Document:

Unassociated Document

    

      Exhibit
10.6

      

      Freddie
Mac Loan Number 534382134

      

      MULTIFAMILY
NOTE

      MULTISTATE
– FIXED RATE

      (REVISION
DATE 2-15-2008)

      

      
        	
                US
      $10,000,000.00

              	
                Effective
      Date: December 16, 2009

              

      

      

      FOR VALUE RECEIVED, the undersigned
(together with such party's or parties' successors and assigns, "Borrower") jointly and
severally (if more than one) promises to pay to the order of KEYCORP REAL ESTATE
CAPITAL MARKETS, INC., an Ohio corporation, the principal sum of Ten Million and
No/100 Dollars (US $10,000,000.00), with interest on the unpaid principal
balance, as hereinafter provided.

      

      
        	
              	
                1.

              	
                Defined
      Terms.

              

      

      

      
        	
              	
                (a)

              	
                As
      used in this Note:

              

      

      

      "Base Recourse" means a portion of the
Indebtedness equal to zero percent (0%) of the original principal balance of
this Note.

      

      "Business Day" means any day
other than a Saturday, a Sunday or any other day on which Lender or the national
banking associations are not open for business.

      

      "Default Rate" means an annual
interest rate equal to four (4) percentage points above the Fixed Interest
Rate.  However, at no time will the Default Rate exceed the Maximum
Interest Rate.

      

      "Fixed Interest Rate" means the
annual interest rate of six and forty-three hundredths percent
(6.43%).

      

      "Installment Due Date" means,
for any monthly installment of interest only or principal and interest, the date
on which such monthly installment is due and payable pursuant to Section 3 of
this Note. The "First
Installment Due Date" under this Note is February 1, 2010.

      

      "Lender" means the holder from
time to time of this Note.

      

      "Loan" means the loan evidenced
by this Note.

      
        
           

        

        
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      "Maturity Date" means the earlier of (i) January 1, 2020 (the "Scheduled Maturity
Date"), and
(ii) the date on which the unpaid principal balance of this Note becomes due and
payable by acceleration or otherwise pursuant to the Loan Documents or the
exercise by Lender of any right or remedy under any Loan Document.

      

      "Maximum Interest Rate" means
the rate of interest that results in the maximum amount of interest allowed by
applicable law.

      

      "Prepayment Premium Period"
means the period during which, if a prepayment of principal occurs, a prepayment
premium will be payable by Borrower to Lender.  The Prepayment Premium
Period is the period from and including the date of this Note until but not
including the first day of the Window Period.

      

      "Security Instrument" means the
multifamily mortgage, deed to secure debt or deed of trust effective as of the
effective date of this Note, from Borrower to or for the benefit of Lender and
securing this Note.

      

      
        	
                 
      

              	
                "Treasury Security" means
      the 3.625% U.S. Treasury Security due August 15,
  2019

              

      

      

      "Window Period" means the three
(3) consecutive calendar month period prior to the Scheduled Maturity
Date.

      

      "Yield Maintenance Period"
means the period from and including the date of this Note until but not
including July 1, 2019.

      

      (b)           Other
capitalized terms used but not defined in this Note shall have the meanings
given to such terms in the Security Instrument.

      

      2.        
    Address
for Payment.  All payments due under this Note shall be payable
at 127 Public Square, Cleveland, Ohio 44114, or such other place as may be
designated by Notice to Borrower from or on behalf of Lender.

      

      3.         
   Payments.

      

      (a)           Interest
will accrue on the outstanding principal balance of this Note at the Fixed
Interest Rate, subject to the provisions of Section 8 of this
Note.

      
        
           

        

        
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      (b)           Interest
under this Note shall be computed, payable and allocated on the basis of an
actual/360 interest calculation schedule (interest is payable for the actual
number of days in each month, and each month's interest is calculated by
multiplying the unpaid principal amount of this Note as of the first day of the
month for which interest is being calculated by the Fixed Interest Rate,
dividing the product by 360, and multiplying the quotient by the number of days
in the month for which interest is being calculated).  The portion of
the monthly installment of principal and interest under this Note attributable
to principal and the portion attributable to interest will vary based upon the
number of days in the month for which such installment is paid. Each monthly
payment of principal and interest will first be applied to pay in full interest
due, and the balance of the monthly installment payment paid by Borrower will be
credited to principal.

      

      (c)           Unless
disbursement of principal is made by Lender to Borrower on the first day of a
calendar month, interest for the period beginning on the date of disbursement
and ending on and including the last day of such calendar month shall be payable
by Borrower simultaneously with the execution of this Note.  If
disbursement of principal is made by Lender to Borrower on the first day of a
calendar month, then no payment will be due from Borrower at the time of the
execution of this Note.  The Installment Due Date for the first
monthly installment payment under Section 3(d) of interest only or principal and
interest, as applicable, will be the First Installment Due Date set forth in
Section 1(a) of this Note.  Except as provided in this Section 3(c)
and in Section 10, accrued interest will be payable in arrears.

      

      (d)           Beginning
on the First Installment Due Date, and continuing until and including the
monthly installment due on the Maturity Date, principal and accrued interest
shall be payable by Borrower in consecutive monthly installments due and payable
on the first day of each calendar month.  The amount of the monthly
installment of principal and interest payable pursuant to this Section 3(d) on
an Installment Due Date shall be Sixty-Two Thousand Seven Hundred Forty-Seven
and 15/100 Dollars ($62,747.15).

      

      (e)           All
remaining Indebtedness, including all principal and interest, shall be due and
payable by Borrower on the Maturity Date.

      

      (f)       
    All payments under this Note shall be made in
immediately available U.S. funds.

      

      (g)           Any
regularly scheduled monthly installment of interest only or principal and
interest payable pursuant to this Section 3 that is received by Lender
before the date it is due shall be deemed to have been received on the due date
for the purpose of calculating interest due.

      

      (h)           Any
accrued interest remaining past due for 30 days or more, at Lender's discretion,
may be added to and become part of the unpaid principal balance of this Note and
any reference to "accrued interest" shall refer to accrued interest which has
not become part of the unpaid principal balance.  Any amount added to
principal pursuant to the Loan Documents shall bear interest at the applicable
rate or rates specified in this Note and shall be payable with such interest
upon demand by Lender and absent such demand, as provided in this Note for the
payment of principal and interest.

      
        
           

        

        
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      4.    
        Application of
Payments.  If at any time Lender receives, from Borrower or
otherwise, any amount applicable to the Indebtedness which is less than all
amounts due and payable at such time, Lender may apply the amount received to
amounts then due and payable in any manner and in any order determined by
Lender, in Lender's discretion.  Borrower agrees that neither Lender's
acceptance of a payment from Borrower in an amount that is less than all amounts
then due and payable nor Lender's application of such payment shall constitute
or be deemed to constitute either a waiver of the unpaid amounts or an accord
and satisfaction.

      

      5.     
       Security.  The
Indebtedness is secured by, among other things, the Security Instrument, and
reference is made to the Security Instrument for other rights of Lender as to
collateral for the Indebtedness.

      

      6.       
     Acceleration.  If an
Event of Default has occurred and is continuing, the entire unpaid principal
balance, any accrued interest, any prepayment premium payable under
Section 10, and all other amounts payable under this Note and any other
Loan Document, shall at once become due and payable, at the option of Lender,
without any prior notice to Borrower (except if notice is required by applicable
law, then after such notice).  Lender may exercise this option to
accelerate regardless of any prior forbearance.  For purposes of
exercising such option, Lender shall calculate the prepayment premium as if
prepayment occurred on the date of acceleration.  If prepayment occurs
thereafter, Lender shall recalculate the prepayment premium as of the actual
prepayment date.

      

      7.       
     Late Charge.

      

      (a)           If
any monthly installment of interest or principal and interest or other amount
payable under this Note or under the Security Instrument or any other Loan
Document is not received in full by Lender within ten (10) days after the
installment or other amount is due, counting from and including the date such
installment or other amount is due (unless applicable law requires a longer
period of time before a late charge may be imposed, in which event such longer
period shall be substituted), Borrower shall pay to Lender, immediately and
without demand by Lender, a late charge equal to five percent (5%) of such
installment or other amount due (unless applicable law requires a lesser amount
be charged, in which event such lesser amount shall be
substituted).

      

      (b)           Borrower
acknowledges that its failure to make timely payments will cause Lender to incur
additional expenses in servicing and processing the Loan and that it is
extremely difficult and impractical to determine those additional
expenses.  Borrower agrees that the late charge payable pursuant to
this Section represents a fair and reasonable estimate, taking into account
all circumstances existing on the date of this Note, of the additional expenses
Lender will incur by reason of such late payment.  The late charge is
payable in addition to, and not in lieu of, any interest payable at the Default
Rate pursuant to Section 8.

      
        
           

        

        
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      8. 
           Default
Rate.

      

      (a)           So
long as (i) any monthly installment under this Note remains past due for
thirty (30) days or more or (ii) any other Event of Default has occurred
and is continuing, then notwithstanding anything in Section 3 of this Note to
the contrary, interest under this Note shall accrue on the unpaid principal
balance from the Installment Due Date of the first such unpaid monthly
installment or the occurrence of such other Event of Default, as applicable, at
the Default Rate.

      

      (b)           From
and after the Maturity Date, the unpaid principal balance shall continue to bear
interest at the Default Rate until and including the date on which the entire
principal balance is paid in full.

      

      (c)           Borrower
acknowledges that (i) its failure to make timely payments will cause Lender
to incur additional expenses in servicing and processing the Loan,
(ii) during the time that any monthly installment under this Note is
delinquent for thirty (30) days or more, Lender will incur additional costs and
expenses arising from its loss of the use of the money due and from the adverse
impact on Lender's ability to meet its other obligations and to take advantage
of other investment opportunities; and (iii)  it is extremely difficult and
impractical to determine those additional costs and
expenses.  Borrower also acknowledges that, during the time that any
monthly installment under this Note is delinquent for thirty (30) days or more
or any other Event of Default has occurred and is continuing, Lender's risk of
nonpayment of this Note will be materially increased and Lender is entitled to
be compensated for such increased risk.  Borrower agrees that the
increase in the rate of interest payable under this Note to the Default Rate
represents a fair and reasonable estimate, taking into account all circumstances
existing on the date of this Note, of the additional costs and expenses Lender
will incur by reason of the Borrower's delinquent payment and the additional
compensation Lender is entitled to receive for the increased risks of nonpayment
associated with a delinquent loan.

      

      9.   
         Limits on Personal
Liability.

      

      (a)           Except
as otherwise provided in this Section 9, Borrower shall have no personal
liability under this Note, the Security Instrument or any other Loan Document
for the repayment of the Indebtedness or for the performance of any other
obligations of Borrower under the Loan Documents and Lender's only recourse for
the satisfaction of the Indebtedness and the performance of such obligations
shall be Lender's exercise of its rights and remedies with respect to the
Mortgaged Property and to any other collateral held by Lender as security for
the Indebtedness.  This limitation on Borrower's liability shall not
limit or impair Lender's enforcement of its rights against any guarantor of the
Indebtedness or any guarantor of any other obligations of Borrower.

      

      (b)           Borrower
shall be personally liable to Lender for the amount of the Base Recourse, plus
any other amounts for which Borrower has personal liability under this
Section 9.

      
        
           

        

        
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      (c)       
   In addition to the Base Recourse, Borrower shall be personally
liable to Lender for the repayment of a further portion of the Indebtedness
equal to any loss or damage suffered by Lender as a result of the occurrence of
any of the following events:

      

      
        	
                 
      

              	
                (i)

              	
                Borrower
      fails to pay to Lender upon demand after an Event of Default all Rents to
      which Lender is entitled under Section 3(a) of the Security
      Instrument and the amount of all security deposits collected by Borrower
      from tenants then in residence.  However, Borrower will not be
      personally liable for any failure described in this subsection (i) if
      Borrower is unable to pay to Lender all Rents and security deposits as
      required by the Security Instrument because of a valid order issued in a
      bankruptcy, receivership, or similar judicial
  proceeding.

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                Borrower
      fails to apply all insurance proceeds and condemnation proceeds as
      required by the Security Instrument.  However, Borrower will not
      be personally liable for any failure described in this
      subsection (ii) if Borrower is unable to apply insurance or
      condemnation proceeds as required by the Security Instrument because of a
      valid order issued in a bankruptcy, receivership, or similar judicial
      proceeding.

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                Borrower
      fails to comply with Section 14(g) or (h) of the Security Instrument
      relating to the delivery of books and records, statements, schedules and
      reports.

              

      

      

      
        	
                 
      

              	
                (iv)

              	
                Borrower
      fails to pay when due in accordance with the terms of the Security
      Instrument the amount of any item below marked
      "Deferred"; provided however, that if no item is marked "Deferred", this
      Section 9(c)(iv) shall be of no force or
      effect.    

              

      

      
        
          	
                    
      

                	  	
                  [Collect]

                	
                  Hazard
      Insurance premiums or other insurance
premiums,

                

        

      

      
        
          
            
              
                	 	
                        [Collect]

                      	
                        Taxes,

                      

              

            

          

        

      

      
        
          	
                   
      

                	
                  [Deferred]

                	
                  water
      and sewer charges (that could become a lien on the Mortgaged
      Property),

                

        

      

      
        
          
            
              
                	 	
                        [N/A]

                      	
                        ground
      rents,

                      

              

            

          

        

      

      
        
          	
                   
      

                	
                  [Deferred]

                	
                  assessments
      or other charges (that could become a lien on the Mortgaged
      Property)

                

        

      

      

      (d)      
    In addition to the Base Recourse, Borrower shall be
personally liable to Lender for:

      

      
        	
                 
      

              	
                (i)

              	
                the
      performance of all of Borrower's obligations under Section 18 of the
      Security Instrument (relating to environmental
  matters);

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                the
      costs of any audit under Section 14(g) of the Security Instrument;
      and

              

      

      
        
           

        

        
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                (iii)

              	
                any
      costs and expenses incurred by Lender in connection with the collection of
      any amount for which Borrower is personally liable under this
      Section 9, including Attorneys' Fees and Costs and the costs of
      conducting any independent audit of Borrower's books and records to
      determine the amount for which Borrower has personal
      liability.

              

      

      

      (e)    
      All payments made by Borrower with respect to the
Indebtedness and all amounts received by Lender from the enforcement of its
rights under the Security Instrument and the other Loan Documents shall be
applied first to the portion of the Indebtedness for which Borrower has no
personal liability.

      

      (f)       
    Notwithstanding the Base Recourse, Borrower shall become
personally liable to Lender for the repayment of all of the Indebtedness upon
the occurrence of any of the following Events of Default:

      

      
        	
                 
      

              	
                (i)

              	
                Borrower's
      ownership of any property or operation of any business not permitted by
      Section 33 of the Security
Instrument;

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                a
      Transfer (including, but not limited to, a lien or encumbrance) that is an
      Event of Default under Section 21 of the Security Instrument, other
      than a Transfer consisting solely of the involuntary removal or
      involuntary withdrawal of a general partner in a limited partnership or a
      manager in a limited liability company;
or

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                fraud
      or written material misrepresentation by Borrower or any officer,
      director, partner, member or employee of Borrower in connection with the
      application for or creation of the Indebtedness or any request for any
      action or consent by Lender.

              

      

      

      (g)     
     To the extent that Borrower has personal liability
under this Section 9, Lender may exercise its rights against Borrower
personally without regard to whether Lender has exercised any rights against the
Mortgaged Property or any other security, or pursued any rights against any
guarantor, or pursued any other rights available to Lender under this Note, the
Security Instrument, any other Loan Document or applicable law. To the
fullest extent permitted by applicable law, in any action to enforce Borrower's
personal liability under this Section 9, Borrower waives any right to set
off the value of the Mortgaged Property against such personal
liability.

      

      10.      
   Voluntary and Involuntary Prepayments.

      

      (a)           Any
receipt by Lender of principal due under this Note prior to the Maturity Date,
other than principal required to be paid in monthly installments pursuant to
Section 3, constitutes a prepayment of principal under this
Note.  Without limiting the foregoing, any application by Lender,
prior to the Maturity Date, of any proceeds of collateral or other security to
the repayment of any portion of the unpaid principal balance of this Note
constitutes a prepayment under this Note.

      
        
           

        

        
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      (b)           Borrower
may voluntarily prepay all of the unpaid principal balance of this Note on an
Installment Due Date so long as Borrower designates the date for such prepayment
in a Notice from Borrower to Lender given at least 30 days prior to the date of
such prepayment.  If an Installment Due Date (as defined in Section
1(a)) falls on a day which is not a Business Day, then with respect to payments
made under this Section 10 only, the term "Installment Due Date" shall mean the
Business Day immediately preceding the scheduled Installment Due
Date.

      

      (c)           Notwithstanding
subsection (b) above, Borrower may voluntarily prepay all of the unpaid
principal balance of this Note on a Business Day other than an Installment Due
Date if Borrower provides Lender with the Notice set forth in subsection (b) and
meets the other requirements set forth in this subsection.  Borrower
acknowledges that Lender has agreed that Borrower may prepay principal on a
Business Day other than an Installment Due Date only because Lender shall deem
any prepayment received by Lender on any day other than an Installment Due Date
to have been received on the Installment Due Date immediately following such
prepayment and Borrower shall be responsible for all interest that would have
been due if the prepayment had actually been made on the Installment Due Date
immediately following such prepayment.

      

      (d)           Unless
otherwise expressly provided in the Loan Documents, Borrower may not voluntarily
prepay less than all of the unpaid principal balance of this Note.  In
order to voluntarily prepay all or any part of the principal of this Note,
Borrower must also pay to Lender, together with the amount of principal
being prepaid, (i) all accrued and unpaid interest due under this Note,
plus (ii) all other sums due to Lender at the time of such prepayment, plus
(iii) any prepayment premium calculated pursuant to
Section 10(e).

      

      (e)       
   Except as provided in Section 10(f), a prepayment premium
shall be due and payable by Borrower in connection with any prepayment of
principal under this Note during the Prepayment Premium Period.  The
prepayment premium shall be computed as follows:

      

      
        	
                 
      

              	
                (i)

              	
                For
      any prepayment made during the Yield Maintenance Period, the prepayment
      premium shall be whichever is the greater of subsections (A) and (B)
      below:

              

      

      

      
        	
                 
      

              	
                (A)

              	
                1.0%
      of the amount of principal being prepaid;
or

              

      

      

      
        	
              	
                (B)

              	
                the
      product obtained by multiplying:

              

      

      

      
        	
              	
                (1)

              	
                the
      amount of principal being prepaid or accelerated,

                by

              

      

      
        
           

        

        
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                (2)

              	
                the
      excess (if any) of the Monthly Note Rate over the Assumed Reinvestment
      Rate,

                by

              

      

      
        	
              	
                (3)

              	
                the
      Present Value Factor.

              

      

      

      For purposes of subsection (B),
the following definitions shall apply:

      

      
        	
                 
      

              	
                Monthly Note Rate:
      one-twelfth (1/12) of the Fixed Interest Rate, expressed as a decimal
      calculated to five digits.

              

      

      

      
        	
                 
      

              	
                Prepayment
      Date:  in the case of a voluntary prepayment, the date on
      which the prepayment is made; in the case of the application by Lender of
      collateral or security to a portion of the principal balance, the date of
      such application.

              

      

      

      
        	
                 
      

              	
                Assumed Reinvestment
      Rate:  one-twelfth (1/12) of the yield rate, as of the
      close of the trading session which is 5 Business Days before the
      Prepayment Date, on the Treasury Security, as reported in The Wall Street
      Journal, expressed as a decimal calculated to five
      digits.  In the event that no yield is published on the
      applicable date for the Treasury Security, Lender, in its discretion,
      shall select the non-callable Treasury Security maturing in the same year
      as the Treasury Security with the lowest yield published in The Wall Street Journal
      as of the applicable date.  If the publication of such yield
      rates in The Wall Street
      Journal is discontinued for any reason, Lender shall select a
      security with a comparable rate and term to the Treasury
      Security.  The selection of an alternate security pursuant to
      this Section shall be made in Lender’s
  discretion.

              

      

      

      
        
          	
                   
      

                	
                  Present Value
      Factor:  the factor that discounts to present value the
      costs resulting to Lender from the difference in interest rates during the
      months remaining in the Yield Maintenance Period, using the Assumed
      Reinvestment Rate as the discount rate, with monthly compounding,
      expressed numerically as follows:

                
	 	 

        

      

      

      

      
        
           

        

        
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                n = the number of months
      remaining in Yield Maintenance Period; provided, however, if a prepayment
      occurs on an Installment Due Date, then the number of months remaining in
      the Yield Maintenance Period shall be
      calculated beginning with the month in which such prepayment occurs and if
      such prepayment occurs on a Business Day other than an Installment Due
      Date, then the number of months remaining in the Yield Maintenance Period
      shall be calculated beginning with the month immediately following the
      date of such prepayment.

              

      

      

      ARR = Assumed Reinvestment
Rate

      

      
        	
                 
      

              	
                (ii)

              	
                For
      any prepayment made after the expiration of the Yield Maintenance Period
      but during the remainder of the Prepayment Premium Period, the prepayment
      premium shall be 1.0% of the amount of principal being
      prepaid.

              

      

      

      (f)   
        Notwithstanding any other
provision of this Section 10, no prepayment premium shall be payable with
respect to (i) any prepayment made during the Window Period, or
(ii) any prepayment occurring as a result of the application of any
insurance proceeds or condemnation award under the Security
Instrument.

      

      (g)           Unless
Lender agrees otherwise in writing, a permitted or required prepayment of less
than the unpaid principal balance of this Note shall not extend or postpone the
due date of any subsequent monthly installments or change the amount of such
installments.

      

      (h)           Borrower
recognizes that any prepayment of any of the unpaid principal balance of this
Note, whether voluntary or involuntary or resulting from an Event of Default by
Borrower, will result in Lender's incurring loss, including reinvestment loss,
additional expense and frustration or impairment of Lender's ability to meet its
commitments to third parties.  Borrower agrees to pay to Lender upon
demand damages for the detriment caused by any prepayment, and agrees that it is
extremely difficult and impractical to ascertain the extent of such
damages.  Borrower therefore acknowledges and agrees that the formula
for calculating prepayment premiums set forth in this Note represents a
reasonable estimate of the damages Lender will incur because of a
prepayment.  Borrower further acknowledges that the prepayment premium
provisions of this Note are a material part of the consideration for the Loan,
and that the terms of this Note are in other respects more favorable to Borrower
as a result of the Borrower's voluntary agreement to the prepayment premium
provisions.

      

      11.
         Costs and
Expenses.  To the fullest extent allowed by applicable law,
Borrower shall pay all expenses and costs, including Attorneys' Fees and Costs
incurred by Lender as a result of any default under this Note or in connection
with efforts to collect any amount due under this Note, or to enforce the
provisions of any of the other Loan Documents, including those incurred in
post-judgment collection efforts and in any bankruptcy proceeding (including any
action for relief from the automatic stay of any bankruptcy proceeding) or
judicial or non-judicial foreclosure proceeding.

      
        
           

        

        
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      12.          Forbearance.  Any
forbearance by Lender in exercising any right or remedy under this Note, the
Security Instrument, or any other Loan Document or otherwise afforded by
applicable law, shall not be a waiver of or preclude the exercise of that or any
other right or remedy.  The acceptance by Lender of any payment after
the due date of such payment, or in an amount which is less than the required
payment, shall not be a waiver of Lender's right to require prompt payment when
due of all other payments or to exercise any right or remedy with respect to any
failure to make prompt payment.  Enforcement by Lender of any security
for Borrower's obligations under this Note shall not constitute an election by
Lender of remedies so as to preclude the exercise of any other right or remedy
available to Lender.

      

      13.          Waivers.  Borrower
and all endorsers and guarantors of this Note and all other third party obligors
waive presentment, demand, notice of dishonor, protest, notice of acceleration,
notice of intent to demand or accelerate payment or maturity, presentment for
payment, notice of nonpayment, grace, and diligence in collecting the
Indebtedness.

      

      14.          Loan Charges (Texas
Only).  Borrower and Lender intend at all times to comply with
the law of the State of Texas governing the Maximum Interest Rate or the maximum
amount of interest payable on or in connection with this Note and the
Indebtedness (or applicable United States federal law to the extent that it
permits Lender to contract for, charge, take, reserve or receive a greater
amount of interest than under Texas law).  If the applicable law is
ever judicially interpreted so as to render usurious any amount payable under
this Note or under any other Loan Document, or contracted for, charged, taken,
reserved or received with respect to the Indebtedness, or as a result of
acceleration of the maturity of this Note, or if any prepayment by Borrower
results in Borrower having paid any interest in excess of that permitted by any
applicable law, then Borrower and Lender expressly intend that all excess
amounts collected by Lender shall be applied to reduce the unpaid principal
balance of this Note (or, if this Note has been or would thereby be paid in
full, shall be refunded to Borrower), and the provisions of this Note, the
Security Instrument and any other Loan Documents immediately shall be deemed
reformed and the amounts thereafter collectible under this Note or any other
Loan Document reduced, without the necessity of the execution of any new
documents, so as to comply with any applicable law, but so as to permit the
recovery of the fullest amount otherwise payable under this Note or any other
Loan Document.  The right to accelerate the Maturity Date of this Note
does not include the right to accelerate any interest, which has not otherwise
accrued on the date of such acceleration, and Lender does not intend to collect
any unearned interest in the event of acceleration.  All sums paid or
agreed to be paid to Lender for the use, forbearance or detention of the
Indebtedness shall, to the extent permitted by any applicable law, be amortized,
prorated, allocated and spread throughout the full term of the Indebtedness
until payment in full so that the rate or amount of interest on account of the
Indebtedness does not exceed the applicable usury
ceiling.  Notwithstanding any provision contained in this Note, the
Security Instrument or any other Loan Document that permits the compounding of
interest, including any provision by which any accrued interest is added to the
principal amount of this Note, the total amount of interest that Borrower is
obligated to pay and Lender is entitled to receive with respect to the
Indebtedness shall not exceed the amount calculated on a simple (i.e., non-compounded)
interest basis at the maximum rate on principal amounts actually advanced to or
for the account of Borrower, including all current and prior advances and any
advances made pursuant to the Security Instrument or other Loan Documents (such
as for the payment of taxes, insurance premiums and similar expenses or
costs).

      
        
           

        

        
          Page
A-11

          
            

          

        

        
           

        

      

      

      15.          Commercial
Purpose.  Borrower represents that Borrower is incurring the
Indebtedness solely for the purpose of carrying on a business or commercial
enterprise, and not for personal, family, household, or agricultural
purposes.

      

      16.          Counting of
Days.  Except where otherwise specifically provided, any
reference in this Note to a period of "days" means calendar days, not Business
Days.

      

      17.          Governing Law.  This
Note shall be governed by the law of the Property Jurisdiction.

      

      18.          Captions.  The
captions of the Sections of this Note are for convenience only and shall be
disregarded in construing this Note.

      

      19.          Notices; Written Modifications.

      

      (a)           All
Notices, demands and other communications required or permitted to be given
pursuant to this Note shall be given in accordance with Section 31 of the
Security Instrument.

      

      (b)           Any
modification or amendment to this Note shall be ineffective unless in writing
signed by the party sought to be charged with such modification or amendment;
provided, however, in the event of a Transfer under the terms of the Security
Instrument that requires Lender's consent, any or some or all of the
Modifications to Multifamily Note set forth in Exhibit A to this Note may
be modified or rendered void by Lender at Lender's option, by Notice to Borrower
and the transferee, as a condition of Lender's consent.

      

      20.          Consent to Jurisdiction and
Venue.  Borrower agrees that any controversy arising under or
in relation to this Note may be litigated in the Property
Jurisdiction.  The state and federal courts and authorities with
jurisdiction in the Property Jurisdiction shall have jurisdiction over all
controversies that shall arise under or in relation to this
Note.  Borrower irrevocably consents to service, jurisdiction, and
venue of such courts for any such litigation and waives any other venue to which
it might be entitled by virtue of domicile, habitual residence or
otherwise.  However, nothing in this Note is intended to limit any
right that Lender may have to bring any suit, action or proceeding relating to
matters arising under this Note in any court of any other
jurisdiction.

      

      21.          WAIVER
OF TRIAL BY JURY.  BORROWER AND LENDER EACH (A) AGREES NOT TO
ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE
RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT
BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH
ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE
FUTURE.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY
EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL
COUNSEL.

      
        
           

        

        
          Page
A-12

          
            

          

        

        
           

        

      

      

      
        22.          State-Specific
Provisions.

      

      

      ATTACHED EXHIBIT.  The
Exhibit noted below, if marked with an "X" in the space provided, is attached to
this Note:

      

      [___]      Exhibit
A      Modifications to Multifamily
Note

      
        
           

        

        
          Page
A-13

          
            

          

        

        
           

        

      

      

      IN WITNESS WHEREOF, and in
consideration of the Lender's agreement to lend Borrower the principal amount
set forth above, Borrower has signed and delivered this Note under seal or has
caused this Note to be signed and delivered under seal by its duly authorized
representative. Borrower intends that this Note shall be deemed to be signed and
delivered as a sealed instrument.

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              CARUTH HAVEN L.P., a
      Delaware limited partnership

                                            
	 
      	 
      	 
      	 
      	 
      
	
                                              By:

                                            	
                                              CARUTH
      HAVEN GP, LLC, a Delaware limited liability company,

                                            
	
                                              Its:

                                            	
                                              Sole
      General Partner

                                            
	 
      	
                                              By:

                                            	
                                              CGI
      Healthcare Operating Partnership, L.P., a Delaware limited
      partnership

                                            
	 
      	
                                              Its:

                                            	
                                              Sole
      Member

                                            
	 
      	 
      	
                                              By:

                                            	
                                              Cornerstone
      Growth & Income Operating Partnership, L.P., a Delaware limited
      Partnership

                                            
	 
      	 
      	
                                              Its:

                                            	
                                              Sole
      General Partner

                                            
	 
      	 
      	 
      	
                                              By:

                                            	
                                              Cornerstone
      Growth & Income REIT, Inc., a Maryland corporation

                                            
	 
      	 
      	 
      	
                                              Its:

                                            	
                                              Sole
      General
Partner

                                            

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        

      

      
        
          
            
              
                
                  
                    
                      
                        	 	 	 	 	
                                By:

                              	
                                /s/
      Terry G. Roussel

                              
	 	 	 	 	
                                Name:

                              	
                                Terry
      G. Roussel

                              
	 	 	 	 	
                                Title:

                              	
                                President

                              

                      

                    

                  

                

              

            

          

        

      

      

      
        
          
            	 
      	 
      
	 
      	
                    Borrower's
      Social Security/Employer ID
Number

                  

          

        

      

      
        
           

        

        
          Page
A-14

          
            

          

        

        
           

        

      

      PAY TO
THE ORDER OF FEDERAL HOME LOAN MORTGAGE CORPORATION WITHOUT
RECOURSE.

      

      
        
          
            
              
                
                  	
                          KEYCORP
      REAL ESTATE CAPITAL

                          MARKETS,
      INC., an Ohio corporation

                        
	 
      	 
      
	
                          By:

                        	
                          /s/
      Crystal L. Williams

                        
	
                          Name: 

                        	
                          Crystal L.
    Williams

                        
	
                          Title:

                        	
                          Vice
      President

                        
	 
      	 
      
	
                          Date:

                        	
                          December
      16,
2009

                        

                

              

            

          

        

      

      
        
           

        

        
          Page
A-15

          
            

          

        

        
           

        

      

      EXHIBIT
A

      

      MODIFICATIONS
TO MULTIFAMILY NOTE

      

      The
following modifications are made to the text of the Note that precedes this
Exhibit.

      

      
        	
                 
      

              	
                1.

              	
                Section
      9(c) is modified by adding an additional subsection (v) as
      follows:

              

      

      

      “(v)         Borrower’s
violation or breach of or other failure to comply with that certain Declaration
of Covenants, Conditions, Restrictions and Reciprocal Easements, dated effective
as of March 31, 1997 as filed September 24, 1997 in the real property records of
Dallas County, Texas in Volume 97186, Page 4996, as amended from time to
time.

      
        
           

        

        
          Page
A-16Unassociated Document

    Exhibit
10.9

    

    DEED
OF TRUST

    (Security
Agreement and Financing Statement)

     

    This
combined Deed of Trust (Security Agreement and Financing Statement) (“Deed of
Trust”) is made on the date stated below among the Grantor, Beneficiary and
Trustee who are identified and whose addresses are stated below.  By
signing this Deed of Trust, Grantor agrees to the terms and conditions and makes
the covenants stated in this Deed of Trust.

     

    
      
        	
                Date:

              	 
      	
                March
      23, 2007

              
	 
      	 
      	 
      
	
                Grantor:

              	 
      	
                HHC
      San Antonio Northwest NC, LP

              
	 
      	 
      	 
      
	
                Grantor’s
      Address:

              	 
      	
                8701
      North Mopac, Suite 300

              
	 
      	 
      	
                Austin,
      Texas  78759

              
	 
      	 
      	 
      
	
                Type
      of Organization:

              	 
      	
                Limited
      Partnership

              
	
                Jurisdiction
      of Organization:

              	 
      	
                Texas

              
	
                Organizational
      ID No.:

              	 
      	
                800597971

              
	 
      	 
      	 
      
	
                Beneficiary:

              	 
      	
                PlainsCapital
      Bank

              
	 
      	 
      	 
      
	
                Beneficiary’s
      Address:

              	 
      	
                919
      Congress Avenue, Suite 600

              
	 
      	 
      	
                Austin,
      Texas  78701

              
	 
      	 
      	 
      
	
                Trustee:

              	 
      	
                Frank
      Jackel

              
	 
      	 
      	 
      
	
                Trustee’s
      Address:

              	
                  

              	
                919
      Congress Avenue, Suite 600

              
	 
      	 
      	
                Austin,
      Texas  78701

              

      

    

    

    
      	
              Note:

            	
              Promissory
      Note dated March 23, 2007, in the original principal amount of
      $8,900,000.00 executed by Grantor and payable to Beneficiary as stated in
      the Note.

            

    

    

    
      	
              Land:

            	
              Lot
      1, Block 2, New City Block 17341, NORTH HOLLOW KNOLL, an addition to the
      City of San Antonio, Bexar County, Texas, according to the map or plat
      thereof, recorded in Volume 9569, Page(s) 38, of the Deed and Plat Records
      of Bexar County, Texas.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
1

     

    SECURITY

     

    1.01        Conveyance in
Trust.  For value received, the receipt and sufficiency of
which Grantor acknowledges, and to secure the payment of the Indebtedness
described in Section 2.01 and performance of the covenants and agreements of
Grantor stated in this Deed of Trust and in the Loan Documents (as hereafter
defined), Grantor conveys the Property described in Section 1.02, including
without limitation the Land, to the Trustee in trust, with power of sale, TO
HAVE AND TO HOLD the Property, together with the rights, privileges, and
appurtenances thereto belonging unto the Trustee and the Trustee's substitutes
or successors forever.  Grantor binds itself and its heirs, executors,
administrators, personal representatives, successors, and assigns to WARRANT AND
FOREVER DEFEND the Property unto the Trustee, and the Trustee's substitutes or
successors and assigns, against the claim or claims of all persons claiming or
to claim the same or any part thereof.

     

    1.02        Property.  The
Property covered by this Deed of Trust includes the Land and the following items
described in this Section 1.02, whether now owned or hereafter acquired by
Grantor, all of which, including replacements and additions thereto, shall be
deemed to be and remain a part of the Property covered by this Deed of Trust,
and all rights, hereditaments and appurtenances pertaining thereto, all of which
are referred to as the “Property”:

     

     (a)           any
and all buildings, improvements, and tenements now or hereafter attached to or
placed, erected, constructed, or developed on the Land (the
“Improvements”);

     

     (b)           all
equipment, fixtures, furnishings, inventory, account receivables, and articles
of personal property (the “Personal Property”) now or hereafter attached to or
used in or about the Improvements;

     

     (c)           all
proceeds arising from or by virtue of the sale, lease or other disposition of
the Land, the Improvements, or the Personal Property, including any sale by
virtue of eminent domain proceedings;

     

     (d)           all
proceeds (including premium refunds) of each policy of insurance relating to the
Land, the Improvements, or the Personal Property;

     

     (e)           all
rents, royalties, bonuses, issues, profits, revenues, or other benefits of the
Land or the Improvements or the Personal Property;

     

     (f)           
other interests of every kind and character that Grantor now has or at any time
hereafter acquires in and to the Land, Improvements, and Personal Property and
all property that is used or useful in connection therewith, including rights of
ingress and egress and all reversionary rights or interests of Grantor with
respect to such property; and

     

     (g)           all
products and proceeds of the Property described in this Section
1.02.

     

    1.03        Subrogation.  Any
of the proceeds of the Note utilized to take up any outstanding liens against
all or any part of the Property have been advanced by Beneficiary at Grantor's
request and upon Grantor's representation that such amounts are due and are
secured by valid liens against the Property.  Beneficiary shall be
subrogated to any and all rights, powers, superior titles, liens, and equities
owned or claimed by any owner or holder of any outstanding liens and debts,
however remote, regardless of whether said liens or debts are acquired by
Beneficiary by assignment or are released by the holder thereof upon
payment.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Without
limiting the foregoing, it is expressly understood that this Deed of Trust is
given in renewal, extension and modification of, but expressly not in
extinguishment of, the liens contained in the following instrument:

     

    Deed of
Trust dated December 22, 2006 to Frank Jackel, Trustee recorded under Volume
12685, Page 65 of the Official Public Records of Bexar County,
Texas.

     

    1.04        Assignment of Rents,
Profits, Etc.  Grantor hereby assigns to Beneficiary, and
grants to Beneficiary a security interest in, all of the rents, royalties,
bonuses, issues, profits, revenue, income and other benefits derived from the
Property or arising from the use or enjoyment of any portion thereof or from any
lease or agreement pertaining thereto, and liquidated damages following default
under such leases, and all proceeds payable under any policy of insurance
covering loss of rents resulting from untenantability caused by damage to any
part of the Property, together with any and all rights that Grantor may have
against any tenant under such leases or any subtenants or occupants of any part
of the Property (hereinafter called the “Rents”).

     

    1.05        Assignment of
Leases.  Grantor hereby assigns to Beneficiary, and grants to
Beneficiary a security interest in, all existing and future leases, including
subleases thereof, and any and all extensions, renewals, modifications and
replacements thereof, upon any part of the Property (the
“Leases”).  Grantor hereby further assigns to Beneficiary, and grants
to Beneficiary a security interest in, all guaranties of tenants' performance
under the Leases.  Prior to foreclosure, Grantor shall have the right,
without joinder of Beneficiary, to enforce the Leases, unless Beneficiary
directs otherwise.

     

    ARTICLE
2

     

    INDEBTEDNESS AND
PAYMENTS

    

    2.01        Indebtedness.  The
indebtedness secured by this Deed of Trust (the “Indebtedness”) shall mean and
include the following:

     

     (a)           Any
and all sums becoming due and payable pursuant to the Note;

     

     (b)           Any
and all other sums becoming due and payable by Grantor (or any one or more of
them, if more than one) to Beneficiary as a result of advancements made by
Beneficiary pursuant to the terms and conditions of this Deed of Trust or any
loan agreement, tri-party financing agreement, security agreement, guaranty
agreement or other agreement or instrument pertaining to the disbursement and
use of the proceeds of the Note or given to secure the Note (all of which
documents are collectively referred to herein as the “Loan Documents”, and
individually as a “Loan Document”);

     

     (c)           Any
and all other indebtedness owed by Grantor to Beneficiary presently existing or
which may in any manner or means hereafter be incurred by Grantor and evidenced
in any manner whatsoever, either by promissory notes, open accounts, advances,
overdrafts, bookkeeping entries, surety agreements, guaranties or any other
method or means; and

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     (d)           Any
and all renewals, extensions, replacements, rearrangements, substitutions, or
modifications of the Indebtedness, or any part of the Indebtedness.

     

    2.02        Payment of Principal and
Interest.  Grantor shall promptly pay when due the principal of
and interest on the Indebtedness evidenced by the Note, any prepayment and late
charges provided in the Note, and all other sums secured by this Deed of
Trust.

     

    2.03        Application of
Payments.  Unless applicable law provides otherwise, all
payments received by Beneficiary from Grantor under the Note or this Deed of
Trust shall be applied by Beneficiary in the following order of
priority:  (a) amounts payable to Beneficiary by Grantor under this
Deed of Trust; (b) sums payable to Beneficiary under the Note, to be applied to
principal or interest as Beneficiary may determine in its discretion; and (c)
any other sums secured by this Deed of Trust in such order as Beneficiary, at
Beneficiary's option, may determine.

     

    2.04        Guarantor.  The
term “Guarantor” shall include any person, company or entity obligated to pay or
guaranteeing collection of all or any portion of the Indebtedness, directly or
indirectly.

     

    ARTICLE
3

     

    SECURITY
AGREEMENT

     

    3.01        Uniform Commercial Code
Security Agreement.  This Deed of Trust is also intended to be
a security agreement between Grantor, as debtor, and Beneficiary, as secured
party, pursuant to the Texas Uniform Commercial Code [Texas Business and
Commerce Code Section 1.01, et seq. (“Texas UCC”)] for any of the items
specified above as part of the Property which, under applicable law, may be
subject to a security interest pursuant to the Texas UCC, and Grantor hereby
grants Beneficiary a security interest in all such items.  Grantor
agrees that Beneficiary may file this Deed of Trust, or a reproduction thereof,
in the real estate records or other appropriate index, as a financing statement
for any of the items specified above as part of the Property.  Any
reproduction of this Deed of Trust or of any other security agreement or
financing statement shall be sufficient as a financing
statement.  Grantor hereby irrevocably authorizes Beneficiary to
prepare, execute and file all initial financing statements, and any
restatements, extensions, continuations, renewals or amendments thereof, in such
form as Beneficiary may require to perfect or continue the perfection of this
security interest or other statutory liens held by Beneficiary.  In
addition, Grantor agrees to execute and deliver to Beneficiary, upon
Beneficiary's request, any financing statement, as well as extensions, renewals,
and amendments thereof, and reproduction of this Deed of Trust in such form as
Beneficiary may require to perfect a security interest with respect to said
items.  Grantor shall pay all costs of filing such financing statement
and any extensions, renewals, amendments, and releases thereof and shall pay all
reasonable costs and expenses of any record searches for financing statements
Beneficiary may reasonably require.  Without the prior written consent
of Beneficiary, Grantor shall not create or suffer to be created pursuant to the
Texas UCC any other security interest in said items, including replacements and
additions thereto.  Upon the occurrence of an Event of Default (as
that term is defined in Article 5 below), including the covenants to pay when
due all sums secured by this Deed of Trust, Beneficiary shall have the remedies
of a secured party under the Texas UCC and, at Beneficiary's option, may also
invoke the remedies provided in Article 6 of this Deed of Trust as to such
items.  In exercising any remedies, Beneficiary may proceed against
the items of real property and any items of personal property specified above as
part of the Property separately or together and in any order whatsoever, without
in any way affecting the availability of Beneficiary's remedies under the Texas
UCC or of the remedies provided in Article 6 of this Deed of Trust.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.02        Notice of
Changes.  Grantor shall give advance notice in writing to
Beneficiary of any proposed change in Grantor's name, identity, or structure and
shall execute and deliver to Beneficiary, prior to or concurrently with the
occurrence of any such change, all additional financing statements that
Beneficiary may require to establish and maintain the validity and priority of
Beneficiary's security interest with respect to any of the
Property.

     

    3.03        Fixtures.  Some
of the items of the Property are goods that are or are to become fixtures,
related to the Land.  Grantor and Beneficiary intend that, as to those
goods, this Deed of Trust shall be effective as a financing statement filed as a
fixture filing from the date of its filing for record in the real estate records
of the county in which the Property is situated.  Information
concerning the security interest created by this Deed of Trust may be obtained
from Beneficiary, as secured party, at the address of Beneficiary stated
above.  The mailing address of the Grantor, as debtor, is as stated
above.

     

    ARTICLE
4

     

    GRANTOR'S
REPRESENTATIONS, WARRANTIES,

    COVENANTS, AND
AGREEMENTS

    

    Grantor
represents, warrants, and covenants to and agrees with Beneficiary as
follows:

     

    4.01        Payment and
Performance.  Grantor shall make all payments on the
Indebtedness when due and shall punctually and properly perform all of Grantor's
covenants, obligations and liabilities under this Deed of Trust and the other
Loan Documents.

     

    4.02        Title to Property and Liens
of this Instrument.  Grantor has good and indefeasible title to
the Land and the Improvements, and good and marketable title to the Personal
Property, free and clear of any liens, charges, encumbrances, security
interests, and adverse claims whatsoever, except as otherwise provided
herein.  If the interest of Beneficiary in the Property or any part
thereof shall be endangered or shall be attacked, directly or indirectly,
Grantor authorizes Beneficiary, at Grantor's expense, to take all necessary and
proper steps for the defense of such interest, including the employment of
attorneys, the prosecution or defense of litigation, and the compromise or
discharge of claims made against such interest.

     

    4.03        Title
Insurance.  If required by Beneficiary, Grantor shall, at its
sole cost and expense, obtain and maintain mortgagee title insurance (in the
form of a commitment, binder, or policy as Beneficiary may require) in form
acceptable to Beneficiary in an amount equal to the amount of the
Note.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.04        Taxes and
Assessments.  Grantor shall pay all taxes and assessments
against or affecting the Property as the same become due and payable, and, upon
request by Beneficiary, Grantor shall deliver to Beneficiary such evidence of
the payment thereof as Beneficiary may require.  If Grantor fails to
do so, Beneficiary may pay them, together with all costs and penalties thereon,
at Grantor's expense; provided, however, that Grantor may in good faith, in lieu
of paying such taxes and assessments as they come due and payable, by
appropriate proceedings, contest their validity.  Pending such
contest, Grantor shall not be deemed in default under this Deed of Trust because
of such nonpayment if:  (a) prior to delinquency of the asserted tax
or assessment, Grantor furnishes Beneficiary an indemnity bond secured by a
deposit in cash or other security acceptable to Beneficiary, or with a surety
acceptable to Beneficiary, in the amount of the tax or assessment being
contested by Grantor plus a reasonable additional sum to pay all costs, interest
and penalties that may be imposed or incurred in connection therewith,
conditioned that such tax or assessment, with interest, cost and penalties, be
paid as herein stipulated; and (b) Grantor promptly pays any amount adjudged by
a court of competent jurisdictions to be due, with all costs, penalties and
interest thereon, on or before the date such judgment becomes
final.  In any event, the tax, assessment, penalties, interest, and
costs shall be paid prior to the date on which any writ or order is issued under
which the Property or any part of the Property may be sold in satisfaction
thereof.

     

    4.05        Insurance.  Grantor
shall, at its sole cost and expense, obtain and maintain insurance upon and
relating to all insurable Property by all-risk insurance policies and, if
requested by Beneficiary, shall include perils of collapse, flood, and
earthquake, as well as other insurance coverages, all in form and in companies
acceptable to Beneficiary, in amounts equal to 100% of the replacement cost of
the Improvements during the construction thereof and at least 100% of the
replacement cost of the Improvements not under construction, or in such
additional amounts as Beneficiary may require, with loss made payable to
Beneficiary and with a standard form mortgage clause.  Grantor shall
deliver the policies of insurance to Beneficiary promptly as issued; and, if
Grantor fails to do so, Beneficiary, at its option, may procure such insurance
at Grantor's expense.  All renewal and substitute policies of
insurance shall be delivered at the office of Beneficiary, premiums paid, at
least ten (10) days before termination of policies theretofore delivered to
Beneficiary.  In case of loss, Beneficiary, at its option, shall be
entitled to receive and retain the proceeds of the insurance policies, applying
the same to payment of the Indebtedness in such order and manner as Beneficiary,
in its sole discretion, may elect.  If any loss shall occur at any
time when Grantor shall be in default hereof, Beneficiary shall be entitled to
the benefit of all insurance held by or for any Grantor, to the same extent as
if it had been made payable to Beneficiary, and upon foreclosure hereunder
Beneficiary shall become the owner thereof.

     

    4.06        Tax and Insurance
Escrow.

     

     (a)           Subject
to applicable law or to a written waiver by Beneficiary, Grantor shall pay to
Beneficiary on a day each month to be designated by Beneficiary, until the Note
is paid in full, a sum (“Funds”) equal to (i) one-twelfth of the yearly taxes
and assessments which may be levied on the Property as reasonably estimated
initially and from time to time by Beneficiary on the basis of assessments and
bills and reasonable estimates thereof, plus (ii) one-twelfth of the yearly
insurance premiums.  Any waiver by Beneficiary of a requirement that
Grantor pay such Funds may be revoked by Beneficiary, in Beneficiary's sole
discretion, at any time upon notice in writing to
Grantor.  Beneficiary may require Grantor to pay to Beneficiary, in
advance, such other Funds for other taxes, charges, premiums, assessments and
impositions in connection with Grantor or the Property which Beneficiary shall
reasonably deem necessary to protect Beneficiary's interests (“Other
Impositions”).  Unless otherwise provided by applicable law,
Beneficiary may require Funds for Other Impositions to be paid by Grantor in a
lump sum or in periodic installments, at Beneficiary's option.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     (b)           If
the amount of the Funds held by Beneficiary shall exceed the amount deemed
necessary by Beneficiary to provide for payment of water and sewer rates, taxes,
assessments, and Other Impositions, as they fall due, such excess shall be
credited to Grantor on the next installment or installments of Funds
due.  If at any time the amount of the Funds held by Beneficiary shall
be less than the amount deemed necessary by Beneficiary to pay water and sewer
rates, taxes, assessments, and Other Impositions, as they fall due, Grantor
shall pay to Beneficiary any amount necessary to make up the deficiency within
thirty (30) days after notice from Beneficiary to Grantor requesting payment
thereof.

     

    4.07        Condemnation.

     

     (a)           Grantor
assigns to Beneficiary all judgments, decrees, and awards for injury or damage,
direct or consequential, to the Property, and all awards pursuant to proceedings
for condemnation or other taking, whether direct or indirect, of the Property or
any part of the Property.  Beneficiary may apply any proceeds from
such sources to the Indebtedness in such manner as Beneficiary may
elect.  Grantor shall promptly notify Beneficiary of any action or
proceeding (or threatened action or proceeding) relating to any condemnation or
other taking, whether direct or indirect, of all or any part of the
Property.  Grantor shall, unless otherwise directed by Beneficiary in
writing, file or defend its claim under any such action and prosecute same with
due diligence to its final disposition and shall cause any awards or settlements
to be paid over to Beneficiary for disposition pursuant to the terms of this
Deed of Trust.  Grantor authorizes Beneficiary, at Beneficiary's
option, as attorney-in-fact for Grantor, to commence, appear in, and prosecute,
in Beneficiary's or Grantor's name, any action or proceeding relating to any
condemnation or other taking of the Property, whether direct or indirect, and to
settle or compromise any claim in connection with such condemnation or other
taking.  The proceeds of any award, payment, or claim for damages,
direct or consequential, in connection with any condemnation or other taking,
whether direct or indirect, of the Property, or part thereof, or for conveyances
in lieu of condemnation, are hereby assigned to and shall be paid to
Beneficiary.  Beneficiary shall be entitled to participate in,
control, and be represented by attorneys of Beneficiary's own choice in any such
action.  Grantor shall deliver, or cause to be delivered, to
Beneficiary such instruments as may be requested by it from time to time to
permit such participation.

     

     (b)           Grantor
authorizes Beneficiary to apply such awards, payments, proceeds, or damages,
after the deduction of Beneficiary's expenses incurred in the collection of such
amounts, at Beneficiary's option, to restoration or repair of the Property, or
to payment of the sums secured by this Deed of Trust, whether or not then due,
in the order of application set forth in Section 2.03, with the balance, if any,
to Grantor.  Unless Grantor and Beneficiary otherwise agree in
writing, any application of proceeds to principal shall not extend or postpone
the due date of the installments due under the Note or other payments required
by this Deed of Trust, or change the amount of such installments or
payments.  Grantor agrees to execute such further evidence of
assignment of any awards, proceeds, damages, or claims arising in connection
with such condemnation or taking as Beneficiary may require.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     (c)           In
the event Beneficiary, as a result of any such judgment, decree, or award,
reasonably believes that the payment or performance of any obligation secured by
this Deed of Trust is impaired, Beneficiary may, without notice, declare all of
the Indebtedness immediately due and payable.

     

    4.08        Statements by
Grantor.  At the request of Beneficiary, Grantor shall furnish
promptly a written statement or affidavit, in such form as may be required by
Beneficiary, stating the unpaid balance of the Note, the date to which interest
has been paid and that there are no offsets or defenses against full payment of
the Note and performance of the terms of the Loan Documents, or, if there are
any such offsets or defenses, specifying them.

     

    4.09        Repair, Waste, Alterations,
Etc.  Grantor shall keep every part of the Property in good
operating order, repair, and condition and shall not commit or permit any waste
thereof.  Grantor shall make promptly all repairs, renewals, and
replacements necessary to such end.  Grantor shall discharge all
claims for labor performed and material furnished therefor, and shall not suffer
any lien of mechanics or materialmen to attach to any part of the
Property.  Grantor shall have the right to contest in good faith the
validity of any such mechanic's or materialman's lien, provided Grantor shall
first furnish Beneficiary a bond or other security satisfactory to Beneficiary
in such amount as Beneficiary shall reasonably require, but not more than one
hundred fifty percent (150%) of the amount of the claim, and provided further
that Grantor shall thereafter diligently proceed to cause such lien to be
removed and discharged.  If Grantor shall fail to discharge any such
lien, then, in addition to any other right or remedy of Beneficiary, Beneficiary
may, but shall not be obligated to, discharge the lien, either by paying the
amount claimed to be due, or by procuring the discharge of such lien by
depositing in court a bond for the amount claimed, or otherwise giving security
for such claim, or by taking such action as may be prescribed by
law.  Grantor shall guard every part of the Property from removal,
destruction, and damage, and shall not do or suffer to be done any act whereby
the value of any part of the Property may be lessened.

     

    Grantor
or any tenant or other person shall not materially alter the Property without
the prior written consent of Beneficiary.

     

    4.10        Compliance with
Laws.  Grantor, the Property, and Grantor's use of the Property
shall comply with all laws, rules, ordinances, regulations, covenants,
conditions, restrictions, orders and decrees of any governmental authority or
court applicable to Grantor or the Property and its use, and Grantor shall pay
all fees or charges of any kind in connection therewith.  Grantor
shall not initiate, participate in, or acquiesce in a change in the zoning
classification of the Property without Beneficiary's prior written
consent.

     

    4.11        Hold
Harmless.  Grantor shall defend, at Grantor's own cost and
expense, and hold Beneficiary harmless from, any proceeding or claim in any way
relating to the Property or the Loan Documents.  All costs and
expenses incurred by Beneficiary in protecting its interests under this Deed of
Trust, including all court costs and reasonable attorneys' fees and expenses,
shall be borne by Grantor.  The provisions of this Section shall
survive the payment in full of the Indebtedness and the release of this Deed of
Trust as to events occurring and causes of action arising before such payment
and release.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.12        Further
Assurances.  Grantor, upon the request of Beneficiary, shall
execute, acknowledge, deliver, and record such further instruments and do such
further acts as may be necessary, desirable, or proper to carry out the purposes
of this Deed of Trust or the other Loan Documents and to subject to the liens
and security interests created by this Deed of Trust or the other Loan Documents
any property intended to be covered by this Deed of Trust and the other Loan
Documents pursuant to their terms, including without limitation any renewals,
additions, substitutions, replacements, improvements, or appurtenances to the
Property.

     

    4.13        Recording and
Filing.  Grantor shall cause this Deed of Trust and the other
recordable Loan Documents and all amendments, supplements, extensions, and
substitutions thereof to be recorded, filed, re-recorded, and refiled in such
manner and in such places as Beneficiary shall reasonably
request.  Grantor shall pay all such recording, filing, re-recording,
and refiling fees, title insurance premiums, and other charges.

     

    4.14        Payment of
Debts.  Grantor shall promptly pay when due all obligations
regarding the ownership and operation of the Property, except any such
obligations which are being diligently contested in good faith by appropriate
proceedings and as to which Grantor, if requested by Beneficiary, shall have
furnished to Beneficiary security satisfactory to Beneficiary.

     

    4.15        Modification by Subsequent
Owners.  Grantor agrees that Grantor shall be bound by any
modification of this Deed of Trust or any of the other Loan Documents made by
Beneficiary and any subsequent owner of the Property, with or without notice to
such Grantor, and no such modifications shall impair the obligations of such
Grantor under this Deed of Trust or any other Loan Document.  Nothing
in this Section shall be construed as permitting any transfer of the Property
which would constitute an Event of Default under other provisions of this Deed
of Trust.

     

    4.16        Inspection.  Beneficiary
may make or cause to be made reasonable entries upon and inspections of the
Property.

     

    4.17        Protection of Beneficiary's
Security.

     

     (a)           If
Grantor fails to perform the covenants and agreements contained in this Deed of
Trust, or if any action or proceeding is commenced which affects the Property or
title thereto or the interest of Beneficiary therein, including without
limitation eminent domain, insolvency, code enforcement, or arrangements or
proceedings involving a bankrupt or decedent, then Beneficiary, at Beneficiary's
option, may make such appearances, disburse such sums and take such action as
Beneficiary deems necessary, in its sole discretion, to protect Beneficiary's
interest.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     (b)           Any
amounts disbursed by Beneficiary pursuant to this Section 4.17, with interest
thereon, shall become additional indebtedness of Grantor secured by this Deed of
Trust.  Unless Grantor and Beneficiary agree to other terms of
payment, such amounts shall be immediately due and payable and shall bear
interest from the date of disbursement at the rate stated in the Note unless
collection from Grantor of interest at such rate would be contrary to applicable
law, in which event such amounts shall bear interest at the highest non-usurious
rate which may be collected from Grantor under applicable
law.  Grantor covenants and agrees that Beneficiary shall be
subrogated to the lien of any mortgage or other lien discharged, in whole or in
part, by the Indebtedness.  Nothing contained in this Section 4.17
shall require Beneficiary to incur any expense or take any action under this
Deed of Trust.

     

    4.18        Subordinate Deed of
Trust.  Grantor shall not, without the prior written consent of
Beneficiary, grant any lien, security interest, or other encumbrance (a
“Subordinate Deed of Trust”) covering any of the Property.  If
Beneficiary consents to a Subordinate Deed of Trust or if the foregoing
prohibition is determined by a court of competent jurisdiction to be
unenforceable, any such Subordinate Deed of Trust shall contain express
covenants to the effect that:  (a) the Subordinate Deed of Trust is
unconditionally subordinate to this Deed of Trust; and (b) written notice of
default under the Subordinate Deed of Trust and written notice of the
commencement of any action (whether judicial or pursuant to a power of sale) to
foreclose or otherwise enforce the Subordinate Deed of Trust shall be given to
Beneficiary with or immediately after the occurrence of any such default or
commencement.

     

    4.19        Liens.  Grantor
shall promptly discharge any lien which has, or may have, priority over or
equality with, the lien of this Deed of Trust, and Grantor shall pay, when due,
the claims of all persons supplying labor or materials to or in connection with
the Property.  Without Beneficiary's prior written permission, Grantor
shall not allow any lien inferior to this Deed of Trust to be perfected against
the Property.

     

    4.20        Mineral
Production.  Grantor will not permit the drilling or exploring
for, or extraction, removal, or production of minerals (which shall include oil,
gas, casinghead gas, coal, lignite, hydrocarbons, methane, carbon dioxide,
helium, uranium, gold, silver and all other natural elements, compounds and
substances, including sand, rock and gravel) from the surface or subsurface of
the Land without Beneficiary's prior written permission.

     

    4.21        Organization and
Power.  Grantor (a) is a limited partnership duly organized,
validly existing under the laws of the State of Texas and in good standing under
the laws of the State of Texas, (b) has complied with all conditions
prerequisite to its lawfully doing business in Texas, and (c) has all requisite
partnership power and all governmental certificates of authority, licenses,
permits, qualifications, and documentation to own, lease, and operate its
properties and to carry on its business as now being, and as proposed to be,
conducted, and the execution of this Deed of Trust, the Note and any and all
other Loan Documents is within Grantor's powers, has been duly authorized by all
requisite action, and is not in contravention of law or the Grantor's
partnership agreement.

     

    4.22        Existence of
Grantor.  Grantor shall preserve and keep in full force and
effect its existence, rights, franchises, and trade names.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
5

     

    EVENTS OF
DEFAULT

     

    The
occurrence of any one of the following shall be a default under this Deed of
Trust and the Loan Documents (“Event of Default”):

     

    5.01        Failure to Pay
Indebtedness.  Any of the Indebtedness is not paid when due,
whether by acceleration or otherwise, subject to any notice and opportunity to
cure provisions in the Note.

     

    5.02        Nonperformance of
Covenants.  Any covenant in this Deed of Trust or any of the
other Loan Documents is not fully and timely performed, or the occurrence of any
default or event of default under this Deed of Trust or any other Loan Document,
subject to any notice and opportunity to cure provisions in the
Note.

     

    5.03        False
Representation.  Any statement, representation or warranty in
this Deed of Trust or any of the other Loan Documents, any financial statement,
or any other writing delivered to Beneficiary in connection with the
Indebtedness is false, misleading, or erroneous in any material
respect.

     

    5.04        Bankruptcy or
Insolvency.  The owner of the Property or any person obligated
to pay any part of the Indebtedness:

     

     (a)           does
not pay its debts as they become due or admits in writing its inability to pay
its debts or makes a general assignment for the benefit of creditors;
or

     

     (b)           commences
any case, proceeding, or other action seeking reorganization, arrangement,
adjustment, liquidation, dissolution, or composition of it or its debts under
any law relating to bankruptcy, insolvency, reorganization, or relief of
debtors; or

     

     (c)           in
any involuntary case, proceeding, or other action commenced against it which
seeks to have an order for relief entered against it, as debtor, or seeks
reorganization, arrangement, adjustment, liquidation, dissolution, or
composition of it or its debts under any law relating to bankruptcy, insolvency,
reorganization, or relief of debtors, (i) fails to obtain a dismissal of such
case, proceeding or other action within sixty (60) days of its commencement, or
(ii) converts the case from one chapter of the Federal Bankruptcy Code to
another chapter, or (iii) is the subject of an order for relief; or

     

     (d)           conceals,
removes, or permits to be concealed or removed, any part of its property, with
intent to hinder, delay, or defraud its creditors or any of them, or makes or
suffers a transfer of any of its property which may be fraudulent under any
bankruptcy, fraudulent conveyance, or similar law; or makes any transfer of its
property to or for the benefit of a creditor at a time when other creditors
similarly situated have not been paid; or suffers or permits, while insolvent,
any creditor to obtain a lien upon any of its property through legal proceedings
which is not vacated within sixty (60) days from the date thereof;
or

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     (e)           has
a trustee, receiver, custodian, or other similar official appointed for or take
possession of all or any part of the Property or any other of its property or
has any court take jurisdiction of any other of its property which remains in
place for a period of sixty (60) days (except where a shorter period is
specified in the immediately following paragraph (f)); or

     

     (f)           
fails to have discharged within a period of ten (10) days any attachment,
sequestration, or similar writ levied upon any property of such person;
or

     

     (g)           fails
to pay immediately any final money judgment against such person.

     

    5.05        Transfer of the
Property.  Title to all or any part of the Property (other than
obsolete or worn Personal Property replaced by adequate substitutes of equal or
greater value than the replaced items when new) shall become vested in any party
other than Grantor, whether by operation of law or
otherwise.  Beneficiary may, in its sole discretion, waive this Event
of Default, but it shall have no obligation to do so, and any waiver may be
conditioned upon such one or more of the following which Beneficiary may
require:  (a) the grantee's integrity, reputation, character,
creditworthiness, and management ability being satisfactory to Beneficiary in
its sole judgment; and (b) grantee executing, prior to such sale or transfer, a
written assumption agreement containing such terms as Beneficiary may require,
such as a principal paydown on the Note, an increase in the rate of interest
payable under the Note, a transfer fee, and any other modification of the Note,
this Deed of Trust or any of the other Loan Documents which Beneficiary may
require.

     

    5.06        Grant of Inferior
Liens.  Without the prior written consent of Beneficiary,
Grantor creates, places or permits to be created or placed or allow to remain
any mortgage, deed of trust, pledge, lien, security interest, encumbrance or
charge, save and except this Deed of Trust, whether constitutional, statutory or
otherwise, regardless of whether same is expressly subordinate to the liens and
security interests set forth in this Deed of Trust with respect to the
Property.

     

    5.07        Grant of Easement,
Etc.   Without the prior written consent of Beneficiary,
Grantor grants any easement or dedication, files any plat, condominium
declaration, or restriction, or otherwise encumbers the Property, unless such
action is expressly permitted by this Deed of Trust or any of the other Loan
Documents.

     

    5.08        Abandonment.  Grantor
abandons or vacates any of the Property.

     

    5.09        Foreclosure of Other
Liens.  The holder of any lien, security interest or assignment
on the Property institutes foreclosure or other proceedings for the enforcement
of its remedies thereunder.

     

    5.10        Liquidation, Death,
Etc.  The liquidation, termination, dissolution, failure to
maintain good standing in the State of Texas (if applicable), death, or legal
incapacity of Grantor or any Guarantor.

     

    5.11        Material, Adverse
Change.  The occurrence of any material, adverse change in the
financial condition of Grantor or any Guarantor.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    5.12        Default by
Partner.  A default by any general partner under Grantor's
partnership agreement.

     

    5.13        Other
Defaults.  The occurrence of any other event or condition
specified herein or in any of the Loan Documents as being a
default.

     

    ARTICLE
6

     

    DEFAULT AND
REMEDIES

     

    6.01        Acceleration and Waiver of
Notices.  Upon the occurrence of an Event of Default,
Beneficiary, at Beneficiary's option, may declare all of the sums secured by
this Deed of Trust to be immediately due and payable without further demand and
may invoke the power of sale and any other remedies permitted by applicable law
or provided herein.  Grantor acknowledges that the power of sale
granted to Beneficiary may be exercised by Beneficiary without prior judicial
hearing.  Grantor and each Guarantor, surety, and endorser of all or
any part of the Indebtedness expressly waive all presentations for payment,
notices of intention to accelerate maturity, notices of acceleration of
maturity, notices of intention to demand payment, demands for payment, protests,
and notices of protest.

     

    6.02        Notice of
Sale.  Notice of sale of all or part of the Property by the
Trustee shall be given by posting written notice thereof at the courthouse door
(or other area in the courthouse as may be designated for such public notices)
of the county in which the sale is to be made, and by filing a copy of the
notice in the office of the county clerk of the county in which the sale is to
be made, at least twenty-one (21) days preceding the date of the sale, and if
the Property to be sold is in more than one county a notice shall be posted at
the courthouse door (or other area in the courthouse as may be designated for
such public notices) and filed with the county clerk of each county in which the
Property to be sold is situated.  In addition, Beneficiary shall, at
least twenty-one (21) days preceding the date of sale, serve written notice of
the proposed sale by certified mail on Grantor and each debtor obligated to pay
the Indebtedness secured hereby according to the records of
Beneficiary.  Service of such notice shall be completed upon deposit
of the notice, enclosed in a postpaid wrapper, properly addressed to such debtor
at the most recent address as shown by the records of Beneficiary, in a post
office or official depository under the care and custody of the United States
Postal Service.  The affidavit of any person having knowledge of the
facts to the effect that such service was completed shall be prima facie
evidence of the fact of service.  Any notice that is required or
permitted to be given to Grantor may be addressed to Grantor at Grantor's
address as stated in this Deed of Trust.  Any notice that is to be
given by certified mail to any other debtor may, if no address for such other
debtor is shown by the records of Beneficiary, be addressed to such other debtor
at the address of Grantor as is shown by the records of
Beneficiary.  Notwithstanding the foregoing provisions of this
Section, notice of such sale given in accordance with the requirements of the
applicable laws of the State of Texas in effect at the time of such sale shall
constitute sufficient notice of such sale.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.03        Trustee's
Sale.  Beneficiary may require the Trustee to sell all or part
of the Property, at public auction, to the highest bidder, for cash, at the
county courthouse of the county in Texas in which the Property or any part
thereof is situated, or if the Property is located in more than one county such
sale or sales may be made at the courthouse in any county in which the Property
is situated.  All sales shall take place at such area of the
courthouse as shall be properly designated from time to time by the
commissioners court (or, if not so designated by the commissioners court, at
such other area in the courthouse as may be provided in the notice of sale
hereinafter described) of the specified county, between the hours of 10:00
o'clock a.m. and 4:00 o'clock p.m. (the commencement of such sale to occur
within three hours following the time designated in the above described notice
of sale as the earliest time at which such sale shall occur, if required by
applicable law) on the first Tuesday of any month, after giving notice of the
time, place and terms of said sale (including the earliest time at which such
sale shall occur) and of the Property to be sold in the manner hereinafter
described.  Trustee may sell all or any portion of the Property,
together or in lots or parcels.  In no event shall Trustee be required
to exhibit, present or display at any such sale any of the Personal Property
described herein to be sold at such sale.  Beneficiary may bid and
become the purchaser of all or any part of the Property at any trustee's or
foreclosure sale hereunder, and the amount of Beneficiary's successful bid may
be credited on the Indebtedness.

     

    6.04        Partial
Sales.  The sale by Trustee of less than the whole of the
Property shall not exhaust the power of sale herein granted, and Trustee is
specifically empowered to make successive sales under such power until the whole
of the Property shall be sold; and if the proceeds of such sale of less than the
whole of the Property shall be less than the aggregate of the Indebtedness and
the expenses thereof, this Deed of Trust and the lien, security interest and
assignment hereof shall remain in full force and effect as to the unsold portion
of the Property just as though no sale had been made; provided, however, that
Grantor shall never have any right to require the sale of less than the whole of
the Property, but Beneficiary shall have the right, at its sole election, to
request Trustee to sell less than the whole of the Property.  If there
is a default on the payment of any installment on the Note or any portion of the
Indebtedness, and Beneficiary elects not to accelerate the unpaid balance of the
Note or Indebtedness, Beneficiary shall have the option to proceed with
foreclosure in satisfaction of such unpaid installment or other amount either
through judicial proceedings or by directing Trustee to proceed as if under a
full foreclosure, conducting the sale as herein provided without declaring the
entire Indebtedness due.  It is agreed that such sale, if so made,
shall not in any manner affect the unmatured part of the Indebtedness, but as to
such unmatured part this Deed of Trust shall remain in full force and effect as
though no sale had been made under the provisions of this
Section.  Several sales may be made hereunder without exhausting the
right of sale for any unmatured part of the Indebtedness.

     

    6.05        Foreclosure of all
Property.  The Land, Improvements, and Personal Property may be
sold in one or more public sales pursuant to Texas Property Code Section 51.002
and Texas UCC Section 9.610.  Grantor and all persons obligated to pay
the Indebtedness agree that notice of sale of the Property provided pursuant to
Section 6.02 above and pursuant to Texas Property Code Section 51.002 is and
shall constitute commercially reasonable notice of the sale of the Property or
any part of the Property.  Beneficiary shall also be entitled to
foreclose its security interests against the Personal Property in accordance
with any other rights and remedies Beneficiary may have as a secured party under
the Texas UCC.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.06        Trustee's
Deed.  Trustee shall deliver to the purchaser a Trustee's deed
and such other assignments and documents of transfer and sale as Trustee may
deem necessary conveying the Property so sold in fee simple with covenants of
general warranty.  Grantor covenants and agrees to defend generally
the purchaser's title to the Property against all claims and
demands.  At any such sale (a) Grantor hereby agrees, in its behalf
and in behalf of Grantor's heirs, executors, administrators, successors,
personal representatives and assigns, that any and all recitals made in any deed
of conveyance given by Trustee with respect to the identity of Beneficiary, the
occurrence or existence of any default, the acceleration of the maturity of any
of the Indebtedness, the request to sell, the notice of sale, the giving of
notice to all debtors legally entitled thereto, the time, place, terms and
manner of sale, and receipt, distribution and application of the money realized
therefrom, or the due and proper appointment of a substitute Trustee, and,
without being limited by the foregoing, with respect to any other act or thing
having been duly done by Beneficiary or by Trustee hereunder, shall be taken by
all courts of law and equity as prima facie evidence that the statements or
recitals state facts and are without further question to be so accepted, and
Grantor hereby ratifies and confirms every act that Trustee or any substitute
Trustee hereunder may lawfully do in the premises by virtue hereof, and (b) the
purchaser may disaffirm any easement granted, subdivision plat filed, or rental,
lease or other contract made in violation of any provision of this Deed of
Trust, and may take immediate possession of the Property free from, and despite
the terms of, such grant of easement, subdivision plat, or rental, lease or
other contract.

     

    6.07        Proceeds of
Sale.  Trustee shall apply the proceeds of the sale in the
following order:  (a) to all reasonable costs and expenses of the
sale, including but not limited to, reasonable Trustee's fees and attorney's
fees and costs of title evidence; (b) to all sums secured by this Deed of Trust
in such order as Beneficiary, in Beneficiary's sole discretion, directs; and (c)
the excess, if any, to the person or persons legally entitled
thereto.

     

    6.08        Possession After
Sale.  If the Property is sold pursuant to Section 6.03,
Grantor or any person holding possession of the Property through Grantor shall
immediately surrender possession of the Property to the purchaser at such sale
upon the purchaser's written demand.  If possession is not surrendered
upon the purchaser's written demand, Grantor or such person shall be a tenant at
sufferance and may be removed by writ of possession or by an action for forcible
entry and detainer.

     

    6.09        Costs and
Expenses.  Beneficiary shall be entitled to collect all costs
and expenses incurred in pursuing such remedies, including but not limited to,
attorney's fees and costs of documentary evidence, abstracts, and title
reports.

     

    6.10        Substitute
Trustee.  Beneficiary, at Beneficiary's option, with or without
cause, may from time to time remove Trustee and appoint a successor trustee to
any Trustee appointed hereunder without other formality than a designation in
writing.  Without conveyance of the Property, the successor trustee
shall succeed to all title, power, and duties conferred upon the Trustee by this
Deed of Trust and by applicable law.

     

    6.11        Remedies
Cumulative.  Each remedy provided in this Deed of Trust is
distinct and cumulative to all other rights or remedies under this Deed of Trust
or afforded by law or equity, and may be exercised concurrently, independently,
or successively, in any order whatsoever.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.12        Forbearance by Beneficiary
Not a Waiver.  Any forbearance by Beneficiary in exercising any
right or remedy hereunder, or otherwise afforded by applicable law, shall not be
a waiver of or preclude the exercise of any right or remedy.  The
acceptance by Beneficiary of payment of any sum secured by this Deed of Trust
after the due date of such payment shall not be a waiver of Beneficiary's right
to either require prompt payment when due of all other sums so secured or to
declare a default for failure to make prompt payment.  The procurement
of insurance or the payment of taxes or other liens or charges by Beneficiary
shall not be a waiver of Beneficiary's right to accelerate the maturity of the
Indebtedness, nor shall Beneficiary's receipts of any awards, proceeds or
damages under Article 4 operate to cure or waive Grantor's default in payment of
sums secured by this Deed of Trust.

     

    6.13        Waiver of
Marshalling.  Notwithstanding the existence of any other
security interests in the Property held by Beneficiary or by any other party,
Beneficiary shall have the right to determine the order in which any or all
portions of the Indebtedness are satisfied from the proceeds realized upon the
exercise of the remedies provided in this Article 6.  Grantor, any
party who consents to this Deed of Trust, and any party who now or hereafter
acquires a security interest in the Property and who has actual or constructive
notice of this Deed of Trust and Beneficiary's rights and interests under this
Deed of Trust, hereby waive any and all right to require the marshalling of
assets in connection with the exercise of any of the remedies permitted by
applicable law or provided by this Deed of Trust.

     

    ARTICLE
7

     

    HAZARDOUS
MATERIALS

     

    7.01        Hazardous
Materials.  For the purposes of this Deed of Trust, “Hazardous
Materials” shall mean (i) any “hazardous waste” as defined by the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), as
amended from time to time, and regulations promulgated thereunder; (ii) any
“hazardous substance” as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.)
(“CERCLA”), as amended from time to time, and regulations promulgated
thereunder; and (iii) any other substance which by any applicable governmental
requirements and regulations requires special handling or notification of any
federal, state, or local governmental entity in its collection, storage,
treatment, or disposal.  Grantor represents and warrants that, except
as is presently used or will be used in the ordinary course of the business of a
nursing home, and in compliance with all applicable federal, state and local
laws and regulations, no Hazardous Materials are now located on the Property,
and neither Grantor nor, to Grantor's knowledge, any other person has ever
caused or permitted any Hazardous Materials to be placed, held, located, or
disposed of on, under, or at the Property or any part
thereof.  Grantor agrees to immediately give Beneficiary notice upon
Grantor's acquiring knowledge of the presence of any Hazardous Materials on the
Property, and to promptly comply with any applicable governmental requirements
and regulations requiring the removal, treatment or disposal of such Hazardous
Materials.  Beneficiary may, at Grantor's expense, perform
environmental site assessments on the Property for the purpose of determining
whether any Hazardous Materials exist on the Property.  Grantor shall
defend, indemnify and hold Beneficiary and Trustee harmless from all liabilities
(including strict liability), costs or expenses resulting from the presence of
Hazardous Materials on the Property.  Beneficiary shall have the
right, but not the obligation, to enter onto the Property for the purpose of
taking such actions it deems necessary or advisable to clean up, remove or
otherwise deal with Hazardous Materials on the Property, the expenses of which
shall be paid by Grantor.  The representations, covenants, warranties
and indemnifications contained in this Article 7 shall survive the release of
this Deed of Trust.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
8

     

    MISCELLANEOUS
PROVISIONS

     

    8.01        Release.  Upon
payment of all sums and the performance of all obligations secured by this Deed
of Trust, Beneficiary shall release this Deed of Trust.  Grantor shall
pay Beneficiary's reasonable costs incurred in releasing this Deed of
Trust.

     

    8.02        Grantor and Lien Not
Released.  From time to time, Beneficiary may, at Beneficiary's
option, without giving notice to or obtaining the consent of Grantor, Grantor's
successors or assigns or any junior lienholder or Guarantor, without liability
on Beneficiary's part and notwithstanding the existence of an Event of Default,
extend the time for payment of the Indebtedness or any part thereof, reduce the
payments thereon, release anyone liable on any of the Indebtedness, accept a
renewal note or notes therefor, modify the terms and time of payment of the
Indebtedness, release from the liens of this Deed of Trust any part of the
Property, take or release other or additional security, reconvey any part of the
Property, consent to any map or plan of the Property, consent to the granting of
any easement, join in any extension or subordination agreement, and agree in
writing with Grantor to modify the rate of interest or period of amortization of
the Note or change the amount of the installments payable
thereunder.  Any actions taken by Beneficiary pursuant to the terms of
this Section 8.02 shall not affect the obligation of Grantor or Grantor's
successors or assigns to pay the sums secured by this Deed of Trust and to
observe the covenants of Grantor contained herein, shall not affect the guaranty
of any person, corporation, partnership, or other entity for payment of the
Indebtedness or any part thereof, and shall not affect the liens or priority of
liens of this Deed of Trust on the Property.  Grantor shall pay
Beneficiary a reasonable charge, together with such title insurance premiums and
attorney's fees as may be incurred at Beneficiary's option, for any such action
if taken at Grantor's request.

     

    8.03        Notice.  Except
for any notice required under applicable law to be given in another manner, (a)
any notice to Grantor provided for in this Deed of Trust or in the Note shall be
given by mailing such notice by United States mail, postage prepaid, addressed
to Grantor at Grantor's address stated in this Deed of Trust or at such other
address as Grantor may designate by notice to Beneficiary as provided herein,
and (b) any notice to Beneficiary shall be given by United States mail, postage
prepaid, addressed to Beneficiary at Beneficiary's address stated in this Deed
of Trust or to such other address as Beneficiary may designate by notice to
Grantor as provided herein.  Any notice provided for in this Deed of
Trust or in the Note shall be deemed to have been given to Grantor or
Beneficiary when given in the manner designated herein, but actual notice,
however given or received, shall always be effective.

     

    8.04        Successors and Assigns
Bound.  The covenants and agreements herein contained shall
bind, and the rights hereunder shall inure to, the respective successors and
assigns of Beneficiary and Grantor, subject to the provisions of Section
5.05.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    8.05        Joint and Several
Liability.  All covenants and agreements of Grantor shall be
joint and several.

     

    8.06        Agents.  In
exercising any rights hereunder or taking any actions provided for herein,
Beneficiary may act through its employees, agents or independent contractors as
authorized by Beneficiary.

     

    8.07        Governing
Law.  This Deed of Trust shall be governed by the applicable
laws of the State of Texas and the United States of America.

     

    8.08        Severability.  In
the event that any provision of this instrument or the Note conflicts with
applicable law, such conflict shall not affect other provisions of this Deed of
Trust or the Note which can be given effect without the conflicting provisions,
and to this end the provisions of this Deed of Trust and the Note are declared
to be severable.

     

    8.09        Usury
Disclaimer.  The term “Maximum Lawful Rate” means the maximum
lawful contractual rate of interest, and the term “Maximum Lawful Amount” means
the maximum lawful contractual amount of interest, that are permissible and
nonusurious under applicable state or federal law for the type of loan evidenced
by the Note and the other Loan Documents.  All agreements between
Beneficiary, whether now existing or hereafter arising and whether written or
oral, are hereby limited so that in no contingency, whether by reason of demand
for payment or acceleration of the maturity of the Note or any other
circumstance whatsoever, shall the interest contracted for, charged or received
by Beneficiary exceed the Maximum Lawful Amount.  If, from any
circumstance whatsoever, interest would otherwise be payable to Beneficiary in
excess of the Maximum Lawful Amount, the interest payable to Beneficiary shall
be reduced to the Maximum Lawful Amount; and if from any circumstance
Beneficiary shall ever receive any interest in excess of the Maximum Lawful
Amount, an amount equal to any excessive interest shall be applied to the
reduction of the principal amount of the Note and not to the payment of
interest, or if such excessive interest exceeds the unpaid principal amount of
the Note such excess shall be refunded to Grantor. All interest paid or agreed
to be paid to Beneficiary shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full period until
payment in full of the principal amount of the Note (including the period of any
renewal or extension thereof) so that the interest thereon for such full period
shall not exceed the Maximum Lawful Amount.  For purposes of this
paragraph, the term interest shall include all considerations and amounts that
constitute interest under applicable usury law.  This paragraph shall
control all agreements between Grantor and Beneficiary.

     

    8.10        Partial
Invalidity.  In the event any portion of the sums intended to
be secured by this Deed of Trust cannot be lawfully secured hereby, payments in
reduction of such sums shall be applied first to those portions not secured
hereby.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    8.11        Captions.  The
captions and headings of the Articles and Sections of this Deed of Trust are for
convenience only and are not to be used to interpret or define the terms and
provisions of this Deed of Trust.

     

    
      
        
          	
                  GRANTOR:

                	
                  HHC
      San Antonio Northwest NC, LP,

                
	 
      	
                   
      a Texas limited partnership

                
	 
      	 
      
	 
      	
                  By:

                	
                  CapWest
      – Texas, LLC,

                
	 
      	 
      	
                   
      a Texas limited liability company,

                
	 
      	 
      	
                    General
      Partner

                
	 
      	 
      	 
      
	 
      	 
      	
                  By:

                	
                  /s/ Ben Hanson

                
	 
      	 
      	 
      	
                  Name:  Ben
      Hanson

                
	 
      	 
      	 
      	
                  Title:    Manager

                
	 
      	 
      	 
      	 
      
	 
      	 
      	
                  By:

                	
                  /s/ Brian DeRoeck

                
	 
      	 
      	 
      	
                  Name:  Brian
      DeRoeck

                
	 
      	 
      	 
      	
                  Title:    Manager

                

        

      

    

    

    
      
        	
                STATE
      OF TEXAS

              	
                §

              
	 
      	
                §

              
	
                COUNTY
      OF TRAVIS

              	
                §

              

      

    

    

    This
instrument was acknowledged before me on March _____, 2007 by Ben Hanson,
Manager of CapWest – Texas, LLC, a Texas limited liability company, on behalf of
said limited liability company in its capacity as General Partner of HHC San
Antonio Northwest NC, LP, a Texas limited partnership.

     

    
      
        	 
      	
                   

              
	 
      	
                Notary
      Public, State of Texas

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        	
                STATE
      OF TEXAS

              	
                §

              
	 
      	
                §

              
	
                COUNTY
      OF TRAVIS

              	
                §

              

      

    

    

    This
instrument was acknowledged before me on March _____, 2007 by Brian DeRoeck,
Manager of CapWest – Texas, LLC, a Texas limited liability company, on behalf of
said limited liability company in its capacity as General Partner of HHC San
Antonio Northwest NC, LP, a Texas limited partnership.

     

    
      	 
      	
                

            
	 
      	
              Notary
      Public, State of Texas

            

    

    

    After recording, please
return to:

    

    Mr. Frank
Jackel

    PlainsCapital
Bank

    919
Congress Avenue, Suite 600

    Austin,
Texas 78701

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