FREDDIE MAC NO: SEE EXHIBIT A

MASTER CLEARING ACCOUNTS AGREEMENT-CME
Lender – Access to Clearing Accounts

(REVISION DATE 8-14-2009)
 
This MASTER CLEARING ACCOUNTS AGREEMENT (the “Agreement”) is entered into as of
the 16th day of December, 2009, by and among PNC BANK, NATIONAL ASSOCIATION, a
national banking association having and address at One PNC Plaza, 19th Floor,
P1-POPP-19-2, Pittsburgh, PA  15222 (“Clearing Bank”), those parties identified
on Exhibit A attached hereto, each having an address at c/o NTS Development
Company, 10172 Linn Station Road, Louisville, Kentucky 40223 (each sometimes
referred to individually as a “Borrower” and all sometimes referred to
collectively as “Borrowers”), and HOLLIDAY FENOGLIO FOWLER, L.P., a Texas
limited partnership, having an address at 9 Greenway Plaza, Suite 700, Houston,
Texas 77046 (together with its successors and assigns, “Lender”).
 
RECITALS

WHEREAS, Lender has agreed to make, or has made to each of the Borrowers a loan
(each a “Loan” and collectively, the “Loans”) in the original principal amounts
set forth on Exhibit A attached hereto.
 
WHEREAS, Each Loan is to be evidenced by the Multifamily Note (each a “Note” and
collectively, the “Notes”) and secured by a Multifamily Mortgage or Deed of
Trust, Assignments of Rents and Security Agreement of even date herewith (each a
“Security Instrument”, and collectively, the “Security Instruments”).
 
WHEREAS, each Security Instrument grants to Lender, among other things, a first
lien on the Mortgaged Property described therein  and an assignment of all Rents
arising with respect to such Mortgaged Property.   References herein to the
“Property” mean each such Mortgaged Property separately and all such Mortgaged
Properties together.
 
WHEREAS, Lender and Borrowers are parties to that certain Master
Cross-Collateralization Agreement dated as of the date of this Agreement (the
“Master Cross-Collateralization Agreement”), wherein Borrowers agree that the
Property is and shall be collateral for all of the Loans.
 
WHEREAS, as a condition of making the Loans, Lender is requiring that Borrowers
deposit all Receipts (as defined below) with a financial institution acceptable
to Lender into an account designated by and established for the benefit of
Lender, and Borrowers and Lender desire to retain Clearing Bank to provide the
services described herein.
 
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Lender, Clearing Bank and
Borrowers agree as follows:
 
1.           Defined Terms. The following terms used in this Agreement shall
have the meanings set forth below in this Paragraph 1.
 
“Available Funds” means funds on deposit in the Clearing Accounts reasonably
determined by the Clearing Bank to constitute available funds, by reference to
Regulation CC of

 

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the Board of Governors of the Federal Reserve System, as amended and interpreted
from time to time.
 
“ACH System” means the automated clearinghouse system.
 
“Business Day” means any day other than a Saturday, a Sunday or any other day on
which Lender, Clearing Bank, or the national banking associations are not open
for business.
 
“Cash Management Agreement” means that certain Master Cash Management Agreement
of even date herewith by and among Borrowers, Manager (as defined in the Cash
Management Agreement) and Lender.
 
“Cash Sweep Period” means any period which commences upon receipt of notice by
Clearing Bank of the delivery of a Notice of Commencement of Cash Sweep Period
and continues until such time, if any, as Lender delivers a Notice of
Termination of Cash Sweep Period.
 
“Clearing Accounts” has the meaning specified in Paragraph 2(a) below.
 
“Deposit Account” means the account established or to be established by Lender
or Servicer in accordance with the terms of the Cash Management Agreement, into
which all funds in the Clearing Accounts shall be deposited as set forth in
Paragraph 4 of this Agreement.
 
“Designee” means the Servicer or other agent of Lender acting for the benefit of
Lender under this Agreement. Lender will provide written notice from time to
time to Borrower and Clearing Bank of the appointment of a Designee.  Clearing
Bank will require receipt of such written notice prior to recognizing a party as
Designee.
 
“Eligible Account” means an identifiable account which is separate from all
other funds held by the holding institution that is either (i) an account or
accounts maintained with the corporate trust department of a federal or
state-chartered depository institution or trust company which complies with the
definition of Eligible Institution or (ii) a segregated trust account or
accounts maintained with the corporate trust department of a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company is subject to regulations substantially similar to 12 C.F.R. §9.10(b),
having in either case a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal and state authority; or (iii) a
deposit account within the meaning of Section 9-104 of the UCC.  An Eligible
Account will not be evidenced by a certificate of deposit, passbook or other
instrument.
 
“Eligible Institution” means a federal or state chartered depository institution
or trust company insured by the Federal Deposit Insurance Corporation, the short
term unsecured debt obligations or commercial paper of which are rated at least
A-1 by Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc (“S&P”); P-1 by Moody’s Investors Service, Inc. (“Moody's”); and
F-1 by Fitch, Inc. (“Fitch”) in the case of accounts in which funds are held for
thirty (30) days or less or, in the case of letters of credit or accounts in
which funds are held for more than thirty (30) days, the long term unsecured
debt obligations of which are rated at least “A” by Fitch and S&P “A2” by
Moody’s.  If at any time an Eligible Institution does not meet the required
rating, the Eligible Account must be moved within thirty (30) days to an
appropriately rated Eligible Institution.
 
“Notice of Commencement of Cash Sweep Period” means a Notice provided to
Clearing Bank and Borrowers by Lender that provides that a Cash Sweep Period has
commenced and thereafter Lender shall have sole dominion and control over the
Clearing Accounts.

 

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“Notice of Termination of Cash Sweep Period” means a Notice provided to Clearing
Bank and Borrowers by Lender that a Cash Sweep Period has terminated and
thereafter Borrowers and Lender shall have joint control over the Clearing
Accounts as provided in the Cash Management Agreement.
 
“Obligations” means any and all debts, liabilities and obligations of Borrowers,
and each of them, to Lender pursuant to or in connection with the Loans,
including without limitation, the indebtedness evidenced by the Notes and any
and all debt, liabilities and obligations of Borrowers under the “Loan
Documents” as defined in the Cash Management Agreement.
 
“Receipts” means any Rents and any other income received by any Borrower or
Manager in connection with the Property.
 
Terms used in this Agreement and not defined herein have the meanings given to
those terms in the Cash Management Agreement.
 
2.           Duties of Clearing Bank.
 
(a)           In order to further secure the performance by Borrowers of their
Obligations (i) Borrowers have established with Clearing Bank eight (8) separate
deposit accounts (collectively, the “Clearing Accounts) designated as set forth
in Exhibit B hereto, provided, that Lender shall have the option to cause
Clearing Bank to change the name of any such account in its sole discretion by
giving Notice to Borrowers and Clearing Bank; and provided further that such
change shall not otherwise modify the terms of this Agreement.  Clearing Bank
will maintain the Clearing Accounts. The Clearing Accounts will be assigned the
respective federal tax identification numbers listed in Exhibit B.
 
(b)           Clearing Bank shall receive and process any Receipts presented by
Borrowers, Manager or any of their respective agents pursuant to the Cash
Management Agreement and shall deposit all Receipts received by it with respect
to the Property into the Clearing Accounts.
 
(c)           Clearing Bank shall hold amounts deposited in the Clearing
Accounts for the benefit of Lender and shall designate such amounts on its books
as being held for the benefit of Lender, subject to the terms of this Agreement.
 
(d)           Borrowers and Clearing Bank shall maintain each Clearing Account
as an Eligible Account.  Each Clearing Account shall constitute a “deposit
account” within the meaning of the Uniform Commercial Code of the State of New
York.  Regardless of any provision of any other agreement, for purposes of the
Uniform Commercial Code, New York shall be deemed the jurisdiction of the Bank,
as “bank” with respect to such “deposit account”.
 
(e)           Clearing Bank shall immediately take any steps necessary in order
for Clearing Bank to effectuate any transfer of funds to Lender or Designee
pursuant to Paragraph 4 of this Agreement and to provide data, via utilization
of Clearing Bank’s internet-based systems then in effect, to Lender or Designee
pursuant to Paragraph 2(g) of this Agreement.
 
(f)           Clearing Bank shall send monthly account statements to Borrowers,
or at Borrowers’ discretion, Manager, itemizing activity with respect to the
Clearing Accounts in accordance with Clearing Bank's regular practices for
providing account statements to its customers.
 
 

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(g)           Upon request of Lender or Designee, Clearing Bank shall (i)
provide to Lender or Designee, as applicable, via utilization of Clearing Bank’s
generally available internet-based banking system, currently accessible via
pnc.com, then in effect, information on Clearing Account balances, the aggregate
amount of withdrawals from the Clearing Accounts and other similar information
and (ii) Clearing Bank (x) shall advise Lender or Designee, as applicable, of
the amount of Available Funds via utilization of Clearing Bank’s generally
available internet-based banking system, currently accessible via pnc.com, then
in effect, (y) shall deliver to Lender or Designee, as applicable, a duplicate
copy of all monthly account statements sent to Borrower, and (z) shall make
available any other information concerning the Clearing Accounts as Lender or
Designee shall reasonably request via utilization of Clearing Bank’s generally
available internet-based banking system, currently accessible via pnc.com, then
in effect.
 
(h)           Items deposited with Clearing Bank that are returned for
insufficient or uncollected funds shall be debited to the Clearing Account, as
provided in Paragraph 8 below, under advice and returned to Borrower.
 
3.           Dominion and Control.  Lender, Clearing Bank and Borrowers
acknowledge and agree that the Clearing Accounts are subject to the dominion,
control and discretion of Lender and Designee as set forth in the Cash
Management Agreement.  Neither any Borrower nor Manager shall have the right to
close the Clearing Accounts; provided, that Clearing Bank shall not be liable
under this Agreement, under applicable law, or in equity in the event that the
Borrower or Manager close any of the Clearing Accounts prior to receipt of a
Notice of Commencement of Cash Sweep Period, and allowing for a reasonable
period of time, not to exceed two (2) Business Days, or following the receipt of
a Notice of Termination of Cash Sweep Period, and allowing for a reasonable
period of time, not to exceed two (2) Business Days..  After the receipt by
Clearing Bank of a Notice of Commencement of Cash Sweep Period, and allowing for
a reasonable period of time not to exceed two (2) Business Days, and prior to
Clearing Bank’s receipt of a Notice of Termination of Cash Sweep Period, neither
any Borrower nor Manager shall have any right of withdrawal with respect to the
Clearing Accounts except with the prior written consent of Lender, which written
consent shall be provided to Clearing Bank.  Each Borrower and Manager and
Lender shall be entitled to request and receive any information about the
Clearing Accounts that it shall reasonably request from time to time via
utilization of the Clearing Bank’s generally available internet-based systems,
currently accessible via pnc.com, then in effect.
 
4.           Transfer of Funds in Clearing Accounts. Clearing Bank shall
transfer all Available Funds on deposit in the Clearing Accounts as follows:
 
(i)           Clearing Bank shall transfer, by wire transfer or via the ACH
System and/or by such means as Clearing Bank generally employs in connection
with “Zero Balance” accounts such as the Clearing Accounts, so much of the
Available Funds as Borrowers shall request from time to time to one or more
accounts designated in writing by Borrowers until such time, if any, as Clearing
Bank and Borrowers have received a Notice of Commencement of Cash Sweep Period
(Clearing Bank shall have no obligation to verify that Borrowers have received
such Notice). Thereafter all Available Funds shall be disbursed on each Business
Day to the Deposit Account designated in writing by Lender or Designee until
such time as Clearing Bank has received a Notice of Termination of Cash Sweep
Period, and thereafter for a reasonable period of time not to exceed two (2)
Business Days.
 
(ii)           Simultaneously with any transfer to the Deposit Account, Clearing
Bank shall send (or make available via electronic information reporting system)
to Manager, Lender, Designee and Borrowers, via telecopy, a wire transfer or ACH
System advice setting forth the amount transferred.

 

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5.           Fees.
 
(a)           To compensate Clearing Bank for performing the services required
hereunder, Borrowers hereby agree to pay all such fees as shall be charged by
the Clearing Bank in connection with Clearing Bank’s obligations
hereunder.  Borrowers shall be liable to Clearing Bank for the amount of any
exchange, collection, processing, transfer, wire, postage or other out-of-pocket
expenses incurred by Clearing Bank, as determined by Clearing Bank from time to
time.
 
(b)           Clearing Bank shall debit the Clearing Accounts by the amount of
its fees on a monthly basis or shall include its fees in an account analysis
statement.  In the event that there are not sufficient collected funds in the
Clearing Accounts to compensate Clearing Bank for such fees, Borrowers authorize
Clearing Bank to debit any other account maintained by Borrowers with Clearing
Bank and in the event that there are not sufficient collected funds in any of
Borrowers’ other accounts, Borrowers agree upon demand to reimburse Clearing
Banking for the amount of such fees.
 
(c)           Borrowers agree to pay Clearing Bank, upon demand, all costs and
expenses, including reasonable attorneys’ fees and disbursements, including, but
not limited to, any and all expenses incurred in any interpleader action,
incurred by Clearing Bank in the preparation, negotiation, administration and
enforcement of this Agreement (including any amendments hereto or additional
instruments or agreements required hereunder).
 
6.           Termination.
 
(a)           Clearing Bank may resign from its obligations under this Agreement
(i) at any time after thirty (30) days’ prior written notice to the other
parties hereto, and (ii) immediately, upon contemporaneous notice thereof to the
other parties hereto, if it becomes aware of fraud or criminal activity in
connection with any of the Clearing Accounts or this Agreement, other than by
Clearing Bank or its employees.  Upon such resignation, Borrowers shall
designate a successor to Clearing Bank promptly after receipt of notice of
resignation by Clearing Bank, which successor shall be subject to the approval
of Lender, and cause such designated successor promptly to assume the
obligations of Clearing Bank hereunder.  It shall be an Event of Default if a
successor to Clearing Bank acceptable to Lender has not been designated or has
not assumed the obligations of Clearing Bank prior to the effective date of
Clearing Bank’s resignation.
 
(b)           Borrowers may not unilaterally terminate this Agreement or close
any of the Clearing Accounts established pursuant to the terms of this
Agreement.  Clearing Bank shall not cause or permit any of such accounts to be
closed unless it has received prior written Notice from Lender; provided,
Clearing Bank shall have no liability under this Agreement, under applicable
law, or in equity, in the event any of the Clearing Accounts are closed by
Borrowers at any time prior to receipt of a Notice of Commencement of Cash Sweep
Period, and allowing for a reasonable period of time, not to exceed two (2)
Business Days, or following the receipt of a Notice of Termination of Cash Sweep
Period, and allowing for a reasonable period of time, not to exceed two (2)
Business Days.
 
(c)          Lender may terminate this Agreement at any time after five (5)
days’ prior written notice to the other parties hereto.  Upon any termination of
this Agreement in accordance with the terms of this Paragraph 6, Clearing Bank
shall hold all funds in the Clearing Accounts for a period of no more than
thirty (30) days until Clearing Bank receives written Notice from Lender
instructing Clearing Bank how to dispose of such funds.
 
 

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7.           Liabilities of Clearing Bank; Indemnity by Borrowers.
 
(a)           The parties hereto agree that Clearing Bank shall not be liable
for damage or loss to any party or to any other person for any delay or failure
of performance arising out of the acts or omissions of any third parties,
including, but not limited to, various communication services, courier services,
the Federal Reserve System, any other bank or any third party who may be
affected by funds transactions, fire, mechanical, computer or electrical
failures or other unforeseen contingencies, strikes, or any similar or
dissimilar cause beyond the reasonable control of the Clearing Bank.
 
(b)           Clearing Bank shall make every commercially reasonable effort to
transfer all Available Funds referred to in Paragraph 4 above by the mutually
agreed upon time but does not guarantee a specific delivery time.  Accordingly,
Clearing Bank’s sole responsibility to Lender, Designee or any third party with
respect to the time of delivery of such amounts and items shall be to deliver
such amounts and items as close to the mutually agreed upon time as may be
reasonably practicable.
 
(c)           Notwithstanding any other term or provision of this Agreement,
Clearing Bank will not be liable to any other party for:

(i)           failing to follow any Notice, including, without limitation, any
Notice of Commencement of Cash Sweep Period or Notice of Termination of Cash
Sweep Period, or any other instruction originated by Lender (A) earlier than two
(2) Business Days after receipt of such Notice or instruction, (B) or any
Notice, instruction, or term set forth in this Agreement, that requires (x) the
disposition or transfer of the funds in the Clearing Account, including, without
limitation, Available Funds, by a method not available under Clearing Bank’s
usual policies and procedures; or (y) the receipt, processing, or deposit of
Receipts by a method not available under Clearing Bank’s usual policies and
procedures, or (C) that Clearing Bank determines would result in Clearing Bank’s
failing to comply with a statute, rule or regulation, court order or other
legal, regulatory, or administrative process, binding upon Clearing Bank; or

(ii)           complying with Lender’s or Borrowers’ instructions regarding
disposition of funds in the Clearing Account, or otherwise completing a
transaction involving the Clearing Account, that Clearing Bank had started to
process two (2) or fewer Business Days after Clearing Bank had actually received
a Notice of Commencement of Cash Sweep Period.

(d)           Clearing Bank will not be liable to any party for any claim, loss,
cost, fee, or expense except to the extent directly caused by Clearing Bank’s
own gross negligence or willful misconduct, as determined by a final
non-appealable judgment by a court of competent jurisdiction.  In no event shall
Clearing Bank be liable for any lost profits or for any indirect, special,
consequential or punitive damages even if advised of the possibility or
likelihood of such damages.

(e)           Clearing Bank shall have no responsibility or liability to Lender
for complying with instructions concerning the Clearing Accounts from Borrowers
or Borrowers’ representatives, which are received by Clearing Bank prior to
receipt of a Notice of Commencement of Cash Sweep Period, and allowing for a
reasonable period of time, not to exceed two (2) Business Days, or following the
receipt of a Notice of Termination of Cash Sweep Period, and allowing for a
reasonable period of time, not to exceed two (2) Business Days.  Clearing Bank
shall have no responsibility or liability to Borrowers for complying with a
Notice of Commencement of Cash Sweep Period or complying with instructions
concerning the Clearing Accounts originated by Lender, and shall have no
responsibility to investigate the appropriateness of any such instruction or
Notice of Commencement of Cash Sweep Period, even if Borrowers notify Clearing
Bank that Lender is not legally entitled to originate any such instruction or
Notice of Commencement of Cash Sweep Period.
 
 

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(f)           Borrowers hereby indemnify and hold harmless Clearing Bank, its
affiliates, and its and their directors, officers, agents and employees from and
against any and all claims, damages, penalties, judgments, liabilities, losses
or expenses (including reasonable attorneys’ fees and disbursements) arising out
of, resulting from, or in any way related to this Agreement or any action taken
or not taken pursuant to this Agreement except to the extent such claims,
damages, penalties, judgments, liabilities, losses or expenses are primarily
caused by Clearing Bank’s gross negligence or willful misconduct, as determined
by a final non-appealable judgment by a court of competent jurisdiction.
 
(g)           Notwithstanding any other term or provisions of this Agreement,
Clearing Bank shall have no obligation to review or confirm that any actions
taken pursuant to this Agreement comply with any other agreement or document,
including, without limitation, the Cash Management Agreement.  Substantial
compliance by Clearing Bank with its standard procedures for the services
Clearing Bank is providing hereunder shall be deemed to be exercise by it of
ordinary care.
 
(h)           This Paragraph 7 shall survive termination of this Agreement.

8.           Set-off.  Clearing Bank waives any right to offset any claim
against Borrowers which it might have against any account maintained hereunder;
provided, however, that Clearing Bank retains the right to charge the Clearing
Accounts for (i) processing or encoding errors arising in a Clearing Account,
(ii) items deposited in a Clearing Account that are subsequently returned to
Clearing Bank unpaid, (iii) automated clearing house (“ACH”) credit entries
initiated from a Clearing Account by Borrowers or Lender for which there are
insufficient funds in the applicable Clearing Account on the date required by
the applicable agreement with the Clearing Bank for such services, or ACH debit
entries initiated from a Clearing Account by Borrowers of Lender which are
returned to Clearing Bank for any reason, (iv) all other charges and obligations
and liabilities arising out of any cash management services provided by Clearing
Bank for Borrowers and related to the Clearing Accounts or the services provided
pursuant to this Agreement, and (v) any of Clearing Bank’s charges, fees and
expenses provided for herein.  Borrowers and Lender understand and agree that
Clearing Bank is authorized to collect any amount owing pursuant to the
preceding sentence (a “Chargeable Amount”) by debiting any of the Clearing
Accounts.  Borrowers shall pay any Chargeable Amount immediately upon demand to
the extent there are not sufficient funds in the Clearing Accounts to cover any
Chargeable Amount on the day of the debit.  If any Chargeable Amount set forth
in paragraph 8(i), 8(ii), or 8(iii) has not been paid in full by Borrower within
fifteen (15) days after demand on Borrowers by Bank and there are still
insufficient funds in the Clearing Accounts, then Lender shall pay such
Chargeable Amount to Clearing Bank, within fifteen (15) days after receipt of
written demand therefor from Clearing Bank, solely to the extent that Lender has
received such funds.  If Clearing Bank is stayed or prohibited from making
demand upon Borrowers for any reason, then Clearing Bank shall not be required
to: (a) make such demand upon Borrowers or (b) wait fifteen (15) days prior to
making demand on Lender.  This paragraph shall survive termination of this
Agreement.
 
9.           Matters Concerning Borrowers and Manager.  Borrowers and Lender
agree that:
 
(a)           Each Borrower hereby pledges, transfers and assigns, and grants to
Lender, as additional security for the payment and performance of the Notes and
the Obligations of Borrowers, a first priority security interest in and to, and
a general first lien upon, subject to Clearing Bank’s right to set-off with
respect to the Clearing Bank’s fees and expenses as described in Paragraph 8
above, (i) the Clearing Accounts and all of such Borrower’s right, title and
interest in and to all Receipts, cash, property, instruments or rights
transferred to or deposited in the Clearing Accounts from time to time by such
Borrower or on behalf of such

 

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 Borrower in accordance with the provisions of this Agreement, (ii) all
earnings, investments and securities held in the Clearing Accounts in accordance
with this Agreement and (iii) any and all proceeds of the foregoing.  This
Agreement and the pledge, assignment and grant of security interest made hereby
shall secure payment of all amounts payable by Borrowers to Lender under the
Notes and the other Obligations of Borrowers.  Borrowers acknowledge and agree
that Clearing Bank is acting at the direction of Lender in connection with the
subject matter of this Agreement.  Borrowers further agree to execute,
acknowledge, deliver, file or do at its sole cost and expense, all other acts,
assignments, notices, agreements or other instruments as Lender may reasonably
require in order to effectuate, assure, convey, secure, assign, transfer and
convey unto Lender any of the rights granted by this Paragraph.
 
(b)           Borrowers shall provide Manager with a copy of this Agreement, as
the same may be amended from time to time, and shall cause Manager to abide by
all of the terms and provisions hereof applicable to Borrowers and/or Manager.
 
10.         Successors and Assigns; Assignments.  This Agreement shall bind and
inure to the benefit of and be enforceable by Clearing Bank, each Borrower and
Lender and their respective successors and permitted assigns.  Lender shall have
the right to assign or transfer its rights under this Agreement in connection
with any assignment of the Loan and the Loan Documents.  Any assignee or
transferee of Lender shall be entitled to all the benefits afforded to Lender
under this Agreement; provided that the assignee or transferee automatically
will be bound by all of the terms and conditions of this Agreement by virtue of
such assignment or transfer.  No Borrower shall have the right to assign or
transfer its rights or obligations under this Agreement without the prior
written consent of Lender.  Clearing Bank shall have the right to assign or
transfer its rights and obligations hereunder in connection with a merger,
consolidation or sale of all or substantially all of the assets of Clearing Bank
provided that the transferee thereof agrees in writing to be bound by the terms
of this Agreement.
 
11.         Amendment.  This Agreement may be amended from time to time only by
a written agreement executed by all of the parties hereto.
 
12.         Notices. All notices, including without limitation any Notice of
Commencement of Cash Sweep Period or Notice of Termination of Cash Sweep Period,
demands, requests, consents, approvals or other communications (any of the
foregoing, a “Notice”) required, permitted, or desired to be given hereunder
shall be in writing sent by telefax (with answer back acknowledged) or by
registered or certified mail, postage prepaid, return receipt requested, or
delivered by hand or reputable overnight courier addressed to the party to be so
notified at its address hereinafter set forth, or to such other address as such
party may hereafter specify in accordance with the provisions of this Paragraph
12.  Any Notice shall be deemed to have been received three (3) days after the
date such Notice is mailed or on the date of sending by telefax or delivery by
hand if sent or delivered during business hours on a Business Day (otherwise on
the next Business Day) or the next Business Day if sent by an overnight
commercial courier addressed to the parties as follows:
 

  If to Lender:
Holliday Fenoglio Fowler, L.P.
9 Greenway Plaza, Suite 700
Houston, Texas 77046
Attention: David Croskery, Senior Managing Director
Facismile No. (713) 852-3498

 
 

  With a copy to:
DESIGNEE'S NAME
(Currently Not Applicable)
                                              
Attention:                             
Facismile No.                      

 

 

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  If to Borrowers:
NTS Development Company
10172 Linn Station Road
Louisville, Kentucky 40223
Attention: Brian F. Lavin
Facismile No. (502) 426-4994

 

  If to Clearing Bank:
PNC Bank - Treasury Management
101 South Fifth Street
Louisville, Kentucky 40202
Attetion: Linda Haas
Facsimile No. (502) 581-2470

 
13.         Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO
ITS CONFLICTS OF LAW RULES OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW). JUDICIAL ACTIONS, SUITS OR PROCEEDINGS BROUGHT AGAINST ANY PARTY HERETO
WITH RESPECT TO ITS OBLIGATIONS, LIABILITIES OR ANY OTHER MATTER UNDER OR
ARISING OUT OF IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREUNDER OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT RENDERED IN ANY SUCH
PROCEEDINGS SHALL BE BROUGHT IN THE STATE COURT OF NEW YORK AND SHALL BE HEARD
BY SUCH COURT SITTING WITHOUT A JURY.
 
14.         Certain Matters Affecting Clearing Bank.
 
(a)           Clearing Bank may rely and shall be protected in acting or
refraining from acting upon any notice (including but not limited to
electronically confirmed facsimiles of such notice) believed by it to be genuine
and to have been signed or presented by the proper party or parties.
 
(b)           The duties and obligations of Clearing Bank hereunder shall be
determined solely by the express provisions of this Agreement.  Clearing Bank
shall not be liable except for the performance of its duties and obligations as
are specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against Clearing Bank.
 
(c)           If at any time: (a) Clearing Bank, in good faith, is in doubt as
to the action it should take under this Agreement, (b) any Borrower becomes
subject to a voluntary or involuntary bankruptcy, reorganization, receivership
or similar proceeding, or (c) Clearing Bank is served with legal process which
it in good faith believes prohibits the disbursement of the funds deposited in
any Clearing Account, then Clearing Bank shall have the right to (i) place a
hold on the funds in the Clearing Accounts until such time as it receives an
appropriate court order or other assurance satisfactory to it as to the
disposition of the funds in the Clearing Accounts, or (ii) commence, at
Borrowers’ expense, an interpleader action in any competent federal or state
court located in the Commonwealth of Pennsylvania, and otherwise to take no
further action except in accordance with joint written instructions from
Borrowers and Lender or in accordance with the final order of a competent court
served on Clearing Bank.

 

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 PAGE 9

 

IN WITNESS WHEREOF, the parties hereto have executed this Clearing Accounts
Agreement in several counterparts (each of which shall be deemed an original) as
from the date first above written.

 

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 PAGE 10

 
 

 
BORROWERS:
 
NLP CASTLE CREEK, LLC, a Delaware limited
    liability company

 

  By:
NTS Realty Holdings Limited Partnership, a
Delaware limited partnership, its sole member

 

  By:
NTS Realty Capital, Inc., a Delaware
corporation, its managing general
partner

 

  By:
 /s/ Neil A. Mitchell   
Name: Neil A. Mitchell
Title: Sr Vice Pres

 
 
 

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 PAGE 11

 

 
NLP LAKE CLEARWATER, LLC, a Delaware
  limited liability company

 

  By:
NTS Realty Holdings Limited Partnership, a
Delaware limited partnership, its sole member

 

  By:
NTS Realty Capital, Inc., a Delaware
corporation, its managing general
partner

 

  By:
 /s/ Neil A. Mitchell   
Name: Neil A. Mitchell
Title: Sr Vice Pres

 

 

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 PAGE 12

 

 
 
NLP PARK PLACE, LLC, a Delaware limited
    liability company

 

  By:
NTS Realty Holdings Limited Partnership, a
Delaware limited partnership, its sole member

 

  By:
NTS Realty Capital, Inc., a Delaware
corporation, its managing general
partner

 

  By:
 /s/ Neil A. Mitchell   
Name: Neil A. Mitchell
Title: Sr Vice Pres

 

 

--------------------------------------------------------------------------------

 PAGE 13

 
 

 
NLP RICHLAND, LLC, a Delaware limited
    liability company

 

  By:
NTS Realty Holdings Limited Partnership, a
Delaware limited partnership, its sole member

 

  By:
NTS Realty Capital, Inc., a Delaware
corporation, its managing general
partner

 

  By:
 /s/ Neil A. Mitchell   
Name: Neil A. Mitchell
Title: Sr Vice Pres

 

 

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 PAGE 14

 
 

 
NLP SWIFT CREEK, LLC, a Delaware limited
    liability company

 

  By:
NTS Realty Holdings Limited Partnership, a
Delaware limited partnership, its sole member

 

  By:
NTS Realty Capital, Inc., a Delaware
corporation, its managing general
partner

 

  By:
 /s/ Neil A. Mitchell   
Name: Neil A. Mitchell
Title: Sr Vice Pres

 
 
 

--------------------------------------------------------------------------------

 PAGE 15

 
 
 
 
NLP WHITWORTH, LLC, a Delaware limited
    liability company

 

  By:
NTS Realty Holdings Limited Partnership, a
Delaware limited partnership, its sole member

 

  By:
NTS Realty Capital, Inc., a Delaware
corporation, its managing general
partner

 

  By:
 /s/ Neil A. Mitchell   
Name: Neil A. Mitchell
Title: Sr Vice Pres

 
 
 

--------------------------------------------------------------------------------

 PAGE 16

 

 
 
NLP WILLOW LAKE, LLC, a Delaware limited
    liability company

 

  By:
NTS Realty Holdings Limited Partnership, a
Delaware limited partnership, its sole member

 

  By:
NTS Realty Capital, Inc., a Delaware
corporation, its managing general
partner

 

  By:
 /s/ Neil A. Mitchell   
Name: Neil A. Mitchell
Title: Sr Vice Pres

 

 

--------------------------------------------------------------------------------

 PAGE 17

 
 
 
 
NLP WILLOWS, LLC, a Delaware limited
    liability company

 

  By:
NTS Realty Holdings Limited Partnership, a
Delaware limited partnership, its sole member

 

  By:
NTS Realty Capital, Inc., a Delaware
corporation, its managing general
partner

 

  By:
 /s/ Neil A. Mitchell   
Name: Neil A. Mitchell
Title: Sr Vice Pres

 

 

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 PAGE 18

 

 
 
        LENDER:
HOLLIDAY FENOGLIO FOWLER, L.P., a
    Texas limited partnership

 

  By:
Holliday GP Corp., a Delaware corporations, its
general partner

 

  By:
/s/ Patrick V. Kinlan   
Patrick V. Kinlan
Vice President

 
 
 

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 PAGE 19

 

 
 
CLEARING BANK:
 
PNC BANK, NATIONAL ASSOCIATION

 

  By:
/s/ Henry R. Synder, IV   
Name: Henry R. Snyder, IV
Title: Vice President

 
 
 

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 PAGE 20

 

EXHIBIT A

BORROWERS, LOAN NUMBERS AND LOAN AMOUNTS
 
Borrower
 
Loan Number
 
Original
Loan Amount
Taxpayer ID
Numbers
       
NLP Park Place, LLC
534381243 $ 30,625,000            
NLP Willows, LLC
534381219 $ 17,920,000            
NLP Willow Lake, LLC
534381200 $ 10,945,000            
NLP Castle Creek, LLC
534381227 $ 13,895,000            
NLP Lake Clearwater, LLC
534381235 $ 11,390,000            
NLP Swift Creek, LLC
534381278 $ 16,845,000            
NLP Richland, LLC
534381251 $ 27,000,000            
NLP Whitworth, LLC
534381286 $ 27,675,000  

 
 

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 PAGE A-1

 

EXHIBIT B

LIST OF ACCOUNTS COMPRISING THE CLEARING ACCOUNTS

Account Title
Tax Identification Account Number      
NLP Park Place, LLC
27-1213199
3007485657
     
NLP Willows, LLC
27-1213238
3007485745
     
NLP Willow Lake, LLC
27-1213310
3007485737
     
NLP Castle Creek, LLC
27-1213344
3007485729
     
NLP Lake Clearwater, LLC
27-1213379
3007485702
     
NLP Swift Creek, LLC
27-1213409
3007485681
     
NLP Richland, LLC
27-1213450
3007485673
     
NLP Whitworth, LLC
27-1213470
3007485665

 

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PAGE B-1