**Exhibit10.476**

 
| ** ** | **DOC# 001253**

**FILED IN OFFICE**

**01/10/2003**

**08:25:46AM**

**BK:05595 PG:0142**

**JUDITH A. LEWIS**

**CLERK OF**

**SUPERIOR COURT**

**HENRY COUNTY, GA** |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 
| Return to:

PIEDMONT TITLE  INSURANCE AGENCY, INC.

Attention: Barbara H.  Morgan

150 East Ponce de Leon  Avenue, Suite 330

Decatur, GA 30030

(404) 377-6464 | Henry Towne Center

LOAN NO.  50-2753516 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|

 

 

 

HENRY TOWN CENTER,LLC, ALPHA SEVEN, LLC, ELLISTON HENRY TOWN CENTER,

LLC, OWEN HENRYTOWN CENTER, LLC, DSCONGDONA, LLC, JWCONGDONA, LLC,

KCVANSTORYA, LLC,ALCONGDONA, LLC, SCTERRYA, LLC, JRCONGDON,JR.A, LLC,

SPENCE HENRY TOWNCENTER, LLC, JAY HENRY TOWN CENTER, LLC,

together, jointlyand severally, as Grantor

 

to

 

WACHOVIA BANK,NATIONAL ASSOCIATION

as Grantee

 

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DEED TO SECUREDEBT AND SECURITY AGREEMENT

 

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Dated as of January 8*,*2003

 

PREPARED BY AND UPON RECORDATION RETURN TO:

 
| ** ** | Return to:

PIEDMONT TITLE  INSURANCE AGENCY, INC.

Attention: Isabel M.  Garcia, Esq.

150 East Ponce de Leon  Avenue, Suite 330

Decatur, GA 30030

(404) 377-6464 |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** |                                                                                                                                                                 |
| ** ** |                                                                                                                                                                 | GEORGIA INTANGIBLE TAX  HENRY COUNTY  SUPERIOR COURT

JAN 09 2003

 

PAID $ 25,000.00 |
| ** ** |                                                                                                                                                                 | /s/ [ILLEGIBLE] |
| ** ** |                                                                                                                                                                 | CLERK OF SUPERIOR COURT |

 

 

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**TABLE OF****CONTENTS**

 
| ARTICLE I   | COVENANTS OF GRANTOR                                                                    |   |
|------------------|-----------------------------------------------------------------------------------------|--------|
| 1.1              | Warranties of Grantor                                                                   |   |
| 1.2              | Defense of Title                                                                        |   |
| 1.3              | Performance of  Obligations                                                             |   |
| 1.4              | Insurance                                                                               |   |
| 1.5              | Payment of Taxes                                                                        |   |
| 1.6              | Tax Impound Account                                                                     |   |
| 1.7              | [Reserved]                                                                              |   |
| 1.8              | Replacement Reserve                                                                     |   |
| 1.9              | Casualty and  Condemnation                                                              |   |
| 1.10             | Construction Liens                                                                      |   |
| 1.11             | Rents and Profits                                                                       |   |
| 1.12             | Leases                                                                                  |   |
| 1.13             | Alienation  and Further Encumbrances                                                    |   |
| 1.14             | Payment  of Utilities, Assessments, Charges, Etc.                                       |   |
| 1.15             | Access  Privileges and Inspections                                                      |   |
| 1.16             | Waste;  Alteration of* *Improvements                                               |   |
| 1.17             | Zoning                                                                                  |   |
| 1.18             | Financial  Statements and Books and Records                                             |   |
| 1.19             | Further Documentation                                                                   |   |
| 1.20             | Payment  of Costs; Reimbursement to Grantee                                             |   |
| 1.21             | Security Interest                                                                       |   |
| 1.22             | Security Agreement                                                                      |   |
| 1.23             | Easements and  Rights-of-Way                                                            |   |
| 1.24             | Compliance with Laws                                                                    |   |
| 1.25             | Additional Taxes                                                                        |   |
| 1.26             | Secured Indebtedness                                                                    |   |
| 1.27             | Grantor’s Waivers                                                                  |   |
| 1.28             | SUBMISSION  TO JURISDICTION; WAIVER OF JURY TRIAL                                       |   |
| 1.29             | Attorney-in-Fact  Provisions                                                            |   |
| 1.30             | Management                                                                              |   |
| 1.31             | Hazardous  Waste and Other Substances                                                   |   |
| 1.32             | Indemnification;  Subrogation                                                           |   |
| 1.33             | Covenants  with Respect to Indebtedness, Operations, Fundamental Changes of Grantor     |   |
|             |                                                                                    |   |
| ARTICLE II  | EVENTS OF DEFAULT                                                                       |   |
| 2.1              | Events of Default                                                                       |   |
|             |                                                                                    |   |
| ARTICLE III | REMEDIES                                                                                |   |
| 3.1              | Remedies Available                                                                      |   |
| 3.2              | Application of Proceeds                                                                 |   |
| 3.3              | Right  and Authority of Receiver or Grantee in the Event of Default; Power of  Attorney |   |

 

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| 3.4             | Occupancy After  Foreclosure                                          |   |
|-----------------|-----------------------------------------------------------------------|--------|
| 3.5             | Notice to Account  Debtors                                            |   |
| 3.6             | Cumulative Remedies                                                   |   |
| 3.7             | Payment of Expenses                                                   |   |
|            |                                                                  |   |
| ARTICLE IV | MISCELLANEOUS  TERMS AND CONDITIONS                                   |   |
| 4.1             | Time of Essence                                                       |   |
| 4.2             | Release of  Security Instrument                                       |   |
| 4.3             | Certain Rights of  Grantee                                            |   |
| 4.4             | Waiver of Certain  Defenses                                           |   |
| 4.5             | Notices;  Designation of Managing Agent                               |   |
| 4.6             | Successors  and Assigns; Joint and Several Liability                  |   |
| 4.7             | Severability                                                          |   |
| 4.8             | Gender                                                                |   |
| 4.9             | Waiver;  Discontinuance of Proceedings                                |   |
| 4.10            | Section Headings                                                 |   |
| 4.11            | GOVERNING LAW                                                         |   |
| 4.12            | Counting of Days                                                      |   |
| 4.13            | Relationship of the  Parties                                          |   |
| 4.14            | Application  of the Proceeds of the Note                              |   |
| 4.15            | Unsecured  Portion of Indebtedness                                    |   |
| 4.16            | Cross Default                                                         |   |
| 4.17            | Interest After Sale                                                   |   |
| 4.18            | Inconsistency  with Other Loan Documents                              |   |
| 4.19            | Construction of  this Document                                        |   |
| 4.20            | No Merger                                                             |   |
| 4.21            | Rights  With Respect to Junior Encumbrances                           |   |
| 4.22            | Grantee May  File Proofs of Claim                                     |   |
| 4.23            | Fixture Filing                                                        |   |
| 4.24            | After-Acquired Property                                               |   |
| 4.25            | No Representation                                                     |   |
| 4.26            | Counterparts                                                          |   |
| 4.27            | Personal Liability                                                    |   |
| 4.28            | Recording and Filing                                                  |   |
| 4.29            | Entire  Agreement and Modifications                                   |   |
| 4.30            | Maximum Interest                                                      |   |
| 4.31            | Interest Payable by  Grantee                                          |   |
| 4.32            | Dissemination of  Information                                         |   |
| 4.33            | Secondary Market                                                      |   |
| 4.34            | Certain  Matters Relating to Property Located in the State of Georgia |   |
| 4.35            | WAIVER OF NOTICE  AND HEARING                                         |   |
| 4.36            | Attorneys’ Fee                                                   |   |

 

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**DEED TO SECURE DEBT AND SECURITY AGREEMENT**

 

**THIS DEEDTO SECURE DEBT AND SECURITY AGREEMENT** (this “SecurityInstrument”) is made as of January 8, 2003 by HENRY TOWN CENTER, LLC, aGeorgia limited liability company, ALPHA SEVEN, LLC, a Delaware limitedliability company, ELLISTON HENRY TOWN CENTER, LLC, a Delaware limitedliability company, OWEN HENRY TOWN CENTER, LLC, a Delaware limited liabilitycompany, DSCONGDONA, LLC, a Delaware limited liability company, JWCONGDONA,LLC, a Delaware limited liability company, KCVANSTORYA, LLC, a Delaware limitedliability company, ALCONGDONA, LLC, a Delaware limited liability company,SCTERRYA, LLC, a Delaware limited liability company, JRCONGDON,JR.A, LLC, aDelaware limited liability company, SPENCE HENRY TOWN CENTER, LLC, a Delawarelimited liability company, JAY HENRY TOWN CENTER, LLC, a Delaware limitedliability company, as Grantor (together, jointly and severally, “Grantor”),to WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, asGrantee (“Grantee”), whose address is 201 South Tryon Street, Suite 130,PMB Box #4, Charlotte, North Carolina 28202.

 

**W I T N E S S E T H:**

 

THAT FOR AND INCONSIDERATION OF THE SUM OF TEN AND NO/100 DOLLARS ($10), AND OTHER VALUABLECONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED,GRANTOR HEREBY IRREVOCABLY GRANTS, BARGAINS, SELLS, CONVEYS, TRANSFERS,PLEDGES, SETS OVER AND ASSIGNS, with power of sale, all of Grantor’s estate,right, title and interest in, to and under any and all of the followingdescribed property, whether now owned or hereafter acquired by Grantor(collectively, the “Property”):

 

(A)                              Allthat certain real property situated in the County of Henry, State of Georgia,more particularly described on Exhibit A attached hereto andincorporated herein by this reference (the “Premises”), together withall of the easements, rights, privileges, franchises, tenements, hereditamentsand appurtenances now or hereafter thereunto belonging or in any wayappertaining thereto, and all of the estate, right, title, interest, claim anddemand whatsoever of Grantor therein or thereto, either at law or in equity, inpossession or in expectancy, now or hereafter acquired;

 

(B)                                Allstructures, buildings and improvements of every kind and description now or at anytime hereafter located or placed on the Premises (the “Improvements”);

 

(C)                                Allfurniture, furnishings, fixtures, goods, equipment, inventory or personalproperty owned by Grantor and now or hereafter located on, attached to or usedin and about the Improvements, including, but not limited to, all machines,engines, boilers, dynamos, elevators, stokers, tanks, cabinets, awnings,screens, shades, blinds, carpets, draperies, lawn mowers, and all appliances,plumbing, heating, air conditioning, lighting, ventilating, refrigerating,disposal and incinerating equipment, and all fixtures and appurtenancesthereto, and such other goods and

 

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chattels and personalproperty owned by Grantor as are now or hereafter used or furnished inoperating the Improvements, or the activities conducted therein, and allbuilding materials and equipment hereafter situated on or about the Premises orImprovements, and all warranties and guaranties relating thereto, and alladditions thereto and substitutions and replacements therefor (exclusive of anyof the foregoing owned or leased by tenants of space in the Improvements);

 

(D)                               Alleasements, rights-of-way, strips and gores of land, vaults, streets, ways,alleys, passages, sewer rights, and other emblements now or hereafter locatedon the Premises or under or above the same or any part or parcel thereof, andall estates, rights, titles, interests, tenements, hereditaments andappurtenances, reversions and remainders whatsoever, in any way belonging, relatingor appertaining to the Property or any part thereof, or which hereafter shallin any way belong, relate or be appurtenant thereto, whether now owned orhereafter acquired by Grantor;

 

(E)                                 Allwater, ditches, wells, reservoirs and drains and all water, ditch, well,reservoir and drainage rights which are appurtenant to, located on, under orabove or used in connection with the Premises or the Improvements, or any partthereof, whether now existing or hereafter created or acquired;

 

(F)                                 Allminerals, crops, timber, trees, shrubs, flowers and landscaping features now orhereafter located on, under or above the Premises;

 

(G)                                Allcash funds, deposit accounts and other rights and evidence of rights to cash,now or hereafter created or held by Grantee pursuant to this SecurityInstrument or any other of the Loan Documents (as hereinafter defined),including, without limitation, all funds now or hereafter on deposit in theImpound Account and the Replacement Reserve (each as hereinafter defined) andthat certain Account and the Leasing Dollars therein, as set forth and definedin that certain Purchase Agreement dated as of September 10, 2002, asamended October 24, 2002, by and between Sembler Family Partnership #22,Ltd., as Seller, and Steven D. Bell & Company, as Buyer, as assigned to Grantor;

 

(H)                               Allleases (including, without limitation, oil, gas and mineral leases), licenses,concessions and occupancy agreements of all or any part of the Premises or theImprovements (each, a “Lease” and collectively, “Leases”),whether written or oral, now or hereafter entered into and all rents,royalties, issues, profits, bonus money, revenue, income, rights and otherbenefits (collectively, the “Rents and Profits”) of the Premises or theImprovements, now or hereafter arising from the use or enjoyment of all or anyportion thereof or from any present or future Lease or other agreementpertaining thereto or arising from any of the Leases or any of the GeneralIntangibles (as hereinafter defined) and all cash or securities deposited tosecure performance by the tenants, lessees or licensees (each, a “Tenant”and collectively, “Tenants”), as applicable, of their obligations underany such Leases, whether said cash or securities are to be held until theexpiration of the terms of said Leases or applied to one or more of theinstallments of rent coming due prior to the expiration of said terms, subject,however, to the provisions contained in Section 1.11 hereinbelow;

 

(I)                                    Allcontracts and agreements now or hereafter entered into covering any part of thePremises or the Improvements (collectively, the “Contracts”) and allrevenue, income and other benefits thereof, including, without limitation,management agreements, joint ownership agreements, co-tenancy agreements,service contracts, maintenance contracts, equipment leases,

 

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personal property leasesand any contracts or documents relating to construction on any part of thePremises or the Improvements (including plans, drawings, surveys, tests,reports, bonds and governmental approvals) or to the management or operation ofany part of the Premises or the Improvements;

 

(J)                                   Allpresent and future monetary deposits given to any public or private utilitywith respect to utility services furnished to any part of the Premises or theImprovements;

 

(K)                               Allpresent and future funds, accounts, instruments, accounts receivable,documents, causes of action, claims, general intangibles (including, withoutlimitation, trademarks, trade names, service marks and symbols now or hereafterused in connection with any part of the Premises or the Improvements, all namesby which the Premises or the Improvements may be operated or known, all rightsto carry on business under such names, and all rights, interest and privilegeswhich Grantor has or may have as developer or declarant under any covenants,restrictions or declarations now or hereafter relating to the Premises or theImprovements) and all notes or chattel paper now or hereafter arising from orby virtue of any transactions related to the Premises or the Improvements(collectively, the “General Intangibles”);

 

(L)                                 Allwater taps, sewer taps, certificates of occupancy, permits, licenses,franchises, certificates, consents, approvals and other rights and privilegesnow or hereafter obtained in connection with the Premises or the Improvementsand all present and future warranties and guaranties relating to theImprovements or to any equipment, fixtures, furniture, furnishings, personalproperty or components of any of the foregoing now or hereafter located orinstalled on the Premises or the Improvements;

 

(M)                            Allbuilding materials, supplies and equipment now or hereafter placed on thePremises or in the Improvements and all architectural renderings, models,drawings, plans, specifications, studies and data now or hereafter relating tothe Premises or the Improvements;

 

(N)                               Allright, title and interest of Grantor in any insurance policies or binders nowor hereafter relating to the Property, including any unearned premiums thereon;

 

(O)                               Allproceeds, products, substitutions and accessions (including claims and demandstherefor) of the conversion, voluntary or involuntary, of any of the foregoinginto cash or liquidated claims, including, without limitation, proceeds ofinsurance and condemnation awards; and

 

(P)                                 Allother or greater rights and interests of every nature in the Premises or theImprovements and in the possession or use thereof and income therefrom, whethernow owned or hereafter acquired by Grantor.

 

THIS CONVEYANCE isintended: (i) to operate and to be construed as a deed passing title to theProperty to Grantee and is made under those provisions of the existing laws ofthe State of Georgia relating to deeds to secure debt, and not as a mortgage,and (ii) to constitute a security agreement pursuant to the Uniform CommercialCode of Georgia, and is given to secure the following:

 

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FOR THE PURPOSE OFSECURING:

 

(1)                                  Thedebt evidenced by that certain Promissory Note (such Promissory Note, together withany and all renewals, amendments, modifications, consolidations and extensionsthereof, is hereinafter referred to as the “Note”) of even date withthis Security Instrument, made by Grantor payable to the order of Grantee inthe principal face amount of THIRTY-SIX MILLION AND NO/100 DOLLARS ($36,000,000.00),together with interest as therein provided, and HAVING A MATURITY DATE OF JANUARY 11,2013;

 

(2)                                  Thefull and prompt payment and performance of all of the provisions, agreements, covenantsand obligations herein contained and contained in any other agreements,documents or instruments now or hereafter evidencing, securing or otherwiserelating to the Debt (as hereinafter defined) including, but not limited to,the Environmental Indemnity Agreement (as hereinafter defined)(the Note, thisSecurity Instrument, and such other agreements, documents and instruments, togetherwith any and all renewals, amendments, extensions and modifications thereof,are hereinafter collectively referred to as the “Loan Documents”) andthe payment of all other sums herein or therein covenanted to be paid;

 

(3)                                  Anyand all additional advances made by Grantee to protect or preserve the Propertyor the lien or security interest created hereby on the Property, or for taxes,assessments or insurance premiums as hereinafter provided or for performance ofany of Grantor’s obligations hereunder or under the other Loan Documents or forany other purpose provided herein or in the other Loan Documents (whether ornot the original Grantor remains the owner of the Property at the time of suchadvances); and

 

(4)                                  Anyand all other indebtedness now owing or which may hereafter be owing by Grantorto Grantee, including, without limitation, all prepayment fees, however andwhenever incurred or evidenced, whether express or implied, direct or indirect,absolute or contingent, or due or to become due, and all renewals,modifications, consolidations, replacements and extensions thereof, it beingcontemplated by Grantor and Grantee that Grantor may hereafter become so indebtedto Grantee.

 

(All of the sums referredto in Paragraphs (1) through (4) above are herein referred to as the “Debt”).

 

TO HAVE AND TOHOLD the Property unto Grantee, its successors and assigns forever, and Grantordoes hereby bind itself, its successors and assigns, to WARRANT AND FOREVERDEFEND the title to the Property, subject to the Permitted Encumbrances (ashereinafter defined), to Grantee against every person whomsoever lawfullyclaiming or to claim the same or any part thereof;

 

PROVIDED, HOWEVER,that if the principal and interest and all other sums due or to become dueunder the Note or under the other Loan Documents, including, withoutlimitation, any prepayment fees required pursuant to the terms of the Note,shall have been paid at the time and in the manner stipulated therein and theDebt shall have been paid and all other covenants contained in the LoanDocuments shall have been performed, then, in such case, the liens, securityinterests, estates and rights granted by this Security Instrument shall besatisfied and the estate, right, title and

 

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interest of Grantee inthe Property shall cease, and upon payment to Grantee of all costs and expensesincurred for the preparation of the release hereinafter referenced and allrecording costs if allowed by law, Grantee shall promptly satisfy and releasethis Security Instrument of record and the lien hereof by proper instrument.

 

**ARTICLE I**

 

**COVENANTSOF GRANTOR**

 

For the purpose offurther securing the Debt and for the protection of the security of thisSecurity Instrument, for so long as the Debt or any part thereof remainsunpaid, Grantor covenants and agrees as follows:

 

**1.1****                               Warrantiesof Grantor.**

 

Grantor, foritself and its successors and assigns, does hereby represent, warrant andcovenant to and with Grantee, its successors and assigns, that:

 

(a)                                  Grantorhas good, marketable and indefeasible fee simple title to the Property, subjectonly to those matters expressly set forth as exceptions to or subordinatematters in the title insurance policy insuring the lien of this SecurityInstrument delivered as of the date hereof which Grantee has agreed to accept,excepting therefrom all preprinted and/or standard exceptions (such items beingthe “Permitted Encumbrances”), and has full power and lawful authorityto grant, bargain, sell, convey, assign, transfer, encumber and mortgage itsinterest in the Property in the manner and form hereby done or intended.Grantor will preserve its interest in and title to the Property and willforever warrant and defend the same to Grantee against any and all claimswhatsoever and will forever warrant and defend the validity and priority of thelien and security interest created herein against the claims of all persons andparties whomsoever, subject to the Permitted Encumbrances. The foregoingwarranty of title shall survive the foreclosure of this Security Instrument andshall inure to the benefit of and be enforceable by Grantee in the eventGrantee acquires title to the Property pursuant to any foreclosure;

 

(b)                                 Nobankruptcy or insolvency proceedings are pending or contemplated by Grantor or,to the best knowledge of Grantor, against Grantor or by or against any endorseror cosigner of the Note or of any portion of the Debt, or any guarantor orindemnitor under any guaranty or indemnity agreement executed in connectionwith the Note or the loan evidenced thereby and secured hereby (an “Indemnitor”);

 

(c)                                  Allreports, certificates, affidavits, statements and other data furnished by or onbehalf of Grantor to Grantee in connection with the loan evidenced by the Noteare true and correct in all material respects and do not omit to state any factor circumstance necessary to make the statements contained therein notmisleading;

 

(d)                                 Theexecution, delivery and performance of this Security Instrument, the Note andall of the other Loan Documents have been duly authorized by all necessaryaction to be, and

 

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are, binding andenforceable against Grantor in accordance with the respective terms thereof anddo not contravene, result in a breach of or constitute a default (nor upon thegiving of notice or the passage of time or both will same constitute a default)under the partnership agreement, articles of incorporation, operating agreementor other organizational documents of Grantor or any contract or agreement ofany nature to which Grantor is a party or by which Grantor or any of itsproperty may be bound and do not violate or contravene any law, order, decree,rule or regulation to which Grantor is subject;

 

(e)                                  ThePremises and the Improvements and the current intended use thereof by Grantorcomply in all material respects with all applicable restrictive covenants,zoning ordinances, subdivision and building codes, flood disaster laws, healthand environmental laws and regulations and all other ordinances, orders orrequirements issued by any state, federal or municipal authorities having orclaiming jurisdiction over the Property. The Premises and Improvementsconstitute one or more separate tax parcels for purposes of ad valoremtaxation. The Premises and Improvements do not require any rights over, orrestrictions against, other property in order to comply with any of theaforesaid governmental ordinances, orders or requirements;

 

(f)                                    Allutility services necessary and sufficient for the full use, occupancy,operation and disposition of the Premises and the Improvements for theirintended purposes are available to the Property, including water, storm sewer,sanitary sewer, gas, electric, cable and telephone facilities, through publicrights-of-way or perpetual private easements approved by Grantee;

 

(g)                                 Allstreets, roads, highways, bridges and waterways necessary for access to and fulluse, occupancy, operation and disposition of the Premises and the Improvementshave been completed, have been dedicated to and accepted by the appropriatemunicipal authority and are open and available to the Premises and theImprovements without further condition or cost to Grantor;

 

(h)                                 Allcurb cuts, driveways and traffic signals shown on the survey delivered toGrantee prior to the execution and delivery of this Security Instrument are existingand have been fully approved by the appropriate governmental authority;

 

(i)                                     Thereare no judicial, administrative, mediation or arbitration actions, suits orproceedings pending or threatened against or affecting Grantor (or, if Grantoris a partnership or a limited liability company, any of its general partners ormembers) or the Property which, if adversely determined, would materiallyimpair either the Property or Grantor’s ability to perform the covenants orobligations required to be performed under the Loan Documents;

 

(j)                                     TheProperty is free from delinquent water charges, sewer rents, taxes andassessments;

 

(k)                                  Asof the date of this Security Instrument, the Property is free from unrepaireddamage caused by fire, flood, accident or other casualty;

 

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(l)                                     Asof the date of this Security Instrument, no part of the Premises or theImprovements has been taken in condemnation, eminent domain or like proceedingnor is any such proceeding pending or, to Grantor’s knowledge and belief,threatened or contemplated;

 

(m)                               Grantorpossesses all franchises, patents, copyrights, trademarks, trade names,licenses and permits necessary for the conduct of its business substantially asnow conducted;

 

(n)                                 Tothe best of Grantor’s knowledge and except as may otherwise be disclosed inthat certain Property Condition Report delivered to Grantee with respect to theProperty, the Improvements are structurally sound, in good repair and free ofdefects in materials and workmanship and have been constructed and installed insubstantial compliance with the plans and specifications relating thereto. Allmajor building systems located within the Improvements, including, withoutlimitation, the heating and air conditioning systems and the electrical andplumbing systems, are in good working order and condition;

 

(o)                                 Grantorhas delivered to Grantee true, correct and complete copies of all Contracts andall amendments thereto or modifications thereof;

 

(p)                                 EachContract constitutes the legal, valid and binding obligation of Grantor and, tothe best of Grantor’s knowledge and belief, is enforceable against any otherparty thereto. To the best of Grantor’s knowledge, no default exists, or withthe passing of time or the giving of notice or both would exist, under anyContract which would, in the aggregate, have a material adverse effect onGrantor or the Property;

 

(q)                                 NoContract provides any party with the right to obtain a lien or encumbrance uponthe Property superior to the lien of this Security Instrument;

 

(r)                                    Grantorand the Property are free from any past due obligations for sales and payrolltaxes;

 

(s)                                  Thereare no security agreements or financing statements affecting all or any portionof the Property other than (i) as disclosed in writing by Grantor to Granteeprior to the date hereof and (ii) the security agreements and financingstatements created in favor of Grantee;

 

(t)                                    Grantorhas delivered a true, correct and complete schedule (the “Rent Roll”)of all Leases affecting the Property as of the date hereof, which accuratelyand completely sets forth in all material respects for each such Lease, thefollowing: the name of the Tenant, the Lease expiration date, extension andrenewal provisions, the base rent payable, the security deposit held thereunderand any other material provisions of such Lease;

 

(u)                                 EachLease constitutes the legal, valid and binding obligation of Grantor and, tothe best of Grantor’s knowledge and belief, is enforceable against the Tenantthereof. No default exists, or with the passing of time or the giving of noticeor both would exist, under any Lease which would, in the aggregate, have amaterial adverse effect on Grantor or the Property;

 

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(v)                                 NoTenant under any Lease has, as of the date hereof, paid rent more than thirty(30) days in advance, and the rents under such Leases have not been waived,released, or otherwise discharged or compromised;

 

(w)                               Allwork to be performed by Grantor under the Leases has been substantiallyperformed, all contributions to be made by Grantor to the Tenants thereunderhave been made and all other conditions precedent to each such Tenant’sobligations thereunder have been satisfied;

 

(x)                                   Exceptas disclosed in writing by Grantor to Grantee, each Tenant under a Lease hasentered into occupancy of the demised premises;

 

(y)                                 Grantorhas delivered to Grantee true, correct and complete copies of all Leasesdescribed in the Rent Roll;

 

(z)                                   Tothe best of Grantor’s knowledge and belief, each Tenant is free frombankruptcy, reorganization or arrangement proceedings or a general assignmentfor the benefit of creditors;

 

(aa)                            NoLease provides any party with the right to obtain a lien or encumbrance uponthe Property superior to the lien of this Security Instrument; and

 

(bb)                          Grantoris not a “foreign person” within the meaning of §1445(f)(3) of the InternalRevenue Code of 1986, as amended, and the related Treasury Departmentregulations, including temporary regulations.

 

**1.2****                               Defenseof Title.**

 

If, while thisSecurity Instrument is in force, the title to the Property or the interest ofGrantee therein shall be the subject, directly or indirectly, of any action atlaw or in equity, or be attached directly or indirectly, or endangered, cloudedor adversely affected in any manner, Grantor, at Grantor’s expense, shall takeall necessary and proper steps for the defense of said title or interest,including the employment of counsel approved by Grantee, the prosecution ordefense of litigation, and the compromise or discharge of claims made againstsaid title or interest. Notwithstanding the foregoing, in the event thatGrantee determines that Grantor is not adequately performing its obligationsunder this Section, Grantee may, without limiting or waiving any other rightsor remedies of Grantee hereunder, take such steps with respect thereto asGrantee shall deem necessary or proper and any and all costs and expensesincurred by Grantee in connection therewith, together with interest thereon atthe Default Interest Rate (as defined in the Note) from the date incurred byGrantee until actually paid by Grantor, shall be immediately paid by Grantor ondemand and shall be secured by this Security Instrument and by all of the otherLoan Documents securing all or any part of the indebtedness evidenced by theNote.

 

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**1.3****                               Performanceof Obligations.**

 

Grantor shall paywhen due the principal of and the interest on the Debt in accordance with theterms of the Note. Grantor shall also pay all charges, fees and other sumsrequired to be paid by Grantor as provided in the Loan Documents, in accordancewith the terms of the Loan Documents, and shall observe, perform and dischargeall obligations, covenants and agreements to be observed, performed ordischarged by Grantor set forth in the Loan Documents in accordance with theirterms. Further, Grantor shall promptly and strictly perform and comply with allcovenants, conditions, obligations and prohibitions required of Grantor inconnection with any other document or instrument affecting title to theProperty, or any part thereof, regardless of whether such document orinstrument is superior or subordinate to this Security Instrument.

 

**1.4****                               Insurance.**

 

Grantor shall, atGrantor’s expense, maintain in force and effect on the Property at all timeswhile this Security Instrument continues in effect the following insurance:

 

(a)                                  Insuranceagainst loss or damage to the Property by fire, windstorm, tornado and hail andagainst loss and damage by such other, further and additional risks as may benow or hereafter embraced by an “all-risk” form of insurance policy. The amountof such insurance shall be not less than one hundred percent (100%) of the fullreplacement cost (insurable value) of the Improvements (as established by anMAI appraisal), without reduction for depreciation. The determination of thereplacement cost amount shall be adjusted annually to comply with the requirementsof the insurer issuing such coverage or, at Grantee’s election, by reference tosuch indices, appraisals or information as Grantee determines in its reasonablediscretion in order to reflect increased value due to inflation. Absent suchannual adjustment, each policy shall contain inflation guard coverage insuringthat the policy limit will be increased over time to reflect the effect ofinflation. Full replacement cost, as used herein, means, with respect to the Improvements,the cost of replacing the Improvements without regard to deduction for depreciation,exclusive of the cost of excavations, foundations and footings below the lowestbasement floor. Grantor shall also maintain insurance against loss or damage tofurniture, furnishings, fixtures, equipment and other items (whether personaltyor fixtures) included in the Property and owned by Grantor from time to time tothe extent applicable. Each policy shall contain a replacement cost endorsementand either an agreed amount endorsement (to avoid the operation of anyco-insurance provisions) or a waiver of any co-insurance provisions, allsubject to Grantee’s approval. The maximum deductible shall be $10,000.00.

 

(b)                                 CommercialGeneral Liability Insurance against claims for personal injury, bodily injury,death and property damage occurring on, in or about the Premises or theImprovements in amounts not less than $1,000,000.00 per occurrence and$2,000,000.00 in the aggregate plus umbrella coverage in an amount not lessthan $2,000,000.00. Grantee hereby retains the right to periodically review theamount of said liability insurance being maintained by Grantor and to requirean increase in the amount of said liability insurance should Grantee deem anincrease to be reasonably prudent under then existing circumstances.

 

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(c)                                  Boilerand machinery insurance is required if steam boilers or other pressure-fired vesselsare in operation at the Premises. Minimum liability coverage per accident mustequal the greater of the replacement cost (insurable value) of the Improvementshousing such boiler or pressure-fired machinery or $2,000,000.00. If one ormore large HVAC units is in operation at the Premises, “Systems Breakdowns”coverage shall be required, as determined by Grantee. Minimum liability coverageper accident must equal the value of such unit(s).

 

(d)                                 Ifthe Improvements or any part thereof is situated in an area designated by the FederalEmergency Management Agency (“FEMA”) as a special flood hazard area(Zone A or Zone V), flood insurance in an amount equal to the lesser of: (a)the minimum amount required, under the terms of coverage, to compensate for anydamage or loss on a replacement basis (or the unpaid balance of the Debt ifreplacement cost coverage is not available for the type of building insured),or (b) the maximum insurance available under the appropriate National FloodInsurance Administration program. The maximum deductible shall be $3,000.00 perbuilding or a higher minimum amount as required by FEMA or other applicablelaw.

 

(e)                                  Duringthe period of any construction, renovation or alteration of the existing Improvementswhich exceeds the lesser of 10% of the principal amount of the Note or$500,000, at Grantee’s request, a completed value, “All Risk” Builder’s Riskform or “Course of Construction” insurance policy in non-reporting form, in anamount approved by Grantee, may be required. During the period of anyconstruction of any addition to the existing Improvements, a completed value, “AllRisk” Builder’s Risk form or “Course of Construction” insurance policy innon-reporting form, in an amount approved by Grantee, shall be required.

 

(f)                                    Whenrequired by applicable law, ordinance or other regulation, Worker’s Compensationand Employer’s Liability Insurance covering all persons subject to the worker’scompensation laws of the state in which the Property is located.

 

(g)                                 Businessincome (loss of rents) insurance in amounts sufficient to compensate Grantorfor all Rents or income during a period of not less than eighteen (18) months.The amount of coverage shall be adjusted annually to reflect the Rents orincome payable during the succeeding eighteen (18) month period.

 

(h)                                 Suchother insurance on the Property or on any replacements or substitutions thereofor additions thereto as may from time to time be required by Grantee againstother insurable hazards or casualties which at the time are commonly insuredagainst in the case of property similarly situated including, withoutlimitation, Sinkhole, Mine Subsidence, Earthquake and Environmental insurance,due regard being given to the height and type of buildings, their construction,location, use and occupancy.

 

(i)                                     Tothe extent required by Grantee and commercially reasonably available atcommercially reasonable rates, terrorism insurance.

 

All such insuranceshall (i) be with insurers fully licensed and authorized to do business in thestate within which the Premises is located and who have and maintain a ratingof at least A from Standard & Poors, or equivalent, (ii) contain thecomplete address of the Premises (or a complete

 

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legal description), (iii)be for terms of at least one year, with premium prepaid, and (iv) be subject tothe approval of Grantee as to insurance companies, amounts, content, forms ofpolicies, method by which premiums are paid and expiration dates, and (vi)include a standard, non-contributory, mortgagee clause naming EXACTLY:

 

Wachovia Bank,National Association

its Successors andAssigns ATIMA

Attn.: StructuredFinance Servicing

P.O. Box 563956

Charlotte, NC28256-3956

 

(a) as an additionalinsured under all liability insurance policies, (b) as the firstmortgagee on all property insurance policies and (c) as the loss payeeon all loss of rents or loss of business income insurance policies.

 

Grantor shall, asof the date hereof, deliver to Grantee evidence that said insurance policieshave been prepaid as required above and certified copies of such insurancepolicies and original certificates of insurance signed by an authorized agentof the applicable insurance companies evidencing such insurance satisfactory toGrantee. Grantor shall renew all such insurance and deliver to Granteecertificates and policies evidencing such renewals at least thirty (30) daysbefore any such insurance shall expire. Grantor further agrees that each suchinsurance policy: (i) shall provide for at least thirty (30) days’ priorwritten notice to Grantee prior to any policy reduction or cancellation for anyreason other than non-payment of premium and at least ten (10) days’ priorwritten notice to Grantee prior to any cancellation due to non-payment ofpremium; (ii) shall contain an endorsement or agreement by the insurer that anyloss shall be payable to Grantee in accordance with the terms of such policynotwithstanding any act or negligence of Grantor which might otherwise resultin forfeiture of such insurance, (iii) shall waive all rights of subrogationagainst Grantee; (iv) in the event that the Premises or the Improvements constitutesa legal non-conforming use under applicable building, zoning or land use lawsor ordinances, shall include an ordinance or law coverage endorsement whichwill contain Coverage A: “Loss Due to Operation of Law” (with a minimumliability limit equal to Replacement Cost With Agreed Value Endorsement),Coverage B: “Demolition Cost” and Coverage C: “Increased Cost of Construction”coverages; and (v) may be in the form of a blanket policy provided that, in theevent that any such coverage is provided in the form of a blanket policy,Grantor hereby acknowledges and agrees that failure to pay any portion of thepremium therefor which is not allocable to the Property or by any other actionnot relating to the Property which would otherwise permit the issuer thereof tocancel the coverage thereof, would require the Property to be insured by aseparate, single-property policy. The blanket policy must properly identify andfully protect the Property as if a separate policy were issued for 100% ofReplacement Cost at the time of loss and otherwise meet all of Grantee’sapplicable insurance requirements set forth in this Section 1.4. Thedelivery to Grantee of the insurance policies or the certificates of insuranceas provided above shall constitute an assignment of all proceeds payable undersuch insurance policies relating to the Property by Grantor to Grantee asfurther security for the Debt. In the event of foreclosure of this SecurityInstrument, or other transfer of title to the Property in extinguishment inwhole or in part of the Debt, all right, title and interest of Grantor in andto all proceeds payable under such policies then in force concerning theProperty shall thereupon vest in the purchaser at such foreclosure, or inGrantee or other transferee in the event of

 

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such other transfer oftitle. Approval of any insurance by Grantee shall not be a representation ofthe solvency of any insurer or the sufficiency of any amount of insurance. Inthe event Grantor fails to provide, maintain, keep in force or deliver andfurnish to Grantee the policies of insurance required by this Security Instrumentor evidence of their renewal as required herein, Grantee may, but shall not beobligated to, procure such insurance and Grantor shall pay all amounts advancedby Grantee therefor, together with interest thereon at the Default Interest Ratefrom and after the date advanced by Grantee until actually repaid by Grantor,promptly upon demand by Grantee. Any amounts so advanced by Grantee, togetherwith interest thereon, shall be secured by this Security Instrument and by allof the other Loan Documents securing all or any part of the Debt. Grantee shallnot be responsible for nor incur any liability for the insolvency of theinsurer or other failure of the insurer to perform, even though Grantee hascaused the insurance to be placed with the insurer after failure of Grantor tofurnish such insurance. Grantor shall not obtain insurance for the Property inaddition to that required by Grantee without the prior written consent ofGrantee, which consent will not be unreasonably withheld provided that (i)Grantee is a named insured on such insurance, (ii) Grantee receives completecopies of all policies evidencing such insurance, and (iii) such insurancecomplies with all of the applicable requirements set forth herein.

 

**1.5****                               Paymentof Taxes.**

 

Grantor shall payor cause to be paid, except to the extent provision is actually made thereforpursuant to Section 1.6 of this Security Instrument, all taxes andassessments which are or may become a lien on the Property or which areassessed against or imposed upon the Property. Grantor shall furnish Granteewith receipts (or if receipts are not immediately available, with copies of canceledchecks evidencing payment with receipts to follow promptly after they becomeavailable) showing payment of such taxes and assessments at least fifteen (15)days prior to the applicable delinquency date therefor. Notwithstanding theforegoing, Grantor may, in good faith, by appropriate proceedings and uponnotice to Grantee, contest the validity, applicability or amount of anyasserted tax or assessment so long as (a) such contest is diligently pursued,(b) Grantee determines, in its subjective opinion, that such contest suspendsthe obligation to pay the tax and that nonpayment of such tax or assessmentwill not result in the sale, loss, forfeiture or diminution of the Property orany part thereof or any interest of Grantee therein, and (c) prior to theearlier of the commencement of such contest or the delinquency date of theasserted tax or assessment, Grantor deposits in the Impound Account (ashereinafter defined) an amount determined by Grantee to be adequate to coverthe payment of such tax or assessment and a reasonable additional sum to coverpossible interest, costs and penalties; provided, however, thatGrantor shall promptly cause to be paid any amount adjudged by a court ofcompetent jurisdiction to be due, with all interest, costs and penaltiesthereon, promptly after such judgment becomes final, and providedfurtherthat in any event each such contest shall be concluded and the taxes,assessments, interest, costs and penalties shall be paid prior to the date anywrit or order is issued under which the Property may be sold, lost orforfeited.

 

**1.6****                               TaxImpound Account.**

 

Grantor shallestablish and maintain at all times while this Security Instrument continues ineffect an impound account (the “Impound Account”) with Grantee forpayment of real estate taxes and assessments on the Property and as additionalsecurity for the Debt. Simultaneously with the execution hereof, Grantor shalldeposit in the Impound Account an amount determined

 

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by Grantee to benecessary to ensure that therewill be on deposit with Grantee an amount which, when added to the monthlypayments subsequently required to be deposited with Grantee hereunder onaccount of real estate taxes and assessments, will result in there being ondeposit with Grantee in the Impound Account an amount sufficient to pay thenext due installment of real estate taxes and assessments on the Property atleast one (1) month prior to the earlier of (a) the due date thereof or (b) anysuch date by which Grantor or Grantee is required by law to pay same.Commencing on the first monthly payment date under the Note and continuingthereafter on each monthly payment date under the Note, Grantor shall pay toGrantee, concurrently with and in addition to the monthly payment due under theNote and until the Debt is fully paid and performed, deposits in an amountequal to one-twelfth (1/12) of the amount of the annual real estate taxes andassessments that will next become due and payable on the Property, each asestimated and determined by Grantee. So long as no Event of Default hasoccurred, and no event has occurred or failed to occur which with the passageof time, the giving of notice, or both would constitute an Event of Default (a “Default;)all sums in the Impound Account shall be held by Grantee in the Impound Accountto pay said taxes and assessments before the same become delinquent. Grantorshall be responsible for ensuring the receipt by Grantee, at least thirty (30)days prior to the respective due date for payment thereof, of all bills,invoices and statements for all taxes and assessments to be paid from theImpound Account, and so long as no Event of Default has occurred, Grantee shallpay the governmental authority or other party entitled thereto directly to theextent funds are available for such purpose in the Impound Account. Commencingon the first payment date following an Event of Default, and continuingthereafter on each monthly payment date under the Note, in addition to themonthly deposit for taxes and assessments, Grantor shall deposit with Granteean amount equal to one-twelfth (1/12) of the amount of the annual premiums thatwill next become due and payable on insurance policies which Grantor isrequired to maintain hereunder. In making any payment from the Impound Account,Grantee shall be entitled to rely on any bill, statement or estimate procuredfrom the appropriate public office or insurance company or agent without anyinquiry into the accuracy of such bill, statement or estimate and without anyinquiry into the accuracy, validity, enforceability or contestability of anytax, assessment, valuation, sale, forfeiture, tax lien or title or claimthereof. No interest on funds contained in the Impound Account, if any, shallbe paid by Grantee to Grantor.

 

**1.7**                               **[Reserved].**

 

**1.8****                               ReplacementReserve.**

 

(a)                                  Followingan Event of Default, as additional security for the Debt, Grantor shallestablish and maintain at all times thereafter while this Security Instrumentcontinues in effect a repair reserve (the “Replacement Reserve”) withGrantee for payment of costs and expenses incurred by Grantor in connectionwith the performance of work to the roofs, chimneys, gutters, downspouts,paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls,exterior doors and doorways, windows, elevators and mechanical and HVACequipment (collectively, the “Repairs”). Commencing on the first monthlyPayment Date under the Note following an Event of Default and continuingthereafter on each monthly Payment Date under the Note, Grantor shall pay toGrantee, concurrently with and in addition to the monthly payment due under theNote and until the Debt is fully paid and performed, a deposit to theReplacement Reserve in an

 

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amount determined byGrantee. All sums in the Replacement Reserve shall be held by Grantee in theReplacement Reserve to pay the costs and expenses of Repairs. Grantee shall, tothe extent funds are available for such purpose in the Replacement Reserve,disburse to Grantor the amount paid or incurred by Grantor in performing suchRepairs within ten (10) days following: (a) the receipt by Grantee of a writtenrequest from Grantor for disbursement from the Replacement Reserve and a certificationby Grantor in a form approved in writing by Grantee that the applicable item ofRepair has been completed; (b) the delivery to Grantee of invoices, receipts orother evidence satisfactory to Grantee, verifying the cost of performing theRepairs; (c) for disbursement requests in excess of $25,000.00, the delivery toGrantee of affidavits, lien waivers or other evidence reasonably satisfactoryto Grantee showing that all materialmen, laborers, subcontractors and any otherparties who might or could claim statutory or common law liens and arefurnishing or have furnished material or labor to the Property have been paidall amounts due for labor and materials furnished to the Property; (d) fordisbursement requests in excess of $25,000.00, delivery to Grantee of acertification from an inspecting architect or other third party acceptable toGrantee describing the completed Repairs and verifying the completion of theRepairs and the value of the completed Repairs, and (e) for disbursementrequests in excess of $25,000.00, delivery to Grantee of a new certificate ofoccupancy for the portion of the Improvements covered by such Repairs, if saidnew certificate of occupancy is required by law, or a certification by Grantorthat no new certificate of occupancy is required. Grantee shall not be requiredto make advances from the Replacement Reserve more frequently than once in anyninety (90) day period. In making any payment from the Replacement Reserve,Grantee shall be entitled to rely on such request from Grantor without anyinquiry into the accuracy, validity or contestability of any such amount.Grantee may, at Grantor’s expense, make or cause to be made during the term ofthis Security Instrument an annual inspection of the Property to determine theneed, as determined by Grantee in its reasonable judgment, for further Repairsof the Property. In the event that such inspection reveals that further Repairsof the Property are required, Grantee shall provide Grantor with a writtendescription of the required Repairs and Grantor shall complete such Repairs tothe reasonable satisfaction of Grantee within ninety (90) days after thereceipt of such description from Grantee, or such later date as may be approvedby Grantee in its sole discretion. Interest on the funds contained in theReplacement Reserve shall be credited to Grantor as provided in Section 4.31hereof.

 

(b)                                 Asadditional security for the payment and performance by Grantor of all duties,responsibilities and obligations under the Note and the other Loan Documents,Grantor hereby unconditionally and irrevocably assigns, conveys, pledges,mortgages, transfers, delivers, deposits, sets over and confirms unto Grantee,and hereby grants to Grantee a security interest in, (i) the Impound Accountand the Replacement Reserve, if any, and any other reserve or escrow accountestablished pursuant to the terms hereof or of any other Loan Document(collectively, the “Reserves”), (ii) the accounts into which theReserves have been deposited, (iii) all insurance on said accounts, (iv) allaccounts, contract rights and general intangibles or other rights and interestspertaining thereto, (v) all sums now or hereafter therein or representedthereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instrumentsand documents now or hereafter evidencing the Reserves or such accounts, (viii)all powers, options, rights, privileges and immunities pertaining to theReserves (including the right to make withdrawals therefrom), and (ix) allproceeds of the foregoing. Grantor hereby authorizes and consents to theaccount into which the Reserves have been deposited being held in Grantee’sname or the name of any

 

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entity servicing the Notefor Grantee and hereby acknowledges and agrees that Grantee, or at Grantee’selection, such servicing agent, shall have exclusive control over said account.Notice of the assignment and security interest granted to Grantee herein may bedelivered by Grantee at any time to the financial institution wherein theReserves have been established, and Grantee, or such servicing entity, shallhave possession of all passbooks or other evidences of such accounts. Grantorhereby assumes all risk of loss with respect to amounts on deposit in theReserves. Grantor hereby knowingly, voluntarily and intentionally stipulates,acknowledges and agrees that the advancement of the funds from the Reserves asset forth herein is at Grantor’s direction and is not the exercise by Granteeof any right of set-off or other remedy upon a Default or an Event of Default.Grantor hereby waives all right to withdraw funds from the Reserves except asprovided for in this Security Instrument. If an Event of Default shall occurhereunder or under any other of the Loan Documents Grantee may, without noticeor demand on Grantor, at its option: (A) withdraw any or all of the funds(including, without limitation, interest) then remaining in the Reserves andapply the same, after deducting all costs and expenses of safekeeping,collection and delivery (including, but not limited to, reasonable attorneys’fees, costs and expenses) to the Debt or any other obligations of Grantor underthe other Loan Documents in such manner as Grantee shall deem appropriate inits sole discretion, and the excess, if any, shall be paid to Grantor, (B)exercise any and all rights and remedies of a secured party under anyapplicable Uniform Commercial Code, or (C) exercise any other remediesavailable at law or in equity. No such use or application of the fundscontained in the Reserves shall be deemed to cure any Default or Event ofDefault.

 

(c)                                  TheReserves shall not, unless otherwise explicitly required by applicable law, beor be deemed to be escrow or trust funds, but, at Grantee’s option and inGrantee’s discretion, may either be held in a separate account or be commingledby Grantee with the general funds of Grantee. The Reserves are solely for theprotection of Grantee and entail no responsibility on Grantee’s part beyond thepayment of the respective items for which they are held following receipt ofbills, invoices or statements therefor in accordance with the terms hereof andbeyond the allowing of due credit for the sums actually received. Uponassignment of this Security Instrument by Grantee, any funds in the Reservesshall be turned over to the assignee and any responsibility of Grantee, asassignor, with respect thereto shall terminate. If the funds in the applicableReserve shall exceed the amount of payments actually applied by Grantee for thepurposes and items for which the applicable Reserve is held, such excess may becredited by Grantee on subsequent payments to be made hereunder or, at theoption of Grantee, refunded to Grantor. If, however, the applicable Reserveshall not contain sufficient funds to pay the sums required by the dates onwhich such sums are required to be on deposit in such account, Grantor shall,within ten (10) days after receipt of written notice thereof, deposit withGrantee the full amount of any such deficiency. If Grantor shall fail todeposit with Grantee the full amount of such deficiency as provided above,Grantee shall have the option, but not the obligation, to make such deposit,and all amounts so deposited by Grantee, together with interest thereon at theDefault Interest Rate from the date so deposited by Grantee until actually paidby Grantor, shall be immediately paid by Grantor on demand and shall be securedby this Security Instrument and by all of the other Loan Documents securing allor any part of the Debt. If there is an Event of Default under this SecurityInstrument, Grantee may, but shall not be obligated to, apply at any time thebalance then remaining in any or all of the Reserves against the Debt inwhatever order Grantee shall subjectively determine. No such application of anyor all of the Reserves shall be

 

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deemed to cure any Eventof Default. Upon full payment of the Debt in accordance with its terms or atsuch earlier time as Grantee may elect, the balance of any or all of theReserves then in Grantee’s possession shall be paid over to Grantor and noother party shall have any right or claim thereto.

 

**1.9****                               Casualtyand Condemnation.**

 

Grantor shall giveGrantee prompt written notice of the occurrence of any casualty affecting, orthe institution of any proceedings for eminent domain or for the condemnationof, the Property or any portion thereof. All insurance proceeds on theProperty, and all causes of action, claims, compensation, awards and recoveriesfor any damage, condemnation or taking of all or any part of the Property orfor any damage or injury to it for any loss or diminution in value of theProperty, are hereby assigned to and shall be paid to Grantee. Grantee mayparticipate in any suits or proceedings relating to any such proceeds, causesof action, claims, compensation, awards or recoveries, and Grantee is herebyauthorized, in its own name or in Grantor’s name, to adjust any loss covered byinsurance or any condemnation claim or cause of action, and to settle orcompromise any claim or cause of action in connection therewith, and Grantorshall from time to time deliver to Grantee any instruments required to permitsuch participation; provided, however, that, so long as noDefault or Event of Default shall have occurred, Grantee shall not have theright to participate in the adjustment of any loss which is not in excess ofthe lesser of (i) five percent (5%) of the then outstanding principal balanceof the Note and (ii) $250,000. Grantee shall apply any sums received by itunder this Section first to the payment of all of its costs and expenses(including, but not limited to, reasonable legal fees and disbursements)incurred in obtaining those sums, and then, as follows:

 

(a)                                  Inthe event that less than forty percent (40%) of the Improvements located on thePremises have been taken or destroyed, then if and so long as:

 

(1)                                  noDefault or Event of Default has occurred hereunder or under any of the otherLoan Documents, and

 

(2)                                  theProperty can, in Grantee’s judgment, with diligent restoration or repair, bereturned to a condition at least equal to the condition thereof that existedprior to the casualty or partial taking causing the loss or damage within theearlier to occur of (i) nine (9) months after the receipt of insurance proceedsor condemnation awards by either Grantor or Grantee, and (ii) sixty (60) daysprior to the stated maturity date of the Note, and

 

(3)                                  allnecessary governmental approvals can be obtained to allow the rebuilding andreoccupancy of the Property as described in Section (a)(2) above,and

 

(4)                                  thereare sufficient sums available (through insurance proceeds or condemnationawards and contributions by Grantor, the full amount of which shall, at Grantee’soption, have been deposited with Grantee) for such restoration or repair (including,without limitation, for any costs and expenses of Grantee to be incurred in administeringsaid restoration or repair) and for payment of principal and interest to becomedue and payable under the Note during such restoration or repair, and

 

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(5)                                  theeconomic feasibility of the Improvements after such restoration or repair willbe such that income from their operation is reasonably anticipated to besufficient to pay operating expenses of the Property and debt service on theDebt in full with the same coverage ratio considered by Grantee in itsdetermination to make the loan secured hereby, and

 

(6)                                  inthe event that the insurance proceeds or condemnation awards received as aresult of such casualty or partial taking exceed the lesser of (i) five percent(5%) of the then outstanding principal balance of the Note and (ii)$250,000.00, Grantor shall have delivered to Grantee, at Grantor’s sole costand expense, an appraisal report in form and substance satisfactory to Granteeappraising the value of the Property as proposed to be restored or repaired tobe not less than the appraised value of the Property considered by Grantee inits determination to make the loan secured hereby, and

 

(7)                                  Grantorso elects by written notice delivered to Grantee within five (5) days aftersettlement of the aforesaid insurance or condemnation claim, then, Granteeshall, solely for the purposes of such restoration or repair, advance so muchof the remainder of such sums as may be required for such restoration orrepair, and any funds deposited by Grantor therefor, to Grantor in the mannerand upon such terms and conditions as would be required by a prudent interimconstruction lender, including, but not limited to, the prior approval by Granteeof plans and specifications, contractors and form of construction contracts andthe furnishing to Grantee of permits, bonds, lien waivers, invoices, receiptsand affidavits from contractors and subcontractors, in form and substancesatisfactory to Grantee in its discretion, with any remainder being applied byGrantee for payment of the Debt in whatever order Grantee directs in itsabsolute discretion.

 

(b)                                 Inall other cases, namely, in the event that forty percent (40%) or more of theImprovements located on the Premises have been taken or destroyed or Grantordoes not elect to restore or repair the Property pursuant to clause (a)above or otherwise fails to meet the requirements of clause (a) above,then, in any of such events, Grantee shall elect, in Grantee’s absolutediscretion and without regard to the adequacy of Grantee’s security, to doeither of the following: (1) accelerate the maturity date of the Note anddeclare any and all of the Debt to be immediately due and payable and apply theremainder of such sums received pursuant to this Section to the payment ofthe Debt in whatever order Grantee directs in its absolute discretion, with anyremainder being paid to Grantor, or (2) notwithstanding that Grantor may haveelected not to restore or repair the Property pursuant to the provisions of Section 1.9(a)(7)above, require Grantor to restore or repair the Property in the manner and uponsuch terms and conditions as would be required by a prudent interimconstruction lender, including, but not limited to, the deposit by Grantor withGrantee, within thirty (30) days after demand therefor, of any deficiencyreasonably determined by Grantee to be necessary in order to assure theavailability of sufficient funds to pay for such restoration or repair,including Grantee’s costs and expenses to be incurred in connection therewith,the prior approval by Grantee of plans and specifications, contractors and formof construction contracts and the furnishing to Grantee of permits, bonds, lienwaivers, invoices, receipts and affidavits from contractors and subcontractors,in form and substance satisfactory to Grantee in its discretion, and apply theremainder of such sums toward such

 

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restoration and repair,with any balance thereafter remaining being applied by Grantee for payment ofthe Debt in whatever order Grantee directs in its absolute discretion.

 

Any reduction in the Debtresulting from Grantee’s application of any sums received by it hereunder shalltake effect only when Grantee actually receives such sums and elects to applysuch sums to the Debt and, in any event, the unpaid portion of the Debt shallremain in full force and effect and Grantor shall not be excused in the paymentthereof. Partial payments received by Grantee, as described in the precedingsentence, shall be applied first to the final payment due under the Note andthereafter to installments due under the Note in the inverse order of their duedate. If Grantor elects or Grantee directs Grantor to restore or repair theProperty after the occurrence of a casualty or partial taking of the Propertyas provided above, Grantor shall promptly and diligently, at Grantor’s solecost and expense and regardless of whether the insurance proceeds orcondemnation award, as appropriate, shall be sufficient for the purpose,restore, repair, replace and rebuild the Property as nearly as possible to itsvalue, condition and character immediately prior to such casualty or partialtaking in accordance with the foregoing provisions and Grantor shall pay toGrantee all costs and expenses of Grantee incurred in administering saidrebuilding, restoration or repair, provided that Grantee makes such proceeds oraward available for such purpose. Grantor agrees to execute and deliver fromtime to time such further instruments as may be requested by Grantee to confirmthe foregoing assignment to Grantee of any award, damage, insurance proceeds,payment or other compensation. Grantee is hereby irrevocably constituted andappointed the attorney-intact of Grantor (which power of attorney shall beirrevocable so long as any portion of the Debt is outstanding, shall be deemedcoupled with an interest, shall survive the voluntary or involuntarydissolution of Grantor and shall not be affected by any disability orincapacity suffered by Grantor subsequent to the date hereof), with full powerof substitution, subject to the terms of this Section, to settle for, collectand receive any such awards, damages, insurance proceeds, payments or othercompensation from the parties or authorities making the same, to appear in andprosecute any proceedings therefor and to give receipts and acquittancestherefor.

 

**1.10****                        ConstructionLiens.**

 

Grantor shall paywhen due all claims and demands of mechanics, materialmen, laborers and othersfor any work performed or materials delivered for the Premises or theImprovements; provided, however, that, Grantor shall have theright to contest in good faith any such claim or demand, so long as it does sodiligently, by appropriate proceedings and without prejudice to Grantee andprovided that neither the Property nor any interest therein would be in anydanger of sale, loss or forfeiture as a result of such proceeding or contest.In the event Grantor shall contest any such claim or demand, Grantor shallpromptly notify Grantee of such contest and thereafter shall, upon Grantee’srequest, promptly provide a bond, cash deposit or other security satisfactoryto Grantee to protect Grantee’s interest and security should the contest beunsuccessful. If Grantor shall fail to immediately discharge or providesecurity against any such claim or demand as aforesaid, Grantee may do so andany and all expenses incurred by Grantee, together with interest thereon at theDefault Interest Rate from the date incurred by Grantee until actually paid byGrantor, shall be immediately paid by Grantor on demand and shall be secured bythis Security Instrument and by all of the other Loan Documents securing all orany part of the Debt.

 

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**1.11****                        Rentsand Profits.**

 

As additional andcollateral security for the payment of the Debt and cumulative of any and allrights and remedies herein provided for, Grantor hereby absolutely andpresently assigns to Grantee all existing and future Rents and Profits. Grantorhereby grants to Grantee the sole, exclusive and immediate right, withouttaking possession of the Property, to demand, collect (by suit or otherwise),receive and give valid and sufficient receipts for any and all of said Rentsand Profits, for which purpose Grantor does hereby irrevocably make, constituteand appoint Grantee its attorney-in-fact with full power to appoint substitutesor a trustee to accomplish such purpose (which power of attorney shall beirrevocable so long as any portion of the Debt is outstanding, shall be deemedto be coupled with an interest, shall survive the voluntary or involuntarydissolution of Grantor and shall not be affected by any disability orincapacity suffered by Grantor subsequent to the date hereof). Grantee shall bewithout liability for any loss which may arise from a failure or inability tocollect Rents, proceeds or other payments. However, until the occurrence of anEvent of Default under this Security Instrument or under any other of the LoanDocuments, Grantor shall have a license to collect, receive, use and enjoy theRents and Profits when due and prepayments thereof for not more than one (1)month prior to due date thereof. Upon the occurrence of an Event of Default,Grantor’s license shall automatically terminate without notice to Grantor andGrantee may thereafter, without taking possession of the Property, collect theRents and Profits itself or by an agent or receiver. From and after thetermination of such license, Grantor shall be the agent of Grantee incollection of the Rents and Profits, and all of the Rents and Profits socollected by Grantor shall be held in trust by Grantor for the sole andexclusive benefit of Grantee, and Grantor shall, within one (1) business dayafter receipt of any Rents and Profits, pay the same to Grantee to be appliedby Grantee as hereinafter set forth. Neither the demand for or collection ofRents and Profits by Grantee shall constitute any assumption by Grantee of anyobligations under any agreement relating thereto. Grantee is obligated toaccount only for such Rents and Profits as are actually collected or receivedby Grantee. Grantor irrevocably agrees and consents that the respective payorsof the Rents and Profits shall, upon demand and notice from Grantee of an Eventof Default, pay said Rents and Profits to Grantee without liability todetermine the actual existence of any Event of Default claimed by Grantee.Grantor hereby waives any right, claim or demand which Grantor may now orhereafter have against any such payer by reason of such payment of Rents andProfits to Grantee, and any such payment shall discharge such payor’sobligation to make such payment to Grantor. All Rents collected or received byGrantee may be applied against all expenses of collection, including, withoutlimitation, reasonable attorneys’ fees, against costs of operation and managementof the Property and against the Debt, in whatever order or priority as to anyof the items so mentioned as Grantee directs in its sole subjective discretionand without regard to the adequacy of its security. Neither the exercise byGrantee of any rights under this Section nor the application of any Rentsto the Debt shall cure or be deemed a waiver of any Event of Default. Theassignment of Rents and Profits hereinabove granted shall continue in fullforce and effect during any period of foreclosure or redemption with respect tothe Property. Grantor has executed an Assignment of Leases and Rents dated ofeven date herewith (the “Assignment”) in favor of Grantee covering allof the right, title and interest of Grantor, as landlord, lessor or licensor,in and to any Leases. All rights and remedies granted to Grantee under theAssignment shall be in addition to and cumulative of all rights and remediesgranted to Grantee hereunder.

 

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**1.12****                        Leases.**

 

(a)                                  Grantorcovenants and agrees that it shall not enter into any Lease affecting 7,500 squarefeet or more of the Property or having a term of five (5) years or more withoutthe prior written approval of Grantee, which approval shall not be unreasonablywithheld. The request for approval of each such proposed new Lease shall bemade to Grantee in writing and shall state that, pursuant to the terms of thisSecurity Instrument, failure to approve or disapprove such proposed Leasewithin fifteen (15) business days is deemed approval and Grantor shall furnishto Grantee (and any loan servicer specified from time to time by Grantee): (i)such biographical and financial information about the proposed Tenant asGrantee may require in conjunction with its review, (ii) a copy of the proposedform of Lease, and (iii) a summary of the material terms of such proposed Lease(including, without limitation, rental terms and the term of the proposed leaseand any options). It is acknowledged that Grantee intends to include among itscriteria for approval of any such proposed Lease the following: (i) such Leaseshall be with a bona-fide arm’s-length Tenant; (ii) such Lease shall notcontain any rental or other concessions which are not then customary andreasonable for similar properties and Leases in the market area of the Premises;(iii) such Lease shall provide that the Tenant pays for its expenses; (iv) therental shall be at least at the market rate then prevailing for similarproperties and leases in the market areas of the Premises; and (v) such Leaseshall contain subordination and attornment provisions in form and contentacceptable to Grantee. Failure of Grantee to approve or disapprove any such proposedLease within fifteen (15) business days after receipt of such written requestand all the documents and information required to be furnished to Grantee withsuch request shall be deemed approval, provided that the written request forapproval specifically mentioned the same.

 

(b)                                 Priorto execution of any Leases of space in the Improvements after the date hereof,Grantor shall submit to Grantee, for Grantee’s prior approval, which approvalshall not be unreasonably withheld, a copy of the form Lease Grantor plans touse in leasing space in the Improvements or at the Property. All such Leases ofspace in the Improvements or at the Property shall be on terms consistent withthe terms for similar leases in the market area of the Premises, shall providefor free rent only if the same is consistent with prevailing market conditionsand shall provide for market rents then prevailing in the market area of thePremises. Such Leases shall also provide for security deposits in reasonableamounts consistent with prevailing market conditions. Grantor shall also submitto Grantee for Grantee’s approval, which approval shall not be unreasonablywithheld, prior to the execution thereof, any proposed Lease of theImprovements or any portion thereof that differs materially and adversely fromthe aforementioned form Lease. Grantor shall not execute any Lease for all or asubstantial portion of the Property, except for an actual occupancy by theTenant, lessee or licensee thereunder, and shall at all times promptly andfaithfully perform, or cause to be performed, all of the covenants, conditionsand agreements contained in all Leases with respect to the Property, now orhereafter existing, on the part of the landlord, lessor or licensor thereunderto be kept and performed. Grantor shall furnish to Grantee, within ten (10)days after a request by Grantee to do so, but in any event by January 1 ofeach year, a current Rent Roll, certified by Grantor as being true and correct,containing the names of all Tenants with respect to the Property, the terms oftheir respective Leases, the spaces occupied and the rentals or fees payablethereunder and the amount of each Tenant’s security deposit. Upon the requestof Grantee, Grantor shall deliver to Grantee a copy of each such Lease. Grantorshall not do or suffer to be done any act, or omit to take any

 

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action, that might resultin a default by the landlord, lessor or licensor under any such Lease or allowthe Tenant thereunder to withhold payment of rent or cancel or terminate sameand shall not further assign any such Lease or any such Rents and Profits.Grantor, at no cost or expense to Grantee, shall enforce, short of termination,the performance and observance of each and every condition and covenant of eachof the parties under such Leases and Grantor shall not anticipate, discount,release, waive, compromise or otherwise discharge any rent payable under any ofthe Leases. Grantor shall not, without the prior written consent of Grantee,modify any of the Leases, terminate or accept the surrender of any Leases,waive or release any other party from the performance or observance of anyobligation or condition under such Leases except, with respect only to Leasesaffecting less than 7,500 square feet and having a term of five (5) years orless, in the normal course of business in a manner which is consistent withsound and customary leasing and management practices for similar properties inthe community in which the Property is located, Grantor shall not permit theprepayment of any rents under any of the Leases for more than one (1) monthprior to the due date thereof.

 

(c)                                  EachLease executed after the date hereof affecting any of the Premises or the Improvementsmust provide, in a manner approved by Grantee, that the Tenant will recognizeas its landlord, lessor or licensor, as applicable, and attorn to any personsucceeding to the interest of Grantor upon any foreclosure of this SecurityInstrument or deed in lieu of foreclosure. Each such Lease shall also providethat, upon request of said successor-in-interest, the Tenant shall execute anddeliver an instrument or instruments confirming its attornment as provided forin this Section; provided, however, that neither Grantee nor anysuccessor-in-interest shall be bound by any payment of rent for more than one (1)month in advance, or any amendment or modification of said Lease made withoutthe express written consent of Grantee or said successor-in-interest.

 

(d)                                 Uponthe occurrence of an Event of Default under this Security Instrument, whetherbefore or after the whole principal sum secured hereby is declared to beimmediately due or whether before or after the institution of legal proceedingsto foreclose this Security Instrument, forthwith, upon demand of Grantee,Grantor shall surrender to Grantee, and Grantee shall be entitled to takeactual possession of, the Property or any part thereof personally, or by its agentor attorneys. In such event, Grantee shall have, and Grantor hereby gives andgrants to Grantee, the right, power and authority to make and enter into Leaseswith respect to the Property or portions thereof for such rents and for suchperiods of occupancy and upon conditions and provisions as Grantee may deemdesirable in its sole discretion, and Grantor expressly acknowledges and agreesthat the term of any such Lease may extend beyond the date of any foreclosuresale of the Property, it being the intention of Grantor that in such event Granteeshall be deemed to be and shall be the attorney-in-fact of Grantor for thepurpose of making and entering into Leases of parts or portions of the Propertyfor the rents and upon the terms, conditions and provisions deemed desirable toGrantee in its sole discretion and with like effect as if such Leases had beenmade by Grantor as the owner in fee simple of the Property free and clear ofany conditions or limitations established by this Security Instrument. Thepower and authority hereby given and granted by Grantor to Grantee shall bedeemed to be coupled with an interest, shall not be revocable by Grantor solong as any portion of the Debt is outstanding, shall survive the voluntary orinvoluntary dissolution of Grantor and shall not be affected by any disabilityor incapacity suffered by Grantor subsequent to the date hereof. In connectionwith any action taken by Grantee pursuant to this Section, Grantee shall not beliable for any loss

 

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sustained by Grantorresulting from any failure to let the Property, or any part thereof, or fromany other act or omission of Grantee in managing the Property, nor shallGrantee be obligated to perform or discharge any obligation, duty or liabilityunder any Lease covering the Property or any part thereof or under or by reasonof this instrument or the exercise of rights or remedies hereunder. Grantorshall, and does hereby, indemnify Grantee for, and hold Grantee harmless from,any and all claims, actions, demands, liabilities, loss or damage which may ormight be incurred by Grantee under any such Lease or under this SecurityInstrument or by the exercise of rights or remedies hereunder and from any andall claims and demands whatsoever which may be asserted against Grantee byreason of any alleged obligations or undertakings on its part to perform ordischarge any of the terms, covenants or agreements contained in any such Leaseother than those finally determined by a court of competent jurisdiction tohave resulted solely from the gross negligence or willful misconduct ofGrantee. Should Grantee incur any such liability, the amount thereof,including, without limitation, costs, expenses and reasonable attorneys’ fees,together with interest thereon at the Default Interest Rate from the dateincurred by Grantee until actually paid by Grantor, shall be immediately dueand payable to Grantee by Grantor on demand and shall be secured hereby and byall of the other Loan Documents securing all or any part of the Debt. Nothingin this Section shall impose on Grantee any duty, obligation orresponsibility for the control, care, management or repair of the Property, orfor the carrying out of any of the terms and conditions of any such Lease, norshall it operate to make Grantee responsible or liable for any waste committedon the Property by the Tenants or by any other parties or for any dangerous ordefective condition of the Property, or for any negligence in the management,upkeep, repair or control of the Property. Grantor hereby assents to, ratifiesand confirms any and all actions of Grantee with respect to the Property takenunder this Section.

 

**1.13****                        Alienationand Further Encumbrances.**

 

(a)                                  Grantoracknowledges that Grantee has relied upon the principals of Grantor and theirexperience in owning and operating the Property and properties similar to theProperty in connection with the closing of the loan evidenced by the Note.Accordingly, except as specifically allowed hereinbelow in this Section andnotwithstanding anything to the contrary contained in Section 4.6hereof, in the event that the Property or any part thereof or interest thereinshall be sold, conveyed, disposed of, alienated, hypothecated, leased (exceptto Tenants of space in the Improvements in accordance with the provisions of Section 1.12hereof), assigned, pledged, mortgaged, further encumbered or otherwise transferredor Grantor shall be divested of its title to the Property or any interesttherein, in any manner or way, whether voluntarily or involuntarily, withoutthe prior written consent of Grantee being first obtained, which consent may bewithheld in Grantee’s sole discretion, then the same shall constitute an Eventof Default and Grantee shall have the right, at its option, to declare any orall of the Debt, irrespective of the maturity date specified in the Note,immediately due and payable and to otherwise exercise any of its other rightsand remedies contained in Article III hereof. For the purposes ofthis Section: (i) in the event either Grantor or any of its general partners ormembers is a corporation or trust, the sale, conveyance, transfer, disposition,alienation, hypothecation or encumbering of more than 10% of the issued andoutstanding capital stock of Grantor or any of its general partners or membersor of the beneficial interest of such trust (or the issuance of new shares ofcapital stock in Grantor or any of its general partners or managing members sothat immediately after such issuance (in one or a series of transactions) thetotal capital stock then

 

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issued and outstanding ismore than 110% of the total immediately prior to such issuance) shall be deemedto be a transfer of an interest in the Property; and (ii) in the event Grantoror any general partner or managing member of Grantor is a limited or generalpartnership, a joint venture or a limited liability company, a change in theownership interests in any general partner, any joint venturer or any managingmember, either voluntarily, involuntarily or otherwise, or the sale,conveyance, transfer, disposition, alienation, hypothecation or encumbering ofall or any portion of the interest of any such general partner, joint ventureror managing member in Grantor or such general partner or managing member(whether in the form of a beneficial or partnership interest or in the form ofa power of direction, control or management, or otherwise), shall be deemed tobe a transfer of an interest in the Property. Notwithstanding the foregoing,however, (i) limited partnership interests in Grantor or in any general partneror member of Grantor shall be freely transferable without the consent ofGrantee, (ii) any involuntary transfer caused by the death of Grantor or anygeneral partner, shareholder, joint venturer, member or beneficial owner of atrust shall not be an Event of Default under this Security Instrument so longas Grantor is reconstituted, if required, following such death and so long asthose persons responsible for the management of the Property and Grantor remainunchanged as a result of such death or any replacement management is approvedby Grantee, (iii) gifts for estate planning purposes of any individual’sinterests in Grantor or in any of Grantor’s general partners, managing membersor joint venturers to the spouse or any lineal descendant of such individual,or to a trust for the benefit of any one or more of such individual, spouse orlineal descendant, shall not be an Event of Default under this SecurityInstrument so long as Grantor is reconstituted, if required, following suchgift and so long as those persons responsible for the management of theProperty and Grantor remain unchanged following such gift or any replacementmanagement is approved by Grantee and (iv) membership interests in each limitedliability company tenant-in-common entity comprising Grantor or in any general partneror member of such entity shall be freely transferable without the consent ofGrantee so long as the principal controlling and managing such entity as of thedate hereof remains unchanged following such transfer.

 

(b)                                 Notwithstandingthe foregoing provisions of this Section, Grantee shall consent to a sale,conveyance or transfer of the Property in its entirety (hereinafter, “a Sale”)to any person or entity provided that, for each Sale, each of the followingterms and conditions are satisfied;

 

(1)                                  NoDefault and no Event of Default is then continuing hereunder or under any ofthe other Loan Documents;

 

(2)                                  Grantorgives Grantee written notice of the terms of such prospective Sale not lessthan sixty (60) days before the date on which such Sale is scheduled to closeand, concurrently therewith, gives Grantee all such information concerning theproposed transferee of the Property (hereinafter, “Buyer”) as Granteewould require in evaluating an initial extension of credit to a borrower andpays to Grantee a non-refundable application fee in the amount of $5,000.Grantee shall have the right to approve or disapprove the proposed Buyer, Indetermining whether to give or withhold its approval of the proposed Buyer, Granteeshall consider the Buyer’s experience and track record in owning and operating facilitiessimilar to the Property, the Buyer’s financial strength, the Buyer’s generalbusiness standing and the Buyer’s relationships and experience withcontractors, vendors, tenants, lenders and other business entities; provided,however, that, notwithstanding Grantee’s

 

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agreement toconsider the foregoing factors in determining whether to give or withhold suchapproval, such approval shall be given or withheld based on what Granteedetermines to be commercially reasonable in Grantee’s sole discretion and, ifgiven, may be given subject to such conditions as Grantee may deem appropriate;

 

(3)                                  Grantorpays Grantee, concurrently with the closing of such Sale, a non-refundableassumption fee in an amount equal to all out-of-pocket costs and expenses, including,without limitation, reasonable attorneys’ fees, incurred by Grantee inconnection with the Sale, plus an amount equal to one half of one percent(0.5%) of the then outstanding principal balance of the Note for the first Saleand one percent (1.0%) of the then outstanding principal balance of the Notefor each Sale after the First Sale;

 

(4)                                  TheBuyer assumes and agrees to pay the Debt subject to the provisions of Section 4.27hereof and, prior to or concurrently with the closing of such Sale, the Buyer executes,without any cost or expense to Grantee, such documents and agreements as Granteeshall reasonably require to evidence and effectuate said assumption anddelivers such legal opinions as Grantee may require;

 

(5)                                  Aparty associated with the Buyer approved by Grantee in its sole discretion assumesthe obligations of the current Indemnitor under its guaranty or indemnityagreement and such party associated with the Buyer executes, without any costor expense to Grantee, a new guaranty or indemnity agreement in form andsubstance satisfactory to Grantee and delivers such legal opinions as Granteemay require;

 

(6)                                  Grantorand the Buyer execute, without any cost or expense to Grantee, new financingstatements or financing statement amendments and any additional documents reasonablyrequested by Grantee;

 

(7)                                  Grantordelivers to Grantee, without any cost or expense to Grantee, such endorsementsto Grantee’s title insurance policy, hazard insurance policy endorsements or certificatesand other similar materials as Grantee may deem necessary at the time of the Sale,all in form and substance satisfactory to Grantee, including, withoutlimitation, an endorsement or endorsements to Grantee’s title insurance policyinsuring the lien of this Security Instrument, extending the effective date ofsuch policy to the date of execution and delivery (or, if later, of recording)of the assumption agreement referenced above in subparagraph (4) of thisSection, with no additional exceptions added to such policy, and insuring thatfee simple title to the Property is vested in the Buyer;

 

(8)                                  Grantorexecutes and delivers to Grantee, without any cost or expense to Grantee, arelease of Grantee, its officers, directors, employees and agents, from allclaims and liability relating to the transactions evidenced by the LoanDocuments, through and including the date of the closing of the Sale, whichagreement shall be in form and substance satisfactory to Grantee and shall bebinding upon the Buyer;

 

(9)                                  Subjectto the provisions of Section 4.27 hereof, such Sale is notconstrued so as to relieve Grantor of any personal liability under the Note orany of the other Loan

 

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Documents for anyacts or events occurring or obligations arising prior to or simultaneously withthe closing of such Sale, whether or not same is discovered prior or subsequentto the closing of such Sale, and Grantor executes, without any cost or expenseto Grantee, such documents and agreements as Grantee shall reasonably requireto evidence and effectuate the ratification of said personal liability. Grantorshall be released from and relieved of any personal liability under the Note orany of the other Loan Documents for any acts or events occurring or obligationsarising after the closing of such Sale which are not caused by or arising outof any acts or events occurring or obligations arising prior to or simultaneouslywith the closing of such Sale, and

 

(10)                            SuchSale is not construed so as to relieve any current Indemnitor of itsobligations under any guaranty or indemnity agreement for any acts or eventsoccurring or obligations arising prior to or simultaneously with the closing ofsuch Sale, and each such current Indemnitor executes, without any cost orexpense to Grantee, such documents and agreements as Grantee shall reasonablyrequire to evidence and effectuate the ratification of each such guaranty andindemnity agreement. Each such current Indemnitor shall be released from andrelieved of any of its obligations under any guaranty or indemnity agreementexecuted in connection with the loan secured hereby for any acts or eventsoccurring or obligations arising after the closing of such Sale which are notcaused by or arising out of any acts or events occurring or obligations arisingprior to or simultaneously with the closing of such Sale.

 

(c)                                  Notwithstandingthe foregoing to the contrary, Grantor shall have the right to obtainsubordinate financing on the Property secured by interests in the Grantorprovided (i) the subordinate lender executes a subordination and standstillagreement acceptable to Grantee in its sole discretion, (ii) the Property withsuch subordinate financing (A) supports a minimum debt service coverage ratioof 1.15:1, as determined by Lender in its sole discretion and (B) does not havea loan-to-value ratio in excess of 85%, as determined by an independent MAIappraisal at Grantor’s expense, subject to review and approval by Grantee and(iii) Grantor or subsequent Buyer reimburses Grantee for all reasonable costsand expenses incurred by Grantee in connection with and directly related tosuch subordinate financing. In addition, a subsequent Buyer may obtainsubordinate financing on the Property secured by interests in such Buyerprovided the Property with such subordinated financing does not exceed a loanto acquisition price of 85%. Subordinate financing obtained by a subsequentBuyer may be secured by a subordinate lien on the Property if the conditionsset forth in this Section 1.13(c)(i), (ii) (A) and (B) and (iii) aresatisfied.

 

**1.14****                        Paymentof Utilities. Assessments, Charges, Etc.**

 

Grantor shall paywhen due all utility charges which are incurred by Grantor or which may becomea charge or lien against any portion of the Property for gas, electricity,water and sewer services furnished to the Premises and/or the Improvements andall other assessments or charges of a similar nature, or assessments payablepursuant to any restrictive covenants, whether public or private, affecting thePremises and/or the Improvements or any portion thereof, whether or not suchassessments or charges are or may become liens thereon.

 

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**1.15****                        AccessPrivileges and Inspections.**

 

Grantee and theagents, representatives and employees of Grantee shall, subject to the rightsof Tenants, have full and free access to the Premises and the Improvements andany other location where books and records concerning the Property are kept atall reasonable times and, except in the event of an emergency, upon not lessthan 24 hours prior notice (which notice may be telephonic) for the purposes ofinspecting the Property and of examining, copying and making extracts from thebooks and records of Grantor relating to the Property. Grantor shall lendassistance to all such agents, representatives and employees of Grantee.

 

**1.16****                        Waste;Alteration of Improvements.**

 

Grantor shall notcommit, suffer or permit any waste on the Property nor take any actions thatmight invalidate any insurance carried on the Property. Grantor shall maintainthe Property in good condition and repair. No part of the Improvements may beremoved, demolished or materially altered, without the prior written consent ofGrantee. Without the prior written consent of Grantee, Grantor shall notcommence construction of any improvements on the Premises other thanimprovements required for the maintenance or repair of the Property.

 

**1.17****                        Zoning.**

 

Without the priorwritten consent of Grantee, Grantor shall not seek, make, suffer, consent to oracquiesce in any change in the zoning or conditions of use of the Premises orthe Improvements. Grantor shall comply with and make all payments requiredunder the provisions of any covenants, conditions or restrictions affecting thePremises or the Improvements. Grantor shall comply with all existing and futurerequirements of all governmental authorities having jurisdiction over theProperty. Grantor shall keep all licenses, permits, franchises and otherapprovals necessary for the operation of the Property in full force and effect.Grantor shall operate the Property as a retail shopping center for so long asthe Debt is outstanding. If, under applicable zoning provisions, the use of allor any part of the Premises or the Improvements is or becomes a nonconforminguse, Grantor shall not cause or permit such use to be discontinued or abandonedwithout the prior written consent of Grantee. Further, without Grantee’s priorwritten consent, Grantor shall not file or subject any part of the Premises orthe Improvements to any declaration of condominium or co-operative or convertany part of the Premises or the Improvements to a condominium, co-operative orother form of multiple ownership and governance.

 

**1.18****                        FinancialStatements and Books and Records.**

 

Grantor shall keepaccurate books and records of account of the Property and its own financialaffairs sufficient to permit the preparation of financial statements therefromin accordance with generally accepted accounting principles. Grantee and itsduly authorized representatives shall have the right to examine, copy and auditGrantor’s records and books of account at all reasonable times. So long as thisSecurity Instrument continues in effect, Grantor shall provide to Grantee, inaddition to any other financial statements required hereunder or under any ofthe other Loan Documents, the following financial statements and information,all

 

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of which must becertified to Grantee as being true and correct by Grantor or the person orentity to which they pertain, as applicable, and be prepared in accordance withgenerally accepted accounting principles consistently applied and be in formand substance acceptable to Grantee:

 

(a)                                  copiesof all tax returns filed by Grantor, within thirty (30) days after the date of filing;

 

(b)                                 monthlyoperating statements for the Property, within fifteen (15) days after the endof each of the first (1st) twelve (12) calendar months following the datehereof; and

 

(c)                                  quarterlyoperating statements for the Property, within thirty (30) days after the end ofeach March, June, September and December commencing with the first (1st)of such months to occur following the first (1st) anniversary of the datehereof;

 

(d)                                 annualbalance sheets for the Property and annual financial statements for Grantor,each principal or general partner in Grantor, and each Indemnitor, withinninety (90) days after the end of each calendar year;

 

(e)                                  suchother information with respect to the Property, Grantor, the principals or generalpartners in Grantor, and each Indemnitor, which may be reasonably requestedfrom time to time by Grantee, within a reasonable time after the applicablerequest.

 

If any of theaforementioned materials are not furnished to Grantee within the applicabletime periods or Grantee has a reasonable basis to be dissatisfied with thecontents of any of the foregoing and has notified Grantor of itsdissatisfaction, in addition to any other rights and remedies of Granteecontained herein, (i) Grantor shall pay to Grantee upon demand, at Grantee’soption and in its sole discretion, an amount equal to $10,000 for each of theaforementioned materials that is not delivered in accordance with generalaccepted accounting principles, provided Grantee has given Grantor at least 30days prior notice of such failure, and (ii) Grantee shall have the right, butnot the obligation, to obtain the same by means of an audit by an independentcertified public accountant selected by Grantee, in which event Grantor agreesto pay, or to reimburse Grantee for, any expense of such audit and furtheragrees to provide all necessary information to said accountant and to otherwisecooperate in the making of such audit.

 

**1.19****                        FurtherDocumentation.**

 

Grantor shall, onthe request of Grantee and at the expense of Grantor: (a) promptly correct anydefect, error or omission which may be discovered in the contents of thisSecurity Instrument or in the contents of any of the other Loan Documents; (b)promptly execute, acknowledge, deliver and record or file such furtherinstruments (including, without limitation, further mortgages, deeds of trust,security deeds, security agreements, financing statements, continuationstatements and assignments of rents or leases) and promptly do such furtheracts as may be necessary, desirable or proper to carry out more effectively thepurposes of this Security Instrument and the other Loan Documents and tosubject to the liens and security interests hereof and thereof any propertyintended by the terms hereof and thereof to be covered hereby and thereby,including specifically, but without limitation, any renewals, additions, substitutions,

 

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replacements orappurtenances to the Property; (c) promptly execute, acknowledge, deliver,procure and record or file any document or instrument (including specifically,without limitation, any financing statement) deemed advisable by Grantee toprotect, continue or perfect the liens or the security interests hereunderagainst the rights or interests of third persons; and (d) promptly furnish toGrantee, upon Grantee’s request, a duly acknowledged written statement andestoppel certificate addressed to such party or parties as directed by Granteeand in form and substance supplied by Grantee, setting forth all amounts dueunder the Note, stating whether any Default or Event of Default has occurredhereunder, stating whether any offsets or defenses exist against the Debt andcontaining such other matters as Grantee may reasonably require.

 

**1.20****                        Paymentof Costs; Reimbursement to Grantee.**

 

Grantor shall payall costs and expenses of every character reasonably incurred in connectionwith the closing of the loan evidenced by the Note and secured hereby orotherwise attributable or chargeable to Grantor as the owner of the Property,including, without limitation, appraisal fees, recording fees, documentary,stamp, mortgage or intangible taxes, brokerage fees and commissions, titlepolicy premiums and title search fees, uniform commercial code/taxlien/litigation search fees, escrow fees and reasonable attorneys’ fees. IfGrantor defaults in any such payment, which default is not cured within anyapplicable grace or cure period, Grantee may pay the same and Grantor shallreimburse Grantee on demand for all such costs and expenses incurred or paid byGrantee, together with such interest thereon at the Default Interest Rate fromand after the date of Grantee’s making such payment until reimbursement thereofby Grantor. Any such sums disbursed by Grantee, together with such interestthereon, shall be additional indebtedness of Grantor secured by this Security Instrumentand by all of the other Loan Documents securing all or any part of the Debt.Further, Grantor shall promptly notify Grantee in writing of any litigation orthreatened litigation affecting the Property, or any other demand or claimwhich, if enforced, could impair or threaten to impair Grantee’s securityhereunder. Without limiting or waiving any other rights and remedies of Granteehereunder, if Grantor fails to perform any of its covenants or agreementscontained in this Security Instrument or in any of the other Loan Documents andsuch failure is not cured within any applicable grace or cure period, or if anyaction or proceeding of any kind (including, but not limited to, anybankruptcy, insolvency, arrangement, reorganization or other debtor reliefproceeding) is commenced which might affect Grantee’s interest in the Propertyor Grantee’s right to enforce its security, then Grantee may, at its option,with or without notice to Grantor, make any appearances, disburse any sums andtake any actions as may be necessary or desirable to protect or enforce thesecurity of this Security Instrument or to remedy the failure of Grantor toperform its covenants and agreements (without, however, waiving any default ofGrantor). Grantor agrees to pay on demand all expenses of Grantee incurred withrespect to the foregoing (including, but not limited to, reasonable fees anddisbursements of counsel), together with interest thereon at the DefaultInterest Rate from and after the date on which Grantee incurs such expensesuntil reimbursement thereof by Grantor. Any such expenses so incurred byGrantee, together with interest thereon as provided above, shall be additionalindebtedness of Grantor secured by this Security Instrument and by all of theother Loan Documents securing all or any part of the Debt. The necessity forany such actions and of the amounts to be paid shall be determined by Granteein its discretion. Grantee is hereby empowered to enter and to authorize othersto enter upon the Property or any part thereof for the purpose of performing orobserving

 

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any such defaulted term,covenant or condition without thereby becoming liable to Grantor or any personin possession holding under Grantor. Grantor hereby acknowledges and agreesthat the remedies set forth in this Section 1.20 shall beexercisable by Grantee, and any and all payments made or costs or expensesincurred by Grantee in connection therewith shall be secured hereby and shallbe, without demand, immediately repaid by Grantor with interest thereon at theDefault Interest Rate, notwithstanding the fact that such remedies wereexercised and such payments made and costs incurred by Grantee after the filingby Grantor of a voluntary case or the filing against Grantor of an involuntarycase pursuant to or within the meaning of the Bankruptcy Reform Act of 1978, asamended, Title 11 U.S.C., or after any similar action pursuant to any otherdebtor relief law (whether statutory, common law, case law or otherwise) of anyjurisdiction whatsoever, now or hereafter in effect, which may be or becomeapplicable to Grantor, Grantee, any Indemnitor, the Debt or any of the LoanDocuments. Grantor hereby indemnifies and holds Grantee harmless from andagainst all loss, cost and expenses with respect to any Event of Defaulthereof, any liens (i.e., judgments, mechanics’ and materialmen’s liens, orotherwise), charges and encumbrances filed against the Property, and from anyclaims and demands for damages or injury, including claims for property damage,personal injury or wrongful death, arising out of or in connection with anyaccident or fire or other casualty on the Premises or the Improvements or anynuisance made or suffered thereon, except those that are due to Grantee’s grossnegligence or willful misconduct as finally determined by a court of competentjurisdiction, including, without limitation, in any case, reasonable attorneys’fees, costs and expenses as aforesaid, whether at pretrial, trial or appellatelevel, and such indemnity shall survive payment in full of the Debt. This Section shallnot be construed to require Grantee to incur any expenses, make any appearancesor take any actions.

 

**1.21****                        SecurityInterest.**

 

This SecurityInstrument is also intended to encumber and create a security interest in, andGrantor hereby grants to Grantee a security interest in, all sums on depositwith Grantee pursuant to the provisions of Section 1.6, Section 1.7,Section 1.8 and Section 1.34 hereof or any other Section hereofor of any other Loan Document and all fixtures, chattels, accounts, equipment,inventory, contract rights, general intangibles and other personal propertyincluded within the Property, all renewals, replacements of any of theaforementioned items, or articles in substitution therefor or in additionthereto or the proceeds thereof (said property is hereinafter referred tocollectively as the “Collateral”), whether or not the same shall beattached to the Premises or the Improvements in any manner. It is hereby agreedthat to the extent permitted by law, all of the foregoing property is to bedeemed and held to be a part of and affixed to the Premises and theImprovements. The foregoing security interest shall also cover Grantor’sleasehold interest in any of the foregoing property which is leased by Grantor.Notwithstanding the foregoing, all of the foregoing property shall be owned byGrantor and no leasing or installment sales or other financing or titleretention agreement in connection therewith shall be permitted without theprior written approval of Grantee. Grantor shall, from time to time upon therequest of Grantee, supply Grantee with a current inventory of all of theproperty in which Grantee is granted a security interest hereunder, in suchdetail as Grantee may reasonably require. Grantor shall promptly replace all ofthe Collateral subject to the lien or security interest of this SecurityInstrument when worn or obsolete with Collateral comparable to the worn out orobsolete Collateral when new and will not, without the prior written consent ofGrantee, remove

 

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from the Premises or the Improvements any of theCollateral subject to the lien or security interest of this Security Instrumentexcept such as is replaced by an article of equal suitability and value asabove provided, owned by Grantor free and clear of any lien or securityinterest except that created by this Security Instrument and the other LoanDocuments. All of the Collateral shall be kept at the location of the Premisesexcept as otherwise required by the terms of the Loan Documents. Grantor shallnot use any of the Collateral in violation of any applicable statute, ordinanceor insurance policy.

 

Grantor warrants that (i) Grantor’s (that is, “Debtor’s”) name,identity or organizational structure, and residence or principal place ofbusiness are as set forth in Exhibit B attached hereto; (ii) Grantor(that is, “Debtor”) has been using or operating under said name, identity ororganizational structure without change from the date of its formation; and(iii) the location of the collateral is upon the Land. Grantor covenants andagrees that Grantor will furnish Grantee with notice of any change in thematters addressed by clauses (i) and (iii) of this paragraph within thirty (30)days of the effective date of any such change and Grantor will promptly executeany financing statements or other instruments deemed necessary by Grantee toprevent any filed financing statement from becoming misleading or losing itsperfected status.

 

**1.22****                        SecurityAgreement.**

 

This Security Instrument constitutes a security agreement betweenGrantor and Grantee with respect to the Collateral in which Grantee is granteda security interest hereunder, and, cumulative of all other rights and remediesof Grantee hereunder, Grantee shall have all of the rights and remedies of asecured party under any applicable Uniform Commercial Code. Grantor herebyagrees to execute and deliver on demand and hereby irrevocably constitutes andappoints Grantee the attorney-in-fact of Grantor to execute and deliver and, ifappropriate, to file with the appropriate filing officer or office, suchsecurity agreements, financing statements, continuation statements or otherinstruments as Grantee may request or require in order to impose, perfect orcontinue the perfection of the lien or security interest created hereby. To theextent specifically provided herein, Grantee shall have the right of possessionof all cash, securities, instruments, negotiable instruments, documents,certificates and any other evidences of cash or other property or evidences ofrights to cash rather than property, which are now or hereafter a part of theProperty, and Grantor shall promptly deliver the same to Grantee, endorsed toGrantee, without further notice from Grantee. Grantor agrees to furnish Granteewith notice of any change in the name, identity, organizational structure,residence, or principal place of business or mailing address of Grantor withinten (10) days of the effective date of any such change. Upon the occurrence ofany Event of Default, Grantee shall have the rights and remedies as prescribedin this Security Instrument, or as prescribed by general law, or as prescribedby any applicable Uniform Commercial Code, all at Grantee’s election. Anydisposition of the Collateral may be conducted by an employee or agent ofGrantee. Any person, including both Grantor and Grantee, shall be eligible topurchase any part or all of the Collateral at any such disposition. Expenses ofretaking, holding, preparing for sale, selling or the like (including, withoutlimitation, Grantee’s reasonable attorneys’ fees and legal expenses), togetherwith interest thereon at the Default Interest Rate from the date incurred byGrantee until actually paid by Grantor, shall be paid by Grantor on demand andshall be secured by this Security Instrument and by all of the other LoanDocuments securing all or any part of the Debt. Grantee shall have

 

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the right to enter upon the Premises and theImprovements or any real property where any of the property which is thesubject of the security interest granted herein is located to take possessionof, assemble and collect the same or to render it unusable, or Grantor, upondemand of Grantee, shall assemble such property and make it available to Granteeat the Premises, or at a place which is mutually agreed upon or, if no suchplace is agreed upon, at a place reasonably designated by Grantee to bereasonably convenient to Grantee and Grantor. If notice is required by law,Grantee shall give Grantor at least ten (10) days’ prior written notice of thetime and place of any public sale of such property, or adjournments thereof, orof the time of or after which any private sale or any other intendeddisposition thereof is to be made, and if such notice is sent to Grantor, asthe same is provided for the mailing of notices herein, it is hereby deemedthat such notice shall be and is reasonable notice to Grantor. No such noticeis necessary for any such property which is perishable, threatens to decline speedilyin value or is of a type customarily sold on a recognized market. Any sale madepursuant to the provisions of this Section shall be deemed to have been apublic sale conducted in a commercially reasonable manner if heldcontemporaneously with a foreclosure sale as provided in Section 3.1(e)hereof upon giving the same notice with respect to the sale of the Propertyhereunder as is required under said Section 3.l(e). Furthermore, to theextent permitted by law, in conjunction with, in addition to or in substitutionfor the rights and remedies available to Grantee pursuant to any applicableUniform Commercial Code:

 

(a)                                  Inthe event of a foreclosure sale, the Property may, at the option of Grantee, besold as a whole; and

 

(b)                                 Itshall not be necessary that Grantee take possession of the aforementioned Collateral,or any part thereof, prior to the time that any sale pursuant to the provisionsof this Section is conducted and it shall not be necessary that saidCollateral, or any part thereof, be present at the location of such sale; and

 

(c)                                  Granteemay appoint or delegate any one or more persons as agent to perform any act oracts necessary or incident to any sale held by Grantee, including the sendingof notices and the conduct of the sale, but in the name and on behalf ofGrantee.

 

The names and addresses of Grantor (as Debtor under any applicableUniform Commercial Code) are set forth on Exhibit B attached hereto.

 

The name and address of Grantee (as Secured Party under any applicableUniform Commercial Code) are:

 
|   |   | Wachovia Bank, National Association |   |   |
|--------|--------|-------------------------------------|--------|--------|
|   |   | 201 South Tryon Street, Suite 130,  |   |   |
|   |   | PMB Box #4                          |   |   |
|   |   | Loan Number 50-2753516              |   |   |
|   |   | Charlotte, North Carolina 28202     |   |   |

 

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**1.23****                        Easementsand Rights-of-Way.**

 

Grantor shall not grant any easement or right-of-way with respect toall or any portion of the Premises or the Improvements without the priorwritten consent of Grantee. The purchaser at any foreclosure sale hereundermay, at its discretion, disaffirm any easement or right-of-way granted inviolation of any of the provisions of this Security Instrument and may takeimmediate possession of the Property free from, and despite the terms of, suchgrant of easement or right-of-way. If Grantee consents to the grant of aneasement or right-of-way, Grantee agrees to grant such consent without chargeto Grantor other than expenses, including, without limitation, reasonableattorneys’ fees, incurred by Grantee in the review of Grantor’s request and inthe preparation of documents effecting the subordination.

 

**1.24****                        Compliancewith Laws.**

 

Grantor shall at all times comply with all statutes, ordinances,regulations and other governmental or quasi-governmental requirements andprivate covenants now or hereafter relating to the ownership, construction, useor operation of the Property, including, but not limited to, those concerningemployment and compensation of persons engaged in operation and maintenance ofthe Property and any environmental or ecological requirements, even if suchcompliance shall require structural changes to the Property; provided, however,that, Grantor may, upon providing Grantee with security satisfactory toGrantee, proceed diligently and in good faith to contest the validity orapplicability of any such statute, ordinance, regulation or requirement so longas during such contest the Property shall not be subject to any lien, charge,fine or other liability and shall not be in danger of being forfeited, lost orclosed. Grantor shall not use or occupy, or allow the use or occupancy of, theProperty in any manner which violates any Lease of or any other agreementapplicable to the Property or any applicable law, rule, regulation or order orwhich constitutes a public or private nuisance or which makes void, voidable orcancelable, or increases the premium of, any insurance then in force withrespect thereto.

 

**1.25****                        AdditionalTaxes.**

 

In the event of the enactment after the date hereof of any law of thestate in which the Property is located or of any other governmental entitydeducting from the value of the Property for the purpose of taxing any lien orsecurity interest thereon, or imposing upon Grantee the payment of the whole orany part of the taxes or assessments or charges or liens herein required to bepaid by Grantor, or changing in any way the laws relating to the taxation ofdeeds of trust, mortgages or security agreements or debts secured by deeds oftrust, mortgages or security agreements or the interest of the Grantee,mortgagee or secured party in the property covered thereby, or the manner ofcollection of such taxes, so as to adversely affect this Security Instrument orthe Debt or Grantee, then, and in any such event, Grantor, upon demand byGrantee, shall pay such taxes, assessments, charges or liens, or reimburseGrantee therefor; provided, however, that if in theopinion of counsel for Grantee (a) it might be unlawful to require Grantor tomake such payment, or (b) the making of such payment might result in theimposition of interest beyond the maximum amount permitted by law, then and ineither such event, Grantee may elect, by notice in writing given to Grantor, todeclare all of the Debt to be

 

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and become due and payable in full thirty (30) daysfrom the giving of such notice, and, in connection with the payment of suchDebt, no prepayment premium or fee shall be due unless, at the time of suchpayment, an Event of Default or a Default shall have occurred, which Default orEvent of Default is unrelated to the provisions of this Section 1.25, inwhich event any applicable prepayment premium or fee in accordance with theterms of the Note shall be due and payable.

 

**1.26****                        SecuredIndebtedness.**

 

It is understood and agreed that this Security Instrument shall securepayment of not only the indebtedness evidenced by the Note but also any and allsubstitutions, replacements, renewals and extensions of the Note, any and allindebtedness and obligations arising pursuant to the terms hereof and any andall indebtedness and obligations arising pursuant to the terms of any of theother Loan Documents, all of which indebtedness is equally secured with and hasthe same priority as any amounts advanced as of the date hereof. It is agreedthat any future advances made by Grantee to or for the benefit of Grantor fromtime to time under this Security Instrument or the other Loan Documents andwhether or not such advances are obligatory or are made at the option ofGrantee, or otherwise, made for any purpose, within twenty (20) years from thedate hereof, and all interest accruing thereon, shall be equally secured bythis Security Instrument and shall have the same priority as all amounts, ifany, advanced as of the date hereof and shall be subject to all of the termsand provisions of this Security Instrument.

 

**1.27****                        Grantor’sWaivers.**

 

To the full extent permitted by law, Grantor agrees that Grantor shallnot at any time insist upon, plead, claim or take the benefit or advantage ofany law now or hereafter in force providing for any appraisement, valuation,stay, moratorium or extension, or any law now or hereafter in force providingfor the reinstatement of the Debt prior to any sale of the Property to be madepursuant to any provisions contained herein or prior to the entering of anydecree, judgment or order of any court of competent jurisdiction, or any rightunder any statute to redeem all or any part of the Property so sold. Grantor,for Grantor and Grantor’s successors and assigns, and for any and all personsever claiming any interest in the Property, to the full extent permitted bylaw, hereby knowingly, intentionally and voluntarily, with and upon the adviceof competent counsel: (a) waives, releases, relinquishes and forever forgoesall rights of valuation, appraisement, stay of execution, reinstatement andnotice of election or intention to mature or declare due the Debt (except suchnotices as are specifically provided for herein); (b) waives, releases,relinquishes and forever forgoes all right to a marshaling of the assets ofGrantor, including the Property, to a sale in the inverse order of alienation,or to direct the order in which any of the Property shall be sold in the eventof foreclosure of the liens and security interests hereby created and agreesthat any court having jurisdiction to foreclose such liens and securityinterests may order the Property sold as an entirety; and (c) waives, releases,relinquishes and forever forgoes all rights and periods of redemption providedunder applicable law. To the full extent permitted by law, Grantor shall nothave or assert any right under any statute or rule of law pertaining to theexemption of homestead or other exemption under any federal, state or local lawnow or hereafter in effect, the administration of estates of decedents or othermatters whatever to defeat, reduce or affect the right of Grantee under theterms of this Security Instrument to a sale of the Property, for the collectionof the Debt without any prior or different

 

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resort for collection, or the right of Grantee underthe terms of this Security Instrument to the payment of the Debt out of theproceeds of sale of the Property in preference to every other claimantwhatever. Furthermore, Grantor hereby knowingly, intentionally and voluntarily,with and upon the advice of competent counsel, waives, releases, relinquishesand forever forgoes all present and future statutes of limitations as a defenseto any action to enforce the provisions of this Security Instrument or tocollect any of the Debt to the fullest extent permitted by law. Grantorcovenants and agrees that upon the commencement of a voluntary or involuntarybankruptcy proceeding by or against Grantor, Grantor shall not seek asupplemental stay or otherwise shall not seek pursuant to 11 U.S.C. §105 or anyother provision of the Bankruptcy Reform Act of 1978, as amended, or any otherdebtor relief law (whether statutory, common law, case law, or otherwise) ofany jurisdiction whatsoever, now or hereafter in effect, which may be or becomeapplicable, to stay, interdict, condition, reduce or inhibit the ability ofGrantee to enforce any rights of Grantee against any guarantor or indemnitor ofthe secured obligations or any other party liable with respect thereto byvirtue of any indemnity, guaranty or otherwise.

 

**1.28****                        SUBMISSIONTO JURISDICTION; WAIVER OF JURY TRIAL.**

 

(a)                                  GRANTOR,TO THE FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY ANDVOLUNTARILY, AFTER CONSULTING WITH COUNSEL, (i) SUBMITS TO PERSONALJURISDICTION IN THE STATE INWHICH THE PREMISES IS LOCATED OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSONARISING FROM OR RELATING TO THE NOTE, THIS SECURITY INSTRUMENT OR ANY OTHER OFTHE LOAN DOCUMENTS, (ii) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BEBROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN THECOUNTY IN WHICH THE PREMISES IS LOCATED, (iii) SUBMITS TO THE JURISDICTION OFSUCH COURTS, AND (iv) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT ITWILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM (BUT NOTHINGHEREIN SHALL AFFECT THE RIGHT OF GRANTEE TO BRING ANY ACTION, SUIT ORPROCEEDING IN ANY OTHER FORUM).

 

(b)                                 GRANTOR,TO THE FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY ANDVOLUNTARILY, AFTER CONSULTING WITH COUNSEL, WAIVES, RELINQUISHES AND FOREVERFORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,ARISING OUT OF, OR IN ANY WAY RELATING TO THE DEBT OR ANY CONDUCT, ACT OR**OMISSION OF GRANTEE OR GRANTOR, OR ANY OFTHEIR RESPECTIVE DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS ORATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH GRANTEE OR GRANTOR, IN EACH ORTHE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.

 

**1.29****                        Attorney-in-FactProvisions.**

 

With respect to any provision of this Security Instrument or any otherLoan Document whereby Grantor grants to Grantee a power-of-attorney, providedno Default or Event of Default has occurred under this Security Instrument,Grantee shall first give Grantor written notice at

 

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least three (3) days prior to acting under such power,which notice shall demand that Grantor first take the proposed action withinsuch period and advising Grantor that if it fails to do so, Grantee will so actunder the power; provided, however, that, in the event that a Default or anEvent of Default has occurred, or if necessary to prevent imminent death,serious injury, damage, loss, forfeiture or diminution in value to the Propertyor any surrounding property or to prevent any adverse affect on Grantee’sinterest in the Property, Grantee may act immediately and without first givingsuch notice. In such event, Grantee will give Grantor notice of such action assoon thereafter as reasonably practical.

 

**1.30****                        Management.**

 

The management of the Property shall be by either: (a) Grantor or anentity affiliated with Grantor approved by Grantee for so long as Grantor orsaid affiliated entity is managing the Property in a first class manner; or (b)a professional property management company approved by Grantee. Such managementby an affiliated entity or a professional property management company shall bepursuant to a written agreement approved by Grantee. In no event shall anymanager be removed or replaced or the terms of any management agreementmodified or amended without the prior written consent of Grantee. After anEvent of Default or a default under any management contract then in effect,which default is not cured within any applicable grace or cure period, Granteeshall have the right to terminate, or to direct Grantor to terminate, suchmanagement contract upon thirty (30) days’ notice and to retain, or to directGrantor to retain, a new management agent approved by Grantee. All Rents andProfits generated by or derived from the Property shall first be utilizedsolely for current expenses directly attributable to the ownership andoperation of the Property, including, without limitation, current expensesrelating to Grantor’s liabilities and obligations with respect to this SecurityInstrument and the other Loan Documents, and none of the Rents and Profitsgenerated by or derived from the Property shall be diverted by Grantor andutilized for any other purposes unless all such current expenses attributableto the ownership and operation of the Property have been fully paid andsatisfied.

 

**1.31****                        HazardousWaste and Other Substances.**

 

(a)                                  Grantorhereby represents and warrants to Grantee that, as of the date hereof, to thebest of Grantor’s knowledge, information and belief, and except as set forth inthat certain Phase I Environmental Site Assessment dated October 4, 2002 andprepared by EPIC Engineering Inc.; (i) none of Grantor nor the Property nor anyTenant at the Premises nor the operations conducted thereon is in direct orindirect violation of or otherwise exposed to any liability under any local,state or federal law, rule or regulation or common law duty pertaining to humanhealth, natural resources or the environment, including, without limitation,the Comprehensive Environmental Response, Compensation and Liability Act of1980 (42 U.S.C. §9601 etseq.) (“CERCLA”), the ResourceConservation and Recovery Act of 1976 (42 U.S.C. §6901 etseq.) (“RCRA”),the Federal Water Pollution Control Act (33 U.S.C. §1251 etseq.),the Clean Air Act (42 U.S.C. §7401 et seq.), the Emergency Planning andCommunity-Right-to-Know Act (42 U.S.C. §11001 etseq.), theEndangered Species Act (16 U.S.C. §1531 et seq.), the Toxic Substances ControlAct (15 U.S.C. §2601 et seq.), the Occupational Safety and Health Act (29U.S.C. §651 etseq.) and the Hazardous Materials TransportationAct (49 U.S.C. §1801 et

 

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seq.),the Georgia Hazardous Waste Management Act, as amended, O.C.G.A. § 12-8-60 etseq., the Georgia Oil or Hazardous Materials Spills or Releases Act, asamended, O.C.G.A. § 12-14-1 etseq., the Georgia ComprehensiveSolid Waste Management Act, as amended, O.C.G.A. § 12-8-20 etseq.,the Georgia Asbestos Safety Act, as amended, O.C.G.A. § 12-12-1 etseq.,the Georgia Underground Storage Tank Act, as amended, O.C.G.A. § 12-13-1 etseq., the Georgia Water Quality Control Act, as amended, O.C.G.A. §12-5-20 etseq., the Georgia Hazardous Site Response Act, asamended, O.C.G.A. § 12-8-90 etseq., and regulations promulgatedpursuant thereto by the Georgia Department of Natural Resources EnvironmentalProtection Division and the regulations promulgated pursuant to said laws, allas amended, regulations promulgated pursuant to said laws, all as amended fromtime to time (collectively, the “Environmental Laws”) or otherwiseexposed to any liability under any Environmental Law relating to or affectingthe Property, whether or not used by or within the control of Grantor; (ii) nohazardous, toxic or harmful substances, wastes, materials, pollutants orcontaminants (including, without limitation, asbestos or asbestos-containingmaterials, lead based paint, polychlorinated biphenyls, petroleum or petroleumproducts or byproducts, flammable explosives, radioactive materials, infectioussubstances, radon gas or raw materials which include hazardous constituents) orany other substances or materials which are included under or regulated byEnvironmental Laws (collectively, “Hazardous Substances”) are locatedon, in or under or have been handled, generated, stored, processed or disposedof on or released or discharged from the Property (including underground contamination),except for those substances used by Grantor or any Tenant in the ordinarycourse of their respective businesses and in compliance with all EnvironmentalLaws and where such could not reasonably be expected to give rise to liability underEnvironmental Laws; (iii) the Property is not subject to any private orgovernmental lien or judicial or administrative notice or action arising underEnvironmental Laws; (iv) there is no pending, nor, to Grantor’s knowledge,information or belief, threatened litigation arising under Environmental Lawsaffecting Grantor or the Property; there are no and have been no existing or closedunderground storage tanks or other underground storage receptacles forHazardous Substances or landfills or dumps on the Property; (v) Grantor hasreceived no notice of, and to the best of Grantor’s knowledge and belief, thereexists no investigation, action, proceeding or claim by any agency, authorityor unit of government or by any third party which could result in any liability,penalty, sanction or judgment under any Environmental Laws with respect to any condition,use or operation of the Property, nor does Grantor know of any basis for suchan investigation, action, proceeding or claim; (vi) Grantor has received nonotice of and, to the best of Grantor’s knowledge and belief, there has been noclaim by any party that any use, operation or condition of the Property hascaused any nuisance or any other liability or adverse condition on any otherproperty, nor does Grantor know of any basis for such an investigation, action,proceeding or claim; and (vii) radon is not present at the Property in excessor in violation of any applicable thresholds or standards or in amounts thatrequire under applicable law disclosure to any tenant or occupant of or inviteeto the Property or to any governmental agency or the general public.

 

(b)                                 Grantorhas not received nor to the best of Grantor’s knowledge, information and beliefhas there been issued, any notice, notification, demand, request forinformation, citation, summons, or order in any way relating to any actual,alleged or potential violation or liability arising under Environmental Laws;and

 

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(c)                                  Neitherthe Property, nor to the best of Grantor’s knowledge, information and belief,any property to which Grantor has, in connection with the maintenance oroperation of the Property, directly or indirectly transported or arranged forthe transportation of any Hazardous Substances is listed or, to the best ofGrantor’s knowledge, information and belief, proposed for listing on theNational Priorities List promulgated pursuant to CERCLA, on CERCLIS (as definedin CERCLA) or on any similar federal or state list of sites requiringenvironmental investigation or clean-up.

 

(d)                                 Grantorshall comply with all applicable Environmental Laws. Grantor shall keep orcause the Property to be kept free from Hazardous Substances (except thosesubstances used by Grantor or any Tenant in the ordinary course of theirrespective businesses and except in compliance with all Environmental Laws andwhere such could not reasonably be expected to give rise to liability underEnvironmental Laws) and in compliance with all Environmental Laws. Grantorshall not install or use any underground storage tanks, shall expresslyprohibit the use, generation, handling, storage, production, processing anddisposal of Hazardous Substances by all Tenants in quantities or conditionsthat would violate or give rise to any obligation to take remedial or otheraction under any applicable Environmental Laws. Without limiting the generalityof the foregoing, during the term of this Security Instrument, Grantor shallnot install in the Improvements or permit to be installed in the Improvementsany asbestos or asbestos- containing asbestos.

 

(e)                                  Grantorshall promptly notify Grantee if Grantor shall become aware of (i) the actualor potential existence of any Hazardous Substances on the Property other thanthose occurring in the ordinary course of Grantor’s business and which do notviolate, or would not otherwise give rise to liability under EnvironmentalLaws, (ii) any direct or indirect violation of, or other exposure to liabilityunder, any Environmental Laws, (iii) any lien, action or notice affecting theProperty or Grantor resulting from any violation or alleged violation of orliability or alleged liability under any Environmental Laws, (iv) theinstitution of any investigation, inquiry or proceeding concerning Grantor orthe Property pursuant to any Environmental Laws or otherwise relating toHazardous Substances, or (v) the discovery of any occurrence, condition orstate of facts which would render any representation or warranty contained inthis Security Instrument incorrect in any respect if made at the time of suchdiscovery. Immediately upon receipt of same, Grantor shall deliver to Granteecopies of any and all requests for information, complaints, citations,summonses, orders, notices, reports or other communications, documents or instrumentsin any way relating to any actual, alleged or potential violation or liabilityof any nature whatsoever arising under Environmental Laws and relating to theProperty or to Grantor. Indemnitors shall remedy or cause to be remedied in atimely manner (and in any event within the time period permitted by applicableEnvironmental Laws) any violation of Environmental Laws or any condition thatcould give rise to liability under Environmental Laws. Without limiting theforegoing, Grantor shall, promptly and regardless of the source of thecontamination or threat to the environment or human health, at its own expense,take all actions as shall be necessary or prudent, for the clean-up of any andall portions of the Property or other affected property, including, withoutlimitation, all investigative, monitoring, removal, containment and remedialactions in accordance with all applicable Environmental Laws (and in all eventsin a manner satisfactory to Grantee) and shall further pay or cause to be paid,at no expense to Grantee, all clean-up, administrative and enforcement costs ofapplicable governmental agencies

 

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which may be asserted against the Property. In theevent Grantor fails to do so, Grantee may, but shall not be obligated to, causethe Property or other affected property to be freed from any HazardousSubstances or otherwise brought into conformance with Environmental Laws andany and all costs and expenses incurred by Grantee in connection therewith,together with interest thereon at the Default Interest Rate from the dateincurred by Grantee until actually paid by Grantor, shall be immediately paidby Grantor on demand and shall be secured by this Security Instrument and byall of the other Loan Documents securing all or any part of the Debt. Grantorhereby grants to Grantee and its agents and employees access to the Propertyand a license to remove any items deemed by Grantee to be Hazardous Substancesand to do all things Grantee shall deem necessary to bring the Property intoconformance with Environmental Laws.

 

(f)                                    Grantorcovenants and agrees, at Grantor’s sole cost and expense, to indemnify, defend(at trial and appellate levels, and with attorneys, consultants and expertsacceptable to Grantee), and hold Grantee harmless from and against any and allliens, damages (including without limitation, punitive or exemplary damages),losses, liabilities (including, without limitation, strict liability),obligations, settlement payments, penalties, fines, assessments, citations,directives, claims, litigation, demands, defenses, judgments, suits,proceedings, costs, disbursements or expenses of any kind or of any naturewhatsoever (including, without limitation, reasonable attorneys’, consultants’and experts’ fees and disbursements actually incurred in investigating,defending, settling or prosecuting any claim, litigation or proceeding) whichmay at any time be imposed upon, incurred by or asserted or awarded againstGrantee or the Property, and arising directly or indirectly from or out of: (i)any violation or alleged violation of, or liability or alleged liability under,any Environmental Law; (ii) the presence, release or threat of release of orexposure to any Hazardous Substances on, in, under or affecting all or anyportion of the Property or any surrounding areas, regardless of whether or notcaused by or within the control of Grantor; (iii) any transport, treatment,recycling, storage, disposal or arrangement therefor of Hazardous Substanceswhether on the Property, originating from the Property, or otherwise associatedwith Grantor or any operations conducted on the Property at any time; (iv) thefailure by Grantor to comply fully with the terms and conditions of this Section1.31; (v) the breach of any representation or warranty contained in this Section1.31; (vi) the enforcement of this Section 1.31, including, withoutlimitation, the cost of assessment, investigation, containment, removal and/orremediation of any and all Hazardous Substances from all or any portion of theProperty or any surrounding areas, the cost of any actions taken in response tothe presence, release or threat of release of any Hazardous Substances on, in,under or affecting any portion of the Property or any surrounding areas toprevent or minimize such release or threat of release so that it does notmigrate or otherwise cause or threaten danger to present or future publichealth, safety, welfare or the environment, and costs incurred to comply withEnvironmental Laws in connection with all or any portion of the Property or anysurrounding areas. The indemnity set forth in this Section 1.31 shallalso include any diminution in the value of the security afforded by theProperty or any future reduction in the sales price of the Property by reasonof any matter set forth in this Section 1.31. The foregoing indemnityshall specifically not include any such costs relating to Hazardous Substanceswhich are initially placed on, in or under the Property after foreclosure or othertaking of title to the Property by Grantee or its successors or assigns.Grantee’s rights under this Section shall survive payment in full of the Debtand shall be in addition to all other rights of Grantee under this SecurityInstrument, the Note and the other Loan Documents.

 

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(g)                                 UponGrantee’s request, at any time after the occurrence of an Event of Default orat such other time as Grantee has reasonable grounds to believe that HazardousSubstances are or have beenreleased, stored or disposed of on the Property, or on property contiguous withthe Property, or that the Property may be in violation of the EnvironmentalLaws, Grantor shall perform or cause to be performed, at Grantor’s sole costand expense and in scope, form and substance satisfactory to Grantee, aninspection or audit of the Property prepared by a hydrogeologist orenvironmental engineer or other appropriate consultant approved by Granteeindicating the presence or absence of Hazardous Substances on the Property, thecompliance or non-compliance status of the Property and the operationsconducted thereon with applicable Environmental Laws, or an inspection or auditof the Property prepared by an engineering or consulting firm approved byGrantee indicating the presence or absence of friable asbestos or substancescontaining asbestos or lead or substances containing lead or lead based paint (“LeadBased Paint”) on the Property. If Grantor fails to provide reports of suchinspection or audit within thirty (30) days after such request, Grantee mayorder the same, and Grantor hereby grants to Grantee and its employees andagents access to the Property and an irrevocable license to undertake suchinspection or audit. The cost of such inspection or audit, together withinterest thereon at the Default Interest Rate from the date incurred by Granteeuntil actually paid by Grantor, shall be immediately paid by Grantor on demandand shall be secured by this Security Instrument and by all of the other LoanDocuments securing all or any part of the Debt.

 

(h)                                 Referenceis made to that certain Environmental Indemnity Agreement of even date herewithby and among Grantor, the indemnitor named therein and Grantee (the “EnvironmentalIndemnity Agreement”). The provisions of this Security Instrument and theEnvironmental Indemnity Agreement shall be read together to maximize thecoverage with respect to the subject matter thereof, as determined by Grantee.

 

(i)                                     **[Reserved]**.

 

(j)                                     If,prior to the date hereof, it was determined that the Property contains LeadBased Paint, Grantor had prepared an assessment report describing the locationand condition of the Lead Based Paint (a “Lead Based Paint Report”). If,at any time hereafter, Lead Based Paint is suspected of being present on theProperty, Grantor agrees, at its sole cost and expense and within twenty (20)days thereafter, to cause to be prepared a Lead Based Paint Report prepared byan expert, and in form, scope and substance, acceptable to Grantee.

 

(k)                                  Grantoragrees that if it has been, or if at any time hereafter it is, determined thatthe Property contains Lead Based Paint, on or before thirty (30) days following(i) the date hereof, if such determination was made prior to the date hereof or(ii) such determination, if such determination is hereafter made, asapplicable, Grantor shall, at its sole cost and expense, develop and implement,and thereafter diligently and continuously carry out (or cause to be developedand implemented and thereafter diligently and continually to be carried out),an operations, abatement and maintenance plan for the Lead Based Paint on theProperty, which plan shall be prepared by an expert, and be in form, scope andsubstance, acceptable to Grantee (together with any Lead Based Paint Report,the “O&M Plan”). (If an O&M Plan has been prepared prior to thedate hereof, Grantor agrees to diligently and continually carry out (or cause

 

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to be carried out) the provisions thereof.) Compliancewith the O&M Plan shall require or be deemed to require, withoutlimitation, the proper preparation and maintenance of all records, papers andforms required under the Environmental Laws.

 

**1.32****                        Indemnification;Subrogation.**

 

(a)                                  Grantorshall indemnify, defend and hold Grantee harmless against: (i) any and all claimsfor brokerage, leasing, finders or similar fees which may be made relating tothe Property or the Debt, and (ii) any and all liability, obligations, losses,damages, penalties, claims, actions, suits, costs and expenses (includingGrantee’s reasonable attorneys’ fees) of whatever kind or nature which may beasserted against, imposed on or incurred by Grantee in connection with the Debt,this Security Instrument, the Property, or any part thereof, or the exercise byGrantee of any rights or remedies granted to it under this Security Instrument;provided, however, that nothing herein shall be construed toobligate Grantor to indemnify, defend and hold harmless Grantee from andagainst any and all liabilities, obligations, losses, damages, penalties,claims, actions, suits, costs and expenses enacted against, imposed on orincurred by Grantee by reason of Grantee’s willful misconduct or grossnegligence.

 

(b)                                 IfGrantee is made a party defendant to any litigation or any claim is threatenedor brought against Grantee concerning the Debt, this Security Instrument, theProperty, or any part thereof, or any interest therein, or the construction,maintenance, operation or occupancy or use thereof, then Grantor shallindemnify, defend and hold Grantee harmless from and against all liability byreason of said litigation or claims, including reasonable attorneys’ fees andexpenses incurred by Grantee in any such litigation or claim, whether or not anysuch litigation or claim is prosecuted to judgment. If Grantee commences anaction against Grantor to enforce any of the terms hereof or to prosecute anybreach by Grantor of any of the terms hereof or to recover any sum securedhereby, Grantor shall pay to Grantee its reasonable attorneys’ fees andexpenses. The right to such attorneys’ fees and expenses shall be deemed tohave accrued on the commencement of such action, and shall be enforceablewhether or not such action is prosecuted to judgment. If Grantor breaches anyterm of this Security Instrument, Grantee may engage the services of anattorney or attorneys to protect its rights hereunder, and in the event of suchengagement following any breach by Grantor, Grantor shall pay Granteereasonable attorneys’ fees and expenses incurred by Grantee, whether or not anaction is actually commenced against Grantor by reason of such breach. Allreferences to “attorneys” in this subsection and elsewhere in thisSecurity Instrument shall include, without limitation, any attorney or law firmengaged by Grantee and Grantee’s in-house counsel, and all references to “feesand expenses” in this subsection and elsewhere in this Security Instrumentshall include, without limitation, any fees of such attorney or law firm, anyappellate counsel fees, if applicable, and any allocation charges andallocation costs of Grantee’s in-house counsel.

 

(c)                                  Awaiver of subrogation shall be obtained by Grantor from its insurance carrier and,consequently, Grantor waives any and all right to claim or recover againstGrantee, its officers, employees, agents and representatives, for loss of ordamage to Grantor, the Property, Grantor’s property or the property of othersunder Grantor’s control from any cause insured against or required to beinsured against by the provisions of this Security Instrument.

 

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**1.33****                        Covenantswith Respect to Indebtedness, Operations, Fundamental Changes of Grantor.**

 

Grantor hereby represents, warrants and covenants as of the date hereofand until such time as the Debt is paid in full, that Grantor;

 

(a)                                  willnot, nor will any partner, limited or general, member or shareholder thereof, asapplicable, amend, modify or otherwise change its partnership certificate,partnership agreement, articles of incorporation, by-laws, operating agreement,articles of organization, or other formation agreement or document, asapplicable, in any material term or manner, or in a manner which adverselyaffects Grantor’s existence as a single purpose entity;

 

(b)                                 willnot liquidate or dissolve (or suffer any liquidation or dissolution), or enter intoany transaction of merger or consolidation, or acquire by purchase or otherwiseall or substantially all the business or assets of, or any stock or otherevidence of beneficial ownership of any entity;

 

(c)                                  hasnot and will not guarantee, pledge its assets for the benefit of, or otherwise becomeliable on or in connection with, any obligation of any other person or entity;

 

(d)                                 doesnot own and will not own any asset other than (i) the Property, and (ii) incidentalpersonal property necessary for the operation of the Property;

 

(e)                                  isnot engaged and will not engage, either directly or indirectly, in any businessother than the ownership, management and operation of the Property;

 

(f)                                    willnot enter into any contract or agreement with any general partner, principal, affiliateor member of Grantor, as applicable, or any affiliate of any general partner,principal or member of Grantor, except upon terms and conditions that areintrinsically fair and substantially similar to those that would be availableon an arms-length basis with third parties other than an affiliate;

 

(g)                                 hasnot incurred and will not incur any debt, secured or unsecured, direct or contingent(including guaranteeing any obligation), other than (i) the Debt, and (ii)affiliate advances or trade payables or accrued expenses incurred in theordinary course of business of operating the Property, and no other debt willbe secured (senior, subordinate or pari passu) by the Property;

 

(h)                                 hasnot made and will not make any loans or advances to any third party (includingany affiliate);

 

(i)                                     isand will be solvent and pay its debts from its assets as the same shall becomedue;

 

(j)                                     hasdone or caused to be done and will do all things necessary to preserve itsexistence, and will observe all formalities applicable to it;

 

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(k)                                  willconduct and operate its business in its own name and as presently conducted andoperated;

 

(l)                                     willmaintain financial statements, books and records and bank accounts separatefrom those of its affiliates, including, without limitation, its generalpartners or members, as applicable;

 

(m)                               willbe, and at all times will hold itself out to the public as, a legal entityseparate and distinct from any other entity (including, without limitation, anyaffiliate, general partner, or member, as applicable, or any affiliate of anygeneral partner or member of Grantor, as applicable);

 

(n)                                 willfile its own tax returns;

 

(o)                                 willmaintain adequate capital for the normal obligations reasonably foreseeable ina business of its size and character and in light of its contemplated businessoperations;

 

(p)                                 willallocate fairly and reasonably any overhead and expense for shared officespace;

 

(q)                                 willnot commingle the funds and other assets of Grantor with those of any generalpartner, member, affiliate, principal or any other person;

 

(r)                                    hasand will maintain its assets in such a manner that it is not costly ordifficult to segregate, ascertain or identify its individual assets from thoseof any affiliate or any other person;

 

(s)                                  doesnot and will not hold itself out to be responsible for the debts or obligationsof any other person;

 

(t)                                    willpay any liabilities out of its own funds, including salaries of its employees,not funds of any affiliate;

 

(u)                                 willuse stationery, invoices, and checks separate from its affiliates; and

 

(v)                                 willnot partition, or permit any partition of, the Property; and

 

(w)                               willnot amend or terminate any co-tenancy or joint ownership agreement without theprior written consent of Grantee.

 

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**ARTICLEII**

 

**EVENTS OFDEFAULT**

 

**2.1****                               Events of Default.**

 

The occurrence of any of the following events shall be an Event ofDefault hereunder:

 

(a)                                  Grantorfails to pay any money to Grantee required hereunder at the time or within anyapplicable grace period set forth herein.

 

(b)                                 Grantorfails to provide insurance as required by Section 1.4 hereof or fails toperform any covenant, agreement, obligation, term or condition set forth in Section1.31 or Section 1.33 hereof.

 

(c)                                  Grantorfails to perform any other covenant, agreement, obligation, term or conditionset forth herein, other than those otherwise described in this Section 2.1,and, to the extent such failure or default is susceptible of being cured, thecontinuance of such failure or default for thirty (30) days after writtennotice thereof from Grantee to Grantor; provided, however, thatif such default is susceptible of cure but such cure cannot be accomplishedwith reasonable diligence within said period of time, and if Grantor commencesto cure such default promptly after receipt of notice thereof from Grantee, andthereafter prosecutes the curing of such default with reasonable diligence,such period of time shall be extended for such period of time as may benecessary to cure such default with reasonable diligence, but not to exceed an additionalsixty (60) days.

 

(d)                                 Anyrepresentation or warranty made herein, in or in connection with any applicationor commitment relating to the loan evidenced by the Note, or in any of theother Loan Documents to Grantee by Grantor, by any principal, general partner,manager or member in Grantor, or by any Indemnitor is determined by Grantee tohave been false or misleading in any material respect at the time made.

 

(e)                                  Thereshall be a sale, conveyance, disposition, alienation, hypothecation, leasing, assignment,pledge, mortgage, granting of a security interest in or other transfer orfurther encumbrancing of the Property, Grantor or its general partners ormanaging members, or any portion thereof or any interest therein, in violationof Section 1.13 hereof.

 

(f)                                    Adefault occurs under any of the other Loan Documents or any joint ownership agreementor co-tenancy agreement which has not been cured within any applicable grace orcure period therein provided.

 

(g)                                 Grantor,any principal, general partner or managing member in Grantor or any Indemnitorbecomes insolvent, or makes a transfer in fraud of creditors, or makes anassignment for the benefit of creditors, or files a petition in bankruptcy, oris voluntarily adjudicated insolvent or bankrupt or admits in writing the inabilityto pay its debts as they mature, or petitions or applies to any tribunal for orconsents to or fails to contest the appointment of a

 

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receiver, trustee, custodian or similar officer forGrantor, for any such principal, general partner or managing member of Grantoror for any Indemnitor or for a substantial part of the assets of Grantor, ofany such principal, general partner or managing member of Grantor or of anyIndemnitor, or commences any case, proceeding or other action under anybankruptcy, reorganization, arrangement, readjustment or debt, dissolution orliquidation law or statute of any jurisdiction, whether now or hereafter ineffect.

 

(h)                                 Apetition is filed or any case, proceeding or other action is commenced againstGrantor, against any principal, general partner or managing member of Grantoror against any Indemnitor seeking to have an order for relief entered againstit as debtor or seeking reorganization, arrangement, adjustment, liquidation,dissolution or composition of it or its debts or other relief under any lawrelating to bankruptcy, insolvency, arrangement, reorganization, receivershipor other debtor relief under any law or statute of any jurisdiction, whethernow or hereafter in effect, or a court of competent jurisdiction enters anorder for relief against Grantor, against any principal, general partner ormanaging member of Grantor or against any Indemnitor, as debtor, or an order,judgment or decree is entered appointing, with or without the consent ofGrantor, of any such principal, general partner or managing member of Grantoror of any Indemnitor, a receiver, trustee, custodian or similar officer forGrantor, for any such principal, general partner or managing member of Grantoror for any Indemnitor, or for any substantial part of any of the properties ofGrantor, of any such principal, general partner or managing member of Grantoror of any Indemnitor, and if any such event shall occur, such petition, case,proceeding, action, order, judgment or decree is not dismissed within sixty(60) days after being commenced.

 

(i)                                     TheProperty or any part thereof is taken on execution or other process of law inany action against Grantor.

 

(j)                                     Grantorabandons all or a portion of the Property.

 

(k)                                  Theholder of any lien or security interest on the Property (without implying theconsent of Grantee to the existence or creation of any such lien or securityinterest), whether superior or subordinate to this Security instrument or anyof the other Loan Documents, declares a default and such default is not curedwithin any applicable grace or cure period set forth in, the applicabledocument or such holder institutes foreclosure or other proceedings for theenforcement of its remedies thereunder.

 

(l)                                     TheProperty, or any part thereof, is subjected to waste or to removal, demolitionor material alteration so that the value of the Property is materiallydiminished thereby and Grantee determines that it is not adequately protectedfrom any loss, damage or risk associated therewith.

 

(m)                               Anydissolution, termination, partial or complete liquidation, merger or consolidationof Grantor, any of its principals, any general partner or any managing member, orany Indemnitor.

 

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**ARTICLEIII**

 

**REMEDIES**

 

**3.1****                               RemediesAvailable.**

 

If there shall occur an Event of Default under this SecurityInstrument, then this Security Instrument is subject to foreclosure as providedby law and Grantee may, at its option and by or through a trustee, nominee,assignee or otherwise, to the fullest extent permitted by law, exercise any orall of the following rights, remedies and recourses, either successively orconcurrently:

 

(a)                                  Acceleration.Accelerate the maturity date of the Note and declare any or all of the Debt tobe immediately due and payable without any presentment, demand, protest, noticeor action of any kind whatever (each of which is hereby expressly waived byGrantor), whereupon the same shall become immediately due and payable. Upon anysuch acceleration, payment of such accelerated amount shall constitute aprepayment of the principal balance of the Note and any applicable prepaymentfee provided for in the Note shall then be immediately due and payable.

 

(b)                                 Entryon the Property. Either in person or by agent, with or without bringing anyaction or proceeding, or by a receiver appointed by a court and without regardto the adequacy of its security, enter upon and take possession of theProperty, or any part thereof, without force or with such force as is permittedby law and without notice or process or with such notice or process as isrequired by law, unless such notice and process is waivable, in which caseGrantor hereby waives such notice and process, and do any and all acts andperform any and all work which may be desirable or necessary in Grantee’sjudgment to complete any unfinished construction on the Premises, to preservethe value, marketability or rentability of the Property, to increase the incometherefrom, to manage and operate the Property or to protect the security hereof,and all sums expended by Grantee therefor, together with interest thereon atthe Default Interest Rate, shall be immediately due and payable to Grantee byGrantor on demand and shall be secured hereby and by all of the other LoanDocuments securing all or any part of the Debt.

 

(c)                                  CollectRents. With or without taking possession of the Property, sue or otherwisecollect the Rents, including those past due and unpaid.

 

(d)                                 Appointmentof Receiver. Upon, or at any time prior or after, initiating the exerciseof any power of sale, instituting any judicial foreclosure or instituting anyother foreclosure of the liens and security interests provided for herein orany other legal proceedings hereunder, make application to a court of competentjurisdiction for appointment of a receiver for all or any part of the Property,as a matter of strict right and without notice to Grantor and without regard tothe adequacy of the Property for the repayment of the Debt or the solvency of Grantoror any person or persons liable for the payment of the Debt, and Grantor doeshereby irrevocably consent to such appointment, waive any and all notices ofand defenses to such appointment and agree not to oppose any applicationtherefor by Grantee, but nothing herein is to be construed to deprive Granteeof any other right, remedy or privilege Grantee may now have

 

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under the law to have a receiver appointed, provided,however, that the appointment of such receiver, trustee or otherappointee by virtue of any court order, statute or regulation shall not impairor in any manner prejudice the rights of Grantee to receive payment of theRents pursuant to other terms and provisions hereof. Any such receiver shallhave all of the usual powers and duties of receivers in similar cases,including, without limitation, the full power to hold, develop, rent, lease,manage, maintain, operate and otherwise use or permit the use of the Propertyupon such terms and conditions as said receiver may deem to be prudent andreasonable under the circumstances as more fully set forth in Section 3.3below. Such receivership shall, at the option of Grantee, continue until fullpayment of all of the Debt or until title to the Property shall have passed byforeclosure sale under this Security Instrument or deed in lieu of foreclosure.

 

(e)                                  Foreclosure.Immediately commence an action to foreclose this Security Instrument or tospecifically enforce its provisions with respect to any of the Debt, pursuantto the statutes in such case made and provided, and sell the Property or causethe Property to be sold in accordance with the requirements and proceduresprovided by said statutes in a single parcel or in several parcels at theoption of Grantee. In the event foreclosure proceedings are instituted byGrantee, all expenses incident to such proceedings, including, but not limitedto, reasonable attorneys’ fees and costs, shall be paid by Grantor and securedby this Security Instrument and by all of the other Loan Documents securing allor any part of the Debt. The Debt and all other obligations secured by thisSecurity Instrument, including, without limitation, interest at the DefaultInterest Rate, any prepayment charge, fee or premium required to be paid underthe Note in order to prepay principal (to the extent permitted by applicablelaw), reasonable attorneys’ fees and any other amounts due and unpaid toGrantee under the Loan Documents, may be bid by Grantee in the event of aforeclosure sale hereunder. In the event of a judicial sale pursuant to aforeclosure decree, it is understood and agreed that Grantee or its assigns maybecome the purchaser of the Property or any part thereof.

 

(f)                                    JudicialRemedies. Proceed by suit or suits, at law or in equity, instituted by oron behalf of Grantee, to enforce the payment of the Debt or the otherobligations of Grantor hereunder or pursuant to the Loan Documents, toforeclose the liens and security interests of this Security Instrument asagainst all or any part of the Property, and to have all or any part of the Propertysold under the judgment or decree of a court of competent jurisdiction. Thisremedy shall be cumulative of any other non-judicial remedies available toGrantee with respect to the Loan Documents. Proceeding with the request orreceiving a judgment for legal relief shall not be or be deemed to be anelection of remedies or bar any available non-judicial remedy of Grantee.

 

(g)                                 Other.Exercise any other right or remedy available hereunder, under any of the otherLoan Documents or at law or in equity.

 

**3.2****                               Applicationof Proceeds.**

 

To the fullest extent permitted by law, the proceeds of any sale underthis Security Instrument shall be applied, to the extent funds are soavailable, to the following items in such order as Grantee in its discretionmay determine:

 

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(a)                                  Topayment of the reasonable costs, expenses and fees of taking possession of the Property,and of holding, operating, maintaining, using, leasing, repairing, improving,marketing and selling the same and of otherwise enforcing Grantee’s rights andremedies hereunder and under the other Loan Documents, including, but notlimited to, receivers’ fees, court costs, attorneys’, accountants’, appraisers’,managers’ and other professional fees, title charges and transfer taxes.

 

(b)                                 Topayment of all sums expended by Grantee under the terms of any of the Loan Documentsand not yet repaid, together with interest on such sums at the Default InterestRate.

 

(c)                                  Topayment of the Debt and all other obligations secured by this Security Instrument,including, without limitation, interest at the Default Interest Rate and, tothe extent permitted by applicable law, any prepayment fee, charge or premiumrequired to be paid under the Note in order to prepay principal, in any orderthat Grantee chooses in its sole discretion.

 

(d)                                 Theremainder, if any, of such funds shall be disbursed to Grantor or to the personor persons legally entitled thereto.

 

**3.3****                               Rightand Authority of Receiver or Grantee in the Event of Default; Power of Attorney.**

 

Upon the occurrence of an Event of Default, and entry upon the Propertypursuant to Section 3.1(b) hereof or appointment of a receiver pursuantto Section 3.1(d) hereof, and under such terms and conditions as may beprudent and reasonable under the circumstances in Grantee’s or the receiver’ssole discretion, all at Grantor’s expense, Grantee or said receiver, or suchother persons or entities as they shall hire, direct or engage, as the case maybe, may do or permit one or more of the following, successively orconcurrently: (a) enter upon and take possession and control of any and all ofthe Property; (b) take and maintain possession of all documents, books,records, papers and accounts relating to the Property; (c) exclude Grantor andits agents, servants and employees wholly from the Property; (d) manage andoperate the Property; (e) preserve and maintain the Property; (f) make repairsand alterations to the Property; (g) complete any construction or repair of theImprovements, with such changes, additions or modifications of the plans andspecifications or intended disposition and use of the Improvements as Granteemay in its sole discretion deem appropriate or desirable to place the Propertyin such condition as will, in Grantee’s sole discretion, make it or any partthereof readily marketable or rentable; (h) conduct a marketing or leasingprogram with respect to the Property, or employ a marketing or leasing agent oragents to do so, directed to the leasing or sale of the Property under suchterms and conditions as Grantee may in its sole discretion deem appropriate ordesirable; (i) employ such contractors, subcontractors, materialmen,architects, engineers, consultants, managers, brokers, marketing agents, orother employees, agents, independent contractors or professionals, as Granteemay in its sole discretion deem appropriate or desirable to implement and effectuatethe rights and powers herein granted; (j) execute and deliver, in the name ofGrantee as attorney-in-fact and agent of Grantor or in its own name as Grantee,such documents and instruments as are necessary or appropriate to consummateauthorized transactions; (k) enter such leases, whether of real or personalproperty, or tenancy agreements, under such terms and conditions as Grantee mayin its sole discretion deem

 

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appropriate or desirable; (1) collect and receive theRents from the Property; (m) eject tenants or repossess personal property, asprovided by law, for breaches of the conditions of their leases or otheragreements; (n) sue for unpaid Rents, payments, income or proceeds in the nameof Grantor or Grantee; (o) maintain actions in forcible entry and detainer,ejectment for possession and actions in distress for rent; (p) compromise orgive acquittance for Rents, payments, income or proceeds that may become due;(q) delegate or assign any and all rights and powers given to Grantee by thisSecurity Instrument; and (r) do any acts which Grantee in its sole discretion deemsappropriate or desirable to protect the security hereof and use such measures,legal or equitable, as Grantee may in its sole discretion deem appropriate ordesirable to implement and effectuate the provisions of this SecurityInstrument. This Security Instrument shall constitute a direction to and fullauthority to any lessee, or other third party who has heretofore dealt or contractedor may hereafter deal or contract with Grantor or Grantee, at the request ofGrantee, to pay all amounts owing under any lease, contract, concession,license or other agreement to Grantee without proof of the Event of Defaultrelied upon. Any such lessee or third party is hereby irrevocably authorized torely upon and comply with (and shall be fully protected by Grantor in so doing)any request, notice or demand by Grantee for the payment to Grantee of anyRents or other sums which may be or thereafter become due under its lease,contract, concession, license or other agreement, or for the performance of anyundertakings under any such lease, contract, concession, license or otheragreement, and shall have no right or duty to inquire whether any Event ofDefault under this Security Instrument or under any of the other Loan Documentshas actually occurred or is then existing. Grantor hereby constitutes andappoints Grantee, its assignees, successors, transferees and nominees, asGrantor’s true and lawful attorney-in-fact and agent, with full power ofsubstitution in the Property, in Grantor’s name, place and stead, to do orpermit any one or more of the foregoing described rights, remedies, powers andauthorities, successively or concurrently, and said power of attorney shall bedeemed a power coupled with an interest and irrevocable so long as any portionof the Debt is outstanding. Any money advanced by Grantee in connection withany action taken under this Section 3.3, together with interest thereonat the Default Interest Rate from the date of making such advancement byGrantee until actually paid by Grantor, shall be a demand obligation owing byGrantor to Grantee and shall be secured by this Security Instrument and byevery other instrument securing all or any portion of the Debt.

 

**3.4****                               OccupancyAfter Foreclosure.**

 

In the event there is a foreclosure sale hereunder and at the time ofsuch sale, Grantor or Grantor’s representatives, successors or assigns, or anyother persons claiming any interest in the Property by, through or underGrantor (except tenants of space in the Improvements subject to leases enteredinto prior to the date hereof), are occupying or using the Property, or anypart thereof, then, to the extent not prohibited by applicable law, each andall shall, at the option of Grantee or the purchaser at such sale, as the casemay be, immediately become the tenant of the purchaser at such sale, whichtenancy shall be a tenancy from day-to-day, terminable at the will of eitherlandlord or tenant, at a reasonable rental per day based upon the value of theProperty occupied or used, such rental to be due daily to the purchaser.Further, to the extent permitted by applicable law, in the event the tenantfails to surrender possession of the Property upon the termination of suchtenancy, the purchaser shall be entitled to institute and maintain an actionfor

 

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unlawful detainer of the Property in the appropriatecourt of the county in which the Premises is located.

 

**3.5****                               Noticeto Account Debtors.**

 

Grantee may, at any time after an Event of Default, notify the accountdebtors and obligors of any accounts, chattel paper, negotiable instruments orother evidences of indebtedness to Grantor included in the Property to payGrantee directly. Grantor shall at any time or from time to time upon therequest of Grantee provide to Grantee a current list of all such accountdebtors and obligors and their addresses.

 

**3.6****                               CumulativeRemedies.**

 

All remedies contained in this Security Instrument are cumulative andGrantee shall also have all other remedies provided at law and in equity or inany other Loan Documents. Such remedies may be pursued separately, successivelyor concurrently at the sole subjective direction of Grantee and may beexercised in any order and as often as occasion therefor shall arise. No act ofGrantee shall be construed as an election to proceed under any particularprovisions of this Security Instrument to the exclusion of any other provisionof this Security Instrument or as an election of remedies to the exclusion ofany other remedy which may then or thereafter be available to Grantee. No delayor failure by Grantee to exercise any right or remedy under this SecurityInstrument shall be construed to be a waiver of that right or remedy or of anyEvent of Default. Grantee may exercise any one or more of its rights andremedies at its option without regard to the adequacy of its security.

 

**3.7****                               Paymentof Expenses.**

 

Grantor shall pay on demand all of Grantee’s expenses incurred in anyefforts to enforce any terms of this Security Instrument, whether or not anylawsuit is filed and whether or not foreclosure is commenced but not completed,including, but not limited to, reasonable legal fees and disbursements,foreclosure costs and title charges, together with interest thereon from andafter the date incurred by Grantee until actually paid by Grantor at theDefault Interest Rate, and the same shall be secured by this SecurityInstrument and by all of the other Loan Documents securing all or any part ofthe Debt.

 

**3.8****                               FairMarket Value**. The “fair market value” of the Property shall bedetermined as of the foreclosure date in order to enforce a deficiency againstGrantor or any other party liable for the repayment of the indebtedness securedhereby, the term “fair market value” shall include those matters required byapplicable law and shall also include the additional factors as follows:

 

(a)                                  TheProperty is to be valued “AS IS, WHERE IS” and “WITH ALL FAULTS” and thereshall be no assumption of restoration of or refurbishment of the Property afterthe date of foreclosure;

 

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(b)                                 Thereshall be an assumption of a prompt resale of the Property for an all cash salesprice by the purchaser at the foreclosure so that no extensive holding periodshould be factored into the determination of “fair market value” of theProperty;

 

(c)                                  Anoffset to the fair market value of the Property, as determined hereunder, shallbe made by deducting from such value the reasonable estimated closing costsrelating to the sale of the Property, including, but not limited to, brokeragecommissions, title policy expenses, tax prorations, escrow fees, and othercommon charges which are incurred by a seller of real property similar to theProperty; and

 

(d)                                 Afterconsideration of the factors required by law and those required above, an additionaldiscount factor shall be calculated based upon the estimated time it will taketo effectuate a sale of the Property so that the “fair market value” as sodetermined is discounted to be as of the date of the foreclosure of theProperty.

 

**ARTICLEIV**

 

**MISCELLANEOUSTERMS AND CONDITIONS**

 

**4.1****                               Timeof Essence.**

 

Time is of the essence with respect to all provisions of this SecurityInstrument.

 

**4.2****                               Releaseof Security Instrument.**

 

If all of the Debt be paid, then and in that event only, all rightsunder this Security Instrument, except for those provisions hereof which bytheir terms survive, shall terminate and the Property shall become wholly clearof the liens, security interests, conveyances and assignments evidenced hereby,which shall be promptly released of record by Grantee in due form at Grantor’scost. No release of this Security Instrument or the lien hereof shall be validunless executed by Grantee.

 

**4.3****                               CertainRights of Grantee.**

 

Without affecting Grantor’s liability for the payment of any of theDebt, Grantee may from time to time and without notice to Grantor: (a) releaseany person liable for the payment of the Debt; (b) extend or modify the termsof payment of the Debt; (c) accept additional real or personal property of anykind as security or alter, substitute or release any property securing theDebt; (d) recover any part of the Property; (e) consent in writing to themaking of any subdivision map or plat thereof; (f) join in granting anyeasement therein; or (g) join in any extension agreement of this SecurityInstrument or any agreement subordinating the lien hereof.

 

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**4.4****                               Waiverof Certain Defenses.**

 

No action for the enforcement of the lien hereof or of any provisionhereof shall be subject to any defense which would not be good and available tothe party interposing the same in an action at law upon the Note or any of theother Loan Documents.

 

**4.5****                               Notices;Designation of Managing Agent.**

 

All notices, demands, requests or other communications to be sent byone party to the other hereunder or required by law shall be in writing andshall be deemed to have been validly given or served by delivery of the same inperson to the intended addressee, or by depositing the same with FederalExpress or another reputable private courier service for next business daydelivery, or by depositing the same in the United States mail, postage prepaid,registered or certified mail, return receipt requested, in any event addressedto the intended addressee: to Grantor as set forth in the next succeedingparagraph, to Grantee at Wachovia Bank, National Association, 201 South TryonStreet, Suite 130, PMB Box #4, Loan Number 50-2753516, Charlotte, NorthCarolina 28202, or at such other address as may be designated by such party asherein provided. All notices, demands and requests shall be effective upon suchpersonal delivery, or one (1) business day after being deposited with theprivate courier service, or two (2) business days after being deposited in theUnited States mail as required above. Rejection or other refusal to accept orthe inability to deliver because of changed address of which no notice wasgiven as herein required shall be deemed to be receipt of the notice, demand orrequest sent. By giving to the other party hereto at least fifteen (15) days’prior written notice thereof in accordance with the provisions hereof, theparties hereto shall have the right from time to time to change theirrespective addresses and each shall have the right to specify as its addressany other address within the United States of America.

 

Steven D. Bell & Company (“SDB&Co”), the Indemnitor and anaffiliate of Henry Town Center, LLC, one of the co-tenants comprising Grantor,hereby accepts appointment as the managing agent with respect to notices,demands, requests or other communications between Grantor and Grantee.SDB&Co hereby agrees to serve as attorney-in-fact for Borrower for thelimited purpose of receiving all notices with respect to the Debt. Borroweracknowledges that SDB&Co will be the only party to be shown in the LoanDocuments as to which notices from Grantee shall be delivered. For the purposesof the Debt, Borrower acknowledges that notice from Grantee to SDB&Co shallbe deemed notice to all co-tenants. SDB&Co agrees that as managing agent itshall keep all books, records and accounts pertaining to the Debt separate fromany other property of SDB&Co. Borrower agrees that SDB&Co, as managingagent and The Sembler Company, as property manager (the “Property Manager”) maybe discharged or replaced only with Grantee’s prior written consent. Borroweragrees that SDB&Co shall be responsible for assuring that the Property iswell maintained by the Property Manager and that all expenses related to theProperty are paid by the Property Manager when due. Any notices to Grantorhereunder shall be sent to SDB&Co, 823 N. Elm Street, Suite 200,Greensboro, North Carolina 27401.

 

**4.6****                               Successorsand Assigns; Joint and Several Liability.**

 

The terms, provisions, indemnities, covenants and conditions hereofshall be binding upon Grantor and the successors and assigns of Grantor,including all successors in interest of

 

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Grantor in and to all or any part of the Property, andshall inure to the benefit of Grantee, its directors, officers, shareholders,employees and agents and their respective successors and assigns and shallconstitute covenants running with the land. All references in this SecurityInstrument to Grantor or Grantee shall be deemed to include all such parties’successors and assigns, and the term “Grantee” as used herein shall also meanand refer to any lawful holder or owner, including pledgees and participants,of any of the Debt. If Grantor consists of more than one person or entity, eachis jointly and severally liable to perform the obligations of Grantor hereunderand all representations, warranties, covenants and agreements made by Grantorhereunder are joint and several.

 

**4.7****                               Severability.**

 

A determination that any provision of this Security Instrument isunenforceable or invalid shall not affect the enforceability or validity of anyother provision, and any determination that the application of any provision ofthis Security Instrument to any person or circumstance is illegal orunenforceable shall not affect the enforceability or validity of such provisionas it may apply to any other persons or circumstances.

 

**4.8****                               Gender.**

 

Within this Security Instrument, words of any gender shall be held andconstrued to include any other gender, and words in the singular shall be heldand construed to include the plural, and vice versa, unless the contextotherwise requires.

 

**4.9****                               Waiver;Discontinuance of Proceedings.**

 

Grantee may waive any single Event of Default by Grantor hereunderwithout waiving any other prior or subsequent Event of Default. Grantee mayremedy any Event of Default by Grantor hereunder without waiving the Event ofDefault remedied. Neither the failure by Grantee to exercise, nor the delay byGrantee in exercising, any right, power or remedy upon any Event of Default byGrantor hereunder shall be construed as a waiver of such Event of Default or asa waiver of the right to exercise any such right, power or remedy at a laterdate. No single or partial exercise by Grantee of any right, power or remedyhereunder shall exhaust the same or shall preclude any other or furtherexercise thereof, and every such right, power or remedy hereunder may beexercised at any time and from time to time. No modification or waiver of anyprovision hereof nor consent to any departure by Grantor therefrom shall in anyevent be effective unless the same shall be in writing and signed by Grantee,and then such waiver or consent shall be effective only in the specificinstance and for the specific purpose given. No notice to nor demand on Grantorin any case shall of itself entitle Grantor to any other or further notice ordemand in similar or other circumstances. Acceptance by Grantee of any paymentin an amount less than the amount then due on any of the Debt shall be deemedan acceptance on account only and shall not in any way affect the existence ofan Event of Default. In case Grantee shall have proceeded to invoke any right,remedy or recourse permitted hereunder or under the other Loan Documents andshall thereafter elect to discontinue or abandon the same for any reason,Grantee shall have the unqualified right to do so and, in such an event,Grantor and Grantee shall be restored to their former positions with respect tothe Debt, the Loan

 

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Documents, the Property and otherwise, and the rights,remedies, recourses and powers of Grantee shall continue as if the same hadnever been invoked.

 

**4.10****                        SectionHeadings.**

 

The headings of the sections and paragraphs of this Security Instrumentare for convenience of reference only, are not to be considered a part hereofand shall not limit or otherwise affect any of the terms hereof.

 

**4.11****                        GOVERNINGLAW.**

 

THIS SECURITY INSTRUMENT WILL BE GOVERNED BY AND CONSTRUED INACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED,PROVIDED THAT TO THE EXTENT THAT ANY OF SUCH LAWS MAY NOW OR HEREAFTER BEPREEMPTED BY FEDERAL LAW, SUCH FEDERAL LAW SHALL SO GOVERN AND BE CONTROLLING,AND PROVIDED FURTHER THAT THE LAWS OF THE STATE IN WHICH THE PREMISES ISLOCATED SHALL GOVERN AS TO THE CREATION, PRIORITY AND ENFORCEMENT OF LIENS ANDSECURITY INTERESTS IN THE PROPERTY LOCATED IN SUCH STATE.

 

**4.12****                        Countingof Days.**

 

The term “days” when used herein shall mean calendar days. If any timeperiod ends on a Saturday, Sunday or holiday officially recognized by the statewithin which the Premises is located, the period shall be deemed to end on thenext succeeding business day. The term “business day” when used herein shallmean a weekday, Monday through Friday, except a legal holiday or a day on whichbanking institutions in New York, New York are authorized by law to be closed.

 

**4.13****                        Relationshipof the Parties.**

 

The relationship between Grantor and Grantee is that of a borrower anda lender only and neither of those parties is, nor shall it hold itself out tobe, the agent, employee, joint venturer or partner of the other party.

 

**4.14****                        Applicationof the Proceeds of the Note.**

 

To the extent that proceeds of the Note are used to pay indebtednesssecured by any outstanding lien, security interest, charge or prior encumbranceagainst the Property, such proceeds have been advanced by Grantee at Grantor’srequest and Grantee shall be subrogated to any and all rights, securityinterests and liens owned by any owner or holder of such outstanding liens,security interests, charges or encumbrances, irrespective of whether saidliens, security interests, charges or encumbrances are released.

 

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**4.15****                        UnsecuredPortion of Indebtedness.**

 

If any part of the Debt cannot be lawfully secured by this SecurityInstrument or if any part of the Property cannot be lawfully subject to thelien and security interest hereof to the full extent of such indebtedness, thenall payments made shall be applied on said indebtedness first in discharge ofthat portion thereof which is unsecured by this Security Instrument.

 

**4.16****                        CrossDefault.**

 

An Event of Default hereunder which has not been cured within anyapplicable grace or cure period shall be a default under each of the other LoanDocuments.

 

**4.17****                        InterestAfter Sale.**

 

In the event the Property or any part thereof shall be sold uponforeclosure as provided hereunder, to the extent permitted by law, the sum forwhich the same shall have been sold shall, for purposes of redemption (pursuantto the laws of the State in which the Premises is located), bear interest atthe Default Interest Rate.

 

**4.18****                        Inconsistencywith Other Loan Documents.**

 

In the event of any inconsistency between the provisions hereof and theprovisions in any of the other Loan Documents, it is intended that theprovisions of the Note shall control over the provisions of this SecurityInstrument, and that the provisions of this Security Instrument shall controlover the provisions of the Assignment of Leases and Rents, the Guaranty andIndemnity Agreement, the Environmental Indemnity Agreement, and the other LoanDocuments.

 

**4.19****                        Constructionof this Document.**

 

This document may be construed as a security deed, Security Instrument,chattel mortgage, conveyance, assignment, security agreement, pledge, financingstatement, hypothecation or contract, or any one or more of the foregoing, inorder to fully effectuate the liens and security interests created hereby andthe purposes and agreements herein set forth.

 

**4.20****                        NoMerger.**

 

It is the desire and intention of the parties hereto that this SecurityInstrument and the lien hereof do not merge in fee simple title to theProperty. It is hereby understood and agreed that should Grantee acquire anyadditional or other interests in or to the Property or the ownership thereof,then, unless a contrary intent is manifested by Grantee as evidenced by anappropriate document duly recorded, this Security Instrument and the lienhereof shall not merge in such other or additional interests in or to theProperty, toward the end that this Security Instrument may be foreclosed as ifowned by a stranger to said other or additional interests.

 

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**4.21****                        RightsWith Respect to Junior Encumbrances.**

 

Any person or entity purporting to have or to take a junior mortgage orother lien upon the Property or any interest therein shall be subject to therights of Grantee to amend, modify, increase, vary, alter or supplement thisSecurity Instrument, the Note or any of the other Loan Documents, and to extendthe maturity date of the Debt, and to increase the amount of the Debt, and towaive or forebear the exercise of any of its rights and remedies hereunder orunder any of the other Loan Documents and to release any collateral or securityfor the Debt, in each and every case without obtaining the consent of theholder of such junior lien and without the lien or security interest of thisSecurity Instrument losing its priority over the rights of any such juniorlien.

 

**4.22****                        GranteeMay File Proofs of Claim.**

 

In the case of any receivership, insolvency, bankruptcy,reorganization, arrangement, adjustment, composition or other proceedingsaffecting Grantor or the principals, general partners or managing members inGrantor, or their respective creditors or property, Grantee, to the extentpermitted by law, shall be entitled to file such proofs of claim and otherdocuments as may be necessary or advisable in order to have the claims ofGrantee allowed in such proceedings for the entire Debt at the date of theinstitution of such proceedings and for any additional amount which may becomedue and payable by Grantor hereunder after such date.

 

**4.23****                        FixtureFiling.**

 

This Security Instrument shall be effective from the date of itsrecording as a financing statement filed as a fixture filing with respect toall goods constituting part of the Property which are or are to become fixtures.This Security Instrument shall also be effective as a financing statement coveringminerals or the like (including oil and gas) and is to be filed for record inthe real estate records of the county where the Premises is situated. Themailing address of Grantor and the address of Grantee from which informationconcerning the security interests may be obtained are set forth in Section1.22 above.

 

**4.24****                        After-AcquiredProperty.**

 

All property acquired by Grantor after the date of this SecurityInstrument which by the terms of this Security Instrument shall be subject tothe lien and the security interest created hereby, shall immediately upon theacquisition thereof by Grantor and without further mortgage, conveyance orassignment become subject to the lien and security interest created by thisSecurity Instrument. Nevertheless, Grantor shall execute, acknowledge, deliverand record or file, as appropriate, all and every such further mortgages,security agreements, financing statements, assignments and assurances asGrantee shall require for accomplishing the purposes of this Security Instrument.

 

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**4.25****                        NoRepresentation.**

 

By accepting delivery of any item required to be observed, performed orfulfilled or to be given to Grantee pursuant to the Loan Documents, including,but not limited to, any officer’s certificate, balance sheet, statement ofprofit and loss or other financial statement, survey, appraisal or insurancepolicy, Grantee shall not be deemed to have warranted, consented to, oraffirmed the sufficiency, legality, effectiveness or legal effect of the same,or of any term, provision or condition thereof, and such acceptance of deliverythereof shall not be or constitute any warranty, consent or affirmation withrespect thereto by Grantee.

 

**4.26****                        Counterparts.**

 

This Security Instrument may be executed in any number of counterparts,each of which shall be effective only upon delivery and thereafter shall bedeemed an original, and all of which shall be taken to be one and the sameinstrument, for the same effect as if all parties hereto had signed the samesignature page. Any signature page of this Security Instrument may be detachedfrom any counterpart of this Security Instrument without impairing the legaleffect of any signatures thereon and may be attached to another counterpart ofthis Security Instrument identical in form hereto but having attached to it oneor more additional signature pages.

 

**4.27****                        PersonalLiability.**

 

Notwithstanding anything to the contrary contained in this SecurityInstrument, the liability of Grantor and its officers, directors, generalpartners, managers, members and principals for the Debt and for the performanceof the other agreements, covenants and obligations contained herein and in theLoan Documents shall be limited as set forth in Section 2.6 of the Note.

 

**4.28****                        Recordingand Filing.**

 

Grantor will cause the Loan Documents and all amendments andsupplements thereto and substitutions therefor to be recorded, filed,re-recorded and re-filed in such manner and in such places as Grantee shallreasonably request, and will pay on demand all such recording, filing,re-recording and re-filing taxes, fees and other charges. Grantor shallreimburse Grantee, or its servicing agent, for the costs incurred in obtaininga tax service company to verify the status of payment of taxes and assessmentson the Property.

 

**4.29****                        EntireAgreement and Modifications.**

 

This Security Instrument and the other Loan Documents contain theentire agreements between the parties relating to the subject matter hereof andthereof and all prior agreements relative hereto and thereto which are notcontained herein or therein are terminated. This Security Instrument and theother Loan Documents may not be amended, revised, waived, discharged, releasedor terminated orally but only by a written instrument or instruments executedby the party against which enforcement of the amendment, revision, waiver,discharge,

 

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release or termination is asserted. Any allegedamendment, revision, waiver, discharge, release or termination which is not sodocumented shall not be effective as to any party.

 

**4.30****                        MaximumInterest.**

 

The provisions of this Security Instrument and of all agreementsbetween Grantor and Grantee, whether now existing or hereafter arising andwhether written or oral, are hereby expressly limited so that in no contingencyor event whatsoever, whether by reason of demand or acceleration of thematurity of the Note or otherwise, shall the amount paid, or agreed to be paid(“Interest”) to Grantee for the use, forbearance or retention of themoney loaned under the Note exceed the maximum amount permissible underapplicable law. If, from any circumstance whatsoever, performance orfulfillment of any provision hereof or of any agreement between Grantor andGrantee shall, at the time performance or fulfillment of such provision shallbe due, exceed the limit for Interest prescribed by law or otherwise transcendthe limit of validity prescribed by applicable law, then, ipsofacto,the obligation to be performed or fulfilled shall be reduced to such limit, andif, from any circumstance whatsoever, Grantee shall ever receive anything ofvalue deemed Interest by applicable law in excess of the maximum lawful amount,an amount equal to any excessive Interest shall be applied to the reduction ofthe principal balance owing under the Note in the inverse order of its maturity(whether or not then due) or, at the option of Grantee, be paid over toGrantor, and not to the payment of Interest. All Interest (including anyamounts or payments deemed to be Interest) paid or agreed to be paid to Granteeshall, to the extent permitted by applicable law, be amortized, prorated,allocated and spread throughout the full period until payment in full of theprincipal balance of the Note so that the Interest thereon for such full periodwill not exceed the maximum amount permitted by applicable law. This Sectionwill control all agreements between Grantor and Grantee.

 

**4.31****                        InterestPayable by Grantee.**

 

Grantee shall cause funds in the Replacement Reserve to be depositedinto interest bearing accounts of the type customarily maintained by Grantee orits servicing agent for the investment of similar reserves, which accounts maynot yield the highest interest rate then available. Interest payable on suchamounts shall be computed based on the daily outstanding balance in theReplacement Reserve. Such interest shall be calculated on a simple,non-compounded interest basis based solely on contributions made to theReplacement Reserve by Grantor. All interest earned on amounts contributed tothe Replacement Reserve shall be retained by Grantee and accumulated for thebenefit of Grantor and added to the balance in the Replacement Reserve andshall be disbursed for payment of the items for which other funds in theReplacement Reserve are to be disbursed.

 

**4.32****                        Disseminationof Information.**

 

If Grantee determines at any time to sell, transfer or assign the Note,this Security Instrument and the other Loan Documents, and any or all servicingrights with respect thereto, or to grant participations therein (the “Participations”)or issue mortgage pass-through certificates or other securities evidencing abeneficial interest in a rated or unrated public offering or private placement(the “Securities”), Grantee may forward to each purchaser, transferee,assignee,

 

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servicer, participant, investor, or their respectivesuccessors in such Participations and/or Securities (collectively, the “Investor”)or any Rating Agency rating such Securities, each prospective Investor and eachof the foregoing’s respective counsel, all documents and information whichGrantee now has or may hereafter acquire relating to the Debt and to Grantor,any Guarantor, any Indemnitor and the Property, which shall have been furnishedby Grantor, any Guarantor, or any Indemnitor, as Grantee determines necessaryor desirable.

 

**4.33****                        SecondaryMarket.**

 

Grantee may sell, transfer and deliver the Loan Documents to one ormore Investors in the secondary mortgage market. In connection with such sale,Grantee may retain or assign responsibility for servicing the loan or maydelegate some or all of such responsibility and/or obligations to a servicer,including, but not limited to, any subservicer or master servicer, on behalf ofthe investors. All references to Grantee herein shall refer to and include,without limitation, any such servicer, to the extent applicable.

 

**4.34****                        CertainMatters Relating to Property Located in the State of Georgia.**

 

With respect to the Property which is located in the State of Georgia,notwithstanding anything contained herein to the contrary:

 

Power of Sale.                     (a) Upon the occurrence of anEvent of Default, Grantee, or the agent or successor of Grantee, may, at itsoption, sell or offer for sale the Property in such portions, order and parcelsas Grantee may determine with or without having first taken possession of same,to the highest bidder for cash at one or more public sales in accordance withthe terms and provisions of the law of the State of Georgia. Such sale shall bemade at the area within the courthouse of the county in which the Property (orany portion thereof to be sold) is situated (whether the parts or parcelsthereof, if any, in different counties are contiguous or not, and without thenecessity of having any personal property hereby secured present at such sale)which is designated by the applicable court of such county as the area in whichpublic sales are to take place, or, if no such area is designated, at the areaat the courthouse designated in the notice of sale as the area in which thesale will take place, on such day and at such times as permitted underapplicable law of the State of Georgia, after advertising the time, place andterms of sale and that portion of the Property in accordance herewith and suchlaw, and after having served written or printed notice of the proposed sale bycertified mail on each borrower obligated to pay the Note and other securedindebtedness secured by this Security Deed according to the records of Granteein accordance with applicable law. The affidavit of any person having knowledgeof the facts to the effect that such service was completed shall be prima facieevidence of the fact of service. The time, place and terms of any such saleshall be advertised once a week for four (4) consecutive weeks, immediatelyprior to the date of sale (but without regard to the number of days elapsedintervening between the date of publication of the first advertisement and thedate of sale) in a newspaper in which sheriff’s sales are advertised in saidcounty. In the event of any such public sale pursuant to the aforesaid power ofsale and agency, Grantor shall be deemed a tenant holding over and shallforthwith deliver possession of the Property to the purchaser or purchasers atsuch sale or be summarily dispossessed according to provisions of lawapplicable to tenants holding over.

 

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At any such public sale, Grantee may execute and deliver in the name ofGrantor to the purchaser a conveyance of the Property or any part of theProperty in fee simple. Grantor hereby constitutes and appoints Grantee theagent and attorney-in-fact of Grantor to make such sale and conveyance, andthereby to divest Grantor of all right, title and equity that Grantor may havein and to the Property and to vest the same in the purchaser or purchasers atsuch sale or sales, and all the acts and doings of said agent and attorney-in-factare hereby ratified and confirmed and any recitals in said conveyance orconveyances as to facts essential to a valid sale shall be binding uponGrantor. The aforesaid power of sale and agency hereby granted are coupled withan interest and are irrevocable by death or otherwise, are granted ascumulative of the other remedies provided hereby or by law for collection ofthe Debt and shall not be exhausted by one exercise thereof but may beexercised until full payment of all of the Debt. In the event of any sale underthis Deed by virtue of the exercise of the powers herein granted, or pursuantto any order in any judicial proceeding or otherwise, the Property may be soldin its entirety or in separate parcels and in such manner or order as Granteein its sole discretion may elect, and if Grantee so elects, Grantee may sellthe personal property covered by this Deed at one or more separate sales in anymanner permitted by the Uniform Commercial Code of Georgia, and one or moreexercises of the powers herein granted shall not extinguish or exhaust suchpowers, until all the Property is sold or the Note and other securedindebtedness is paid in full. If the Note and other secured indebtedness is nowor hereafter further secured by any chattel mortgages, deeds to secure debt ordeeds of trust, pledges, contracts or guaranty, assignments of lease, or othersecurity instruments, Grantee at its option may exhaust the remedies grantedunder any of said security instruments either concurrently or independently,and in such order as Grantee may determine.

 

(b)                                 Uponany foreclosure sale or sales of all or any portion of the Property under thepower herein granted, Grantee may bid for and purchase the Property and shallbe entitled to apply all or any part of the Debt as a credit to the purchaseprice.

 

(c)                                  Inthe event of a foreclosure or a sale of all or any portion of the Property underthe power herein granted, the proceeds of said sale shall be applied, inwhatever order Grantee in its sole discretion may decide, to the expenses of suchsale and of all proceedings in connection therewith (including, withoutlimitation, attorneys’ fees and expenses), to insurance premiums, liens,assessments, taxes and charges (including, without limitation, utility charges advancedby Grantee), to payment of the outstanding principal balance of the Debt, andto the accrued interest on all of the foregoing; and the remainder, if any,shall be paid to Grantor, or to the person or entity lawfully entitled thereto.

 

**4.35****                        WAIVEROF NOTICE AND HEARING.**

 

**GRANTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE UNDERTHE CONSTITUTION OF THE STATE OF GEORGIA OR THE CONSTITUTION OF THE UNITEDSTATES OF AMERICA TO NOTICE OR TO A JUDICIAL HEARING PRIOR TO THE EXERCISE OFANY RIGHT OR REMEDY PROVIDED BY THIS SECURITY DEED AND GRANTOR WAIVES ITSRIGHTS, IF ANY, TO SET ASIDE OR**

 

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**INVALIDATE****ANY SALE DULY CONSUMMATED IN ACCORDANCE WITH THE PROVISIONS OF THISSECURITY DEED ON THE GROUND (IF SUCH BE THE CASE) THAT THE SALE WAS CONSUMMATED WITHOUT A PRIOR JUDICIAL HEARING. ALL WAIVERS BY GRANTOR INTHIS PARAGRAPH HAVE BEEN VOLUNTARILY,INTELLIGENTLY AND KNOWINGLY, AFTER THE GRANTOR HAS BEEN FIRST INFORMED BY COUNSEL OF ITS OWN CHOOSINGAS TO POSSIBLE ALTERNATIVE RIGHTS, AND HAVE BEEN AS AN INTENTIONAL RELINQUISHMENT AND ABANDONMENT OFA KNOWN RIGHT AND PRIVILEGE.**

 

**4.36****                        Attorneys’Fee.**

 

When used hereinand in the other Loan Documents, the phrase “attorneys’ fees and expenses”shall mean attorneys’ fees and expenses actually incurred without the benefitof statutory presumption.

 

**[THE BALANCE OF THIS PAGE ISINTENTIONALLY LEFT BLANK]**

 

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IN WITNESSWHEREOF, Grantor has executed this Security Instrument on the day and yearfirst written above.

 

 
|   | **GRANTOR:**                         |
|--------|--------------------------------------|
|   |                                 |
|   | Henry Town Center, LLC               |
|   | A Georgia limited  liability company |
|   |                                 |
|   |                                 |
|   | By:                                  | /s/ Steven D. Bell |   |
|   |                                 | Steven D. Bell |
|   |                                 | Managing Member |

 

 
| Signed, sealed and  delivered              |
|--------------------------------------------|
| in the presence of:                        |   |
|                                       |   |
|                                       |   |
| /s/ Barbara R. Christy                     |   |
| Print Name:                                | Barbara R. Christy |   |
|                                       | Unofficial Witness |   |
|                                       |   |
|                                       |   |
| /s/ Lois J. Blankenship                    |   |
| Notary Public                              |   |
| (Notarial Seal)                            |   |
|                                       |   |
| My commission expires: April 7,  2007 |   |

 

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| Signed, sealed and  delivered     | **Alpha  Seven, LLC**                 |
|-----------------------------------|---------------------------------------|
| in the presence of the  following | a Delaware limited  liability company |
| witnesses:                        |                                  |
|                              | By:                                   | Edwards Mill Village  Associates Limited |
| /s/ [ILLEGIBLE]                   |                                  |   | Partnership, a North  Carolina limited |
| Unofficial Witness                |                                  |   | partnership |
|                              | Its:                                  | Sole Member |
| /s/ [ILLEGIBLE]                   |                                  |   |
| Notary Public                     |                                  | By: | ALPHA THREE, a North  Carolina |
|                              |                                  |   | general partnership |
| (NOTARY SEAL)                     |                                  |   |   |   |
|                              |                                  |   | Its: | General Partner |
| My Commission Expires:            |                                  |   |   |
|                              |                                  | By: | /s/ Robert F. Andrews,  III |   |
| 9-11-04                           |                                  |   |   | Robert F. Andrews, III |
|                              |                                  |   | General  Partner |
|                                   |                                       |  |  |  |  |  |  |  |

 

----

 
|   | Elliston Henry Town  Center, LLC      |
|--------|---------------------------------------|
|   | a Delaware limited  liability company |
|   |                                  |
|   | By                                    | Winston Three, LLC, a  North Carolina |
|   |                                  | Limited liability  company, its sole member |
|   |                                  |   |
|   |                                  |   |
|   |                                  | By | /s/ W. Leon Elliston |   |
|   |                                  |   | W. Leon Elliston |
|   |                                  |   | Sole Member/Manager |
|   |                                  |   |

 
| Signed, sealed and  delivered      |
|------------------------------------|
| in the presence of:                |   |
|                               |   |
|                               |   |
| /s/ C.W. Eller                     |   |
| Print Name:                        | C.W. ELLER |   |
|                               | Unofficial Witness |   |
|                               |   |
|                               |   |
| /s/ Cameron R. Higdon              |   |
| Notary Public                      |   |
| (Notarial Seal)                    |   |
|                               |   |
| My commission expires:  02/25/2006 |   |
|                               |   |
|                               | *[Signatures  continue on following page]* |

 

----

 
|                                       | Owen Henry Town Center,  LLC          |
|--------------------------------------------|---------------------------------------|
|                                       | A Delaware limited  liability company |
|                                       |                                  |
|                                       |                                  |
|                                       | By:                                   | /s/ Benjamin Ligon Owen |   |
|                                       |                                  | Benjamin Ligon Owen |
|                                       |                                  | Sole Member/Manager |
|                                       |                                  |
|                                       |                                  |
| Signed, sealed and  delivered              |                                  |
| in the presence of:                        |                                  |
|                                       |
|                                       |
| /s/ Lydia Owen Boesch                      |                                  |   |
| Print Name:                                | Lydia Owen Boesch                     |   |
|                                       | Unofficial Witness                    |   |
|                                       |                                  |
|                                       |                                  |
| /s/ [ILLEGIBLE]                            |                                  |   |
| Notary Public                              |                                  |
| (Notarial Seal)                            |                                  |
|                                       |                                  |
| My commission expires: June 26,  2004 |                                  |
|                                            |                                       |  |  |  |  |  |

 

----

 
|                               |               | DSCongdonA, LLC                       |
|------------------------------------|--------------------|---------------------------------------|
|                               |               | a Delaware limited  liability company |
|                               |               |                                  |
|                               |               |                                  |
|                               |               | By:                                   | /s/ Robert A. Cox, Jr. |   |
|                               |               |                                  | Robert A. Cox, Jr. |
|                               |               |                                  | Manager |
|                               |               |                                  |
|                               |               |                                  |
| Signed, sealed and  delivered      |               |                                  |
| in the presence of:                |               |                                  |
|                               |               |                                  |
|                               |               |                                  |
| /s/ Jirleen K. Sandhu              |               |
| Print Name:                        | Jirleen K. Sandhu  |                                  |
|                               | Unofficial Witness |                                  |
|                               |               |
|                               |               |
| /s/ [ILLEGIBLE]                    |               |
| Notary Public                      |               |
| (Notarial Seal)                    |               |
|                               |               |
| My commission expires:  10/31/2006 |               |

 

----

 
|                               |               | JWCongdonA, LLC                       |
|------------------------------------|--------------------|---------------------------------------|
|                               |               | a Delaware limited  liability company |
|                               |               |                                  |
|                               |               |                                  |
|                               |               | By:                                   | /s/ Robert A. Cox, Jr., |   |
|                               |               |                                  | Robert A. Cox, Jr., |
|                               |               |                                  | Manager |
|                               |               |                                  |
|                               |               |                                  |
| Signed, sealed and  delivered      |               |                                  |
| in the presence of:                |               |                                  |
|                               |               |
|                               |               |
| /s/ Jirleen K. Sandhu              |               |
| Print Name:                        | Jirleen K. Sandhu  |                                  |
|                               | Unofficial Witness |                                  |
|                               |               |
|                               |               |
| /s/ [ILLEGIBLE]                    |               |
| Notary Public                      |               |
| (Notarial Seal)                    |               |
|                               |               |
| My commission expires:  10/31/2006 |               |

 

----

 
|                               |               | KCVanstoryA, LLC                      |
|------------------------------------|--------------------|---------------------------------------|
|                               |               | a Delaware limited  liability company |
|                               |               |                                  |
|                               |               |                                  |
|                               |               | By:                                   | /s/ Robert A. Cox, Jr. |   |
|                               |               |                                  | Robert A. Cox, Jr. |
|                               |               |                                  | Manager |
|                               |               |                                  |
|                               |               |                                  |
| Signed, sealed and  delivered      |               |                                  |
| in the presence of:                |               |                                  |
|                               |               |                                  |
|                               |               |                                  |
| /s/ Jirleen K. Sandhu              |               |                                  |
| Print Name:                        | Jirleen K. Sandhu  |                                  |
|                               | Unofficial Witness |                                  |
|                               |               |
|                               |               |
| /s/ [ILLEGIBLE]                    |               |
| Notary Public                      |               |
| (Notarial Seal)                    |               |
|                               |               |
| My commission expires:  10/31/2006 |               |

 

----

 
|                               |               | ALCongdonA, LLC                       |
|------------------------------------|--------------------|---------------------------------------|
|                               |               | a Delaware limited  liability company |
|                               |               |                                  |
|                               |               |                                  |
|                               |               | By:                                   | /s/ Robert A. Cox, Jr. |   |
|                               |               |                                  | Robert A. Cox, Jr. |
|                               |               |                                  | Manager |
|                               |               |                                  |
|                               |               |                                  |
| Signed, sealed and  delivered      |               |
| in the presence of:                |               |
|                               |               |
|                               |               |
| /s/ Jirleen K. Sandhu              |               |
| Print Name:                        | Jirleen K. Sandhu  |                                  |
|                               | Unofficial Witness |                                  |
|                               |               |
|                               |               |
| /s/ [ILLEGIBLE]                    |               |
| Notary Public                      |               |
| (Notarial Seal)                    |               |
|                               |               |
| My commission expires:  10/31/2006 |               |

 

----

 
|                               |               | SCTerryA, LLC                         |
|------------------------------------|--------------------|---------------------------------------|
|                               |               | a Delaware limited  liability company |
|                               |               |                                  |
|                               |               |                                  |
|                               |               | By:                                   | /s/ Robert A. Cox, Jr. |   |
|                               |               |                                  | Robert A. Cox, Jr. |
|                               |               |                                  | Manager |
|                               |               |                                  |
|                               |               |                                  |
| Signed, sealed and delivered       |               |                                  |
| in the presence of:                |               |                                  |
|                               |               |
|                               |               |
| /s/ Jirleen K. Sandhu              |               |
| Print Name:                        | Jirleen K. Sandhu  |                                  |
|                               | Unofficial Witness |                                  |
|                               |               |
|                               |               |
| /s/ [ILLEGIBLE]                    |               |
| Notary Public                      |               |
| (Notarial Seal)                    |               |
|                               |               |
| My commission expires:  10/31/2006 |               |

 

----

 
|                              |               | JRCongdon,Jr.A, LLC                   |
|-----------------------------------|--------------------|---------------------------------------|
|                              |               | a Delaware limited  liability company |
|                              |               |                                  |
|                              |               |                                  |
|                              |               | By:                                   | /s/ Robert A. Cox, Jr. |   |
|                              |               |                                  | Robert A. Cox, Jr. |
|                              |               |                                  | Manager |
|                              |               |                                  |
|                              |               |                                  |
| Signed, sealed and  delivered     |               |                                  |
| in the presence of:               |               |
|                              |               |
|                              |               |
| /s/ Jirleen K. Sandhu             |               |
| Print Name:                       | Jirleen K. Sandhu  |                                  |
|                              | Unofficial Witness |                                  |
|                              |               |
|                              |               |
| /s/ [ILLEGIBLE]                   |               |
| Notary Public                     |               |
| (Notarial Seal)                   |               |
|                              |               |
| My commission expires: 10/31/2006 |               |

 

----

 
|                             |               | Spence Henry Town  Center, LLC        |
|----------------------------------|--------------------|---------------------------------------|
|                             |               | a Delaware limited  liability company |
|                             |               |                                  |
|                             |               |                                  |
|                             |               | By:                                   | /s/ David A. Spence |   |
|                             |               |                                  | David Spence |
|                             |               |                                  | Sole Member/Manager |
|                             |               |                                  |   |
|                             |               |                                  |   |
| Signed, sealed and  delivered    |               |                                  |
| in the presence of:              |               |
|                             |               |
|                             |               |
| /s/ Jeanette DeVeau              |               |
| Print Name:                      | Jeanette DeVeau    |                                  |
|                             | Unofficial Witness |                                  |
|                             |               |
|                             |               |
| /s/ Leigh Ann Weber              |               |
| Notary Public                    |               |
| (Notarial Seal)                  |               |
|                             |               |
| My commission expires:  3-3-2007 |               |

 

----

 
|                              |                | Jay Henry Town Center,  LLC           |
|-----------------------------------|---------------------|---------------------------------------|
|                              |                | a Delaware limited  liability company |
|                              |                |                                  |
|                              |                | By:                                   | Jay Family Limited  Partnership, a North |
|                              |                |                                  | Carolina limited partnership,  its sole member |
|                              |                |                                  |
|                              |                |                                  |
|                              |                |                                  | By: | /s/ Mack C. Jay III |   |
|                              |                |                                  | Name: | Mack C. Jay III |   |
|                              |                |                                  | Title: |  Gen. Partner |   |
|                              |                |
|                              |                |
| Signed, sealed and  delivered     |                |
| in the presence of:               |                |
|                              |                |
|                              |                |
| /s/ Gregory S. Williams           |                |
| Print Name:                       | Gregory S. Williams |                                  |
|                              | Unofficial Witness  |                                  |
|                              |                |
|                              |                |
| /s/ M. Lynn Pound                 |                |
| Notary Public                     |                |
| (Notarial Seal)                   |                |
|                              |                |
| My commission expires:  7-25-2007 |
|                                   |                     |                                       |  |  |  |  |  |  |

 

----

 

EXHIBIT “A” 

LEGAL DESCRIPTION

 

**Developer Tract 1**

 

All that tract or parcelof land lying and being in Land Lots 82 & 111 of the 6thDistrict, Henry County, Georgia, and being more particularly described asfollows:

 

Commencing at a concreteright-of-way monument found at the southwestern corner of the mitered intersection ofthe western right-of-way of Interstate Highway No. 75 (variable right-of-way)and the northern right-of-way of Jonesboro Road (variable right-of-way); Thencealong the northern right-of-way of Jonesboro Road (variable right-of-way) North71 degrees 36 minutes 51 seconds West, a distance of 111.85 feet to a concreteright-of-way monument found; Thence along said right-of-way South 18 degrees 19minutes 24 seconds West, a distance of 25.00 feet to a point; Thence North 71degrees 36 minutes 34 seconds West, a distance of 88.11 feet to a 1/2 inchcrimped top pipe found; Thence North 18 degrees 19 minutes 21 seconds East, adistance of 88.00 feet to a point; Thence North 71 degrees 41 minutes 15seconds West, a distance of 665.75 feet to a 5/8 inch rebar set; said pointbeing the TRUE POINT OF BEGINNING; Thence along said right-of-way North 71degrees 41 minutes 15 seconds West, a distance of 88.50 feet to a 5/8 inchrebar set; Thence leaving said right-of-way North 18 degrees 15 minutes 14seconds East, a distance of 24.16 feet to a 5/8 inch rebar set; Thence South 71degrees 44 minutes 46 seconds East, a distance of 20.00 feet to a 5/8 inchrebar set; Thence North 18 degrees 15 minutes 14 seconds East, a distance of188.56 feet to a pk nail set; Thence along a curve to the left, an arc lengthof 147.29 feet, said curve having a radius of 490.00 feet, with a chorddistance of 146.73 feet, at North 09 degrees 38 minutes 34 seconds East, to a5/8 inch rebar set; Thence North 01 degrees 01 minutes 54 seconds East, adistance of 29.74 feet to a 5/8 inch rebar set; Thence North 43 degrees 00minutes 13 seconds West, a distance of 26.67 feet to a 5/8 inch rebar set;Thence North 87 degrees 02 minutes 20 seconds West, a distance of 130.46 feetto a 5/8 inch rebar set; Thence North 72 degrees 57 minutes 01 seconds West, adistance of 49.30 feet to a 5/8 inch rebar set; Thence North 87 degrees 02minutes 20 seconds West, a distance of 161.78 feet to a 5/8 inch rebar set;Thence North 02 degrees 57 minutes 40 seconds East, a distance of 76.00 feet toa pk nail set; Thence North 87 degrees 02 minutes 20 seconds West, a distanceof 52.04 feet to a pk nail set; Thence North 02 degrees 57 minutes 40 secondsEast, a distance of 254.40 feet to a pk nail set; Thence South 87 degrees 02minutes 20 seconds East, a distance of 82.00 feet to a point; Thence North 02degrees 57 minutes 40 seconds East, a distance of 332.88 feet to a pk nail set;Thence North 87 degrees 02 minutes 20 seconds West, a distance of 93.17 feet toa pk nail set; Thence North 02 degrees 57 minutes 40 seconds East, a distanceof 181.83 feet to a pk nail set; Thence South 87 degrees 02 minutes 20 secondsEast, a distance of 12.00 feet to a pk nail set; Thence North 02 degrees 57minutes 40 seconds East, a distance of 96.69 feet to a pk nail set; ThenceSouth 87 degrees 02 minutes 20 seconds East, a distance of 108.00 feet to a pknail set; Thence North 02 degrees 57 minutes 40 seconds East, a distance of579.84 feet to a 5/8 inch rebar set; Thence North 89 degrees 59 minutes 42seconds East, a distance of 145.88 feet to a 1/2 inch rebar found; Thence South79 degrees 37 minutes 33 seconds East, a distance of 150.01 feet to a 1/2 inchrebar found; Thence North 85 degrees 56 minutes 21 seconds East, a distance of84.92 feet to a 1/2**inch rebarfound; Thence North 72

 

----

 

degrees 16 minutes 16 secondsEast, a distance of 119.73 feet to a 5/8 inch rebar found; Thence North 42degrees 50 minutes 27 seconds East, a distance of 123.21 feet to a 3\4 inchopen top pipe found on the western right-of-way of Interstate Highway No. 75(variable right-of-way); Thence along said right-of-way, South 19 degrees 05minutes 25 seconds East, a distance of 715.05 feet to a point; Thence leavingsaid right-of-way South 02 degrees 57 minutes 40 seconds West, a distance of321.79 feet to a point; Thence South 47 degrees 57 minutes 40 seconds West, adistance of 25.73 feet to a point; Thence South 02 degrees 57 minutes 40seconds West, a distance of 194.72 feet to a point; Thence South 88 degrees 59minutes 16 seconds East, a distance of 110.72 feet to a point; Thence North 01degrees 00 minutes 44 seconds East, a distance of 20.84 feet to a point; ThenceSouth 88 degrees 59 minutes 16 seconds East, a distance of 99.51 feet to apoint on the western right-of-way of Interstate Highway No. 75 (variableright-of-way); Thence along said right-of-way South 22 degrees 00 minutes 10seconds East, a distance of 69.74 feet to a 5/8 inch rebar found; Thenceleaving said right-of-way North 88 degrees 59 minutes 16 seconds West, adistance of 307.56 feet to a pk nail set; Thence South 81 degrees 36 minutes 34seconds West, a distance of 259.79 feet to a point; Thence North 88 degrees 58minutes 17 seconds West, a distance of 179.04 feet to a pk nail set; ThenceSouth 01 degrees 01 minutes 54 seconds West, a distance of 564.43 feet to a pknail set; Thence South 71 degrees 44 minutes 46 seconds East, a distance of40.50 feet to a point; Thence South 66 degrees 24 minutes 28 seconds West, adistance of 28.19 feet to a point; Thence South 18 degrees 15 minutes 14seconds West, a distance of 206.00 feet to a 5/8” rebar set located on theNorthern right-of-way of Jonesboro Road, said point being the TRUE POINT OFBEGINNING.

 

Said tract contains26.177 Acres.

 

**TOGETHERWITH:**

 

**Developer Tract 2**

 

All that tract or parcelof land lying and being in Land Lots 83 & 110 of the 6thDistrict, Henry County, Georgia, and being more particularly described asfollows:

 

Commencing at a concreteright-of-way monument found at the southwestern corner of the mitered intersection ofthe western right-of-way of Interstate Highway No. 75 (variable right-of-way)and the northern right-of-way of Jonesboro Road (variable right-of-way); Thencealong the northern right-of-way of Jonesboro Road (variable right-of-way) North71 degrees 36 minutes 51 seconds West, a distance of 111.85 feet to a concreteright-of-way monument found; Thence along said right-of-way South 18 degrees 19minutes 24 seconds West, a distance of 25.00 feet to a point; Thence North 71degrees 36 minutes 34 seconds West, a distance of 88.11 feet to a 1/2 inchcrimped top pipe found; Thence North 18 degrees 19 minutes 21 seconds East, adistance of 88.00 feet to a point; Thence North 71 degrees 41 minutes 15seconds West, a distance of 925.05 feet to a point; Thence along a curve to theleft, an arc length of 131.42 feet, said curve having a radius of 1417.32 feet,with a chord distance of 131.37 feet, at North. 74 degrees 20 minutes 37seconds West, to a point; Thence along a curve to the left, an arc length of212.21 feet, said curve having a radius of 1417.32 feet, with a chord distanceof 212.01 feet, at North 81 degrees 17 minutes 21 seconds West, to a point;Thence along a curve to the left, an arc length

 

----

 

of 50.00 feet, said curvehaving a radius of 1417.32 feet, with a chord distance of 50.00 feet, at North86 degrees 35 minutes 21 seconds West, to a 5/8 inch rebar found; Thence alonga curve to the left, an arc length of 17.27 feet, said curve having a radius of1417.32 feet, with a chord distance of 17.27 feet, at North 87 degrees 56minutes 56 seconds West, to a 5/8 inch rebar set; Thence North 88 degrees 17minutes 53 seconds West, a distance of 487.47 feet to a 5/8 inch rebar set;said 5/8 inch rebar set being the TRUE POINT OF BEGINNING; Thence South 02degrees 57 minutes 40 seconds West, a distance of 38.78 feet to a 5/8 inchrebar set; Thence North 88 degrees 07 minutes 55 seconds West, a distance of101.03 feet to a 5/8 inch rebar set; Thence leaving said right-of-way North 02degrees 57 minutes 40 seconds East, a distance of 30.00 feet to a 5/8 inchrebar set; Thence South 88 degrees 07 minutes 55 seconds East, a distance of 20.00feet to a 5/8 inch rebar set; Thence North 02 degrees 57 minutes 40 secondsEast, a distance of 637.29 feet to a 5/8 inch rebar set; Thence North 87degrees 02 minutes 20 seconds West, a distance of 29.37 feet to a pk nail set;Thence South 02 degrees 57 minutes 40 seconds West, a distance of 54.68 feet toa pk nail set; Thence North 87 degrees 02 minutes 20 seconds West, a distanceof 308.09 feet to a pk nail set; Thence South 02 degrees 57 minutes 40 secondsWest, a distance of 65.67 feet to a pk nail set; Thence North 87 degrees 02minutes 20 seconds West, a distance of 511.22 feet to a 5/8 inch rebar set onthe Eastern right-of-way of Mount Olive Road (variable right-of-way); Thencealong said right-of-way the following courses and distances; North 18 degrees38 minutes 12 seconds West, a distance of 108.35 feet to a 5/8 inch rebar set;Thence along a curve to the right, an arc length of 81.70 feet, said curvehaving a radius of 860.00 feet, with a chord distance of 81.67 feet, at North15 degrees 54 minutes 54 seconds West, to a 5/8 inch rebar set; Thence along acurve to the right, an arc length of 330.70 feet, said curve having a radius of860.00 feet, with a chord distance of 328.66 feet, at North 02 degrees 10minutes 39 seconds West, to a 5/8 inch rebar set; Thence North 08 degrees 50minutes 26 seconds East, a distance of 15.23 feet to a 5/8 inch rebar set;Thence North 09 degrees 24 minutes 00 seconds East, a distance of 26.66 feet toa 5/8 inch rebar set; Thence leaving said right-of-way, South 55 degrees 04minutes 52 seconds East, a distance of 48.90 feet to a 5/8 inch rebar found;Thence South 87 degrees 02 minutes 20 seconds East, a distance of 199.65 feetto an angle iron found; Thence South 89 degrees 33 minutes 01 seconds East, adistance of 97.25 feet to a 5/8 inch rebar found; Thence North 51 degrees 07minutes 53 seconds East, a distance of 212.77 feet to a 5/8 inch rebar set;Thence North 51 degrees 07 minutes 53 seconds East, a distance of 196.92 feetto a 5/8 inch rebar found; Thence North 02 degrees 57 minutes 40 seconds East,a distance of 194.91 feet to a 5/8 inch rebar set; Thence South 87 degrees 02minutes 20 seconds East, a distance of 330.21 feet to a 5/8 inch rebar found;Thence North 02 degrees 57 minutes 40 seconds East, a distance of 127.12 feetto a point on the centerline of Walnut Creek (said point also herein called “PointA”); Thence northeasterly, easterly, and southeasterly along the centerline ofWalnut Creek and following the meanderings thereof 278.17 feet, more or less,to a point on the centerline of Walnut Creek (said point also herein called “PointB”) said Point B also being located by commencing at Point A and following thetraverse line described as follows: North 78 degrees 29 minutes 37 secondsEast, a distance of 61.76 feet to a point; Thence North 71 degrees 58 minutes40 seconds East, a distance of 63.78 feet to a point; Thence North 78 degrees18 minutes 44 seconds East, a distance of 63.54 feet to a point; Thence North87 degrees 43 minutes 53 seconds East, a distance of 60.45 feet to a point;Thence North 69 degrees 07 minutes 39 seconds East, a distance of 28.64 feet toPoint B; Thence leaving the said centerline of Walnut Creek South 02 degrees 57minutes 40 seconds West, a distance of 285.39 feet to a 5/8 inch rebar set;Thence

 

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North 87 degrees 02minutes 20 seconds West, a distance of 12.00 feet to a 5/8 inch rebar set;Thence South 02 degrees 57 minutes 40 seconds West, a distance of 247.00 feetto a pk nail set; Thence South 87 degrees 02 minutes 20 seconds East, adistance of 12.00 feet to a point; Thence South 02 degrees 57 minutes 40seconds West, a distance of 197.81 feet to a pk nail set; Thence South 87degrees 02 minutes 20 seconds East, a distance of 24.51 feet to a pk nail set;Thence South 02 degrees 57 minutes 40 seconds West, a distance of 318.69 feetto a pk nail set; Thence North 87 degrees 02 minutes 20 seconds West, adistance of 20.20 feet to a pk nail set; Thence South 02 degrees 57 minutes 40seconds West, a distance of 274.61 feet to a 5/8 inch rebar set; Thence North87 degrees 02 minutes 20 seconds West, a distance of 58.80 feet to a 5/8 inchrebar set; Thence North 87 degrees 02 minutes 20 seconds West, a distance of162.21 feet to a 5/8 inch rebar set; Thence South 47 degrees 57 minutes 40seconds West, a distance of 28.69 feet to a 5/8 inch rebar set; Thence South 02degrees 57 minutes 40 seconds West, a distance of 355.26 feet to a 5/8 inchrebar set; Thence South 88 degrees 17 minutes 53 seconds East, a distance of16.89 feet to a 5/8 inch rebar set; said rebar set being the TRUE POINT OFBEGINNING.

 

Said tract contains24.261 Acres.

 

**TOGETHERWITH:**

 

**Developer Tract 3**

 

All that tract or parcelof land lying and being in Land Lot 110 of the 6th District, HenryCorner, Georgia, and being more particularly described as follows:

 

Commencing at a concreteright-of-way monument found at the southwestern corner of the mitered intersection ofthe western right-of-way of Interstate Highway No. 75 (variable right-of-way)and the northern right-of-way of Jonesboro Road (variable right-of-way); Thencealong the northern right-of-way of Jonesboro Road (variable right-of-way) North71 degrees 36 minutes 51 seconds West, a distance of 111.85 feet to a concreteright-of-way monument found; Thence along said right-of-way South 18 degrees 19minutes 24 seconds West, a distance of 25.00 feet to a point; Thence North 71 degrees36 minutes 34 seconds West, a distance of 88.11 feet to a 1/2 inch crimped toppipe found; Thence North 18 degrees 19 minutes 21 seconds East, a distance of88.00 feet to a point; Thence North 71 degrees 41 minutes 15 seconds West, adistance of 925.05 feet to a point; Thence along a curve to the left, an arclength of 131.42 feet, said curve having a radius of 1417.32 feet, with a chorddistance of 131.37 feet, at North 74 degrees 20 minutes 37 seconds West, to apoint; Thence along a curve to the left, an arc length of 212.21 feet, saidcurve having a radius of 1417.32 feet, with a chord distance of 212.01 feet, atNorth 81 degrees 17 minutes 21 seconds West, to a point; Thence along a curveto the left, an arc length of 50.00 feet, said curve having a radius of 1417.32feet, with a chord distance of 50.00 feet, at North 86 degrees 35 minutes 21seconds West, to a 5/8 inch rebar found; Thence along a curve to the left, anarc length of 17.27 feet, said curve having a radius of 1417.32 feet, with achord distance of 17.27 feet, at North 87 degrees 56 minutes 56 seconds West toa 5/8 inch rebar set; Thence North 88 degrees 17 minutes 53 seconds West, adistance of 487.47 feet to a 5/8 inch rebar set; Thence South 02 degrees 57minutes 40 seconds West, a distance of 38.78 feet to a 5/8 inch rebar set;Thence North 88 degrees 07 minutes 55 seconds West, a distance of 101.03 feet

 

----

 

to a 5/8 inch rebar set;said point being the TRUE POINT OF BEGINNING; Thence along the right-of-way ofJonesboro Road, North 88 degrees 07 minutes 55 seconds West, a distance of684.41 feet to a 5/8 inch rebar set at the intersection of the northernright-of-way of Jonesboro Road (variable right-of-way) and eastern right-of-wayof Mount Olive Road (variable right-of-way); Thence along the easternright-of-way of Mount Olive Road (variable right-of-way) North 22 degrees 04minutes 25 seconds West, a distance of 31.15 feet to a 5/8 inch rebar set;Thence along said right-of-way North 15 degrees 51 minutes 54 seconds West, adistance of 49.30 feet to a 5/8 inch rebar set; Thence North 07 degrees 39minutes 18 seconds West, a distance of 298.06 feet to a 5/8 inch rebar set;Thence along a curve to the left, an arc length of 154.10 feet, said curvehaving a radius of 803.90 feet, with a chord distance of 153.86 feet, at North13 degrees 08 minutes 46 seconds West, to a 5/8 inch rebar set; Thence North 18degrees 38 minutes 12 seconds West, a distance of 48.10 feet to a 5/8 inchrebar set; Thence leaving said right-of-way South 87 degrees 02 minutes 20seconds East, a distance of 511.22 feet to a pk nail set; Thence North 02degrees 57 minutes 40 seconds East, a distance of 65.67 feet to a pk nail set;Thence South 87 degrees 02 minutes 20 seconds East, a distance of 308.09 feetto a pk nail set; Thence North 02 degrees 57 minutes 40 seconds East, adistance of 54.68 feet to a pk nail set; Thence South 87 degrees 02 minutes 20seconds East, a distance of 29.37 feet to a 5/8 inch rebar set; Thence South 02degrees 57 minutes 40 seconds West, a distance of 637.29 feet to a 5/8 inchrebar set; Thence North 88 degrees 07 minutes 55 seconds West, a distance of20.00 feet to a 5/8 inch rebar set; Thence South 02 degrees 57 minutes 40seconds West, a distance of 30.00 feet to a 5/8 inch rebar set; said pointbeing the TRUE POINT OF BEGINNING.

 

Said tract contains10.379 Acres.

 

**TOGETHERWITH:**

 

**Outparcel 7**

 

All that tract or parcelof land lying and being in Land Lot 110 of the 6th District, HenryCounty, Georgia, and being more particularly described as follows:

 

Commencing at a concreteright-of-way monument found at the southwestern corner of the mitered intersection ofthe western right-of-way of Interstate Highway No. 75 (variable right-of-way)and the northern right-of-way of Jonesboro Road (variable right-of-way); Thencealong the northern right-of-way of Jonesboro Road (variable right-of-way) North71 degrees 36 minutes 51 seconds West, a distance of 111.85 feet to a concreteright-of-way monument found; Thence along said right-of-way South 18 degrees 19minutes 24 seconds West, a distance of 25.00 feet to a point; Thence North 71degrees 36 minutes 34 seconds West, a distance of 88.11 feet to a 2 1/2inchcrimped top pipe found; Thence North 18 degrees 19 minutes 21 seconds East, adistance of 88.00 feet to a point; Thence North 71 degrees 41 minutes 15seconds West, a distance of 925.05 feet to a point; Thence along a curve to theleft, an arc length of 131.42 feet, said curve having a radius of 1417.32 feet,with a chord distance of 131.37 feet, at North 74 degrees 20 minutes 37 secondsWest, to a point; Thence along a curve to the left, an arc length of 212.21feet, said curve having a radius of 1417.32 feet, with a chord distance of212.01 feet, at North 81 degrees 17 minutes 21 seconds West, to a point; Thencealong a curve to the left, an arc length of 50.00 feet, said curve having aradius of 1417.32 feet, with a chord distance of 50.00 feet, at

 

----

 

North 86 degrees 35minutes 21 seconds West, to a 5/8” rebar found; said point being the **TRUE POINT OF BEGINNING**; Thence along said right-of-wayalong a curve to the left, an arc length of 17.27 feet, said curve having aradius of 1417.32 feet, with a chord distance of 17.27 feet, at North 87degrees 56 minutes 56 seconds West, to a 5/8 inch rebar set; Thence North 88degrees 17 minutes 53 seconds West, a distance of 187.78 feet to a 5/8” rebarset; Thence leaving said right-of-way North 02 degrees 57 minutes 40 secondsEast, a distance of 368.59 feet to a PK nail set; Thence South 87 degrees 02minutes 20 seconds East, a distance of 71.79 feet to a 5/8” rebar found; Thencealong a curve to the right, an arc length of 119.20 feet, said curve having aradius of 490.00 feet, with a chord distance of 118.90 feet, at South 80degrees 04 minutes 12 seconds East, to a 5/8” rebar found; Thence South 34degrees 53 minutes 21 seconds East, a distance of 24.74 feet to a 5/8” rebarfound; Thence South 02 degrees 57 minutes 40 seconds West, a distance of 330.23feet to a 5/8” rebar found on said right-of-way of Jonesboro Road, said point beingthe TRUE POINT OF BEGINNING.

 

Said tract of landcontain 1.703 Acres.

 

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**EXHIBIT B**

 
| Debtor’s name:                                                                                                      |   | Henry Town Center, LLC                                                                                          |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |                                                                                                            |
| Debtor’s organizational  structure:                                                                                 |   | limited liability  company                                                                                      |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s principal  place of business:                                                                              |   | 823 North Elm Street,  Suite 200  Greensboro, North Carolina 27401                                              |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s mailing  address:                                                                                          |   | 823 North Elm Street,  Suite 200  Greensboro, North Carolina 27401                                              |
|                                                                                                                     |   |                                                                                                            |
| Time period for which  Debtor has been using or operating under said names and organizational  structure without change: |   | 2002                                                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s name:                                                                                               |   | Wachovia Bank, National  Association                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured  Party’s organizational structure:  Secured Party’s mailing address:                                   |   | a national banking  association  201 South Tryon Street, Suite 130  PMB Box #4  Charlotte, North Carolina 28202 |

 

**[Continued on next page]**

 

B-1

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| Debtor’s name:                                                                                                      |   | Alpha Seven LLC                                                                                                 |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |                                                                                                            |
| Debtor’s organizational  structure:                                                                                 |   | limited liability  company                                                                                      |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s principal  place of business:                                                                              |   | 5151 Glenwood Avenue  Raleigh, North Carolina 27612                                                             |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s mailing  address:                                                                                          |   | 5151 Glenwood Avenue  Raleigh, North Carolina 27612                                                             |
|                                                                                                                     |   |                                                                                                            |
| Time period for which  Debtor has been using or operating under said names and organizational  structure without change: |   | 2002                                                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s name:                                                                                               |   | Wachovia Bank, National  Association                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured  Party’s organizational structure:  Secured Party’s mailing address:                                   |   | a national banking  association  201 South Tryon Street, Suite 130  PMB Box #4  Charlotte, North Carolina 28202 |

 

B-2

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| Debtor’s name:                                                                                                      |   | Elliston Henry Town  Center                                                                                     |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |                                                                                                            |
| Debtor’s organizational  structure:                                                                                 |   | limited liability  company                                                                                      |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s principal  place of business:                                                                              |   | 388 Vanderbilt Road  Asheville, North Carolina 28803                                                            |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s mailing  address:                                                                                          |   | 388 Vanderbilt Road  Asheville, North Carolina 28803                                                            |
|                                                                                                                     |   |                                                                                                            |
| Time period for which  Debtor has been using or operating under said names and organizational  structure without change: |   | 2002                                                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s name:                                                                                               |   | Wachovia Bank, National  Association                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured  Party’s organizational structure:  Secured Party’s mailing address:                                   |   | a national banking  association  201 South Tryon Street, Suite 130  PMB Box #4  Charlotte, North Carolina 28202 |

 

B-3

----

 
| Debtor’s name:                                                                                                      |   | Owen Henry Town Center,  LLC                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |                                                                                                            |
| Debtor’s organizational  structure:                                                                                 |   | limited liability  company                                                                                      |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s principal  place of business:                                                                              |   | 124 5th* *Street N  Columbus, MS 39701                                                                     |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s mailing  address:                                                                                          |   | 124 5th  Street N  Columbus, MS 39701                                                                           |
|                                                                                                                     |   |                                                                                                            |
| Time period for which  Debtor has been using or operating under said names and organizational  structure without change: |   | 2002                                                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s name:                                                                                               |   | Wachovia Bank, National  Association                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured  Party’s organizational structure:  Secured Party’s mailing address:                                   |   | a national banking  association  201 South Tryon Street, Suite 130  PMB Box #4  Charlotte, North Carolina 28202 |

 

B-4

----

 
| Debtor’s name:                                                                                                      |   | DSCongdonA, LLC                                                                                                 |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |                                                                                                            |
| Debtor’s organizational  structure:                                                                                 |   | limited liability  company                                                                                      |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s principal  place of business:                                                                              |   | 701 East Byrd Street,  15th Floor  Richmond, Virginia 23219                                                     |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s mailing  address:                                                                                          |   | 701 East Byrd Street,  15th Floor  Richmond, Virginia 23219                                                     |
|                                                                                                                     |   |                                                                                                            |
| Time period for which Debtor  has been using or operating under said names and organizational structure  without change: |   | 2002                                                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s name:                                                                                               |   | Wachovia Bank, National  Association                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured  Party’s organizational structure:  Secured Party’s mailing address:                                   |   | a national banking  association  201 South Tryon Street, Suite 130  PMB Box #4  Charlotte, North Carolina 28202 |

 

B-5

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| Debtor’s name:                                                                                                      |   | JWCongdonA, LLC                                                                                                 |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |                                                                                                            |
| Debtor’s organizational  structure:                                                                                 |   | limited liability  company                                                                                      |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s principal  place of business:                                                                              |   | 701 East Byrd Street,  15th Floor  Richmond, Virginia 23219                                                     |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s mailing  address:                                                                                          |   | 701 East Byrd Street,  15th Floor  Richmond, Virginia 23219                                                     |
|                                                                                                                     |   |                                                                                                            |
| Time period for which  Debtor has been using or operating under said names and organizational  structure without change: |   | 2002                                                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s name:                                                                                               |   | Wachovia Bank, National  Association                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured  Party’s organizational structure:  Secured Party’s mailing address:                                   |   | a national banking  association  201 South Tryon Street, Suite 130  PMB Box #4  Charlotte, North Carolina 28202 |

 

B-6

----

 
| Debtor’s name:                                                                                                      |   | KCVanstoryA, LLC                                                                                                |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |                                                                                                            |
| Debtor’s organizational  structure:                                                                                 |   | limited liability  company                                                                                      |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s principal  place of business:                                                                              |   | 701 East Byrd Street,  15th Floor  Richmond, Virginia 23219                                                     |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s mailing  address:                                                                                          |   | 701 East Byrd Street,  15th Floor  Richmond, Virginia 23219                                                     |
|                                                                                                                     |   |                                                                                                            |
| Time period for which  Debtor has been using or operating under said names and organizational  structure without change: |   | 2002                                                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s name:                                                                                               |   | Wachovia Bank, National  Association                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s organizational structure:  Secured Party’s mailing address:                                    |   | a national banking  association  201 South Tryon Street, Suite 130  PMB Box #4  Charlotte, North Carolina 28202 |

 

B-7

----

 
| Debtor’s name:                                                                                                      |   | ALCongdonA, LLC                                                                                                 |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |                                                                                                            |
| Debtor’s organizational  structure:                                                                                 |   | limited liability  company                                                                                      |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s principal  place of business:                                                                              |   | 701 East Byrd Street,  15th Floor  Richmond, Virginia 23219                                                     |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s mailing  address:                                                                                          |   | 701 East Byrd Street,  15th Floor  Richmond, Virginia 23219                                                     |
|                                                                                                                     |   |                                                                                                            |
| Time period for which  Debtor has been using or operating under said names and organizational  structure without change: |   | 2002                                                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s name:                                                                                               |   | Wachovia Bank, National  Association                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s organizational structure:  Secured Party’s mailing address:                                    |   | a national banking  association  201 South Tryon Street, Suite 130  PMB Box #4  Charlotte, North Carolina 28202 |

 

B-8

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| Debtor’s name:                                                                                                      |   | SCTerryA, LLC                                                                                                   |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |                                                                                                            |
| Debtor’s organizational  structure:                                                                                 |   | limited liability  company                                                                                      |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s principal  place of business:                                                                              |   | 701 East Byrd Street,  15th Floor  Richmond, Virginia 23219                                                     |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s mailing  address:                                                                                          |   | 701 East Byrd Street,  15th Floor  Richmond, Virginia 23219                                                     |
|                                                                                                                     |   |                                                                                                            |
| Time period for which  Debtor has been using or operating under said names and organizational  structure without change: |   | 2002                                                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s name:                                                                                               |   | Wachovia Bank, National  Association                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s organizational structure:  Secured Party’s mailing address:                                    |   | a national banking  association  201 South Tryon Street, Suite 130  PMB Box #4  Charlotte, North Carolina 28202 |

 

B-9

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| Debtor’s name:                                                                                                      |   | JRCongdon, JR.A, LLC                                                                                            |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |                                                                                                            |
| Debtor’s organizational  structure:                                                                                 |   | limited liability  company                                                                                      |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s principal  place of business:                                                                              |   | 701 East Byrd Street,  15th Floor  Richmond, Virginia 23219                                                     |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s mailing  address:                                                                                          |   | 701 East Byrd Street,  15th Floor  Richmond, Virginia 23219                                                     |
|                                                                                                                     |   |                                                                                                            |
| Time period for which  Debtor has been using or operating under said names and organizational  structure without change: |   | 2002                                                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s name:                                                                                               |   | Wachovia Bank, National  Association                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s organizational structure:  Secured Party’s mailing address:                                    |   | a national banking  association  201 South Tryon Street, Suite 130  PMB Box #4  Charlotte, North Carolina 28202 |

 

B-10

----

 
| Debtor’s name:                                                                                                      |   | Jay Henry Town Center,  LLC                                                                                     |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |                                                                                                            |
| Debtor’s organizational  structure:                                                                                 |   | limited liability  company                                                                                      |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s principal  place of business:                                                                              |   | 1400 Battleground  Avenue, Suite 217  Greensboro, North Carolina 27401                                          |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s mailing  address:                                                                                          |   | 1400 Battleground  Avenue, Suite 217  Greensboro, North Carolina 27401                                          |
|                                                                                                                     |   |                                                                                                            |
| Time period for which  Debtor has been using or operating under said names and organizational  structure without change: |   | 2002                                                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s name:                                                                                               |   | Wachovia Bank, National  Association                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s organizational structure:  Secured Party’s mailing address:                                    |   | a national banking  association  201 South Tryon Street, Suite 130  PMB Box #4  Charlotte, North Carolina 28202 |

 

B-11

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| Debtor’s name:                                                                                                      |   | Spence Henry Town  Center, LLC                                                                                  |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |                                                                                                            |
| Debtor’s organizational  structure:                                                                                 |   | limited liability  company                                                                                      |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s principal  place of business:                                                                              |   | 516 East Rosemary  Street  Chapel Hill, North Carolina 27514                                                    |
|                                                                                                                     |   |                                                                                                            |
| Debtor’s mailing  address:                                                                                          |   | 516 East Rosemary  Street  Chapel Hill, North Carolina 27514                                                    |
|                                                                                                                     |   |                                                                                                            |
| Time period for which  Debtor has been using or operating under said names and organizational  structure without change: |   | 2002                                                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s name:                                                                                               |   | Wachovia Bank, National  Association                                                                            |
|                                                                                                                     |   |                                                                                                            |
| Secured Party’s organizational structure:  Secured Party’s mailing address:                                    |   | a national banking  association  201 South Tryon Street, Suite 130  PMB Box #4  Charlotte, North Carolina 28202 |

 

**[End of Exhibit B]**

 

B-12

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