively as "Lessees"). Grantor
shall faithfully perform the lessor's material covenants under the Leases.
Grantor shall neither do, nor neglect to do, nor permit to be done (other than
enforcing the terms of such Leases and exercising the lessor's remedies
thereunder following a default or event of default on the part of any Lessee in
the performance of its obligations pursuant to the Lease or except as provided
for in the Assignment), anything which may cause the modification or termination
of any of the Leases, or of the obligations of any Lessee or any other person
claiming through such Lessee, or which may diminish or impair the value of any
Lease or the rents provided for therein, or the interest of the lessor or of
Beneficiary therein or thereunder. Each Lease shall make provision for the
attornment of the Lessee thereunder to any person succeeding to the interest of
Grantor as the result of any judicial or nonjudicial foreclosure or transfer in
lieu of foreclosure hereunder, such provision to be in form and substance
approved by Beneficiary, provided that nothing herein shall be construed to
require Beneficiary to agree to recognize the rights of any Lessee under any
Lease following any such foreclosure or transfer in lieu thereof unless
Beneficiary shall expressly hereafter agree thereto in writing with respect to a
particular Lease.

 

1.08B. Notice of Default. Grantor shall give Beneficiary immediate notice of any
notice of a material default or of any Event of Default, extension, renewal,
expansion, surrender or cancellation given to or received from any Lessee or
from any other Person with respect to any Lease and shall furnish Beneficiary
with a copy of each such notice.

 

1.08C. Representations Regarding Leases. Grantor represents and warrants that
(1) to the best of Grantor’s knowledge after due inquiry, all representations
made by it in the Leases are true; (2) to the best of Grantor’s knowledge after
due inquiry, all Improvements and the leased space demised and let pursuant to
each Lease have been completed to the satisfaction of the applicable Lessee; (3)
each Lessee is in possession of its leased space and has commenced payment of
Rent under its Lease except as disclosed to Beneficiary in writing in the Rent
Roll or Rent Roll Certification; (4) all Rents and other charges due and payable
under the Leases have been paid except as disclosed to Beneficiary in writing in
the Rent Roll or Rent Roll Certification; (5) no Rent has been prepaid, except
as expressly provided pursuant to the applicable Lease; (6) there is no existing
default or breach of any covenant or condition on the part of any Lessee or
lessor under any Lease except as disclosed to Beneficiary in writing in the Rent
Roll or Rent Roll Certification; (7) there are no options to purchase all or any
portion of the Secured Property contained in any Lease; (8) there are no options
to renew, cancel, extend or expand by any Lessee except as stated in the
Leases;(9) there are no amendments of or modifications to any Leases except as
disclosed in writing to Beneficiary; (10) Grantor is the absolute owner of each
Lease with full right and title to assign the same and the Rents thereunder to
Beneficiary; (11) to the best of Grantor’s knowledge after due inquiry, each
Lease is valid and in full force and effect; (12) except as provided in the
Assignment, there is no outstanding assignment or pledge thereof or of the Rents
due or to become due; (13) to the best of Grantor’s knowledge after due inquiry,
no Lessee has any defense, set-off or counterclaim against Grantor; (14) no
Rents payable pursuant to any Lease have been or will be anticipated,
discounted, released, waived, compromised or otherwise discharged, except as may
be expressly permitted by such Lease; and (15) all Leases are subject and
subordinate to this Deed of Trust.

 

WCSR 3179289227Deed of Trust
Loan No. 374-0551

 

 

1.08D. Covenants Regarding Leases. Grantor shall not, without the prior written
consent of Beneficiary obtained in each instance:

 

(1)      lease to any Person, all or any part of the space in, on or over any of
the Premises; except Leases for actual occupancy by the Lessee made in the
ordinary course of the business of owning and operating a first-class apartment
project in a prudent manner, on Grantor’s standard lease form, approved by
Beneficiary, without material deviation therefrom;

 

(2)     cancel, terminate or accept a surrender or suffer or permit any
cancellation, termination or surrender of any Lease or any guaranty of any Lease
except, with respect to any Lease, in the ordinary course of business of owning
and operating a first class apartment project in a prudent manner;

 

(3)     modify any Lease so as to (i) reduce the term thereof or the Rents
payable thereunder, (ii) change any renewal provision contained therein, (iii)
otherwise increase any obligation of Grantor thereunder, or (iv) reduce any
obligation of Lessee thereunder except, with respect to any Lease, in the
ordinary course of business of owning and operating a first class apartment
project in a prudent manner;

 

(4)     commence any summary proceeding or other action to recover possession of
any space demised pursuant to any Lease, other than a proceeding brought in good
faith by reason of a default of any Lessee;

 

(5)     receive or collect, or permit the receipt or collection of, any Rents
for more than one month in advance of the payment due dates plus a one-month
security deposit;

 

(6)      take any other action with respect to any Lease which would tend to
impair the security of Beneficiary pursuant to this Deed of Trust;

 

(7)      extend any present Lease other than in accordance with the terms
presently provided for therein; except leases for actual occupancy by the Lessee
made in the ordinary course of business of owning and operating a first-class
apartment project in a prudent manner;

 

(8)      execute any agreement or instrument or create or permit a lien which
may be or become superior to any Lease;

 

WCSR 3179289228Deed of Trust
Loan No. 374-0551

 

 

(9)      suffer or permit to occur any release of liability of any Lessee or the
accrual of any right in any Lessee to withhold payment of any Rent except, with
respect to any Lease, in the ordinary course of business of owning and operating
a first class apartment project in a prudent manner;

 

(10)    sell, assign, transfer, mortgage, pledge or otherwise dispose of or
encumber, whether by merger, consolidation, operation of law or otherwise, any
Lease or any Rents;

 

(11)    alter, modify or change the terms of any guaranty of any Lease or
consent to the release of any party thereto except, with respect to any Lease,
in the ordinary course of business of owning and operating a first class
apartment project in a prudent manner; or

 

(12)    request, consent, agree to, or accept, the subordination of any Lease to
any mortgage (other than this Deed of Trust) or other encumbrance now or
hereafter affecting the Premises.

 

1.08E. Application of Rents. Grantor shall use and apply all Rents from the
Secured Property first to the payment and performance of the Obligations in
accordance with the terms of the Loan Instruments as they become due (but
subject to the last sentence of this Section), and then to the payment of all
Impositions and the costs and expenses of management, operation, repair,
maintenance, preservation, reconstruction and restoration of the Secured
Property in accordance with the requirements of this Deed of Trust and the
obligations of Grantor as the lessor under any Lease. Grantor shall not use any
Rents for purposes unrelated to the Secured Property unless and until all
current payments of the Obligations, Impositions and such costs and expenses
have been paid or provided for and adequate cash reserves have been set aside to
ensure the timely future payment of all such items.

 

1.08F. Indemnity Against Unapproved Lease Modifications and Amendment. In the
event that Beneficiary or any grantee or assignee of Beneficiary takes title to,
or otherwise comes into possession of, the Secured Property and thereafter a
Lessee under a Lease attorns to Beneficiary or such other party pursuant to a
Subordination, Non-Disturbance and Attornment Agreement entered into by
Beneficiary and such Lessee, Grantor hereby indemnifies and holds Beneficiary
harmless from and against any and all claims, liabilities, costs and expenses of
any kind or nature against or incurred by Beneficiary arising out of the
enforcement by any Lessee against Beneficiary or any grantee or assignee of
Beneficiary, of any affirmative claim, cost or expense, or any defense,
abatement or right of set off under any modification or amendment to a Lease
which is binding upon Beneficiary and which was entered into by Grantor after
the date of this Deed of Trust in violation of the requirements of subsection
1.08D hereof

 

WCSR 3179289229Deed of Trust
Loan No. 374-0551

 

 

1.09Assignment of Leases, Rents, Income, Profits and Cash Collateral.

 

1.09A. Assignment; Discharge of Obligations. Grantor hereby unconditionally,
absolutely and presently bargains, sells, grants, assigns, releases and sets
over unto Beneficiary and Trustee (1) all Leases and all other tenancies,
occupancies, subleases, franchises and concessions of the Land or Improvements
or which in any way affect the use or occupancy of all or any part of the Land
or Improvements, and any other agreements affecting the use and occupancy of all
or any part of the Land or Improvements, in each case, whether now or hereafter
existing, and all right, title and interest of Grantor thereunder, including all
rights to all security or other deposits, (2) all guarantees of the obligations
of any lessee, licensee or other similar party under any of the foregoing,
whether now or hereafter existing, and (3) the Rents, regardless of whether the
Rents accrue before or after foreclosure or during the full period of
redemption. For the aforesaid purpose, Grantor does hereby irrevocably
constitute and appoint Beneficiary its attorney-in-fact, in its name, to receive
and collect all Rents, as the same accrue, and, out of the amount so collected,
Beneficiary, its successors and assigns, are hereby authorized (but not
obligated) to pay and discharge the Obligations (including any accelerated
Obligations) in such order as Beneficiary may determine and whether due or not,
and to pay the remainder, if any, to Grantor, or as otherwise required by law.
Neither this assignment nor any such action shall constitute Beneficiary as a
"mortgagee in possession" or otherwise make Beneficiary responsible or liable in
any manner with respect to the Secured Property or the use, occupancy, enjoyment
or operation of all or any portion thereof, unless and until Beneficiary, in
person or by agent, assumes actual possession thereof. Nor shall appointment of
a receiver for the Secured Property by any court at the request of Beneficiary
or by agreement with Grantor, or the entering into possession of the Secured
Property or any part thereof by such receiver, be deemed to make Beneficiary a
mortgagee-in-possession or otherwise responsible or liable in any manner with
respect to the Secured Property or the use, occupancy, enjoyment or operation of
all or any portion thereof. The assignment of all Leases and Rents in this
Section 1.09 is intended to be an absolute, unconditional and present assignment
from Grantor to Beneficiary and not merely the passing of a security interest.
Grantor shall, at any time or from time to time, upon request of Beneficiary,
execute and deliver any instrument as may be requested by Beneficiary to further
evidence the assignment and transfer to Beneficiary of Grantor's interest in any
Lease or Rents. Nothing herein shall in any way limit Beneficiary's remedies or
Grantor's Obligations under the Assignment.

 

1.09B. Entry Onto Secured Property; Lease of Secured Property. Beneficiary, at
its option, may enter and take possession of the Secured Property and manage and
operate the same as provided in Section 4.01, such management and operation to
include the right to enter into Leases and new agreements and to take any action
which, in Beneficiary's judgment, is necessary or proper to conserve the value
of the Secured Property. The expenses (including any receiver's fees, attorneys'
fees and agent's compensation) incurred pursuant to the powers herein contained
shall be secured hereby. Beneficiary shall not be liable to account to Grantor
for any action taken pursuant hereto other than to account for any Rents
actually received by Beneficiary.

 

1.09C. License to Manage Secured Property. Notwithstanding anything to the
contrary contained in Section 1.09A or Section 1.09B, so long as there shall
exist no Event of Default hereunder, Grantor shall have the license to manage
and operate the Secured Property, including the right to enter into Leases, and
collect all Rents as they accrue (but not more than one month in advance).

 

WCSR 3179289230Deed of Trust
Loan No. 374-0551

 

 

1.09D. Delivery of Assignments. Grantor shall execute such additional documents
as may be reasonably requested from time to time by Beneficiary, to evidence the
assignment to Beneficiary or its nominee of any Leases now or hereafter made,
such assignment documents to be in form and content acceptable to Beneficiary.
Grantor shall deliver to Beneficiary, within thirty (30) days after
Beneficiary's written request therefor (1) a duplicate original or photocopy of
each Lease which is at the time of such request outstanding upon the Secured
Property and (2) a complete schedule, certified by Grantor, of each Lease,
showing the unit number, type, Lessee name, monthly rental, date to which Rents
have been paid, term of Lease, date of occupancy, date of expiration, existing
defaults, if any, and every special provision, concession or inducement granted
to such Lessee.

 

1.09E. Indemnity. Grantor shall assert no claim or liability related to
Beneficiary’s exercise of its rights pursuant to this Section 1.09. Grantor
expressly waives all such claims and liabilities. Grantor hereby holds
Beneficiary harmless from and against any and all claims, liabilities and
expenses of any kind or nature against or incurred by Beneficiary arising out of
Beneficiary's exercise of its rights pursuant to this Section 1.09, including
Beneficiary's management, operation or maintenance of the Secured Property or
the collection and disposition of Rents.

 

1.10       Further Assurances.

 

1.10A. General; Appointment of Attorney-in-Fact. Upon request by Beneficiary,
from time to time, Grantor shall prepare, execute and deliver, or cause to be
prepared, executed and delivered, to Beneficiary, all instruments, certificates
and other documents which may, in the reasonable opinion of Beneficiary, be
necessary or desirable in order to effectuate, complete, perfect or continue and
preserve the Obligations and the lien of this Deed of Trust provided that such
instruments, certificates and other documents do not (i) materially increase any
obligation imposed on Grantor or (ii) materially change the applicability, scope
or effect of any covenant, condition, or restriction contained in any of the
Loan Instruments. Upon any failure by Grantor to do so, Beneficiary may prepare,
execute and record any such instruments, certificates and documents for and in
the name of Grantor and Grantor hereby appoints Beneficiary the agent and
attorney-in-fact of Grantor for such purposes. This power is coupled with an
interest and shall be irrevocable so long as any part of the Obligations remain
unpaid or unperformed. Grantor shall reimburse Beneficiary for all sums expended
by Beneficiary in preparing, executing and recording such instruments,
certificates and documents and such sums shall be secured by this Deed of Trust.

 

1.10B. Statement Regarding Obligations. Grantor shall, within ten (10) days
after request by Beneficiary, furnish Beneficiary with a written statement, duly
acknowledged, setting forth (1) the unpaid principal balance of the Loan and the
accrued but unpaid interest thereon,(2) whether or not any setoffs or defenses
exist against the payment of such principal or interest, and (3) if such setoffs
or defenses exist, the particulars thereof.

 

WCSR 3179289231Deed of Trust
Loan No. 374-0551

 

 

1.10C. Additional Security Instruments. Grantor, from time to time and within
fifteen (15) days after request by Beneficiary, shall execute, acknowledge and
deliver to Beneficiary such chattel mortgages, security agreements or other
similar security instruments, in form and substance reasonably satisfactory to
Beneficiary, covering all property of any kind whatsoever owned by Grantor or in
which Grantor may have any interest which, in the opinion of Beneficiary, is
necessary to the operation and maintenance of the Secured Property or is
otherwise a part of the Secured Property. Grantor, from time to time and within
fifteen (15) days after request by Beneficiary, shall also execute, acknowledge
and deliver any financing statement, renewal, affidavit, certificate,
continuation statement, supplementary mortgage or other document as Beneficiary
may reasonably request in order to perfect, preserve, continue, extend or
maintain the security interest under, and the priority of, this Deed of Trust or
such chattel mortgage or other security instrument, as a first lien. Grantor
shall pay to Beneficiary on demand all costs and expenses incurred by
Beneficiary in connection with the preparation, execution, recording, filing and
refiling of any such instrument or document, including charges for examining
title and attorneys' fees and expenses for rendering an opinion as to the
priority of this Deed of Trust and of each such chattel mortgage or other
security agreement or instrument as a valid and subsisting first lien on such
property. Neither a request so made by Beneficiary, nor the failure of
Beneficiary to make such a request, shall be construed as a release of such
property, or any part thereof, from the lien of this Deed of Trust. This
covenant and each such mortgage, chattel or other security agreement or
instrument, delivered to Beneficiary are cumulative and given as additional
security. Grantor shall pay all premiums and related costs in connection with
any title insurance policy or policies in full or partial replacement of the
title insurance policy now insuring or which will insure the lien of this Deed
of Trust.

 

1.10D. Security Agreement. This Deed of Trust shall constitute a security
agreement under Article 9 of the Code with respect to the Personal Property
covered by this Deed of Trust. Pursuant to the applicable Granting Clauses
hereof, Grantor has granted Beneficiary a security interest in the Personal
Property and in all additions and accessions thereto, substitutions therefor and
proceeds thereof for the purpose of securing all Obligations now or hereafter
secured by this Deed of Trust. The following provisions relate to such security
interest:

 

(1)       The Personal Property includes all now existing or hereafter acquired
or arising equipment, inventory, accounts, chattel paper, instruments,
documents, deposit accounts, investment property, letter-of-credit rights,
commercial tort claims, supporting obligations and general intangibles now or
hereafter used or procured for use on the Premises or otherwise relating to the
Premises. If Grantor shall at any time acquire a commercial tort claim relating
to the Premises, Grantor shall immediately notify Beneficiary in a writing
signed by Grantor of the brief details thereof and grant to Beneficiary a
security interest therein and in the proceeds thereof.

 

(2)       Grantor hereby irrevocably authorizes Beneficiary at any time and from
time to time to file in any filing office in any Uniform Commercial Code
jurisdiction any initial financing statements and amendments thereto that (a)
indicate the collateral as “all assets used or procured for use or otherwise
relating to” the Premises or words of similar effect, or as being of equal or
lesser scope or in greater detail, and to indicate the Premises as defined, or
in a manner consistent with the term as defined, in this Deed of Trust and (b)
contain any other information required by part 5 of Article 9 of the Uniform
Commercial Code of the filing office for the sufficiency or filing office
acceptance of any initial financing statement or amendment, including whether
Grantor is an organization, the type of organization and any organizational
identification number issued to Grantor. Grantor agrees to provide any such
information to Beneficiary promptly upon written request. Grantor also ratifies
its authorization for Beneficiary to have filed in any filing office in any
Uniform Commercial Code jurisdiction any like initial financing statements or
amendments thereto if filed prior to the date hereof. Grantor shall pay to
Beneficiary, from time to time, upon demand, any and all costs and expenses
incurred by Beneficiary in connection with the filing of any such initial
financing statements and amendments, including attorneys’ fees and all
disbursements. Such costs and expenses shall bear interest at the Increased Rate
from the date paid by Beneficiary until the date repaid by Grantor and such
costs and expenses together with such interest, shall be part of the Obligations
and shall be secured by this Deed of Trust.

 

WCSR 3179289232Deed of Trust
Loan No. 374-0551

 

 

(3)       Grantor shall any time and from time to time take such steps as
Beneficiary may reasonably request for Beneficiary to obtain “control” of any
Personal Property for which control is a permitted or required method to perfect
or to insure priority of the security interest in such Personal Property granted
hereby.

 

(4)       Upon the occurrence of an Event of Default, Beneficiary shall have the
rights and remedies of a secured party under the Code as well as all other
rights and remedies available at law or in equity or under this Deed of Trust.

 

(5)       This Deed of Trust also constitutes a fixture filing.

 

(6)       If Grantor does not have an organizational identification number and
later obtains one, Grantor shall forthwith notify Beneficiary of such
organizational identification number.

 

(7)       Terms defined in the Code and not otherwise defined in this Deed of
Trust have the same meanings in this Section 1.10D as are set forth in the Code.
In the event that a term is used in Article 9 of the Code and also in another
Article of the Code, the term used in this Section 1.10D is that used in Article
9. The term “control", as used in this Paragraph, has the meaning given in
Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the Code, as applicable.

 

1.10E. Preservation of Grantor's Existence. Grantor shall do all things
necessary to preserve and keep in full force and effect its existence,
franchises, rights and privileges under the laws of the state of its formation
and of the State, and shall comply with all applicable Legal Requirements.

 

1.10F. Further Indemnities. In addition to any other indemnities contained in
the Loan Instruments, and except as otherwise limited in the Loan Instruments,
Grantor hereby agrees to indemnify and hold Beneficiary harmless from and
against all losses, liabilities, suits, obligations, fines, damages, penalties,
claims, costs, charges and expenses, including architects', engineers' and
attorneys' fees and disbursements which may be imposed upon, incurred or
asserted against Beneficiary by reason of: (1) the construction of the
Improvements, (2) any capital improvements, other work or things, done in, on,
under or about the Secured Property or any part thereof, (3) any use, nonuse,
misuse, possession, occupation, alteration, repair, condition, operation,
maintenance or management of the Secured Property or any part thereof or any
street, drive, sidewalk, curb, passageway or space adjacent thereto, (4) any
negligence or willful act or omission on the part of Grantor, any Lessee or any
agent, contractor, servant, employee, licensee or invitee of any Lessee or of
Grantor, (5) any accident, injury (including death) or damage to any person or
property occurring in, on, under or about the Secured Property or any part
thereof or in, on, under or about any street, drive, sidewalk, curb, passageway
or space adjacent thereto, (6) any default under any Loan Instrument or any
Event of Default, (7) any lien or claim arising or alleged to have arisen on or
against the Secured Property or any part thereof under any Legal Requirement or
any liability asserted against Beneficiary with respect thereto, (8) any tax
attributable to the execution, delivery, filing or recording of any Loan
Instrument, (9) any contest permitted pursuant to the provisions of this Deed of
Trust, or (10) the enforcement or attempted enforcement of this indemnity.

 

WCSR 3179289233Deed of Trust
Loan No. 374-0551

 

 

1.10G. Absence of Insurance. The obligations of Grantor under this Deed of Trust
and the other Loan Instruments shall not in any way be affected by (1) the
absence, in any case, of adequate insurance, (2) the amount of the insurance or
(3) the failure or refusal of any insurer to perform any obligation required to
be performed by it pursuant to any insurance policy affecting the Secured
Property. If any claim, action or proceeding is made or brought against
Beneficiary by reason of any event as to which Grantor is obligated to indemnify
Beneficiary, then, upon demand by Beneficiary, Grantor, at Grantor’s sole cost
and expense, shall resist or defend such claim, action or proceeding in
Beneficiary's name, if necessary, by such attorneys as Beneficiary shall
approve. Notwithstanding the foregoing, Beneficiary may engage its own
attorneys, in its discretion, to defend it or to assist in its defense, and
Grantor shall pay the fees and disbursements of such attorneys and, until so
paid, such amounts shall bear interest at the Increased Rate and shall be
secured by this Deed of Trust.

 

1.10H. Lost Note. Upon Beneficiary furnishing to Grantor an affidavit stating
that the Note has been mutilated, destroyed, lost or stolen (and that
Beneficiary is the current owner thereof free of liens), Grantor shall deliver
to Beneficiary, in substitution therefor, a new note containing the same terms
and conditions as the Note, with a notation thereon of the unpaid principal
balance and accrued and unpaid interest thereon. Upon execution and delivery of
the replacement note, all references in any of the Loan Instruments to the
“Note” shall mean the replacement note.

 

1.11      Prohibition on Transfers, Liens or Further Encumbrances.

 

1.11A. Continuing Ownership and Management. Grantor acknowledges that the
continuous ownership of the Secured Property and its continuous management and
operational control by Grantor are material to the making of the Loan.

 

1.11B. Prohibition on Transfers, Liens or Further Encumbrances. Except with the
prior written consent of Beneficiary, neither Grantor, nor any other Person, may
transfer, convey, assign, sell, alienate, mortgage, encumber, pledge,
hypothecate, grant a security interest in, or otherwise dispose of (in each
instance whether voluntarily or involuntarily, by operation of law or otherwise,
directly or indirectly, and, in each case, also prohibiting the granting of an
option or the execution of an agreement relating to any of the foregoing):

 

(1)all or any part of the Secured Property and/or the Rents, or any interest
therein;

 

WCSR 3179289234Deed of Trust
Loan No. 374-0551

 

 

(2)any legal or beneficial ownership interest in Grantor or in any of Grantor’s
constituent entities, whether direct or indirect, and on all levels, whether
made directly or through an intermediary, and whether made in one transaction or
effected in more than one transaction; or

 

(3)the management and operation by Grantor of the Secured Property.

 

Without limiting the generality of the foregoing, for purposes of this Section
1.11, a transfer or disposition of the Secured Property (or the Rents, as
applicable) or any part thereof or interest therein shall include (a) the change
of Grantor's type of organization, jurisdiction of organization or other legal
structure, (b) the transfer of the Secured Property or any part thereof or
interest therein to a cooperative corporation or association, (c) the conversion
of all or any part of the Secured Property or interest therein to a condominium
form of ownership, (d) any lease for space in any Improvements for purposes
other than occupancy by the tenant, (e) any lease for space in the Improvements
containing an option to purchase, (f) any conditional sale or any title
retention agreement with regard to, all or any part of the Secured Property or
the Rents and (g) unless Grantor has provided Beneficiary with at least thirty
(30) days prior written notice thereof, any change of Grantor's name, place of
business or, if Grantor has more than one place of business, any change of its
chief executive office, or any change of Grantor's mailing address or
organizational identification number if it has one. Any action or event
described in this Section 1.11B is herein called a "Transfer" and all Transfers
are prohibited without the prior written consent of Beneficiary.

 

1.11C. Acceleration of Obligations. In the event of a Transfer without the prior
written consent of Beneficiary, Beneficiary may, without limiting any other
right or remedy available to Beneficiary at law, in equity or by agreement with
Grantor, and in Beneficiary's discretion, and without regard to the adequacy of
its security, accelerate the maturity of the Note and require the payment of all
then existing Obligations, including the Make-Whole Amount provided in Section
4.06. The giving of consent by Beneficiary to a Transfer in any one or more
instances shall not limit or waive the need for such consent in any other or
subsequent instances.

 

1.12       Expenses. Promptly after Beneficiary’s demand therefor, Grantor shall
pay Beneficiary for all costs and expenses, including attorneys’ fees and
expenses and costs of obtaining evidence of title, incurred by Beneficiary in
connection with any action, suit, legal proceeding, claim or dispute (a) arising
under or in connection with the performance of any rights or obligations under
any Loan Instrument or affecting the Obligations or the Secured Property, (b)
involving any insurance proceeds or condemnation awards with respect to the
Secured Property, (c) to protect the security hereof, (d) as to any concern of
Beneficiary with the condition of the Secured Property, or (e) of any other kind
or nature in which Beneficiary is made a party relating to the Secured Property
or the Loan, or appears as a party, including those related to the estate of an
insolvent or decedent or any bankruptcy, receivership, or other insolvency under
any chapter of the Bankruptcy Code (Title 11 of the United States Code), as
amended, or any other insolvency proceeding or any exercise of the power of sale
or judicial foreclosure as set forth in this Deed of Trust. If the Obligations
are referred to attorneys for collection, foreclosure or any cause set forth in
Article III, Grantor shall pay all costs and expenses incurred by Beneficiary,
including attorneys' fees and expenses, all costs of collection, litigation
costs and costs (which may be estimated as to items to be expended after
completion of any foreclosure or other action) of procuring title insurance
policies, whether or not obtained, Torrens certificates and similar assurances
with respect to title and value as Beneficiary may deem necessary together with
all statutory costs, with or without the institution of an action or proceeding.
All costs and expenses described in this Section 1.12, with interest thereon at
the Increased Rate from the date paid by Beneficiary to the date paid by
Grantor, shall be paid by Grantor on demand, and shall be secured by this Deed
of Trust.

 

WCSR 3179289235Deed of Trust
Loan No. 374-0551

 

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES

 

Grantor represents and warrants:

 

2.01       Warranty of Title. Grantor (a) lawfully owns and holds title to the
Secured Property (other than the Personal Property), in fee simple, subject to
no mortgage, lien, charge or other encumbrance, except as specifically set forth
in the title insurance policy issued to Beneficiary upon recordation of this
Deed of Trust (the “Title Policy”), (b) has full power and lawful authority to
grant, bargain, sell, convey, assign, release, pledge, set over, transfer and
mortgage the Secured Property as set forth herein,(c) lawfully owns and holds
title to the Personal Property subject to no mortgage, lien, charge or other
encumbrance except as set forth herein, and (d) does warrant and will defend the
title to the Secured Property against all claims and demands whatsoever.

 

2.02       Ownership of Additional or Replacement Improvements and Personal
Property. All Improvements and Personal Property hereafter affixed, placed or
used by Grantor on the Secured Property shall be owned by Grantor free from all
mortgages, liens, charges or other encumbrances other than set forth in the
Title Policy.

 

2.03      No Pending Material Litigation or Proceeding; No Hazardous Materials.

 

2.03A. Proceedings Affecting Grantor. There are no actions, suits,
investigations or proceedings of any kind pending, or, to the best knowledge and
belief of Grantor, threatened, against or affecting Grantor, or any Guarantor,
or against any shareholder, general partner or member of Grantor or any
Guarantor, or the business, operations, properties or assets of Grantor or any
shareholder, general partner or member of Grantor or any Guarantor, or before or
by any Governmental Agency, which may result in any material adverse change in
the business, operations, properties or assets or in the condition, financial or
otherwise, of Grantor or any Guarantor or any general partner or member of
Grantor or any Guarantor, or in the ability of Grantor to pay or otherwise
perform the Obligations. To the best knowledge and belief of Grantor, no default
exists with respect to any judgment, order, writ, injunction, decree, demand,
rule or regulation of any Governmental Agency, which might materially and
adversely affect the business, operations, properties or assets or the
condition, financial or otherwise, of Grantor or any Guarantor or any general
partner or member of Grantor or the ability of Grantor to pay or otherwise
perform the Obligations.

 

WCSR 3179289236Deed of Trust
Loan No. 374-0551

 

 

2.03B. Proceedings Affecting Secured Property. There are no actions, suits,
investigations or proceedings of any kind pending, or, to the best knowledge and
belief of Grantor, threatened, against or affecting the Secured Property
(including any attempt or threat by any Governmental Agency to condemn or rezone
all or any portion of the Secured Property), or involving the validity,
enforceability or priority of the Loan Instruments or enjoining or preventing or
threatening to enjoin or prevent the use and occupancy of the Secured Property
or the performance by Grantor of the Obligations, and there are no rent
controls, governmental moratoria or environmental controls (other than those
generally imposed by federal or state law) presently in existence or, to the
best knowledge and belief of Grantor, threatened, affecting the Secured
Property.

 

2.03C. No Hazardous Material. Neither Grantor nor, to the best knowledge and
belief of Grantor, any other Person has ever:

 

(1)       caused or knowingly permitted any Hazardous Material to be placed,
held, located or disposed of, in, on, under or about the Secured Property or any
part thereof, except for the use, storage and disposal (such use, storage and
disposal to be in all cases in accordance with all applicable Legal
Requirements) of de minimis amounts of janitorial and cleaning supplies and
other Hazardous Materials typically used in the ordinary course of operating and
maintaining a first class apartment complex, or caused or knowingly permitted,
in violation of any Legal Requirement, any Hazardous Material to be placed,
held, located or disposed of, in, on, under or about any other real property
legally or beneficially owned (or any interest or estate which is so owned) by
Grantor in any jurisdiction now or hereafter having in effect a so-called
"superlien" law or ordinance (the effect of which superlien law or ordinance
would be to permit the creation of a lien on the Secured Property to secure any
obligation), and neither the Secured Property, nor any part thereof, nor any
other real property legally or beneficially owned (or any interest or estate
therein which is so owned) by Grantor in any jurisdiction now or hereafter
having in effect a so-called "superlien" law or ordinance or any part thereof,
has ever been used (whether by Grantor or, to the best knowledge or belief of
Grantor, by any other Person) as a dump site, storage (whether permanent or
temporary) site or transfer site for any Hazardous Material; or

 

(2)       caused or knowingly permitted any asbestos or underground fuel storage
facility to be located in, on, under or about the Secured Property; or

 

(3)       discovered any occurrence or condition on any real property adjoining
or in the vicinity of the Secured Property that could cause the Secured Property
or any part thereof to be subject to any remediation requirements or any
restrictions on the ownership, occupancy, transferability or use of the Secured
Property under any Environmental Requirement.

 

2.03D. No Litigation Regarding Hazardous Material. To the best knowledge and
belief of Grantor after due inquiry, no Person has brought, settled or
threatened any litigation or administrative action or proceeding alleging the
presence, Release or threatened Release of any Hazardous Material in, on, under
or about the Secured Property.

 

WCSR 3179289237Deed of Trust
Loan No. 374-0551

 

 

2.04       Valid Organization, Good Standing and Qualification of Grantor; Other
Organizational Information. Grantor is a duly and validly organized and existing
limited liability company in good standing under the laws of the jurisdiction of
its organization, and is duly licensed or qualified and in good standing in all
other jurisdictions where its ownership or leasing of property or the nature of
the business transacted by it makes such qualification necessary, and is
entitled to own its properties and assets and to carry on its business, all as,
and in the places where, such properties and assets are now owned or operated or
such business is now conducted. Grantor has paid all franchise and similar taxes
in the jurisdiction in which the Secured Property is located and in all of the
jurisdictions in which it is so qualified, insofar as such taxes are due and
payable at the date of this Deed of Trust. Grantor’s exact legal name is that
indicated on the signature page hereof. Grantor is an organization of the type,
and is organized in the jurisdiction, as set forth in the first paragraph of
this Deed of Trust. Grantor’s organizational identification number is 5465572.
Section 5.07 accurately sets forth Grantor’s place of business or, if Grantor
has more than one place of business, its chief executive office as well as
Grantor’s mailing address if different.

 

2.05       Authorization; No Legal Restrictions on Performance. The execution
and delivery by Grantor of the Loan Instruments and its compliance with the
terms and conditions of the Loan Instruments have been duly and validly
authorized by all necessary corporate, partnership, membership or other
applicable action by Grantor and its constituent entities and the Loan
Instruments are valid and enforceable obligations of Grantor in accordance with
the terms thereof. Neither the execution and delivery by Grantor of the Loan
Instruments, nor the consummation of the transactions contemplated by the Loan
Instruments, nor compliance with the terms and conditions thereof will (A)
conflict with or result in a breach of, or constitute a default under, any of
the terms, obligations, covenants or conditions or provisions of (1) any
corporate charter or bylaws, partnership agreement, limited liability company
operating agreement, or other organizational or qualification document,
restriction, indenture, mortgage, deed of trust, pledge, bank loan or credit
agreement, or any other agreement or instrument to which Grantor is now a party
or by which Grantor or its properties may be bound or affected, or (2) to the
best knowledge and belief of Grantor, any judgment, order, writ, injunction,
decree or demand of any Governmental Agency, or (B) result in (1) the creation
or imposition of any lien, charge or encumbrance of any nature whatsoever upon
any property or asset of Grantor pursuant to the terms or provisions of any of
the foregoing or (2) the violation of any Legal Requirement applicable to
Grantor or any Guarantor. Grantor is not in default in the performance,
observance or fulfillment of any of the terms, obligations, covenants or
conditions contained in any indenture or other agreement creating, evidencing or
securing the Obligations or pursuant to which Grantor is a party or by which the
Grantor or its properties may be bound or affected.

 

In addition, (a) the Obligations incurred by Grantor and the granting of this
Deed of Trust and of the security interest, rights, and/or lien in and to the
Secured Property in connection with the Loan are not made or incurred with the
intent to hinder, delay, or defraud any present or future creditor of Grantor;
(b) Grantor has not received less than reasonably equivalent value in exchange
for incurring the Obligations and/or the granting of this Deed of Trust and of
the security interest, rights, and/or lien in and to the Secured Property in
connection with the Loan; (c) Grantor is solvent as of the date hereof, and
Grantor will not become insolvent as a result of incurring the Obligations
and/or the granting of this Deed of Trust and of the security interest, rights,
and/or lien in and to the Secured Property in connection with the Loan; (d)
Grantor is not engaged, and Grantor is not about to engage, in business or a
transaction for which any property remaining with Grantor is an unreasonably
small capital; (e) Grantor has not and does not intend to incur, and Grantor
does not believe that it will incur, debts that would be beyond Grantor’s
ability to pay as such debts mature; and (f) Grantor is not granting this Deed
of Trust and the security interest, rights, and/or lien in and to the Secured
Property and/or incurring the Obligations to or for the benefit of an insider
(as defined in 11 U.S.C. § 101(31)), under an employment contract and other than
in the ordinary course of business.

 

WCSR 3179289238Deed of Trust
Loan No. 374-0551

 

 

2.06      Compliance With Laws. Grantor has, to the best knowledge and belief of
Grantor, complied with all applicable Legal Requirements with respect to the
conduct of its business and ownership of its properties. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained,
and no registrations or declarations are required to be filed in connection with
the execution, delivery or performance by Grantor of its obligations under the
Loan Instruments.

 

2.07      Tax Status. Grantor has filed all United States income tax returns and
all state and municipal tax returns which are required to be filed, and has
paid, or made provision for the payment of, all taxes which have become due
pursuant to such returns or pursuant to any assessment received by Grantor. The
United States income tax liability of Grantor, if any, has been finally
determined by the Internal Revenue Service and satisfied for all taxable years
up to and including the taxable year ending December 31, 2012.

 

2.08      Absence of Foreign or Enemy Status; Absence of Blocked Persons;
Foreign Corrupt Practices Act. Neither the Loan, nor Grantor's use of the
proceeds thereof, will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto. Grantor is and shall remain in
compliance with the requirements of Executive Order 13224 of September 23, 2001
“Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)) (the
“Order”) and other similar requirements contained in the rules and regulations
of the Office of Foreign Assets Control, Department of the Treasury (“OFAC”) and
in any enabling legislation or other executive orders or regulations in respect
thereof (the Order and such other rules regulations, legislation or orders are
referred to hereinafter, collectively, as the “Orders”). Without limiting the
generality of the foregoing, neither Grantor, nor any subsidiary or affiliate of
Grantor, nor any member, partner or shareholder or other beneficial owner of
Grantor or of any such subsidiary, affiliate, member, partner, shareholder or
other beneficial owner (A) is listed on the Specially Designated Nationals and
Blocked Persons List maintained by OFAC pursuant to the Order and/or on any
other list of terrorists or terrorist organizations maintained pursuant to any
of the rules and regulations of OFAC or pursuant to any other applicable Orders,
(B) is or will become a “blocked person” described in Section 1 of the Order or
(C) knowingly engages or will engage in any dealings or transactions, or is or
will be otherwise associated, with any such blocked person. No part of the
proceeds of the Loan will be used, directly or indirectly, for any payments to
any governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the Foreign Corrupt Practices Act of 1977, as
amended. Grantor shall promptly notify Beneficiary should Grantor become aware
of any information which would render untrue any of the representations,
warranties or covenants set forth in this Section 2.08.

 

WCSR 3179289239Deed of Trust
Loan No. 374-0551

 

 

2.09      Federal Reserve Board Regulations. No part of the proceeds of the Loan
will be used, directly or indirectly, for the purpose of buying or carrying any
margin stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve Grantor in a
violation of Regulation X of said Board (12 CFR 224) or to involve any broker or
dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock
does not constitute any of the value of the consolidated assets of Grantor and
its subsidiaries, if any, and Grantor does not have any present intention that
margin stock will constitute any of the value of such assets. As used in this
Section, the terms "margin stock" and "purpose of buying or carrying" shall have
the meanings assigned to them in said Regulation U.

 

2.10       Investment Company Act and Public Utility Holding Company Act.
Neither Grantor, nor any subsidiary of Grantor, if any, is subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act as amended.

 

2.11        Exempt Status of Transactions Under Securities Act and
Representations Relating Thereto. Neither Grantor, nor anyone acting on its
behalf, has (a) solicited offers to make all or any part of the Loan, from more
than ten Persons or (b) otherwise approached, negotiated or communicated with
more than ten Persons regarding the making of all or any part of the Loan by
such Person(s). Neither Grantor, nor anyone acting on its behalf has taken, or
will take, any action that would subject the making of the Loan to the
registration requirements of Section 5 of the Securities Act of 1933, as
amended.

 

2.12        ERISA .

 

2.12A.      Neither Grantor nor any entity that holds a direct or indirect
interest in Grantor (a “Constituent Entity”) is or shall be (i) an employee
benefit plan within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974 (“ERISA”) regardless of whether such plan is
actually subject to ERISA, (ii) a plan to which Internal Revenue Code Section
4975 applies, or (iii) an entity the underlying assets of which include ERISA
“plan assets” by reason of a plan’s investment in the entity (e.g., insurance
company general or separate account; bank commingled fund).

 

2.12B.      Transactions by or with Grantor are not and will not be subject to
any Legal Requirements regulating investments of and fiduciary obligations with
respect to an employee benefit plan (within the meaning of Section 3(3) of
ERISA), regardless of whether such plan is actually subject to ERISA.

 

2.12C.      Any liability or obligation that Grantor (or any Constituent Entity)
may have in respect of an employee benefit plan as defined in Section 3(3) of
ERISA regardless of whether such plan is actually subject to ERISA has been and
shall continue to be satisfied in full.

 

WCSR 3179289240Deed of Trust
Loan No. 374-0551

 

 

ARTICLE III

DEFAULTS

 

3.01      Events of Default. The existence of any of the following circumstances
shall be deemed an "Event of Default" pursuant to this Deed of Trust, without
cure or grace period unless expressly otherwise provided herein:

 

3.01A. if Grantor fails to pay any portion of the Obligations as and when the
same shall become due and payable as provided in the Loan Instruments; or

 

3.01B. if Grantor fails to perform or observe any other term, provision,
covenant or agreement in the Loan Instruments other than as described in the
other clauses of this Section 3.01 and such failure continues for thirty (30)
days following written notice from Beneficiary, provided that if such failure to
perform is not monetary and by its nature cannot reasonably be remedied within
thirty (30) days following such written notice from Beneficiary, but is capable
of cure, Grantor shall have such additional period of time (but in no event
exceeding an additional thirty (30) days) as may be reasonably necessary to cure
such default provided that Grantor commences such cure in good faith promptly
upon receipt of Beneficiary’s notice and proceeds diligently thereafter to cure
same; or

 

3.01C. if any representation, warranty, certification, financial statement or
other information made or furnished at any time pursuant to the terms of the
Loan Instruments or otherwise, by or on behalf of Grantor, any Guarantor or any
other Person liable for the Obligations, shall prove to be materially false; or

 

3.01D. if Grantor shall:

 

(1)   apply for, consent to or acquiesce in the appointment of a receiver,
trustee or liquidator of Grantor or of all or any part of Grantor's assets or
the Secured Property or any interest in any part thereof (the term "acquiesce"
includes the failure to file a petition or motion to vacate or discharge any
order, judgment or decree providing for such appointment within ten (10) days
after the appointment); or

 

(2)   commence a voluntary case or other proceeding in bankruptcy, or admit in
writing its inability to pay its debts as they come due; or

 

(3)   make a general assignment for the benefit of creditors; or

 

(4)  file a petition or an answer seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief for itself
under any present or future bankruptcy code or any other statute or law relating
to bankruptcy, insolvency or other relief for debtors; or

 

(5)   file an answer admitting the material allegations of, or consent to, or
default in answering, a petition filed against it in any bankruptcy,
reorganization or insolvency case or proceeding; or

 

WCSR 3179289241Deed of Trust
Loan No. 374-0551

 

 

3.01E. if a court of competent jurisdiction enters an order for relief against
Grantor under any present or future bankruptcy code or any other statute or law
relating to bankruptcy, insolvency or other relief for debtors, which order
shall continue unstayed and in effect for any period of forty-five (45)
consecutive days; or

 

3.01F. if a court of competent jurisdiction enters an order, judgment or decree
adjudicating Grantor insolvent, approving a petition seeking reorganization or
arrangement of Grantor or appointing a receiver, custodian, trustee or
liquidator of Grantor or of all or any part of Grantor's assets or the Secured
Property or any interest in any part thereof, and such order, judgment or decree
shall continue unstayed and in effect for any period of forty-five (45)
consecutive days; or

 

3.01G. if Grantor assigns or purports to assign the whole or any part of the
Rents arising from the Secured Property or any part thereof without the prior
written consent of Beneficiary; or

 

3.01H. if a Transfer in violation of the Loan Instruments shall occur without
the prior written consent of Beneficiary; or

 

3.01I. if Grantor shall be in default beyond any applicable grace period
pursuant to any other mortgage, security instrument or other agreement affecting
Grantor or any substantial part of its assets or all or any part of the Secured
Property; or

 

3.01J. if any mechanic's, laborer's or materialman's lien, federal tax lien,
broker's lien or other lien not permitted hereunder and affecting the Secured
Property or any part thereof is not discharged, by payment, bonding, order of a
court of competent jurisdiction or otherwise, within twenty (20) days after
Grantor receives notice thereof from the lienor or from Beneficiary; or

 

3.01K. if any of the events described in Section 3.01(D), Section 3.01(E) and/or
Section 3.01(F) shall occur in respect of any Guarantor; or

 

3.01L. if a default by any Guarantor or other Person (other than Beneficiary)
shall occur under any guaranty, indemnity agreement, or other instrument which
it has executed in connection with the Loan and such default continues for
thirty (30) days following written notice from Beneficiary, provided that such
thirty (30) day grace period shall not apply to a monetary default or a default
pursuant to Section 3.01(K) or Section 3.01(M); or

 

3.01M. if any Guarantor shall contest, repudiate or purport to revoke any
guaranty, indemnity agreement or other instrument which it has executed in
connection with the Loan for any reason or if any such guaranty, indemnity or
other instrument shall cease to be in full force and effect as to the Guarantor
or shall be judicially declared null and void as to the Guarantor, or if any
Guarantor shall be liquidated, dissolved or wound-up.

 

WCSR 3179289242Deed of Trust
Loan No. 374-0551

 

 

ARTICLE IV

 

REMEDIES

 

4.01 Acceleration, Foreclosure, etc. Upon the happening of any Event of Default,
Beneficiary may, at its sole option, declare the entire unpaid balance of the
Obligations, including, the Make-Whole Amount and any other prepayment charges,
if any, due pursuant to any Loan Instrument, immediately due and payable without
further notice or demand, provided, however, simultaneously with the occurrence
of an Event of Default under Section 3.01D, 3.01E or 3.01F,and without the
necessity of any notice or other action by the Beneficiary, all Obligations
shall automatically become and be due and payable, without notice or demand. In
addition, upon the happening of any Event of Default, Beneficiary may, at its
sole option, without further delay, undertake any one or more of the following
or exercise any other remedies available to it under applicable law or equity:

 

4.01A. Foreclosure. Institute an action, judicial or otherwise, to foreclose
this Deed of Trust, or take such other action as may be allowed at law or in
equity, for the enforcement hereof and realization on the Secured Property or
any other security which is herein or elsewhere provided for, or proceed thereon
through power of sale or to final judgment and execution thereon for the entire
unpaid balance of the Obligations, including interest at the rate specified in
the Loan Instruments to the date of the Event of Default and thereafter at the
Increased Rate, and all other sums secured by this Deed of Trust, including all
attorneys' fees and expenses, costs of suit and other collection costs, interest
at the Increased Rate on any judgment obtained by Beneficiary from and after the
date of any sale of the Secured Property (which may be sold in one parcel or in
such parcels, manner or order as Beneficiary shall elect) until actual payment
is made of the full amount due Beneficiary pursuant to the Loan Instruments, any
law, usage or custom to the contrary notwithstanding.

 

4.01B. Partial Foreclosure. Beneficiary shall have the right to foreclose the
lien hereof to satisfy payment and performance of any part of the Obligations
from time to time. If an Event of Default exists as to the payment of any part
of the Obligations, as an alternative to the right of foreclosure to satisfy
payment of the Obligations after acceleration thereof, to the extent permitted
by applicable law, Beneficiary may institute partial foreclosure proceedings
("Partial Foreclosure") with respect to the portion of the Obligations as to
which the Event of Default exists, as if under a full foreclosure, and without
declaring the entire unpaid balance of the Obligations due. If Beneficiary
institutes a Partial Foreclosure, Beneficiary may sell, from time to time, such
part or parts of the Secured Property as Beneficiary, in its discretion, deems
appropriate, and may make each such sale subject to the continuing lien of this
Deed of Trust for the remainder, from time to time, of the Obligations. No
Partial Foreclosure, if so made, shall in any manner affect the remainder, from
time to time, of the Obligations or the priority of this Deed of Trust. As to
such remainder, this Deed of Trust and the lien hereof shall remain in full
force and effect as though no foreclosure sale had been made pursuant to the
provisions of this Section 4.01B. Notwithstanding the filing of any Partial
Foreclosure or the entry of a decree of sale therein, Beneficiary may elect, at
any time prior to any Partial Foreclosure, to discontinue such Partial
Foreclosure and the acceleration of the Obligations by reason of any Event of
Default upon which such Partial Foreclosure was predicated, and to proceed with
full foreclosure proceedings. Beneficiary may commence a Partial Foreclosure,
from time to time, as to any part of the Obligations without exhausting the
right of full foreclosure or Partial Foreclosure for any other part of the
Obligations as to which such Partial Foreclosure shall not have occurred.

 

WCSR 3179289243Deed of Trust
Loan No. 374-0551

 

 

4.01C. Entry. Beneficiary personally, or by its agents or attorneys, may enter
all or any part of the Secured Property, and may exclude Grantor, its agents and
servants wholly therefrom without liability for trespass, damages or otherwise.
Grantor shall surrender possession of the Secured Property to Beneficiary on
demand after the happening of any Event of Default. Thereafter, Beneficiary may
use, operate, manage and control the Secured Property and conduct the business
thereof, either personally or by its superintendents, managers, agents,
servants, attorneys or receivers. Upon each such entry, Beneficiary, at the
expense of Grantor from time to time, either by purchase, repairs or
construction, may maintain and restore the Secured Property, may complete the
construction of the Improvements and in the course of such completion may make
such changes in the contemplated or completed Improvements as Beneficiary may
deem desirable and may insure the same. At the expense of Grantor, Beneficiary
may make, from time to time, all necessary or desirable repairs, renewals and
replacements and such alterations, additions, betterments and improvements
thereto and thereon as Beneficiary may reasonably deem advisable to protect the
value of the Secured Property. In each of the circumstances described in this
Section 4.01C, Beneficiary shall have the right to manage and operate the
Secured Property and to carry on the business thereof and exercise all rights
and powers of Grantor with respect thereto, either in the name of Grantor or
otherwise as Beneficiary shall deem best.

 

4.01D. Collection of Rents, etc. Beneficiary may collect and receive all Rents.
Beneficiary may deduct, from the monies so collected and received, all expenses
of conducting the business of the Secured Property and of all maintenance,
repairs, renewals, replacements, alterations, additions, betterments and
improvements and amounts necessary to pay for Impositions, insurance, taxes and
assessments, liens or other charges upon the Secured Property or any part
thereof, as well as reasonable compensation for the services of Beneficiary and
for all attorneys, agents, clerks, servants, and other employees engaged and
employed by Beneficiary. After such deductions and the establishment of all
reasonable reserves, Beneficiary shall apply all such monies to the payment of
the unpaid Obligations. Beneficiary shall account only for Rents actually
received by Beneficiary.

 

4.01E. Receivership. Beneficiary may have a receiver appointed to enter into
possession of the Secured Property, collect the Rents therefrom and apply the
same as the court may approve. Beneficiary may have a receiver appointed, as a
matter of right without notice and without the necessity of proving either the
inadequacy of the security provided by this Deed of Trust or the insolvency of
Grantor or any other Person who may be legally or equitably liable to pay the
Obligations. Grantor and each such Person, presently and prospectively, waive
such proof and consent to the appointment of such receiver. If Beneficiary or
any receiver collects the Rents, the monies so collected shall not be
substituted for payment of the Obligations, nor can they be used to cure an
Event of Default, without the prior written consent of Beneficiary. Beneficiary
shall not be liable to account for Rents not actually received by Beneficiary.

 

4.01F. Specific Performance. Beneficiary may institute an action for specific
performance of any covenant contained herein or in aid of the execution of any
power herein granted.

 

WCSR 3179289244Deed of Trust
Loan No. 374-0551

 

 

4.01G. Recovery of Sums Required to be Paid. Beneficiary may, from time to time,
take action to recover any sum or sums which constitute a part of the
Obligations as such sums shall become due, without regard to whether or not the
remainder of the Obligations shall be due, and without prejudice to the right of
Beneficiary thereafter to bring an action of foreclosure or any other action for
each Event of Default existing from time to time.

 

4.01H. Other Remedies. Beneficiary may take all actions permitted under the
Uniform Commercial Code of the State and may take any other action, or pursue
any other right or remedy, as Beneficiary may have under applicable law, and
Grantor does hereby grant such rights to Beneficiary.

 

4.01I. State Specific Remedies. Beneficiary may exercise all other remedies as
specified below in Article VI, Special State Provisions, which are incorporated
herein by reference.

 

4.02       No Election of Remedies. Beneficiary may, in its discretion, exercise
all or any of the rights and remedies provided herein or in the other Loan
Instruments, or which may be provided by statute, law, equity or otherwise, in
such order and manner and from time to time, as Beneficiary shall elect without
impairing Beneficiary's lien, or rights pursuant to any of the Loan Instruments
and without affecting the liability of any Person for the Obligations.

 

4.03      Beneficiary's Right to Release, etc. Beneficiary may, in its
discretion, from time to time, release (for such consideration as Beneficiary
may require) any part of the Secured Property (A) without notice to, or the
consent, approval or agreement of any other party in interest, (B) without, as
to the remainder of the Secured Property, in any way impairing or affecting the
validity or the lien of this Deed of Trust or any of the other Loan Instruments,
or the priority thereof and (C) without releasing Grantor from any liability for
any of the Obligations. Beneficiary may accept, by assignment, pledge or
otherwise, any other property in place of any part of the Secured Property as
Beneficiary may require without being accountable for so doing to any other
lienor or other Person. To the extent permitted by law, neither Grantor, nor the
holder of any lien or encumbrance affecting the Secured Property or any part
thereof shall have the right to require Beneficiary to marshall assets.

 

WCSR 3179289245Deed of Trust
Loan No. 374-0551

 

 

4.04       Beneficiary's Right to Remedy Defaults, etc. If Grantor defaults in
the performance of any of the covenants or agreements contained in this Deed of
Trust or any of its other obligations under the other Loan Instruments beyond
any applicable cure periods, or if any action or proceeding is commenced which
affects Beneficiary’s interest in the Secured Property or any part thereof,
including, but not limited to, eminent domain, code enforcement, or proceedings
of any nature whatsoever under any federal or state law, whether now existing or
hereafter enacted or amended, relating to bankruptcy, insolvency, arrangement,
reorganization or other form of debtor relief, then Beneficiary may, but without
obligation to do so and without releasing Grantor from any obligation hereunder,
cure such defaults, make such appearances, disburse such sums and/or take such
other action as Beneficiary deems necessary or appropriate to protect
Beneficiary’s interest, including disbursement of attorneys’ fees, entry upon
the Secured Property to make repairs, payment of Impositions or insurance
premiums or otherwise cure the default in question or protect the security of
the Secured Property, and payment, purchase, contest or compromise of any
encumbrance, charge or lien encumbering the Secured Property. Grantor further
agrees to pay all expenses incurred by Beneficiary (including fees and
disbursements of counsel) pursuant to this Section 4.04, including those
incident to the curing of any default and/or the protection of the rights of
Beneficiary hereunder, and enforcement or collection of payment of the Note or
any future advances whether by judicial or nonjudicial proceedings, or in
connection with any bankruptcy, insolvency, arrangement, reorganization or other
debtor relief proceeding of Grantor, or otherwise. Any amounts disbursed by
Beneficiary pursuant to this Section 4.04 shall be additional indebtedness of
Grantor secured by this Deed of Trust as of the date of disbursement and shall
bear interest at the Increased Rate from such date until paid by Grantor in
full. All such amounts shall be payable by Grantor immediately without demand.
Nothing contained in this Section 4.04 shall be construed to require Beneficiary
to incur any expense, make any appearance, or take any other action and any
action taken by Beneficiary pursuant to this Section 4.04 shall be without
prejudice to any other rights or remedies available to Beneficiary pursuant to
any Loan Instrument or at law or in equity.

 

4.05       Waivers. Grantor waives and releases (A) all benefits that might
accrue to Grantor by virtue of any present or future laws exempting the Secured
Property, or any part of the proceeds arising from any sale of the Secured
Property, from attachment, levy or sale under execution, or providing for any
stay of execution, exemption from civil process or extension of time; (B) all
benefits that might accrue to Grantor from requiring valuation or appraisal of
any part of the Secured Property levied or sold on execution of any judgment
recovered for the Obligations; (C) all notices not herein or in any other Loan
Instrument specifically required as a result of Grantor's default or of
Beneficiary's exercise, or election to exercise, any option pursuant to any of
the Loan Instruments; and (D) all rights of redemption to the extent that
Grantor may lawfully waive same. At no time will Grantor insist upon, plead or
in any manner whatsoever claim or take any benefit or advantage of any stay or
extension or moratorium law or any exemption from execution or sale of the
Secured Property or any part thereof, whenever enacted, now or at any time
hereafter in force, which may affect the covenants or terms of performance of
the Loan Instruments. Similarly, Grantor will not claim, take or insist upon any
benefit or advantage of any law now or hereafter in force providing for the
valuation or appraisal of the Secured Property or any part thereof, prior to any
sale or sales thereof which may be made pursuant to any provision hereof, or
pursuant to the decree, judgment or order of any court of competent
jurisdiction. After any such sale or sales, to the extent permitted by law,
Grantor shall not claim or exercise any right under any law or laws heretofore
or hereafter enacted to redeem the property so sold or any part thereof. Grantor
waives all benefits or advantages of any such law or laws, and covenants not to
hinder, delay or impede the execution of any power herein granted or delegated
to Beneficiary. Grantor shall suffer and permit the execution of every such
power as though no such law or laws had been made or enacted. To the extent
permitted by law, the Secured Property may be sold in one parcel, as an
entirety, or in such parcels, manner or order as Beneficiary in its discretion
may decide. To the extent permitted by law, neither Grantor nor the holder of
any lien or encumbrance affecting the Secured Property or any part thereof may
require Beneficiary to marshall assets.

 

WCSR 3179289246Deed of Trust
Loan No. 374-0551

 

 

4.06       Prepayment. Except as otherwise set forth herein, Grantor shall pay
the charge provided in the Note for prepayment of the Obligations if for any
reason (including the acceleration of the due date of the Obligations by
Beneficiary following the occurrence of an Event of Default) any of such
Obligations shall be due and payable or paid prior to the stated maturity date
thereof, whether or not such payment is made prior to or at any sale held
pursuant to or by virtue of this Article IV. Beneficiary has relied on Grantor's
creditworthiness and its agreement to repay the Obligations in strict accordance
with the terms set forth in the Loan Instruments, and would not make the Loan
without the promises by Grantor to make all payments due pursuant to the Loan
Instruments and not to prepay all or any part of the principal balance of the
Note prior to the final maturity date thereof, except on the terms expressly set
forth herein and in the Note. Therefore, any prepayment of the Note, whether
occurring as a voluntary prepayment by Grantor or occurring upon an acceleration
of the Note by Beneficiary or otherwise, will prejudice Beneficiary's ability to
meet its obligations and to earn the return on the funds advanced to Grantor,
which Beneficiary intended and expected to earn when it made the Loan, and will
also result in other losses and additional expenses to Beneficiary. In
consideration of Beneficiary making the Loan at the interest rate and for the
term set forth in the Note, Grantor expressly waives all rights it may have
under applicable law to prepay, without charge or premium, all or any part of
the Note, either voluntarily or upon an acceleration of the Note by Beneficiary,
including an acceleration upon the making or suffering by Grantor of any
transfer or disposition prohibited by Section 1.11. If a prepayment of all or
any part of the principal balance of the Note is made by or on behalf of
Grantor, for any reason, whether due to the voluntary acceptance by Beneficiary
of a prepayment tendered by Grantor, or the acceleration of the Note by
Beneficiary, or in connection with any reinstatement of the Loan Instruments
pursuant to any foreclosure proceedings, or any right of redemption exercised by
Grantor or any other party having the right to redeem or to prevent any
foreclosure of this Deed of Trust, or upon the consummation of any foreclosure
sale, or under any other circumstances, Grantor or any other Person making any
such prepayment shall be obligated to pay, concurrently therewith, the
Make-Whole Amount, as defined and as set forth in the Note, and the payment of
the Make-Whole Amount shall be a condition to the making of such prepayment, and
the payment of the Make-Whole Amount shall be secured by this Deed of Trust and
the other Loan Instruments. Grantor shall pay the Make-Whole Amount without
prejudice to the right of Beneficiary to collect any other amounts due pursuant
hereto or to declare a default hereunder. Nothing herein shall be construed as
permitting any partial prepayment of the Obligations, except with Beneficiary's
prior written consent thereto obtained in each instance.

 

WCSR 3179289247Deed of Trust
Loan No. 374-0551

 

 

ARTICLE V

MISCELLANEOUS

 

5.01      Non-Waiver. The failure of Beneficiary to insist upon strict
performance of any term of this Deed of Trust or any other Loan Instrument shall
not be deemed to be a waiver of any term of this Deed of Trust or any other Loan
Instrument. Grantor shall not be relieved of its obligation to pay and perform
the Obligations, at the time and in the manner provided in the Loan Instruments,
by reason of (A) a failure by Beneficiary to take any action to foreclose this
Deed of Trust or otherwise enforce any of the provisions of this Deed of Trust
or of any other Loan Instrument (regardless of whether or not Grantor has
requested Beneficiary to do so), (B) the release, regardless of consideration,
of the whole or any part of the Secured Property or any other security for the
Obligations, or (C) any agreement or stipulation between Beneficiary and any
subsequent owner or owners of the Secured Property or any other Person extending
the time of payment or otherwise modifying or supplementing the terms of this
Deed of Trust or any other Loan Instrument, without first having obtained the
consent of Grantor. Grantor shall pay and perform the Obligations at the time
and in the manner provided in this Deed of Trust and the other Loan Instruments
as so extended, modified or supplemented, unless expressly released and
discharged by Beneficiary. Regardless of consideration, and without the
necessity for any notice to or consent by the holder of any subordinate lien,
encumbrance, right, title or interest in or to the Secured Property, Beneficiary
may release any Person at any time liable for the payment or performance of the
Obligations, or any part thereof, or any part of the security held for the
Obligations, and may extend the time of such payment or performance or otherwise
modify the terms of any Loan Instrument, including a modification of the
interest rate payable on the principal balance of the Note, without in any
manner impairing or affecting any of the Loan Instruments or the lien thereof or
the priority of this Deed of Trust, as so extended and modified, as security for
the Obligations over any such subordinate lien, encumbrance, right, title or
interest. Beneficiary may resort for the payment and performance of the
Obligations to any other security held by Beneficiary in such order and manner
as Beneficiary, in its discretion, may elect. Beneficiary may take action to
require payment and performance of the Obligations, or any part thereof, or to
enforce any term of this Deed of Trust, without prejudice to the right of
Beneficiary thereafter to foreclose this Deed of Trust. In addition to the
rights and remedies stated in this Deed of Trust, Beneficiary may exercise every
additional right and remedy now or hereafter afforded by law or in equity. Each
right of Beneficiary pursuant to this Deed of Trust shall be separate, distinct
and cumulative, and no such right shall be given effect to the exclusion of any
other. No act of Beneficiary shall be construed as an election to proceed
pursuant to any one provision of this Deed of Trust to the exclusion of any
other provision.

 

5.02      Sole Discretion of Beneficiary. Whenever pursuant to this Deed of
Trust or in any other Loan Instrument (A) Beneficiary exercises any right to
approve or disapprove or to give or withhold its consent, (B) any arrangement or
term is to be satisfactory to Beneficiary, or (C) any other decision or
determination is to be made by Beneficiary, Beneficiary may give or withhold
such approval or consent, determine whether or not such arrangement or term is
satisfactory, and make all other decisions or determinations, in Beneficiary’s
sole and absolute discretion, and Beneficiary's decision shall be final and
conclusive except where this Deed of Trust or such other Loan Instrument
expressly provides to the contrary. If Grantor shall seek the consent or
approval of Beneficiary pursuant to this Deed of Trust and Beneficiary shall
fail or refuse to give such consent or approval, Grantor shall not be entitled
to any damages for any withholding of such approval or consent by Beneficiary.
Grantor's sole remedy shall be an action for injunctive or declaratory relief,
which remedy shall be available only in those cases where Beneficiary has
expressly agreed not to unreasonably withhold its consent or approval.

 

5.03      Legal Tender. Grantor shall pay all payments of principal, interest or
other amounts required or provided for herein in lawful money of the United
States of America at the time of payment, at the above described office of
Beneficiary or at such other place as Beneficiary may from time to time
designate.

 

5.04      No Merger or Termination. If both the lessor's and Lessee's estates
under any Lease or any portion thereof which constitutes a part of the Secured
Property shall at any time become vested in one owner, this Deed of Trust and
the lien created hereby shall not be destroyed or terminated by the application
of the doctrine of merger and in such event, Beneficiary shall continue to have
and enjoy all of its rights and privileges as to the separate estates. In
addition, the foreclosure of this Deed of Trust shall not destroy or terminate
any Lease or sublease then existing and created by Grantor, whether by
application of the law of merger or as a matter of law or otherwise, unless
Beneficiary or any purchaser at any sale related to such foreclosure shall so
elect. No act by or on behalf of Beneficiary or any such purchaser shall
constitute a termination of any Lease or sublease, unless Beneficiary or such
purchaser shall give written notice thereof to the related Lessee or sublessee.

 

WCSR 3179289248Deed of Trust
Loan No. 374-0551

 

 

5.05      Discontinuance of Actions. If Beneficiary shall enforce any right
pursuant to this Deed of Trust by foreclosure, sale, entry or otherwise and
discontinue or abandon such enforcement for any reason or any such proceedings
shall have been determined adversely, then, in each such case, Grantor and
Beneficiary shall be restored to their former positions and rights hereunder,
and the Secured Property shall remain subject to the lien of this Deed of Trust.

 

5.06      Headings. The headings of the Sections and other subdivisions of this
Deed of Trust are for the convenience of reference only, are not to be
considered a part hereof, and shall not limit or otherwise affect any of the
terms hereof.

 

5.07      Notice to Parties. All notices and demands or other communications
hereunder shall be in writing, and shall be deemed to have been sufficiently
given or served for all purposes when presented personally or sent by generally
recognized overnight delivery service, with postage prepaid, addressed to
Grantor or Beneficiary or Trustee, as applicable, at the addresses stated below,
or at such other address of which either Grantor or Beneficiary or Trustee may
hereafter notify the other in writing:

 

Grantor: Wake Forest Apartments LLC   19950 West Country Club Drive, Suite 800  
Aventura, Florida 33180     Attn:  Richard Ross       with a copy to:  
Greenspoon Marder     100 W. Cypress Creek Road, Suite 700     Fort Lauderdale,
FL  33309     Attn:  Barry E. Somerstein, Esq.       Beneficiary:   NEW YORK
LIFE INSURANCE COMPANY     c/o New York Life Investment Management LLC     51
Madison Avenue   New York, New York 10010-1603     Attn:   Real Estate Group    
Director – Loan Administration Division     Loan No. 374-0551       With a copy
to:   NEW YORK LIFE INSURANCE COMPANY     Office of the General Counsel     51
Madison Avenue   New York, New York 10010-1603     Attn:   Managing Director –
Real Estate Section     Loan No. 374-0551

 

WCSR 3179289249Deed of Trust
Loan No. 374-0551

 

 

Trustee:   The Fidelity Company     c/o Womble Carlyle Sandridge & Rice, LLP    
One West Fourth Street     Winston-Salem, North Carolina 27101     Attn:  Hardin
G. Halsey

 

Each notice or demand so given or served shall be deemed given and effective,
(A) if personally delivered, on the day of actual delivery or refusal and (B) if
sent by generally recognized overnight delivery service, on the next business
day. Notwithstanding the foregoing, service of any notice of default or notice
of sale provided or required by law in connection with Beneficiary’s exercise of
any of its remedies following an Event of Default shall, if mailed as required
by law, be deemed given and effective on the date of mailing.

 

5.08      Successors and Assigns Included In Parties. Subject to the provisions
of Section 1.11, each reference herein to Grantor or Beneficiary shall mean and
include, the heirs, legal representatives, successors and assigns of such
Person. All covenants and agreements contained in this Deed of Trust by or on
behalf of Grantor shall bind and inure to the benefit of Grantor’s heirs, legal
representatives, successors and assigns, and all covenants and agreements by or
on behalf of Beneficiary shall bind and inure to the benefit of Beneficiary’s
successors and assigns.

 

5.09      Changes and Modifications. This Deed of Trust may only be changed or
modified by an agreement in writing, signed by both Grantor and Beneficiary.

 

5.10      Applicable Law. This Deed of Trust shall be construed and enforced
according to the law of the State, other than such law with respect to conflicts
of laws.

 

5.11      Invalid Provisions to Affect No Others. The unenforceability or
invalidity of any provision or provisions of this Deed of Trust as to any
Persons or circumstances shall not render that provision or those provisions
unenforceable or invalid as to any other Persons or circumstances, and all
provisions hereof, in all other respects, shall remain valid and enforceable.

 

5.12      Usury Savings Clause. Grantor and Beneficiary intend to conform
strictly to the usury laws now or hereafter in force in the State and all
interest and loan charges, including without limitation, any Late Charge (as
defined in the Note), payable pursuant to the Note, this Deed of Trust or any
other Loan Instrument, unless exempt from such laws, shall be subject to
reduction to the amount equal to the maximum non-usurious amount allowed
pursuant to such usury laws as now or hereafter construed by the courts having
jurisdiction over such matters. The aggregate of all interest and loan charges
(whether designated as interest, service charges, points or otherwise)
contracted for, chargeable or receivable pursuant to the Note, this Deed of
Trust or any other Loan Instrument shall under no circumstances exceed the
maximum non-usurious rates of interest and loan charges which Beneficiary may
charge under applicable law from time to time. Any interest and loan charges in
excess of the maximum amount permitted by law shall be deemed a mistake and
shall be canceled automatically and, if theretofore paid, Beneficiary shall, at
its option, either rebate such amounts to Grantor or credit such amounts to the
principal amount of the Obligations, or if all such principal has been repaid,
Beneficiary shall rebate such excess to Grantor.

 

WCSR 3179289250Deed of Trust
Loan No. 374-0551

 

 

5.13      No Statute of Limitations. To the full extent permitted by law,
Grantor hereby waives the pleading of any statute of limitations as a defense to
any or all of the Obligations.

 

5.14      Late Charges. If Grantor fails to pay, when due, without regard to any
grace period, any installment of interest or principal, any payment due pursuant
to Section 1.04 or any deposit or reserve due pursuant to this Deed of Trust or
any other Loan Instrument, Grantor shall pay to Beneficiary (unless waived by
Beneficiary) the Late Charge as defined and described in the Note; provided,
however, no Late Charge shall apply to the balloon payment due on the Maturity
Date. Each such Late Charge, if not previously paid, shall, at the option of
Beneficiary, be added to and become part of the succeeding monthly payment to be
made pursuant to the Note, and shall be secured by this Deed of Trust.

 

5.15      Waiver of Jury Trial. To the extent not prohibited by applicable law,
Grantor waives any right to trial by jury with respect to any action or
proceeding (a) brought by Grantor, Beneficiary or any other Person relating to
(i) the Obligations or any understandings or prior dealings between Grantor and
Beneficiary or (ii) the Loan Instruments, or (b) to which Beneficiary is a
party.

 

5.16      Continuing Effectiveness. This Deed of Trust shall secure all advances
made pursuant to the Loan Instruments, all rearrangements and renewals of the
Obligations and all extensions as to the time of payment thereof, whether or not
such advances, rearrangements, renewals or extensions are evidenced by new
promissory notes or other instruments hereafter executed and irrespective of
whether filed or recorded. The execution of this Deed of Trust shall not impair
or affect any other security which may be given to secure the payment of the
Obligations, and all such additional security shall be considered as cumulative.
The taking of additional security, execution from time to time of partial
releases as to the Secured Property or any extension of time of payment of the
Obligations shall not diminish the force, effect or lien of this Deed of Trust,
and shall not affect or impair the liability of any maker, surety or endorser
for the payment of the Obligations.

 

5.17      Time of Essence. Time is of the essence as to Grantor’s performance of
each provision of this Deed of Trust, the Note and the other Loan Instruments.
Grantor agrees that where, by the terms of this Deed of Trust, the Note or any
other Loan Instrument, a day is named or a time is fixed for the payment of any
sum of money or the performance of any obligation by Grantor, the day and/or
time stated enters into the consideration and is of the essence of the whole
contract.

 

5.18      Non-Recourse. If an Event of Default has occurred (and regardless of
whether or not it has been cured), Beneficiary shall have all rights provided in
the Note, this Deed of Trust or any other Loan Instrument or at law or in
equity, and shall have full recourse to the Secured Property and to any other
collateral given by Grantor to secure any or all of the Obligations, provided
that any judgment obtained by Beneficiary in any proceeding to enforce such
rights shall be enforced only against the Secured Property and such other
collateral. Notwithstanding the foregoing, Beneficiary shall not in any way be
prohibited from naming Grantor or any of its successors or assigns or any Person
holding under or through them as parties to any actions, suits or other
proceedings initiated by Beneficiary to enforce such rights or to foreclose the
lien of this Deed of Trust or to otherwise realize upon any other lien or
security interest created in any other collateral given to secure the payment of
the Obligations. The foregoing restriction shall not apply to, and Grantor shall
be personally liable for, and Beneficiary may seek and enforce judgment against
Grantor for:

 

WCSR 3179289251Deed of Trust
Loan No. 374-0551

 

 

(A)                        any and all losses, claims, damages, costs, expenses
and/or liabilities, including, reasonable attorneys’ fees and expenses, incurred
by Beneficiary:

 

(1) relating to or as a result of any material misstatement of fact (a) by or on
behalf of, Grantor or Guarantor to Beneficiary or Beneficiary’s advisor relating
to the Loan or (b) contained in any Loan Instrument,

 

(2) relating to or as a result of fraud relating to the Loan, the Loan
Instruments, or any documents, materials or other information delivered by or on
behalf of Grantor or Guarantor to Beneficiary, Beneficiary’s advisor or their
respective counsel relating to the Loan,

 

(3) relating to or as a result of misapplication of (a) insurance proceeds in a
manner which is not in accordance with the provisions of the Loan Instruments,
(b) condemnation awards in a manner which is not in accordance with the
provisions of the Loan Instruments, (c) trust funds or Lessee security deposits
which are received by or on behalf of Grantor and are neither turned over to
Beneficiary or used in compliance with the Loan Instruments, or (d) Rents,
issues, profits or other proceeds from the Secured Property received by, or on
behalf of, Grantor or Guarantor and not otherwise applied to the Loan or to
payment of Secured Property operating expenses as required by the Loan
Instruments,

 

(4) relating to or as a result of the breach of any representation or warranty
contained in the Sections of this Deed of Trust pertaining to environmental
matters, including Section 1.05E(4), 2.03C or 2.03D, or any default with respect
to any covenant contained in the Sections of this Deed of Trust pertaining to
environmental matters including Section 1.05E,

 

(5) relating to or as a result of any default with respect to Grantor's covenant
to pay Impositions, pursuant to Section 1.02 hereof, or insurance premiums,
pursuant to Section 1.03 hereof other than Impositions or insurance premiums
accruing during periods after which Grantor no longer has title to the Secured
Property by reason of foreclosure of this Deed of Trust or tender of a deed in
lieu of foreclosure of this Deed of Trust to Beneficiary or with respect to
Grantor’s covenant to obtain and maintain the insurance, including without
limitation, the Terrorism Insurance, required by this Deed of Trust through the
date of foreclosure of this Deed of Trust or the date Grantor tenders a deed in
lieu of foreclosure of this Deed of Trust to Beneficiary of the Secured
Property,

 

WCSR 3179289252Deed of Trust
Loan No. 374-0551

 

 

(6) arising from, in respect of, as a consequence of, or in connection with: (1)
the existence of any circumstance or the occurrence of any action described in
Section 1.05E(1), (2) claims asserted by any Person (including any Governmental
Agency) in connection with, or in any way arising out of, the presence, storage,
use, disposal, generation, transportation or treatment of any Hazardous Material
in, on, or under or about the Secured Property, or (3) the violation or claimed
violation of any law relating to any Hazardous Material or any other
Environmental Requirement in regard to the Secured Property, regardless of
whether or not such violation or claimed violation occurred prior to or after
the date of this Deed of Trust or whether or not such violation or claimed
violation occurred prior to or after the time that Grantor became the owner of
the Secured Property, and/or

 

(7) as a result of any intentional, bad faith waste of the Secured Property
committed by Grantor or its agents (such damages to include all repair costs
incurred by Beneficiary), (For purposes of this subparagraph, “bad faith waste”
is intended to mean the neglect or misconduct of Grantor resulting in material
damage to the Secured Property or any portion thereof);

 

(B)         all outstanding principal, interest and other Obligations, including
the Make-Whole Amount:

 

(1) if there shall be a violation of Section 1.11 of this Deed of Trust that is
not waived or consented to by Beneficiary in writing and/or

 

(2) in the event that (a) any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by, consented to or acquiesced in by Grantor or any
Guarantor and/or if any proceeding for the dissolution, liquidation or
receivership of Grantor or any Guarantor shall be instituted by Grantor or any
Guarantor and/or (b) Grantor or any Guarantor shall be the subject of any
petition or proceeding for an involuntary bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law and/or the subject of any liquidation, dissolution, receivership or other
similar proceeding, in which Grantor or any Guarantor or any affiliate of such
parties colludes with, or otherwise assists, the petitioning party or solicits
or causes to be solicited petitioning creditors; and/or

 

(3) if there shall be a violation of Section 5.20 of this Deed of Trust and/or

 

4) if this Deed of Trust or any of the other Loan Instruments are deemed
fraudulent conveyances or preferences or are otherwise deemed void pursuant to
any principles limiting the rights of creditors, whether such claims, demands or
assertions are made under the United States Bankruptcy Code (as amended or
replaced from time to time), including, without limitation, under Sections 544,
547 or 548 thereof, or under any applicable state fraudulent conveyance statues
or similar laws; and

 

WCSR 3179289253Deed of Trust
Loan No. 374-0551

 

 

(C)        in the event of a loss which would be covered by the Terrorism
Insurance required by the Loan Instruments, an amount equal to the deductible on
such Terrorism Insurance, which amount shall either be applied by Beneficiary to
the debt secured by this Deed of Trust or disbursed by Beneficiary for the
repair and restoration of the Secured Property, all in accordance with the terms
of the Loan Instruments.

 

The restriction on enforcement contained in the first sentence of this Section
5.18 shall not apply to the Environmental Indemnity Agreement of even date
herewith executed by Grantor and the other indemnitors, if any, in favor of
Beneficiary and/or to the obligations of any Guarantor. It is expressly
understood and agreed, however, that nothing contained in this Section 5.18
shall (y) in any manner or way constitute or be deemed to be a release of the
Obligations or otherwise affect or impair the enforceability of the liens,
assignments, rights and security interests created by this Deed of Trust or any
of the other Loan Instruments or any future advance or any related agreements or
(z) preclude Beneficiary from foreclosing this Deed of Trust or from exercising
its other remedies set forth in this Deed of Trust or the Assignment, or from
enforcing any of its rights and remedies in law or in equity (including
injunctive and declaratory relief, restraining orders and receivership
proceedings), except as provided in this Section 5.18. All matters as to which
this Section 5.18 provides that Grantor is personally liable shall be referred
to herein as the “Non-Recourse Exceptions”.

 

5.19     Non-Business Days. If any payment required hereunder or under any other
Loan Instrument becomes due on a Saturday, Sunday, or legal holiday in the state
in which the Premises are located, then such payment shall be due and payable on
the immediately following business day.

 

5.20 Single Purpose Entity. Grantor represents, warrants and covenants that at
all times since its formation and thereafter:

 

(A)        Each of Grantor and its general partner or managing member, as
applicable, does not own and will not own, either directly or indirectly, any
asset or property other than (1) the Secured Property, (2) with respect to
Grantor, incidental personal property necessary for the ownership or operation
of the Secured Property and (3) with respect to the general partner or managing
member of Grantor, incidental personal property necessary for the ownership or
operation of Grantor’s general partner or managing member,

 

(B)        Each of Grantor and its general partner or managing member, as
applicable, has not engaged in and will not engage in any business other than
the ownership, management and operation of the Secured Property (with respect to
Grantor) or the ownership of the general partnership or managing member interest
in Grantor (with respect to Grantor’s general partner or managing member, as
applicable), and each of Grantor and its general partner or managing member, as
applicable, will conduct and operate its business as presently conducted and
operated.

 

WCSR 3179289254Deed of Trust
Loan No. 374-0551

 

 

(C)        Each of Grantor and its general partner or managing member, as
applicable, has not entered and will not enter into any contract or agreement
with any affiliate of Grantor, any constituent party of Grantor or any affiliate
of any constituent party, except upon terms and conditions that are
intrinsically fair, commercially reasonable and substantially similar to those
that would be available on an arms-length basis with unaffiliated third parties.

 

(D)        Each of Grantor and its general partner or managing member, as
applicable, has not incurred and will not incur any indebtedness, secured or
unsecured, direct or indirect, absolute or contingent (including guaranteeing
any obligation), other than (1) the Obligations and (2) trade and operational
debt incurred in the ordinary course of business with trade creditors in amounts
as are normal and reasonable under the circumstances provided that such debt is
paid within sixty (60) days of the date it is incurred. No indebtedness other
than the Obligations may be secured (subordinate or pari passu) by the Secured
Property.

 

(E)        Each of Grantor and its general partner or managing member, as
applicable, has not made and will not make any loans or advances to any third
party (including any affiliate, constituent party or any affiliate of any
constituent party), and have not and will not acquire obligations or securities
of its affiliates or any constituent party.

 

(F)        Each of Grantor and its general partner or managing member, as
applicable, has been, is and intends to remain solvent and each of Grantor and
its general partner or managing member, as applicable, have and will pay its own
debts and liabilities from its assets (to the extent of such funds and assets),
as the same shall become due.

 

(G)        Each of Grantor and its general partner or managing member, as
applicable, has done or caused to be done and will do or cause to be done all
things necessary to observe organizational formalities and preserve its
existence, and each of Grantor and its general partner or managing member, as
applicable, has not and will not, nor has Grantor or its general partner or
managing member, as applicable, permitted nor will Grantor or its general
partner or managing member, as applicable, permit any of its constituent
parties, to amend, modify or otherwise change the partnership certificate,
partnership agreement, articles of incorporation, bylaws, articles of
organization, operating agreement, trust agreement or other organizational
document of Grantor, its general partner or managing member, as applicable, or
such constituent party in a manner which would result in a breach of any of the
representations, warranties or covenants set forth in this Section 5.20 or in a
manner that would otherwise adversely affect Grantor’s and its general partner’s
or managing member’s, as applicable, single purpose status.

 

(H)        Each of Grantor and its general partner or managing member, as
applicable, has and will maintain all of its books, records, financial
statements and bank accounts separate from those of its affiliates, any
constituent party and any other Person; provided, however, Grantor or its
general partner or managing member, as applicable, may include its financial
statements as part of a consolidated financial statement if (i) such statements
contain a notation that makes clear that Grantor or its general partner or
managing member, as applicable is a separate entity and that the assets and
credit of Grantor or its general partner or managing member, as applicable, are
not available to satisfy liabilities of any other Person and that the assets and
credit of such other Person are not available to satisfy liabilities of Grantor
or its general partner or managing member, as applicable; each of Grantor and
its general partner or managing member, as applicable, has and will file its own
tax returns as required by applicable state and federal law; each of Grantor and
its general partner or managing member, as applicable, has maintained and shall
maintain its books, records, resolutions and agreements as official records.

 

WCSR 3179289255Deed of Trust
Loan No. 374-0551

 

 

(I)        Each of Grantor and its general partner or managing member, as
applicable, has been and will be, and at all times has and will hold itself out
to the public as, a legal entity separate and distinct from any other entity
(including any affiliate of Grantor or its general partner or managing member,
as applicable, any constituent party of Grantor or its general partner or
managing member, as applicable, or any affiliate of any constituent party), has
corrected and will correct any known misunderstanding regarding its status as a
separate entity, has conducted and will conduct business in its own name, has
not identified and shall not identify itself or any of its affiliates as a
division or part of the other and has maintained and shall maintain and utilize
separate stationery, invoices and checks.

 

(J)        Each of Grantor and its general partner or managing member, as
applicable, has not assumed or guaranteed and will not assume or guaranty the
debts of any other Person, has not held and will not hold itself out to be
responsible for the debts of any other Person, and has not and will not
otherwise pledge its assets for the benefit of any other Person or hold out its
credit as being available to satisfy the obligations of any other Person.

 

(K)        Each of Grantor and its general partner or managing member, as
applicable, has maintained and intends to maintain adequate capital as
reasonably determined by Grantor for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations.

 

(L)        Neither Grantor nor its general partner, or nor its managing member,
as applicable, nor any of their respective constituent parties has caused or
will cause or permit the dissolution, winding up, liquidation, consolidation or
merger in whole or in part, of Grantor or its general partner or managing
member, as applicable; and neither Grantor nor its general partner, nor its
managing member, as applicable, nor any of their respective constituent parties
has disposed or will dispose of all or substantially all of the assets of
Grantor or its general partner or managing member, as applicable, and has not
changed and will not change Grantor’s or its general partner’s or managing
member’s, as applicable, legal structure.

 

(M)        Each of Grantor and its general partner or managing member, as
applicable, has not commingled and will not commingle the funds and other assets
of Grantor or its general partner or managing member, as applicable, with those
of any affiliate or constituent party or any other Person.

 

(N)        Each of Grantor and its general partner or managing member, as
applicable, have maintained and will maintain its assets in such a manner that
it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any affiliate or constituent party, or any other
Person.

 

WCSR 3179289256Deed of Trust
Loan No. 374-0551

 

 

(O)        Each of Grantor and its general partner or managing member, as
applicable, does not and will not hold itself out to be responsible for the
debts or obligations of any other Person.

 

(P)        Each of Grantor and its general partner or managing member, as
applicable, does and shall continue to (i) allocate fairly and reasonably any
overhead and expense for office space shared with any affiliated Person, (ii)
pay any liabilities, including salaries of its employees, out of its own funds
and not from funds of any affiliated Person and/or (iii) maintain a sufficient
number of employees (which may be zero) in light of its contemplated business
operations.

 

(Q)        Each of Grantor and its general partner or managing member, as
applicable shall not, without the prior unanimous consent of all of Grantor’s
and its general partner’s or managing member’s, as applicable, (i) members and
managers (in the event that Grantor, or its general partner or managing member,
as applicable is a limited liability company), (ii) partners (in the event that
Grantor or its general partner or managing member, as applicable, is a general
partnership), (iii) general partner (in the event that Grantor or its general
partner or managing member, as applicable, is a limited partnership) or (iv)
shareholders or board of directors (in the event that Grantor or its general
partner or managing member, as applicable, is a corporation) and of the
Independent Director (as defined below) or Independent Manager (as defined
below), as applicable, institute proceedings to be adjudicated bankrupt or
insolvent, or consent to the institution of such proceedings against it, or file
a petition seeking, or consent to, reorganization or relief, under any chapter
of the Bankruptcy Code (Title 11 of the United States Code), as amended, or any
other bankruptcy or similar laws, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator or similar official of it or of a
substantial part of its assets or property, or make an assignment for the
benefit of creditors, or admit in writing its inability to pay its debts
generally as they become due, or take any action in furtherance of any of the
foregoing. Without limiting the foregoing and notwithstanding any other
provision of this Deed of Trust or of any of the organizational documents of
Grantor or any provision of law that otherwise so empowers the Grantor, so long
as any Obligations are outstanding, Grantor shall not be authorized or empowered
to, nor shall Grantor, without the prior unanimous written consent of the
Independent Manager and/or Independent Director, as the case may be, institute
proceedings to have Grantor adjudicated bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against Grantor or file a
voluntary petition seeking, or consent to, reorganization or relief with respect
to Grantor under any applicable federal or state law relating to bankruptcy, or
seek or consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of Grantor or a substantial part of its
property, or make any assignment for the benefit of creditors of Grantor, or
admit in writing Grantor’s inability to pay its debts generally as they become
due, or to the fullest extent permitted by law, to take any action in
furtherance of any such action. To the fullest extent permitted by law, for so
long as any Obligations are outstanding, Grantor shall not be authorized or
empowered, nor shall Grantor consolidate, merge, dissolve, liquidate or sell all
or substantially all of Grantor’s assets (other than such sales, if any, as are
permitted hereunder).

 

(R)        Each of Grantor and its general partner or managing member, as
applicable, shall not violate or cause to be violated the assumptions made with
respect to Grantor and its general partner or managing member, as applicable,
and their respective direct or indirect constituent entities in any opinion
letter pertaining to substantive consolidation delivered to Beneficiary in
connection with the Loan, if any.

 

WCSR 3179289257Deed of Trust
Loan No. 374-0551

 

 

(S)        Within forty-five (45) days after the end of each fiscal quarter of
Grantor, Grantor shall deliver to Beneficiary a certification executed by an
officer of Grantor certifying to Beneficiary that, as of such date, Grantor and
its general partner or managing member, as applicable, complies with the
provisions of Section 5.20 of this Deed of Trust.

 

(T)        Each of Grantor and its general partner(s) or managing member(s), as
applicable, shall be formed in Delaware; and at all times, Grantor’s and its
general partner(s)’ or managing member’s, as applicable, limited liability
company agreement, limited partnership agreement or articles or incorporation,
as applicable, shall contain the provisions set forth in Section 5.20(A)-(U) of
this Deed of Trust or as otherwise approved in writing by Beneficiary. So long
as any Obligations are outstanding, none of such instruments shall be amended,
altered or changed without the prior written consent of Beneficiary.

 

WCSR 3179289258Deed of Trust
Loan No. 374-0551

 

 

(U)        In the event that Grantor is a limited liability company, Grantor
shall at all times cause there to be (i) at least one duly appointed manager (an
“Independent Manager”) of Grantor, and (ii) unless the managing member is an
Acceptable Delaware LLC, a corporation or other entity approved by Beneficiary,
at least one springing non-economic member that will become a member of Grantor
upon the dissolution or withdrawal or similar event as to the sole remaining
member of Grantor and that will satisfy the requirements of Delaware law such
that the dissolution or withdrawal or similar event as to the sole remaining
member of Grantor will not cause the dissolution of Grantor (the “Springing
Member”). In the event that Grantor is a corporation, Grantor shall at all times
cause there to be at least one duly appointed director (an “Independent
Director”) of Grantor. In the event that Grantor is a partnership, in the case
of a limited partnership, Grantor shall have as its only general partner (and in
the case of a general partnership, Grantor shall have as each of its general
partners), a limited liability company or corporation that complies with the
provisions of Sections 5.20(A)-(U) of this Deed of Trust. The Independent
Manager or Independent Director, as applicable, shall be satisfactory to
Beneficiary, and must be a natural person employed by, or an entity owned and
controlled by a nationally recognized corporate service provider and shall not
at the time of initial appointment, nor at any time during the preceding five
(5) years have been: (1) a stockholder, director, officer, employee, partner,
attorney or counsel of Grantor, or any affiliate of Grantor; (2) a customer,
supplier or other person who derives more than ten percent (10%) of its
purchases or revenues from its activities with Grantor or any affiliate of
Grantor; (3) a Person or other entity controlling or under common control with
any such stockholder, partner, customer, supplier or other Person; or (4) a
member of the immediate family of any such stockholder, director, officer,
employee, partner, customer, supplier or other Person. As used in this
paragraph, the term “control” means the possession, directly or indirectly, of
the power to direct or cause the direction of management, policies or activities
of a Person or entity, whether through ownership of voting securities, by
contract or otherwise. The Independent Manager’s, Springing Member’s and/or
Independent Director’s vote shall be required only for Material Actions (as
defined below) and those matters specifically requiring its vote in Grantor’s
organizational documents, all as approved by Beneficiary. As used herein,
“Material Actions” shall mean (a) any proposed insolvency or bankruptcy
proceeding of Grantor, (b) any dissolution or liquidation of Grantor, and (c)
any amendment or modification of any provision of Grantor’s organizational
documents relating to company purpose or Grantor’s bankruptcy-remote status. The
affirmative vote or written consent of the Independent Manager, Springing Member
or Independent Director, as applicable, shall be required for the Grantor to
approve or take any Material Action. No termination or change of the Independent
Manager, Springing Member or Independent Director, as applicable, shall be made
without giving Beneficiary at least five (5) Business Days prior written notice,
which notice shall include a copy of a resume for such proposed replacement
Independent Manager, Springing Member or Independent Director, as applicable,
that reflects that such individual meets the requirements contained herein;
provided further, that Beneficiary shall have the right to object to the
appointment of said replacement and in the event of such objection, the proposed
replacement shall not be admitted. Notwithstanding the foregoing, any current
Independent Manager, Springing Member or Independent Director, as applicable,
that receives notice of the termination of its duties shall provide a copy of
said notice to Beneficiary within five (5) days of receipt thereof. To the
fullest extent permitted by applicable law, and notwithstanding any duty
otherwise existing at law or in equity, the Independent Manager, Springing
Member or Independent Director, as applicable, shall consider only the interests
of Grantor (including its creditors) and the members, partners or shareholders
of Grantor, as applicable (“Constituent Owners”), in acting or otherwise voting
on any Material Actions or matters provided for in Grantor’s organizational
documents (which such fiduciary duties to the Constituent Owners and Grantor
(including its creditors), in each case, shall be deemed to apply solely to the
extent of their respective economic interests in such entity, exclusive of (x)
all other interests (including, without limitation, all other interests of the
Constituent Owners), (y) the interests of other affiliates of the Constituent
Owners or of Grantor, as applicable, and (z) the interests of any group of
affiliates of which the Constituent Owners or Grantor, as applicable, is a
part)). Regardless of the solvency of Grantor, the Independent Manager,
Springing Member or Independent Director, as applicable, shall owe duties to
protect creditors in the enforcement of their contractual rights, including all
remedies. Other than as provided above, the Independent Manager, Springing
Member or Independent Director, as applicable, shall not have any fiduciary
duties to any Constituent Owners, any directors or managers of Grantor, as
applicable, or any other Person, provided, however, that the foregoing shall not
eliminate the implied contractual covenant of good faith and fair dealing under
applicable law. To the fullest extent permitted by applicable law, an
Independent Manager, Springing Member or Independent Director shall not be
liable to Grantor, any Constituent Owner or any other person for breach of
contract or breach of duties (including fiduciary duties), unless such
Independent Manager, Springing Member or Independent Director acted in bad faith
or engaged in willful misconduct. All other matters as to the Independent
Manager, Springing Member and/or Independent Director shall be set forth in the
organizational documents of Grantor and shall be satisfactory to Beneficiary.

 

ARTICLE VI

SPECIAL STATE PROVISIONS

 

The provisions of this Article VI are an integral part of this Deed of Trust. In
the event of any inconsistencies between the terms and conditions of this
Article VI and the other provisions of this Deed of Trust, the terms and
conditions of Article VI shall be controlling.

 

6.01        Maturity Date. The Maturity Date of the Note, unless renewed or
extended, is February 10, 2021.

 

WCSR 3179289259Deed of Trust
Loan No. 374-0551

 

 

6.02        Attorneys’ Fees . In case the Note or this Deed of Trust or any
other Loan Instrument should be placed in the hands of an attorney at law for
collection or enforcement, Grantor agrees to pay all costs of collection or
enforcement including reasonable attorneys’ fees. Notwithstanding anything
herein or in any other Loan Instrument to the contrary, whenever the term
“reasonable attorneys’ fees” or other similar phrase is used it shall mean
attorney and paralegal fees actually incurred (based on the actual number of
hours worked by legal counsel and paralegals multiplied by the usual and
customary hourly rate then in effect), notwithstanding any statutory presumption
set forth in N.C.G.S. §6-21-2 or otherwise to the contrary. The foregoing
provision shall not be deemed to limit the obligation to pay out-of-pocket
expenses and costs as provided in the Loan Instruments.

 

6.03        Interest Before and After Judgment . Following an Event of Default,
the Obligations evidenced by the Note, the other Obligations, all accrued and
unpaid interest thereon and all other sums evidenced and/or secured by the Loan
Instruments shall bear interest at the Increased Rate both before and after any
judgment on the Obligations to the extent permitted by applicable law.

 

6.04        Power of Sale . Upon the occurrence of an Event of Default, the
Beneficiary may notify the Trustee to exercise the power of sale granted
hereunder and upon such notification it shall be lawful for and the duty of the
Trustee, and the Trustee is hereby authorized and empowered to expose to sale
and to sell the Secured Property or any part thereof at public sale to the
highest bidder for cash, in compliance with all applicable requirements of North
Carolina law then governing the exercise of powers of sale contained in deeds of
trust and upon such sale, the Trustee shall collect the purchase proceeds and
convey title to the portion of the Secured Property so sold to the purchaser in
fee simple. In the event of a sale of the Secured Property or any part thereof,
the proceeds of sale shall be applied in the following order of priority: (i) to
the payment of all costs and expenses for and in connection with the effecting
of such sale and all proceedings (either before the Clerk of Superior Court or
otherwise) for such sale, including a commission for the Trustee’s services as
hereinafter provided and including reasonable attorney’s fees incurred by the
Trustee for legal services actually performed; (ii) to the reimbursement of
Beneficiary for all sums expended or incurred by the Beneficiary under the terms
of this Deed of Trust or to establish, preserve or enforce this Deed of Trust or
to collect or enforce the Obligations secured hereby (including, without
limitation, reasonable attorneys’ fees as provided herein or in any instruments
evidencing the Obligations secured hereby); (iii) to the payment of the
Obligations secured hereby and interest thereon and all other indebtedness
hereby secured; and (iv) the balance, if any, shall be paid to the parties
lawfully entitled thereto. The Grantor agrees that in the event of a sale
hereunder, the Beneficiary shall have the right to bid at such sale and shall
have the right to credit all or any portion of the Obligations secured hereby
against the purchase price. The 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. The Trustee may require the
successful bidder at any sale to deposit immediately with the Trustee cash or
certified check or cashier's check in an amount up to five percent (5.0%) 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 an upset bid or if the Trustee is unable to convey
the portion of the Secured 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 the Trustee be
retained and applied to any damages incurred by reason of such default
(including, without limitation, liability to the extent that the final sales
price is less than the bid plus all the costs of resale as provided in N.C. Gen.
Stat. Section 45-21.30, as amended) or may be deposited with 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), the Trustee is expressly authorized and empowered to expose
to sale and sell together with the real estate any portion of the Secured
Property which constitutes personal property. If personal property is sold
hereunder, it need not be at the place of sale. The Secured Property may be sold
in such parcels or lots as the Trustee may determine without regard to
principles of marshalling and the Secured Property may be sold at one sale or in
multiple sales as determined by the Trustee. The exercise of the power of sale
hereunder by the Trustee on one or more occasions shall not be deemed to
extinguish the power of sale which power of sale shall continue in full force
and effect until all of the Secured Property shall have been finally sold and
properly conveyed to the purchasers at the sales. The Trustee shall be entitled
to receive a reasonable commission for either a completed or uncompleted
foreclosure based upon the actual number of hours worked by Trustee, its
attorneys and paralegals, at their usual and customary hourly rates then in
effect. In addition, Grantor shall pay all out-of-pocket expenses actually
incurred by the Trustee. Subject to the requirements and limits imposed by law,
the Trustee may postpone sale of all or any portion of the Secured Property by
public announcement at such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement or subsequently noticed
sale, and without further notice make such sale at the time fixed by the last
postponement, or may, in its discretion, give a new notice of sale.

 

WCSR 3179289260Deed of Trust
Loan No. 374-0551

 

 

6.05        Environmental Laws. The listing of Environmental Laws in Paragraph
(b) of the definition of “Hazardous Materials” of this Deed of Trust, is amended
to also include the following State laws: The Oil Pollution and Hazardous
Substances Control Act of 1978, N.C.G.S. § 143 215.75 et seq.; The North
Carolina Inactive Hazardous Sites Act, N.C.G.S. § 130A-310, et seq.; The North
Carolina Water and Air Resources Act, N.C.G.S. § 143-211, et seq.; The North
Carolina Drinking Water Act, N.C.G.S. § 130A-311, et seq.; and the North
Carolina Solid Waste Management Act, N.C.G.S. § 130A-290, et seq.; and the
regulations promulgated pursuant to said laws, all as amended.

 

6.06        Substitution of Trustee. Beneficiary shall at any time have the
irrevocable right to remove the Trustee herein named without notice or cause and
to appoint his successor by an instrument in writing, duly acknowledged, in such
form as to entitle such written instrument to record in North Carolina, and in
the event of the death or resignation of the Trustee herein named, Beneficiary
shall have the right to appoint his successor by such written instrument, and
any Trustee so appointed shall be vested with the title to the Secured Property
hereinbefore described, and shall possess all the powers, duties and obligations
herein conferred on the Trustee in the same manner and to the same extent as
though he were named herein as Trustee.

 

6.07        Waiver. Grantor hereby waives any rights or remedies on account of
any extensions of time, releases granted or other dealings between Beneficiary
and any subsequent owner of the Secured Property as said activities are
contemplated or otherwise addressed in N.C. Gen. Stat. Sec. 45-45.1 or any
similar or subsequent law.

 

WCSR 3179289261Deed of Trust
Loan No. 374-0551

 

 

6.08        Deed of Trust as Financing Statement. As to those items of personal
property which are or are to become affixed to the Secured Property and/or the
Improvements, and all products and proceeds thereof, this Deed of Trust is and
shall be effective as a Financing Statement filed as a fixture filing as and
from the date of its recordation in the real estate records of the county in
which the real property is situated. The name of the record owner of the real
property and improvements is the Grantor identified on the first page of this
Deed of Trust. The name and address of the Grantor, as debtor, is set forth in
Section 5.07 of this Deed of Trust. The name and address of Beneficiary, as
secured party, and from whom information concerning the security interest
created herein may be obtained, is set forth in Section 5.07 of this Deed of
Trust. The provisions set forth in the Granting Clauses of this Deed of Trust
describe the types and items of the personal property affixed or to be affixed
to the Secured Property and the Improvements. The fixtures are related to the
real estate described in Exhibit A attached hereto and incorporated herein by
reference. The Grantor is a limited liability company organized under the laws
of the State of Delaware. The organizational identification number of the
Grantor, as debtor, is 5465572. This Deed of Trust shall remain in effect as a
fixture filing until this Deed of Trust is released or satisfied of record.

 

6.09        Security Agreement. This Deed of Trust is both a real property Deed
of Trust and a “security agreement” within the meaning of the Uniform Commercial
Code of the State. The Secured Property includes both real and personal property
and all other rights and interests, whether tangible or intangible in nature, of
Grantor in the Secured Property. Grantor, by executing and delivering this Deed
of Trust grants to Beneficiary and Trustee (to the extent provided herein), as
security for the Obligations, a security interest in the Secured Property to the
full extent that the Secured Property may be subject to the Uniform Commercial
Code. If an Event of Default shall occur, Beneficiary and/or Trustee, in
addition to any other rights and remedies which it may have, shall have and may
exercise immediately and without demand, any and all rights and remedies granted
to a secured party upon default under the Uniform Commercial Code, including,
without limiting the generality of the foregoing, the right to sell the Personal
Property at public or private sale, the right to take possession of the Personal
Property or any part thereof, and to take such other measures as Beneficiary
and/or Trustee may deem necessary for the care, protection and preservation of
the Personal Property. Upon request or demand of Beneficiary and/or Trustee,
Grantor shall at its expense assemble the Personal Property and make it
available to Beneficiary and/or Trustee at a convenient place acceptable to
Beneficiary and/or Trustee. Grantor shall pay to Beneficiary and Trustee on
demand any and all expenses, including legal expenses and attorneys’ fees and
disbursements, incurred or paid by Beneficiary and Trustee in protecting its
interest in the Personal Property and in enforcing its rights hereunder with
respect to the Personal Property. Any notice of sale, disposition or other
intended action by Beneficiary and/or Trustee with respect to the Personal
Property sent to Grantor in accordance with the provisions hereof at least ten
(10) days prior to such sale, disposition or action shall constitute reasonable
notice to Grantor. The proceeds of any disposition of the Personal Property, or
any part thereof, may be applied by Beneficiary to the payment of the
Obligations in such priority and proportions as Beneficiary in its discretion
shall deem proper.

 

[Signature Page Follows]

 

WCSR 3179289262Deed of Trust
Loan No. 374-0551

 

 

[Signature Page - Deed of Trust]

 

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

 

  GRANTOR:                           WAKE FOREST APARTMENTS LLC,   a Delaware
limited liability company     (SEAL)                 By: Trade Street Operating
Partnership, LP, a Delaware     limited partnership, its Sole Member     (SEAL)
                  By: Trade Street OP GP, LLC, a Delaware limited      
liability company, its general partner     (SEAL)                     By: Trade
Street Residential, Inc., a Maryland         corporation, its sole member
   (SEAL)                       By: /s/ Richard Ross (SEAL)         Name:
Richard Ross           Title: Chief Financial Officer  

 

Miami Dade County, State of Florida

 

I certify that the following person(s) personally appeared before me this day,
each acknowledging to me that he or she signed the foregoing document:

Richard Ross

name(s) of principal(s)

 

Date:   January 14, 2014 /s/ Rachael Peters     (official signature of Notary)  
Rachael Peters, Notary Public   (Notary's printed or typed name)     (Official
Seal) My commission expires: August 2, 2014 Commission # EE013802  

 

WCSR 31792892 Deed of Trust
Loan No. 374-0551

 

 

EXHIBIT A

 

Land

 

TRACT ONE

PROPERTY OF: WAKE FOREST APARTMENTS, LLC

DB 14848, PG. 366

PIN: 1830-73-4599

TOWN OF WAKE FOREST, WAKE COUNTY, NORTH CAROLINA

 

COMMENCING AT AN IRON PIPE FOUND IN THE SOUTHERN 60' RIGHT-OF-WAY OF CAVENESS
FARMS AVENUE, HAVING NC GRID, NAD 83/2001 COORDINATES OF Y(N): 804,156.619 Y(E):
2,136,752.391, SAID IRON PIPE BEING THE POINT OF BEGINNING FOR TRACT ONE:

 

THENCE ALONG SAID RIGHT-OF-WAY THE FOLLOWING COURSES AND DISTANCES:

 

N60°55'12”E 33.85 FEET TO AN IRON PIPE FOUND;

 

ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 970.02 FEET, AN ARC LENGTH OF
274.03 FEET, AND A CHORD BEARING AND DISTANCE OF N69°00'47”E, 273.12 FEET TO A
PUNCHMARK SET;

 

N77°06'22”E, 612.66 FEET TO A REBAR SET;

 

ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 432.86 FEET, AN ARC LENGTH OF
131.66 FEET, AND A CHORD BEARING AND DISTANCE OF N85°55'30”E, 131.15 FEET TO A
REBAR SET;

 

S85°21'42”E, 78.35 FEET TO A REBAR SET;

 

ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 530.00 FEET, AN ARC LENGTH OF
38.85 FEET, AND A CHORD BEARING AND DISTANCE OF S87°27'43”E, 38.84 FEET TO A
REBAR SET;

 

ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 25.00 FEET, AN ARC LENGTH OF 38.22
FEET, AND A CHORD BEARING AND DISTANCE OF S45°47'13”E, 34.61 FEET TO A REBAR SET
ALONG THE WESTERN RIGHT-OF-WAY OF LIGON MILL ROAD;

 

THENCE ALONG WITH SAID RIGHT-OF-WAY THE FOLLOWING COURSES AND DISTANCES:

 

S01°59'12”E, 340.31 FEET TO A REBAR SET;

 

ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 1,155.00 FEET, AN ARC LENGTH OF
200.31 FEET, AND A CHORD BEARING AND DISTANCE OF S02°53'07”W, 200.06 FEET TO A
REBAR SET;

 

S07°58'35”W, 196.27 FEET TO A REBAR SET;

 

ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 895.00 FEET, AN ARC LENGTH OF
501.35 FEET, AND A CHORD BEARING AND DISTANCE OF S08°04'17”E, 494.82 FEET TO A
REBAR SET;

 

THENCE LEAVING SAID RIGHT-OF-WAY ALONG THE COMMON LINE WITH LOT 2G S02°53'54”E,
111.10 FEET TO A POINT IN THE CENTER OF THE CREEK;

 

WCSR 31792892 Deed of Trust
Loan No. 374-0551

 

 

THENCE WITH SAID CENTERLINE OF CREEK THE FOLLOWING COURSES AND DISTANCES:

 

S39°09'10”W, 27.73 FEET; S73°32'52”W, 37.46 FEET; S42°48'56”W, 47.67 FEET;
S27°16'24”W, 49.40 FEET; S57°52'57”W, 8.16 FEET; N80°21'31”W, 22.34 FEET;
S41°23'51”W, 62.56 FEET; N75°55'15”W, 18.97 FEET; S77°42'33”W, 22.04 FEET;
N56°55'25”W, 11.92 FEET; N69°52'33”W, 33.51 FEET; S27°00'00”W, 45.90 FEET;
S30°13'32”E, 41.36 FEET; S17°53'51”E, 27.04 FEET; S40°23'55”E, 66.57 FEET;
N61°13'38”E, 19.85 FEET; S33°47'30”E, 30.50 FEET; S20°08'38”E, 46.82 FEET;
S60°25'04”E, 16.95 FEET;    

 

S07°17'06”W, 25.05 FEET; TO A POINT IN THE CENTER OF THE CREEK ALONG THE COMMON
LINE WITH WAL-MART;

 

THENCE WITH SAID COMMON LINE S86°01'24”W, 556.46 FEET TO A POINT IN THE
CENTERLINE OF THE CREEK COMMON LINE WITH WEINGARTEN INVESTMENTS;

 

THENCE WITH SAID CREEK NORTH TO THE PLACE OF BEGINNING.

 

THE FOLLOWING REFERENCE LINE COURSES AND DISTANCES ARE FOR REFERENCE ONLY; THE
CREEK IS THE PROPERTY LINE:

 

THENCE FROM THE CENTER OF THE CREEK N34°00'14”W, 146.82 FEET TO AN IRON PIPE
FOUND;

 

N19°55'03”E, 107.90 FEET TO AN IRON PIPE FOUND;

 

N19°22'23”E, 100.20 FEET TO AN IRON PIPE FOUND;

 

N12°23'19”W, 211.90 FEET TO AN IRON PIPE FOUND;

 

N12°59'31”W, 182.68 FEET TO AN IRON PIPE FOUND;

 

N06°13'11”E, 225.05 FEET TO A REBAR SET;

 

N05°57'54”W, 200.44 FEET TO A REBAR SET;

 

N43°40'21”W, 261.16 FEET TO A REBAR SET;

 

N46°10'18”W, 314.20 FEET TO THE POINT OF BEGINNING,

 

CONTAINING 30.4472 (+/-) ACRES (BM 2012, PG. 248-252 / CENTER OF THE CREEK) FOR
TRACT ONE HEREIN DESCRIBED.

 

TOGETHER WITH the easements, rights and benefits as set forth in the Reciprocal
Easement Agreement recorded in Book 14848, Page 379, Wake County Registry.

 

WCSR 31792892 Deed of Trust
Loan No. 374-0551