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Exhibit 10.22.2  

PREPARED BY AND AFTER RECORDING

RETURN TO:  

Thomas M. Little, Esq.

Foley & Lardner LLP

P.O. Box 3391

Tampa, Florida 33601  

 
 

MORTGAGE    
    
    SECURITY AGREEMENT AND FIXTURE FILING    
    

Dated as of March 18, 2004 

from

GOLF TRUST OF AMERICA, L.P,

a Delaware limited partnership having an office at

14 N. Adger's Wharf

Charleston, SC 29401

Attention: M. Bradley Blair, II and Brendan Magee

(the "Mortgagor") 

to 

TEXTRON FINANCIAL CORPORATION,

a Delaware corporation, having an office at

11575 Great Oaks Way, Suite 210

Alpharetta, Georgia 30022

Attention: President—Golf Finance

(the "Mortgagee") 

LOCATION
OF PREMISES
 Richland County, South Carolina

        ADDITIONAL
SUM OR SUMS FOR ANY PURPOSE, INCLUDING FUTURE ADVANCES AND READVANCES IN ACCORDANCE WITH SECTION 29-3-50, S.C. CODE ANN. (1976), AS AMENDED, AND FOR SUCH FURTHER SUMS AS MAY
BE ADVANCED TO OR FOR THE MORTGAGOR'S ACCOUNT FOR TAXES, INSURANCE PREMIUMS, PUBLIC ASSESSMENTS AND NECESSARY REPAIRS. THE MAXIMUM AMOUNT OF THE INDEBTEDNESS SECURED HEREBY SHALL NOT EXCEED $4,200,000 

 
 
 

COLLATERAL IS OR INCLUDES FIXTURES    

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MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING    
    

        THIS MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING (as amended, supplemented, restated or otherwise modified
from time to time, this "Mortgage") is made and entered into as of the 18th day of March, 2004, by GOLF TRUST OF AMERICA,
L.P.., a Delaware limited partnership, having a mailing address of 14 N. Adger's Wharf, Charleston, South Carolina 29401,
Attention: W. Bradley Blair, II and Brendan Magee (hereinafter referred to as "Mortgagor"), in favor of TEXTRON FINANCIAL
CORPORATION, a Delaware corporation, having a mailing address of 11575 Great Oaks Way, Suite 210, Alpharetta, Atlanta, GA 30022, Attention: President—Golf Finance
(hereinafter referred to as the "Mortgagee"). 

        In
order to secure the payment, performance and observance of the indebtedness and other obligations of Mortgagor hereinafter set forth, Mortgagor has granted and conveyed, and does
hereby irrevocably grant, bargain, sell, release, convey, warrant, assign, transfer, mortgage, pledge and set over and confirm unto the Mortgagee, its successors and assigns, all of Mortgagor's right,
title, and interest in and to the following described land and interests in land, estates, easements, rights, improvements, property, fixtures, equipment, furniture, furnishings, appliances and
appurtenances (hereinafter collectively referred to as the "Premises"): 

        (a)   All
those certain tracts, or parcels of land more particularly described in Exhibit "A" attached hereto and by this
reference made a part hereof (hereinafter referred to as the "Land"). 

        (b)   Certain
perpetual, non-exclusive appurtenant easements for the use and benefit of the Land across, over and upon those certain tracts or parcels of land more
particularly described on Exhibit "A" attached hereto and by this reference made a part hereof. 

        (c)   All
buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Land (hereinafter referred to as the
"Improvements"). 

        (d)   All
of Mortgagor's right, title and interest in the collateral described in Exhibit "B" attached hereto and by this
reference made a part hereof. 

        TO HAVE AND TO HOLD the Premises, with all privileges and appurtenances thereunto belonging or in any manner now or hereinafter
appertaining thereto, for the use and benefit of the Mortgagee upon the conditions hereinafter set forth. Mortgagor covenants that Mortgagor is lawfully seized and possessed of the Premises as
aforesaid, and has all requisite right and authority to encumber the same, that the same is unencumbered except for those matters expressly set forth in the title insurance commitment dated February
9, 2004 issued by Commonwealth Land Title Insurance Company (the "Permitted Exceptions") and that Mortgagor does hereby bind itself, its successors and
assigns, to warrant and will forever defend the title thereto against the claims of all persons whomsoever, except as to the Permitted Exceptions. 

        This
Mortgage is given to secure the following described indebtedness (collectively, the "Indebtedness"): 

        (a)   Any
and all sums owed by Mortgagor to the Mortgagee and the liabilities and obligations of Mortgagor hereunder or under the that certain Guaranty Agreement of even date
herewith by Mortgagor in favor of Mortgagee, whereby Mortgagor guaranteed the obligations of GTA Stonehenge, LLC (the "Borrower") under that certain Revolving Promissory Note by Borrower to Mortgagee
of even date herewith, or any and all other indebtedness, liabilities, or obligations of Mortgagor to the Mortgagee, of any nature whatsoever, whether now existing or hereafter created, whether
direct, indirect or secondary, and any and all modifications, extensions or renewals thereof, including without limitation sums owed under any other instrument evidencing securing or in any way
concerning the debt evidenced by the Note. 

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        Mortgagor
is the sole member of Borrower and as such, will derive direct economic benefit from the loan from Mortgagee evidenced by the Revolving Promissory Note delivered by Borrower. 

        This
Mortgage and the Guaranty Agreement between Mortgagee and Mortgagor, each dated of even date herewith, which evidence, secure and/or relate to the loan evidenced by the Note are
hereinafter collectively referred to as the "Security Documents." 

        Should
the Indebtedness be paid according to the terms and provisions of the Security Documents when the same shall become due and payable, and should Mortgagor perform all covenants,
terms and
conditions herein contained in a timely manner, then this Mortgage shall be null and void and may be released of record at the request and the expense of Mortgagor. 

        Mortgagor
hereby further covenants and agrees as follows: 

ARTICLE I  

        1.1    Payment of Indebtedness.    Mortgagor will pay all amounts due
under the Indebtednes according to the tenor thereof and all other sums now or hereafter secured hereby promptly as the same shall become due. 

        1.2    Taxes, Liens and Other Charges.    

        (a)   In
the event of the passage of any state, federal, municipal or other governmental law, order, rule or regulation, subsequent to the date hereof, in any manner changing
or modifying the laws now in force governing the taxation of the Indebtedness or this Mortgage or the manner of collecting taxes so as to adversely affect the Mortgagor (exclusive of any tax assessed
on Mortgagee's net income), Mortgagor will promptly pay any such tax before the same becomes delinquent. If Mortgagor fails to make such prompt payment, then the entire balance of the principal sum
secured by this Mortgage and all interest accrued thereon shall, at the option of the Mortgagee, become immediately due and payable. If in the opinion of the Mortgagee, any such state, federal,
municipal, or other governmental law, order, rule or regulation prohibits Mortgagor from making such payment or would penalize the Mortgagee if Mortgagor makes such payment or if, in the opinion of
the Mortgagee, the making of such payment might result in the imposition of interest beyond the maximum amount permitted by applicable law, then the entire balance of the principal sum secured by this
Mortgage and all interest accrued thereon shall, at the option of the Mortgagee, become immediately due and payable. 

        (b)   Mortgagor
will pay (to the extent same are not paid from the escrowed funds provided for in Paragraph 1.4), before the same become delinquent, all taxes, liens,
assessments and charges of every character, including but not limited to all utility charges, now or hereafter levied or assessed upon the Premises; and upon demand will furnish the Mortgagee
receipted bills evidencing such payment. 

        (c)   Subject
to Paragraph 1.2(d) below, Mortgagor will not suffer or permit any mechanic's, materialman's, laborer's, construction, statutory or other lien to remain
outstanding upon all or any part of the Premises. 

        (d)   Mortgagor
may contest at its sole expense, after prior written notice to Mortgagee, by appropriate legal proceedings conducted in good faith and with due diligence, the
amount, validity or application of any taxes, liens, assessments or charges levied or assessed upon the Premises or any mechanic's, materialman's, laborer's, construction, statutory or other lien
filed against the Premises, so long as such proceedings operate to prevent the collection or other realization thereon and the sale or forfeiture of the Premises or any part thereof to satisfy the
same or the impairment of Mortgagee's lien; provided that (i) during such contest Mortgagor shall, at the option of Mortgagee, provide Mortgagee with security reasonably satisfactory to Mortgagee 

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assuring
the payment of the Indebtedness and of any additional interest, charge, penalty or expense arising from or incurred as a result of such contest, and (ii) if at any time Mortgagee determines
that the payment of any obligation imposed upon Mortgagor under this Paragraph 1.2 shall become necessary to prevent either the sale or forfeiture of the Premises or any part thereof to satisfy the
same or the imposition of any liability on Mortgagee, then Mortgagor shall immediately pay the same. 

        1.3    Insurance.    

        (a)   Mortgagor
shall deliver to and maintain, for the benefit of Mortgagee during the term of this Mortgage, paid up insurance policies in all respects acceptable to
Mortgagee, with co-insurance clauses (if any) approved by Mortgagee, and containing a waiver of subrogation rights by the insuring company, non-contributory standard mortgage benefit clause or their
equivalents, and a mortgagee loss payable endorsement in favor of and satisfactory to Mortgagee, providing insurance on the Premises as is more particularly set forth on  Exhibit "C" attached
hereto and by this reference made a part hereof. 

        (b)   Mortgagor
shall deliver to Mortgagee annually during the term of this Mortgage certificates, from the applicable insuring companies evidencing the existence of the types
and amounts of insurance on the Premises required hereunder and evidencing full payment of all premiums in connection therewith. 

        (c)   The
Mortgagee is hereby authorized and empowered, at its option, to adjust or compromise any loss under any insurance policies maintained pursuant to this Paragraph 1.3,
and to collect and receive the proceeds from any such policies. In such event, each insurance company is hereby authorized and directed to make payment for all such losses directly to the Mortgagee,
instead of to Mortgagor and the Mortgagee jointly. In the event any insurance company fails to disburse directly and solely to the Mortgagee but disburses instead either solely to Mortgagor or to
Mortgagor and the Mortgagee jointly, Mortgagor agrees immediately to endorse and transfer such proceeds to the Mortgagee. Upon the failure of Mortgagor to endorse and transfer such proceeds as
aforesaid, the Mortgagee may execute such endorsements or transfers for and in the name of Mortgagor and Mortgagor hereby unconditionally and irrevocably appoints the Mortgagee as Mortgagor's agent
and attorney-in-fact, coupled with an interest, to endorse and transfer such proceeds to Mortgagee. After deducting from said insurance proceeds all of its expenses incurred in the collection and
administration of such sums, including attorneys' fees, the Mortgagee may apply the net proceeds or any part thereof, at its option
(i) to the payment of the Indebtedness, whether or not due and in whatever order the Mortgagee elects, (ii) to the repair and/or restoration of the Premises or (iii) for any other purposes or objects
for which the Mortgagee is entitled to advance funds under this Mortgage all without affecting the lien of this Mortgage. The Mortgagee shall not be held responsible for any failure to collect any
insurance proceeds due under the terms of any policy regardless of the cause of such failure. 

        (d)   All
insurance policies required pursuant to this Mortgage shall provide that the coverage afforded thereby shall not expire or be amended (including any reduction of the
scope or limits of coverage), canceled or otherwise terminated without at least thirty (30) days prior written notice to the Mortgagee. At least thirty (30) days prior to the expiration date of each
policy maintained pursuant to this Paragraph 1.3, a certificate evidencing the renewal or replacement thereof and otherwise satisfying the requirements of subparagraph (b) above shall be delivered to
the Mortgagee. Mortgagor shall deliver to the Mortgagee receipts evidencing the payment for all such insurance policies and renewals or replacements. 

        (e)   Should
any insurance required by Mortgagee be cancelled, reduced, or non-renewed, or if Mortgagor fails to provide such required insurance, Mortgagee may, at its sole
discretion, procure insurance and the cost thereof shall be additional indebtedness of Mortgagor under this Mortgage. 

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Mortgagor
shall reimburse Mortgagee for any premiums and other costs paid or otherwise incurred by Mortgagee associated with obtaining any such insurance. 

        (f)    The
delivery of any insurance certificates or receipts for payment of premiums hereunder shall constitute an assignment of all unearned premiums as further security
hereunder. In the event of the foreclosure of this Mortgage or any other transfer of title to the Premises in full or partial extinguishment of the Indebtedness, all right, title and interest of
Mortgagor in and to all insurance policies then in force shall pass to the purchaser or grantee. 

        1.4    Monthly Deposits.    To further secure the payment of the
taxes, assessments and the premiums on the insurance, Mortgagor will deposit with the Mortgagee, on the due date of each monthly installment under the Note, a sum which, in the estimation of the
Mortgagee, shall be equal to one-twelfth (1/12) of the annual taxes, assessments and insurance premiums on or with respect to the Premises; provided, however, that deposits for insurance premiums
shall not be required so long as (a) the insurance required to be provided hereunder is being provided under a blanket insurance policy approved by Mortgagee or (b) there shall exist no Event of
Default (as hereinafter defined) hereunder. Said deposits shall be held by the Mortgagee, free of interest and free of any liens or claims on the part of creditors of Mortgagor and as part of the
security of the Mortgagee, and to be used by the Mortgagee to pay current taxes, assessments and insurance premiums on the Premises as the same are due. Said deposits shall not be trust funds but may
be commingled with the general funds of the Mortgagee. If said deposits are insufficient to pay the taxes, assessments and insurance premiums in full as the same become due, Mortgagor shall, upon
request of Mortgagee, deposit immediately with the Mortgagee such additional sum as may be required in order for the Mortgagee to pay such taxes, assessments and
insurance premiums in full. Upon the occurrence of any default or Event of Default at any time when the Mortgagee is in possession of such deposits, the Mortgagee may, at its option, apply any of said
deposits to the payment of the Indebtedness in such manner as it may elect. 

        1.5    Condemnation.    If all or any portion of the Premises shall be
damaged or taken through condemnation (which term when used in this Mortgage shall include any damage or taking by any governmental authority and any transfer by private sale in lieu thereof), either
temporarily or permanently, then the entire Indebtedness shall, at the option of Mortgagee, become immediately due and payable. Mortgagee shall be entitled to receive all compensation, awards and
other payments or relief payable with respect to any condemnation. Mortgagee is hereby authorized, at its option, to commence, appear in and prosecute, in its own or in Mortgagor's name, any action or
proceeding relating to any condemnation, and to settle or compromise any claim in connection therewith. All such compensation awards, damages, claims, rights of action and proceeds and the right
thereto are hereby assigned by Mortgagor to Mortgagee. After deducting from said condemnation proceeds all of its expenses incurred in the collection and administration of such sums, including
attorneys' fees, Mortgagee may apply the net condemnation proceeds or any part thereof, at its option, (a) to the payment of the Indebtedness, whether or not due and in whatever order Mortgagee
elects, (b) to the repair and/or restoration of the Premises, or (c) for any other purposes or objects for which Mortgagee is entitled to advance funds under this Mortgage, all without affecting the
lien of this Mortgage. All net condemnation proceeds to be disbursed by Mortgagee pursuant to this Paragraph 1.5 shall be disbursed in a manner acceptable to Mortgagee as the repair and/or replacement
work proceeds. Mortgagee shall not be held responsible for any failure to collect any condemnation regardless of the cause of such failure. Mortgagor agrees to execute such further assignment of any
compensation, awards, damages, claims, rights of action and proceeds as Mortgagee may require. 

        1.6    Care of Premises.    Mortgagor hereby convenants and agrees as
follows: 

        (a)   Mortgagor
will keep the buildings, parking areas, roads and walkways, recreational facilities, landscaping and all other improvements of any kind now or hereafter
erected on the Land or any part thereof (including, without limitation, the golf course), and the fixtures, 

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furnishings
and equipment therein and thereon, in good condition and repair (normal wear and tear excepted), will not commit or suffer any waste and will not do or suffer to be done anything which
will increase the risk of fire or other hazard to the Premises or any part thereof. 

        (b)   Mortgagor
will not remove or demolish or alter the structural character of any Improvement located on the Land without the written consent of Mortgagee. 

        (c)   If
the Premises or any part thereof is damaged by fire or any other cause and the amount of the damage exceeds Ten Thousand and 00/100 Dollars ($10,000), Mortgagor will
give immediate written notice thereof to Mortgagee. 

        (d)   Mortgagee
and its representatives are hereby authorized to enter upon and inspect the Premises at any time during normal business hours or, after the occurrence of an
Event of Default, at any time. 

        (e)   Mortgagor
will promptly comply with all present and future laws, ordinances, rules and regulations of any governmental authority affecting the Premises or any part
thereof. Mortgagor will deliver to Mortgagee, within ten (10) days after Mortgagor's receipt thereof, copies of any additional governmental permits or approvals or disapprovals or notices issued with
regard to the Premises or any portion thereof. 

        (f)    If
all or any part of the Premises shall be damaged by fire or other casualty, Mortgagor will promptly restore the Premises to the equivalent of its original condition
or better , and if a part of the Premises shall be damaged through condemnation, Mortgagor will promptly restore, repair or alter the remaining portions of the Premises to a facility which is
comparable to the preexisting facility in terms of overall usable square footage and type of functions served by such facility, which new facility shall be constructed with the same or better quality
of materials and workmanship as the preexisting facility and shall be constructed in accordance with the applicable requirements of the then existing zoning and building codes and other applicable
laws and market considerations. All repair and restoration shall be diligently prosecuted to completion by Mortgagor and shall be completed within six (6) months after the original damage or
destruction provided, however, that if Mortgagor diligently pursues completion of all repair and restoration throughout said six (6) month period but is unable to complete the work during such time
period, Mortgagor shall have an additional, reasonable period of time in which to complete such work, in no event to exceed an additional six (6) months. Notwithstanding the foregoing, Mortgagor shall
not be obligated to so restore unless in each instance, the Mortgagee agrees to make available to Mortgagor (pursuant to a procedure satisfactory to Mortgagee in its sole and absolute discretion) any
net insurance or condemnation proceeds actually received by the Mortgagee hereunder in connection with such casualty loss or condemnation, to the extent such proceeds are required to defray the
expense of such restoration. In no event shall the unavailability or insufficiency of any such insurance or condemnation proceeds to defray the entire expense of restoration in any way relieve
Mortgagor of its obligation to restore. In the event all or any portion of the Premises shall be damaged or destroyed by fire or other casualty or by condemnation, Mortgagor shall promptly deposit
with the Mortgagee a sum equal to the amount by which an architect's estimate (acceptable to Mortgagee in its sole discretion) of cost of the restoration of the Premises exceeds the actual net
insurance or condemnation proceeds received by Mortgagee in connection with such damage or destruction. 

        1.7    Security Agreement and Fixture Filing.    Insofar as (a) any of
the property listed on Exhibit "B" attached hereto and, (b) all other personal property either referred to or described in this Mortgage, or in any way
connected with the use or enjoyment of the Premises (hereinafter all collateral defined in clauses (a) and (b) of this paragraph shall be collectively referred to as "Collateral"), this Mortgage, in
compliance with the provisions of the Uniform Commercial Code as enacted in the State of South Carolina, as it may be amended from time to time (the "UCC"), is hereby made and declared to be: 

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(x)
a security agreement, encumbering the Collateral and (y) a fixture filing. Mortgagor does hereby grant to the Mortgagee a continuing lien and security interest in and to all of Mortgagor's right,
title and interest in and to the Collateral and all replacements, substitutions, additions and proceeds thereof and all after-acquired property relating thereto. A financing statement or statements
reciting this Mortgage to be a security agreement, affecting all of the Collateral aforementioned, shall be executed by Mortgagor and appropriately filed. Mortgagor covenants and agrees that, prior to
changing its name, identity or structure, it will so notify the Mortgagee in writing and will promptly execute any financing statements or other instruments deemed necessary by the Mortgagee to
prevent any filed financing statement from becoming seriously misleading or losing its perfected status. The remedies for any violation of the covenants, terms and conditions of the security agreement
herein contained shall be (a) as prescribed herein, (b) as prescribed by general law, or (c) as prescribed by the specific statutory consequences now or hereafter enacted and specified in the UCC, all
at Mortgagee's sole and absolute discretion. Mortgagor and Mortgagee agree that the filing of such financing statement(s) in the records normally having to do with personal property shall never be
construed in anywise derogating from or impairing this declaration and hereby stated intention of Mortgagor and Mortgagee that everything used in connection with the production of income from the
Premises, adapted for use therein, and/or which is described in this Mortgage, is, and at all times and for all purposes and in all proceedings both legal or equitable shall be, regarded as part of
the real estate irrespective of whether (a) any such item is physically attached to the improvements, (b) serial numbers are used for the better identification of certain items capable of being thus
identified in a recital contained herein, or (c) any such item is referred to or reflected in any such financing statement(s) so filed at any time. Similarly, the mention in any such financing
statement(s) of the rights in and to (aa) the proceeds of any insurance policy relating to the Premises (bb) any award in eminent domain proceedings for a taking or for loss of value, or (cc)
Mortgagor's interest as lessor in any present or future lease, sublease, or rights to income growing out of the use and/or occupancy of the Premises, whether pursuant to lease, sublease, or otherwise,
shall never be construed as in anywise altering any of the rights of Mortgagee as determined by this Mortgage or impugning the priority of Mortgagee's lien granted hereby or by any other recorded
document, but such mention in such financing statement(s) is declared to be for the protection of Mortgagee in the event any court shall at any time hold with respect to the foregoing (aa), (bb) or
(cc), that notice of Mortgagee's priority of interest to be effective against a particular class of persons, must be filed in the UCC records. The information contained herein is provided in order
that this Mortgage shall comply with the requirements of the UCC for instruments to be filed as financing statements. The "Debtor" is Mortgagor herein and; the "Secured Party" is Mortgagee herein. The
principal place of business of the Debtor is as set forth on Page 1 of this Mortgage, the mailing addresses of the Debtor and Secured Party are as set forth on Page 1 of this Mortgage, and the types
or items of collateral are as described hereinabove. 

        1.8    Further Assurances; After Acquired Property.    At any time,
and from time to time, upon request by Mortgagee, Mortgagor will make, execute and deliver or cause to be made, executed and delivered, to Mortgagee and, where appropriate, cause to be recorded and/or
filed and from time to time thereafter to be re-recorded and/or re-filed at such time and in such offices and places as shall be reasonably deemed desirable by Mortgagee, any and all such other and
further mortgages to secure debt or deeds of trust, security agreements, financing statements, continuation statements, instruments of further assurance, certificates and other documents as may, in
the opinion of Mortgagee, be necessary or desirable in order to effectuate, complete, or perfect, or to continue and preserve (a) the obligations of Mortgagor under the Revolving Note and under this
Mortgage, and (b) the lien of this Mortgage as a lien upon and security title in and to all of the Premises, whether now owned or hereafter acquired by Mortgagor. Upon any failure by Mortgagor so to
do, Mortgagee may make, execute, record, file, re-record and/or re-file any and all such mortgages to secure debt or deeds of trust, security agreements, financing statements, continuation statements,
instruments, certificates, and documents for and in the name of Mortgagor and Mortgagor hereby irrevocably appoints Mortgagee 

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the
agent and attorney-in-fact of Mortgagor so to do. The lien hereof will automatically attach, without further act, to all of Mortgagor's right, title, and interest in and to after acquired property
attached to and/or used in the operation of the Premises or any part thereof. 

        1.9    Expenses.    

        (a)   All
expenses, costs and other liabilities, including reasonable attorneys' fees, which Mortgagee may incur: (i) in enforcing, defending or construing this Mortgage (or
its priority) or any of the other Security Documents; (ii) for any inspection, evaluation, appraisal, survey or other service in connection with any of the Premises, (iii) for any title examination or
title insurance policy relating to the title to any of the Premises; or (iv) in the exercise by Mortgagee of any rights or remedies granted by this Mortgage or any of the other Security Documents,
shall be paid by Mortgagor upon demand by Mortgagee, together with interest thereon, from the date that such sum is advanced or expense incurred, to and including the date of reimbursement, computed
at an interest rate equal to the lesser of the Default Rate under the Revolving Note or the highest lawful contractual rate. 

        (b)   Mortgagee
shall not be required to pay any brokerage fee or commission or similar compensation in connection with the transactions contemplated herein, and Mortgagor
agrees to indemnify Mortgagee from and against any and all other claims for any fees, commissions, taxes or similar compensation arising in connection with the Indebtedness. 

        (c)   Whether
or not the Indebtedness is funded, Mortgagor agrees to pay all costs incurred by Mortgagee in connection with the Indebtedness, including, but not limited to,
all taxes and assessments, all recording fees, title insurance premiums and other charges of the title company issuing the policy of title insurance insuring the lien of this Mortgage, both
Mortgagor's and Mortgagee's attorneys' fees, document binding costs, appraisal fees, lien and judgment search costs, fees of architects, engineers, surveyors and any special consultants, construction
inspection fees, brokers fees (except as otherwise
specified herein) and escrow fees. Payments made by Mortgagor under this paragraph shall be in addition to any commitment fee or other fee charged by Mortgagee. 

        1.10    Estoppel Affidavits.    Mortgagor, upon ten (10) days prior
written notice, shall furnish to Mortgagee a written statement, duly acknowledged, setting forth the unpaid principal of, and interest on, the Indebtedness and whether or not any offsets or defenses
are claimed to exist against such principal and interest, and such other information as may be requested by Mortgagee. 

        1.11    Subrogation.    To the extent permitted by law, Mortgagee
shall be subrogated to the claims and liens of all parties whose claims or liens are discharged or paid with the proceeds of the Indebtedness. 

        1.12    Books, Records, Accounts and Annual Reports.    

        (a)   Mortgagor
will keep and maintain or will cause to be kept and maintained proper and accurate books, records and accounts reflecting all items of income and expense in
connection with the operation of the Premises or in connection with any services, equipment or furnishings provided in connection with the operation of the Premises. Mortgagee shall have the right
from time to time at all times during normal business hours to examine such books, records and accounts at the office of Mortgagor or such other person or entity maintaining such books, records and
accounts and to make copies or extracts thereof as Mortgagee shall desire. In conducting such examination, Mortgagee shall exercise its best efforts not to interfere with the normal business
operations of the Mortgagor. Mortgagor will furnish or cause Borrower to furnish to Mortgagee annually on or before ninety (90) days following the expiration of each fiscal year of Mortgagor: (i)
year-end income statements for the Premises and operation thereof and for Borrower as of the end of such fiscal year and for the twelve (12) months then ended, prepared in accordance with 

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generally
accepted accounting principles consistently applied with prior accounting periods, setting out in detail satisfactory to Mortgagee, income and expenditures from the operation of the
Premises, and certified by Borrower, as being true, correct and complete, (ii) audited income statements and balance sheets for Mortgagor as of the end of said Mortgagor's fiscal year and for the
twelve (12) months then ended and a reconciliation of the operations of the Premises and Borrower, in form, with content and from an accounting firm acceptable to Mortgagee, prepared in accordance
with generally accepted accounting principles consistently applied with respect to prior periods; provided, however, in the event the Mortgagor transfers its assets to a liquidating trust, in which
case Mortgagor is no longer required to file annual audited financial statements with the SEC, then income statements and balance sheets for Mortgagor as of the end of said Mortgagor's fiscal year and
for the twelve (12) months then ended and a reconciliation of the operations of the Premises and Borrower, in form and content acceptable to Mortgagee, prepared in accordance with generally accepted
accounting principles consistently applied with respect to prior period, and certified by Mortgagor, as being true, correct and complete; (iii) copies of signed federal tax returns for Borrower,
Mortgagor and Mortgagor's general partner or managing member; provided, however; if the Borrower is not required under law to file any tax returns, said requirement for same shall be waived; and (iv)
a current annual rent roll from the Premises (if any leases exist), certified in writing by Borrower as true and correct. Within thirty (30) days following the end of each month, Mortgagor shall, or
cause Borrower to, deliver, or shall cause to be delivered, to Mortgagee copies of the monthly operating statements with respect to the Premises certified by Borrower to be true, correct and complete
(or if delivered by the Managing Agent, shall, by their submission be deemed to be substantially true, correct and complete) and containing, at a minimum, information as to the total number of rounds
of golf played at the Premises number of rounds by members, total number of rounds of public play, number of rounds of public play with discounted cards, and the revenue and expense items for such
month, all of which must be in form and substance satisfactory to Mortgagee. Mortgagor shall supply to Mortgagee, from time to time upon request by Mortgagee, all additional information relating to
the Indebtedness, Mortgagor, Borrower and the Premises as Mortgagee may reasonably request. In the event any Event of Default occurs and is continuing, Mortgagee shall thereafter have the right to
have independent or in-house auditors of Mortgagee's choice inspect and audit the books and other records of Mortgagor during normal business hours, the cost of which shall be paid by Mortgagor upon
demand and which cost shall be secured by this Mortgage. 

        (b)   In
the event that the substance of the foregoing financial information required pursuant to the foregoing Paragraph 1.12(a) is not acceptable to Mortgagee in its
discretion, Mortgagor shall, or cause Borrower to, at Mortgagee's request, furnish to Mortgagee copies of audited income statements and
balance sheets for Borrower (the "Audited Annual Statements"), certified by an independent certified public accountant approved by Mortgagee, and
prepared in accordance with generally accepted accounting principles applied on a basis consistent with prior accounting periods. If the figures for the total operating income and total operating
expenses of the Premises (as defined in accordance with generally accepted accounting principles) in the Audited Annual Statements do not vary more than five percent (5%) from the figures in the
annual statements previously submitted to Mortgagee pursuant to Paragraph 1.12(a) above, then Mortgagee shall bear the reasonable cost of the certified public accountant's audit and preparation of the
Audited Annual Statements. If, however, such figures vary more than five percent (5%), Mortgagor shall pay for the cost of the certified public accountant's audit and preparation of the Audited Annual
Statements, and such amount shall be secured by this Mortgage. 

        1.13    Limit of Validity.    All agreements between Mortgagor and
Mortgagee, whether now existing or hereafter arising and whether written or oral, are hereby limited so that in no contingency, whether by reason of demand or acceleration of the maturity of the
Revolving Note or otherwise, shall the interest contracted for, charged, received, paid or agreed to be paid to Mortgagee exceed the maximum 

10

 

amount
permissible under applicable usury law. If, from any circumstance whatsoever, interest would otherwise be payable to Mortgagee in excess of the maximum lawful amount, the interest payable to
Mortgagee shall be reduced to the maximum amount permitted under applicable law; and if from any circumstance Mortgagee shall ever receive anything of value deemed interest by applicable law in excess
of the maximum lawful amount, an amount equal to any excessive interest shall be credited to the reduction of the principal of the Indebtedness and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of the Indebtedness, such excess shall be refunded to Mortgagor. All interest paid or agreed to be paid to Mortgagee 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 so that the interest on the Indebtedness for such full period shall not
exceed the maximum amount permitted by applicable law. Mortgagee hereby expressly disclaims any intent to contract for, charge or receive interest in an amount which exceeds the maximum amount of
interest permitted by applicable law. This Paragraph 1.14 shall control all agreements between Mortgagor and Mortgagee. 

        1.14    No Further Encumbrances.    Mortgagor shall not without the
prior written consent of Mortgagee, directly or indirectly (including, without limitation, by equipment leasing or similar arrangements, or by pledging or hypothecation of partnership interests in
mortgagor), further encumber the Premises, or any part thereof, it being understood by Mortgagor that the Premises, and all parts thereof, shall remain free and clear of any and all debt instruments
or other obligations for repayment of money except those given in connection with the loan evidenced by the Note. 

        1.15    Restrictions on Transfers.    

        (a)   Mortgagor
shall not, without first obtaining the prior written consent of the Mortgagee (which may be given or withheld by the Mortgagee in the Mortgagee's sole and
absolute discretion), whether voluntarily or involuntarily by operation of law or otherwise (i) transfer, sell, convey or assign all or any portion of the Premises, or contract to do any of the
foregoing, including, without limitation, enter into options to purchase, installment sales contracts, land contracts, real estate contracts or contracts for Mortgage, (ii) lease all or any portion of
the Premises or change the legal possession or use thereof, (iii) except as provided in this Paragraph, permit the dilution, transfer, pledge, hypothecation or encumbrance of any ownership interest in
Mortgagor or any or ownership interests in any partner of Mortgagor , or (iv) permit the assignment, transfer, delegation, change, modification or any diminution of the duties or responsibilities of
Mortgagor as manager of the Premises (except to a professional management company or companies acceptable to Mortgagee, in Mortgagee's sole discretion). Without limiting the generality of the
preceding sentence, the prior written consent of the Mortgagee shall be required for (i) any transfer made to a subsidiary or affiliate entity of Mortgagor, (ii) any transfer made to a reconstituted
general or limited partnership or limited liability company, transfer by any partnership or limited liability company to its individual partners or members, respectively, or vice versa, (iii) any
transfer by any corporation to its stockholders or vice versa and (iv) any corporate merger or consolidation. In the event that the Mortgagee, in the Mortgagee's sold discretion, is willing to consent
to a transfer which would otherwise be prohibited by this Paragraph 1.15(a), the Mortgagee may condition its consent on such terms as it desires, including, without limitation, an increase in the
interest rate of the Revolving Note (and recalculation of the amortization provisions thereof), and the requirement that Mortgagor pay a transfer fee, together with any expenses incurred by the
Mortgagee in connection with the granting of such consent (including, without limitation, reasonable attorneys' fees). 

        (b)   If
Mortgagor violates the terms of Paragraph 1.15(a) hereof, in addition to any other rights or remedies which Mortgagor may have herein, in any other Security Document
or at law or in equity, Mortgagee may increase the interest rate charged on the Indebtedness up to the Default Rate, such interest being due on demand and being secured by this Mortgage. 

11

 

        (c)   Mortgagor
shall not enter into any easements, rights of way, agreements affecting property lines or similar agreements affecting the Premises without the prior written
consent of Mortgagee, which consent shall not be unreasonably withheld or delayed. 

        1.16    Management of the Premises.    Mortgagor agrees that, so long
as this Mortgage is in effect, the Premises shall be managed by Mortgagor unless the Mortgagee has given its prior written approval to the retention of a professional management company (the
"Managing Agent"). If retained, the Managing Agent shall govern and manage the Premises pursuant to a management contract
("Management Agreement"), which must be approved by Mortgagee, and Mortgagor shall collaterally assign its rights under the Management Contract to
Mortgagee. Additionally, the Managing Agent shall enter into the Mortgagee's then-current "Consent to Collateral Assignment of Management Agreement"
which shall provide, inter alia that: (i) the Management Contract may not be modified or terminated so long as this Mortgage is in effect without the
prior written consent of the Mortgagee, which may be granted or withheld in the sole discretion of Mortgagee; (ii) subject to the last sentence hereof, all
amounts due and payable to the Managing Agent under the Management Agreement shall be subordinate to the Indebtedness; and (iii) in the event of a default by the Mortgagor under the Management
Agreement, the Managing Agent shall provide the Mortgagee with prompt written notice of such default, and the Mortgagee shall have the right, but not the obligation, to cure such default within a
reasonable period of time. Prior to an Event of Default hereunder, any compensation for management or operation of the Collateral in excess of four percent (4%) of annual gross revenues shall be
subordinated to payment of the Loan, although upon the occurrence of an Event of Default, all such compensation shall be subordinated to all payments of the Loan. 

        1.17    Use of Premises.    Mortgagor represents and warrants that, as
of the date of this Mortgage, the Premises are being used as a golf course and for attendant facilities only. Mortgagor covenants that Mortgagor will not allow any other uses on the Premises unless
Mortgagee has given its prior written consent thereto, which consent may be granted or withheld by Mortgagee in its sole and absolute discretion. 

        1.18    Equipment Purchases.    As a material inducement for Mortgagee
to fund the loan evidenced by the Note, Mortgagor covenants and agrees that, so long as the Indebtedness or any portion thereof remains outstanding, for any purchases of equipment of the type normally
sold by the E-Z-Go, Jacobsen, Cushman or Ransomes divisions of Textron, Inc. (collectively, "Textron Turfcare"), Mortgagor shall purchase said Textron
Turfcare products, provided that prices of said products shall be in conformity with local competitive pricing levels, commercially reasonable and shall be agreed upon by Mortgagor and Textron
Turfcare. Any financing for such purposes shall be separate and apart from the loan evidenced by the Revolving Note and shall be accomplished on terms which have been negotiated between Mortgagor and
Textron Turfcare. 

        1.19    Indemnity.    Mortgagor hereby indemnifies Mortgagee and
agrees to defend and hold Mortgagee harmless from and against any and all liens, damages, losses, liabilities, obligations, penalties, claims, litigation, demands judgments, suits, proceedings, costs,
disbursements or expenses of any kind of nature whatsoever (including, without limitation, reasonable attorneys' fees and expenses and experts' fees and expenses) which may at any time (whether prior
to or after payment of the Revolving Note in full) be imposed upon, incurred by or asserted or awarded against Mortgagor, Mortgagee or the Premises and arising directly or indirectly from or out of or
in connection with the operation of the Premises as a golf course and related facilities including, without limitation, any and all personal injury or property damage claims and trespass claims
claimed by, caused by or attributable to golfers and golf equipment. 

12

 

        1.20    Inspection.    Intentionally Omitted. 

        1.21    Single Purpose Entity.    Intentionally Omitted. 

        1.22    Debt Service Coverage Ratio.    As long as the Indebtedness,
or any portion thereof, remains outstanding, Mortgagor represents and covenants that it shall provide the Mortgagee with evidence (based upon evidence submitted by Mortgagor which should be in the
form of financial information to be provided by Mortgagor pursuant to Paragraph 1.12 hereof) that operations at the Premises for the immediately preceding twelve (12) month period is sufficient to
meet a "Debt Service Coverage Ratio" of at least 1.20, as measured monthly. The term "Debt Service Coverage Ratio" shall mean the ratio of "Net
Operating Income" to "Annual Debt Service". The term "Net Operating Income" shall mean all of Mortgagor's income from the operation and management of
the Premises after deducting all operating expenses, but prior to the deduction of income taxes, depreciation, and Annual Debt Service. The term "Annual Debt
Service" shall mean all principal, interest and other payments due by Mortgagor on all of Mortgagor's debt, including the Loan and shall be calculated based upon the greater of
eight percent (8%) or the current Interest Rate. Operating expenses for purposes of calculation of debt service shall include (i) a management fee equal to the greater of actual management fees paid
or three percent (3%) of annual gross revenues and (ii) a capital improvement reserve equal to two percent (2%) of the annual gross revenues. Mortgagor's compliance with the covenants set forth in
this Paragraph shall be verified by the financial statements to be delivered by Mortgagor to Mortgagee from time to time pursuant to Paragraph 1.12 above. Mortgagee shall have the right to determine,
in its sole but reasonable discretion, whether Mortgagor has deferred certain items of maintenance, limited ordinary or customary business expenses or shifted the time of payment of certain expenses
for the sole purpose of attempting to achieve the required Debt Service Coverage Ratio and not in the exercise of prudent business judgment in operating business conducted at the Premises. If
Mortgagee so determines, Mortgagee may make reasonable and appropriate adjustments to the calculation of the Net Operating Income from the Premises. Mortgagor's failure to maintain a debt service
coverage ratio of at least 1.20 shall be an Event of Default under this Mortgage and shall entitle Mortgagee to the remedies set forth in Article II hereof. 

        1.23    GTA Lease.    Mortgagor hereby covenants and agrees with
respect to that certain Lease of even date herewith between Borrower and Mortgagor (the "GTA Lease") as follows: 

        (a)   Mortgagor
shall deliver to Mortgagee true, correct and complete copies of any written notices received from Tenant under the GTA Lease within two (2) days after
Mortgagor's receipt of each such written notice; 

        (b)   Mortgagor
shall perform all of its obligations under the GTA Lease in accordance with the terms thereof; 

        (c)   Without
the prior written consent of Mortgagee, Mortgagor will not (i) modify or amend the GTA Lease or any of the terms thereof, (ii) agree with Tenant to terminate the
GTA Lease, or (iii) consent to any termination of the GTA Lease by Tenent; 

        (d)   Mortgagor
shall exercise all of the extension options granted to Mortgagor under the GTA Lease at least ninety (90) days prior to the expiration of Mortgagor's rights to
exercise the same, and Mortgagor shall provide evidence of such exercise to Mortgagee; and 

        (e)   Mortgagor
shall indemnify Mortgagee and hold and defend Mortgagee harmless from and against any and all causes of action, claims, damages, demands, liabilities, losses,
costs and expenses at any time asserted against, suffered or incurred by Mortgagee under or in connection with the GTA Lease. 

        Mortgagor
hereby appoints and designates Mortgagee as Mortgagor's agent and attorney-in-fact, and grants to Mortgagee the right, at any time and from time to time to exercise any and all
rights, and 

13

 

to
perform any obligations, of Mortgagor under the GTA Lease. Without limitation of the foregoing, Mortgagee shall have the right, without prior notice to Mortgagor, to cure or attempt to cure any
defaults or alleged defaults of Mortgagor under the GTA Lease, and Mortgagee shall have no liability to Mortgagor for any damages, losses, costs or expenses suffered or incurred by Mortgagor as a
result of the cure or attempted cure by Mortgagee of any default or alleged default under the GTA Lease. The foregoing appointment is coupled with an interest and is irrevocable as long as the
Indebtedness remains outstanding. Any amounts expended by Mortgagee under or pursuant to the GTA Lease or this Paragraph 1.23 shall bear interest from the date of each such expenditure to and
including the date of reimbursement at an interest rate equal to the lesser of the Default Rate under the Revolving Note or the highest lawful contractual rate. 

        1.24    Covenants.    Mortgagee acknowledges and agrees that with
respect to the obligations under Sections 1.2, 1.3, 1.4, 1.6 , 1.16 and 1.22 hereof, it will accept performance of same from Borrower in accordance with the terms of Borrower's Leasehold Mortgage,
Security Agreement, and Fixture Filing to Mortgagee of even date herewith, provided, however, if Borrower fails to comply with any of the obligations under said Sections, Mortgagor shall be liable for
same in accordance with the terms hereof. 

ARTICLE II  

        2.1    Events of Default.    The terms "Event of Default" or "Events
of Default", wherever used in this Mortgage, shall mean any one or more of the following events: 

        (a)   Failure
by Mortgagor to pay within nine (9) calendar days after due, any sum due under the Indebtedness, or any payment of tax or insurance deposit or premium when due;
or 

        (b)   Failure
by Mortgagor to duly observe, comply with or perform within thirty (30) calendar days after written notice of such failure is given to Mortgagor any other term,
covenant, condition or agreement of this Mortgage except Paragraphs 1.14 and 1.15; or 

        (c)   The
occurrence of a default or event of default under or failure by Mortgagor, or Borrower, to perform any of their obligations under any of the Security Documents,
which is not cured within any applicable grace or cure period; or 

        (d)   Any
warranty, representation of Mortgagor or Borrower contained in this Mortgage or in any other instrument, document, transfer, conveyance, assignment, certificates,
loan agreement or financial statement given by Mortgagor, or Borrower with respect to the Indebtedness secured hereby, is incomplete, untrue or misleading in any material respect when made; or 

        The
filing by Mortgagor or Borrower of a voluntary petition in bankruptcy or adjudication of Mortgagor as a bankrupt or insolvent, or the filing by Mortgagor, or Borrower of any petition
or answer seeking or acquiescing in any reorganization, arrangement, composition readjustment, liquidation, dissolution or similar relief for itself under any present or future federal, state or other
law or regulation relating to bankruptcy, insolvency or other relief for debtors, or the seeking or consenting to or acquiescing in the appointment of any trustee, receiver or liquidator of Mortgagor
or Borrower or of all or any substantial part of the Premises or of any or all of the rents, issues, profits or revenues thereof, or the making by Mortgagor, or Borrower of any general assignment for
the benefit of creditors, or the admission in writing by Mortgagor, or Borrower of its inability to pay its debts generally as they become due; or 

        (f)    The
entry by a court of competent jurisdiction of an order, judgment or decree approving a petition, filed against Mortgagor or Borrower seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or other relief under any present or future federal, state or other law or regulation relating to bankruptcy, insolvency or other
relief for debtors, which order, judgment or decree remains unvacated and unstayed for an aggregate of sixty 

14

 

(60)
days (whether or not consecutive) from the date of entry thereof, or the appointment of any trustee, receiver or liquidator of Mortgagor or Borrower, or of all or any substantial part of the
Premises or of any or all of the rents, issues, profits or revenues thereof without the consent or acquiescence of Mortgagor, or Borrower, which appointment shall remain unvacated and unstayed for an
aggregate of sixty (60) days (whether or not consecutive); or 

        (g)   Failure
by Mortgagor to comply with the terms of Paragraphs 1.14, 1.15 and 1.22 hereof, including, but not limited to, failure to achieve the minimum Debt Service
Coverage Ratio required pursuant to Paragraph 1.22; or 

        (h)   The
termination, liquidation or dissolution of Mortgagor, or Borrower; or 

        (i)    Any
default by Mortgagor under any other loan or extension of credit (including, without limitation, equipment leases) for which Mortgagor is responsible for making
payments, whether or not such loan or extension of credit is made by the Mortgagee or others, if such default creates a liability in excess of Twenty Five Thousand Dollars ($25,000); or 

        (j)    Any
default under any other note, mortgage or other document, evidencing or securing indebtedness of Mortgagor, the general partner or managing member of Mortgagor,
[any Borrower or any affiliate of any of them], in favor of the Mortgagee or any affiliate of the Mortgagee; or 

        (k)   Failure
to reinstate any license, permit or contract necessary or appropriate for conduct of any business now or hereafter being operated at the Premises within thirty
(30) days after the termination, revocation or expiration thereof, or the failure to timely pay any sales, employment or similar tax imposed on Mortgagor or the Premises; or 

        (l)    If
the Management Contract, if any, shall be terminated by either party thereto without the prior written consent of Mortgagee, or if Mortgagor shall default in any of
its obligations under the Management Contract; or 

        (m)  Failure
to comply with any representation or warranty described in the Borrower's Certificate, including, but not limited to, failure to comply with the minimum Debt
Service Coverage Ratio or make the minimum required capital expenditures to the Premises; or 

        (n)   The
curtailment in availability to the Premises of utilities or other public services necessary for the full utilization of any of the Premises for its intended use; or
.. 

        (o)   The
occurrence of any default or event of default under the GTA Lease; or 

        (p)   The
occurrence of any default or event of default under the Loan Agreement and/or Post Closing Agreement of even date herewith between Borrower and Mortgagee. 

        2.2    REMEDIES.    IF AN UNCURED EVENT OF
DEFAULT SHALL OCCUR, MORTGAGEE MAY, AT MORTGAGEE'S ELECTION, EXERCISE ANY OR ALL OF THE FOLLOWING REMEDIES. IF AN UNCURED EVENT OF DEFAULT SHALL OCCUR, MORTGAGEE RIGHTS, REMEDIES AND RECOURSES AS SET
FORTH HEREIN, IN ADDITION TO ANY OTHER REMEDIES WHICH MORTGAGEE MAY HAVE.

        2.3    Acceleration and Subsequent Advances.    Mortgagee may declare
the entire Indebtedness, including but not limited to the then unpaid principal balance on the Note, the accrued but unpaid interest thereon (including any prepayment charge or fee payable under the
Note), court costs and attorney's fees hereunder, immediately due and payable, without notice, presentment, protest, demand or action of any nature whatsoever (each of which hereby is expressly waived
by Mortgagor), whereupon the same shall become immediately due and payable. Additionally, Mortgagee shall not be required to make any further advances on the Revolving Note or other Security Documents
upon the occurrence of an Event of Default or an event which, with the giving of notice or passing of time, would constitute an Event of Default. 

15

 

        2.4    Entry on Premises.    Mortgagee may enter upon the Premises and
take exclusive possession thereof and of all books, records and accounts relating thereto without notice and without being guilty of trespass. If Mortgagor remains in possession of all or any part of
the Premises after an Event of Default and without Mortgagee's prior written consent thereto, Mortgagee may, without notice to Mortgagor, invoke any and all legal remedies to dispossess Mortgagor.
Nothing contained in the foregoing sentence shall, however, be construed to impose any greater obligation or any prerequisites to acquiring possession of the Premises after an Event of Default than
would have existed in the absence of such sentence. 

        2.5    Operation of Premises.    Mortgagee may hold, lease, manage,
operate or otherwise use or permit the use of the Premises, either itself or by other persons, firms or entities, in such manner, for such time and upon such other terms as Mortgagee may deem to be
prudent and reasonable under the circumstances (making such repairs, alterations, additions and improvements thereto and taking any and all other action with reference thereto, from time to time, as
Mortgagee shall deem necessary or desirable), and apply all rents and other amounts collected in connection therewith in accordance with the provisions of Paragraph 2.16 herein. Mortgagor hereby
irrevocably appoints Mortgagee as the agent and attorney-in-fact of Mortgagor, with full power of substitution, and in the name of Mortgagor, if Mortgagee elects to do so, to (a) endorse the name of
Mortgagor on any checks or drafts representing proceeds of the insurance policies, or other checks or instruments payable to Mortgagor with respect to the Premises, (b) prosecute or defend any action
or proceeding incident to the Premises, and (c) take any action with respect to the Premises that Mortgagee may at any time and from time to time deem necessary or appropriate. Mortgagee shall have no
obligation to undertake any of the foregoing actions,
and if Mortgagee should do so, it shall have no liability to Mortgagor for the sufficiency or adequacy of any such actions taken by Mortgagee. 

        2.6    Enforcement.    In each and every Event of Default, Mortgagee
is authorized, to proceed by suit or suits at law or in equity or by any other appropriate remedy to protect and enforce its rights, whether for the specific performance of any covenant or agreement
contained herein or in aid of the execution of any power herein granted, to enforce payment of the Note, and to foreclose this Mortgage or to exercise any power of sale herein granted. 

        2.7    Foreclosure, Execution and Sale.    Mortgagor hereby authorizes
and fully empowers Mortgagee to foreclose this Mortgage by judicial proceedings or by advertisement with full authority to sell the Premises at public auction and convey the same to the purchaser in
fee simple all in accordance with and in the manner prescribed by law, and to retain out of the proceeds arising from such sale an amount equal to the Indebtedness together with (i) all such sums of
money as Mortgagee shall have expended or advanced pursuant to this Mortgage or pursuant to statute together with interest thereon as herein provided and (ii) all reasonable costs and expenses of such
foreclosure, including reasonable attorneys' fees, with the balance, if any, to be paid to the persons entitled thereto by law. In case of any sale of the Premises, or any part thereof, pursuant to
any judgement or decree of any court or otherwise in connection with the enforcement of any of the terms of this Mortgage, Mortgagee, its successors and assigns, may become the purchaser, and for the
purpose of making settlement for or payment of the purchase price, shall be entitled to deliver and use the Indebtedness in order that any such sums due to the Mortgagee from the Mortgagor and be
credited as paid on the purchase price. 

        2.8    Divestment of Rights; Tenant at Sufferance.    After
foreclosure of this Mortgage and after any judicial sale of the Premises, or any portion thereof, Mortgagor will be divested of any and all interest and claim thereto, including any interest or claim
to all insurance policies, bonds, loan commitments and other intangible property covered hereby. Additionally, after a sale of all or any portion of the Premises, Mortgagor will be considered a tenant
at sufferance of the purchaser of the same, and said purchaser shall be entitled to immediate possession thereof, and if Mortgagor shall fail to vacate the Premises immediately, the purchaser may and
shall have the right, without further notice to Mortgagor, to go into any court of competent jurisdiction in any city or county in which the Premises is located 

16

 

and
file an action in ejectment, which action shall lie against Mortgagor or its assigns or legal representatives, as a tenant at sufferance. This remedy is cumulative of any and all remedies the
purchaser may have hereunder or otherwise. 

        2.9    Receiver.    

        (a)   The
Mortgagee, upon application to a court of competent jurisdiction, shall be entitled without notice and without regard to the occupancy or value of any security for
the Indebtedness or the
solvency of any party bound for its payment, to the appointment of a receiver to take possession of and to operate the Premises and to collect, apply and use the rents, issues, profits and revenues
thereof, including those past due as well as those accruing thereafter, and said receiver shall have the benefit of all operating expenses and deposits prepaid by Mortgagor and being acknowledged by
Mortgagor that if an Event of Default shall have occurred, that Mortgagee shall have the right to the Premises and that the Premises and the rents and profits therefrom in such event will be in danger
of being lost, or materially injured or impaired. The receiver shall have all of the rights and powers permitted under the laws of the State of South Carolina. Mortgagor will pay to the Mortgagee upon
demand all expenses, including receiver's fees, attorney's fees and costs and agents' compensation, incurred pursuant to the provisions of this Paragraph 2.9(a); and all such expenses shall be secured
by this Mortgage. 

        (b)   Mortgagee
may exercise any and all other rights, remedies and recourses granted under the Security Documents or now or hereafter existing in equity, at law, by virtue of
statute or otherwise. 

        2.10    Separate Sales.    Mortgagee may sell all of the Premises
together or may sell portions thereof separately from the remainder thereof and in such manner and order as Mortgagee, in its sole discretion, may elect. The sale or sales by Mortgagee of less than
the whole of the Premises shall not exhaust the power of sale herein granted, and Mortgagee is specifically empowered to make successive sale or sales under such power until the whole of the premises
shall be sold; and if the proceeds of such sale or sales of less than the whole of such Premises shall be less than the aggregate of the Indebtedness and the expenses of executing this trust, this
Mortgage and the lien, security interest and assignment hereof shall remain in full force and effect as to the unsold portion of the Premises just as though no sale or sales of less than the whole of
the Premises, but Mortgagee shall have the right, at its sole election, to sell less than the whole of the Premises. As among the various counties or cities in which items of the Premises may be
situated, sales in such counties or cities may be conducted in any order that Mortgagee may deem expedient; and any one or more of such sales may be conducted in the same month, or in successive or
different months, as Mortgagee may deem expedient. If an Event of Default occurs hereunder, the holder of the Indebtedness or any part thereof on which the payment is delinquent shall have the option
to proceed as if under a full foreclosure, conducting the sale as herein provided without declaring the entire Indebtedness due, and if sale is made because of default of an installment, or a part of
an installment, such sale, if so made, shall not in any manner affect the unmatured part of the Indebtedness but as to such unmatured part, this Mortgage shall remain in full force and effect as
though no sale had been made under the provisions of this paragraph. Any number of sales may be made hereunder without exhausting the right of sale for any unmatured part of the Indebtedness secured
hereby. 

        2.11    Remedies Cumulative, Concurrent and Nonexclusive.    Mortgagee
shall have all rights, remedies and recourses granted in the Security Documents and available at law or equity (including specifically those granted by the UCC) and same (a) shall be cumulative and
concurrent; (b) may be pursued separately, successively or concurrently against Mortgagor or others obligated under the Note, or against the Premises, or against any one or more of them at the sole
discretion of Mortgagee; (c) may be exercised as often as occasion therefor shall arise, it being agreed by Mortgagor that the exercise or 

17

 

failure
to exercise any of the same shall in no event be construed as a waiver or release thereof or of any other right, remedy or recourse; and (d) are intended to be, and shall be, nonexclusive. 

        2.12    Release of and Resort to Collateral.    Any part of the
Premises may be released by Mortgagee without affecting, subordinating or releasing the lien, security interest and assignment hereof against the remainder. The lien, security interest and other
rights granted hereby shall not affect or be affected by any other security taken for the same indebtedness or any part thereof. The taking of additional security, or the rearrangement, extension or
renewal of the Indebtedness, or any part thereof, shall not release or impair the lien, security interest and other rights granted hereby or affect the liability of Mortgagor or of any endorser,
guarantor or surety, or improve the right of any permitted junior lienholder; and this Mortgage, as well as any instrument given to secure any rearrangement, renewal or extension of the Indebtedness
secured hereby, or any part thereof, shall be and remain a first and prior lien, except as otherwise provided herein, on all of the Premises not expressly released until the Indebtedness is completely
paid. 

        2.13    Waiver of Redemption, Notice and Marshalling of Assets.    To
the fullest extent permitted by law, Mortgagor hereby irrevocably and unconditionally waives and releases (a) all benefits that might accrue to Mortgagor by any present or future laws exempting the
Premises from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment; (b) all
notices of any Event of Default (except as may be specifically provided for under the terms hereof), presentment, demand, notice of intent to accelerate, notice of acceleration and any other notice of
Mortgagee's election to exercise or the actual exercise of any right, remedy or recourse provided for under the Security Documents; (c) any right to appraisal or marshaling of assets or a sale in
inverse order of alienation; (d) the exemption of homestead; and (e) the administration of estates of decedents, or other matter to defeat, reduce or affect the right of Mortgagee under the terms of
this Mortgage to sell the Premises for the collection of the Indebtedness secured hereby (without any prior or different resort for collection) or the right of Mortgagee, under the terms of this
Mortgage, to the payment of the Indebtedness out of the proceeds of sale of the Premises in preference to every other person and claimant whatever (only reasonable expenses of such sale being first
deducted). 

        2.14    Discontinuance of Proceedings.    In case Mortgagee shall have
proceeded to invoke any right, remedy or recourse permitted under this Mortgage or under the Security Documents and shall thereafter elect to discontinue or abandon the same for any reason, Mortgagee
shall have the unqualified right so to do and, in such event, Mortgagor and Mortgagee shall be restored to their former positions with respect to the Indebtedness, the Security Documents, the Premises
and otherwise, and the rights, remedies, recourses and power of Mortgagee shall continue as if the same had never been invoked. 

        2.15    Form and Substance.    All documents, certificates, insurance
policies, and other items required under this Mortgage to be executed and/or delivered to Mortgagee shall be in form and substance satisfactory to Mortgagee in Mortgagee's sole and absolute
discretion. 

        2.16    Application of Proceeds; Deficiency Obligation.    The
proceeds of any sale of, and the rents and other income generated by the holding, leasing, operating or other use of the Premises shall be applied by Mortgagee (or the receiver, if one is appointed)
to the extent that funds are so available therefrom in the following orders of priority (to the extent such order of application is permitted by the laws of the State of Florida): (a) first, to the
payment of the costs and expenses of taking possession of the Premises and of holding, using, leasing, maintaining, repairing, improving and selling the same, including, without limitation, (i)
receiver's fees; (ii) costs of advertisement; (iii) attorneys' and accountants' fees; and (iv) court costs, if any; (b) second, to the payment of all amounts, other than the principal amount and
accrued but unpaid interest on the Note, which may be due to Mortgagee under the Security Documents, including all indebtedness and obligations, together with interest thereon as 

18

 

provided
therein, in such order and manner as Mortgagee may determine; (c) third, to the payment of all accrued but unpaid interest due on the Revolving Note in such order and manner as Mortgagee may
determine; (d) fourth, to the payment of the principal amount outstanding on the Revolving Note in such order and manner as Mortgagee may determine and all other Indebtedness; and (e) fifth, to
Mortgagor. Mortgagor and any other party liable on the Indebtedness shall be liable for any deficiency remaining in the Indebtedness. In the event the laws of the State of Florida require application
of the proceeds of any sale of, or the rents, income or profits from, the Premises in an order different from the order set forth in this Paragraph 2.16, such funds shall be applied in the order
required by the laws of the State of Florida. 

        2.17    Purchase by Mortgagee.    Mortgagee shall have the right to
become the purchaser at any judicial foreclosure sale of the Premises hereunder and shall receive a credit up to the amount of its bid for the Indebtedness due and owing as of the date of such sale. 

        2.18    Power of Attorney.    Mortgagor hereby grants Mortgagee a
power of attorney, coupled with an interest, to carry out and enforce, upon the non-payment of the Revolving Note on demand therefore, or the occurrence of a default by Mortgagor any material respect
in the performance or observance of any covenant or agreement contained herein and the expiration of any applicable grace period, all or any specified portion of the incorporeal rights collaterally
assigned and/or pledged by Mortgagor in this Instrument, or in which Mortgagor has granted a security interest under Chapter 9 of the South Carolina Uniform Commercial Code. 

        2.19    Remedies Cumulative, Concurrent and Nonexclusive.    Trustee
and Mortgagee shall have all rights, remedies and recourses granted in the Security Documents and available at law or equity (including specifically those granted by the UCC) and same (a) shall be
cumulative and concurrent; (b) may be
pursued separately, successively or concurrently against Mortgagor or others obligated under the Note, or against the Premises, or against any one or more of them at the sole discretion of Mortgagee;
(c) may be exercised as often as occasion therefor shall arise, it being agreed by Mortgagor that the exercise or failure to exercise any of the same shall in no event be construed as a waiver or
release thereof or of any other right, remedy or recourse; and (d) are intended to be, and shall be, nonexclusive. No right, power or remedy conferred upon or reserved to Beneficiary by this Mortgage
is intended to be exclusive of any other right, power or remedy, but each and every right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and
remedy given hereunder now or hereafter existing at law or in equity or by statute. 

        2.20    Performance by Mortgagee After Occurrence of Events of
Default.    Upon the occurrence of an uncured Event of Default, Mortgagee may, at its option, without waiving the right to accelerate the maturity of the
Indebtedness, pay, perform or observe any term covenant or condition of this Mortgage to be performed or observed by the Mortgagor. Mortgagee shall be the sole and absolute judge of the necessity for
any such actions and of the amounts to be paid. Mortgagee is hereby empowered to enter and to authorize others to enter upon the Premises or any part thereof for the purpose of performing or observing
any such defaulted term, covenant or condition without thereby becoming liable to Mortgagor or any person in possession holding under Mortgagor. 

        2.21    Interest After an Event of Default.    If any payment due
hereunder is not paid when due, then and in such event, Mortgagor shall pay interest thereon from and after the date on which such payment first becomes due at a rate equal to the lesser of the
default rate provided in the Revolving Note or the highest lawful contractual rate, and such interest shall be due and payable, on demand, whether or not any action shall have been taken or proceeding
commenced to recover the same or to foreclose this Mortgage. Nothing in this Paragraph 2.21 or in any other provision of this Mortgage shall constitute an extension of the time of payment of the
Indebtedness. 

19

 

        2.22    Waiver.    

        (a)   No
delay or omission of Mortgagee or of any holder of the Revolving Note to exercise any right, power, or remedy accruing upon any default shall exhaust or impair any
such right, power or remedy or shall be construed to be a waiver of any such default, or acquiescence therein, and every right, power, and remedy given by this Mortgage to Mortgagee may be exercised
from time to time and as often as may be deemed expedient by Mortgagee. No consent or waiver, express or implied, by Mortgagee to or of any breach or default by Mortgagor in the performance of the
obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance of the same or any other obligations of Mortgagor hereunder.
Failure on the part of Mortgagee to complain of any act or failure to act or to declare an Event of Default, irrespective of how long such failure continues, shall not constitute a waiver by Mortgagee
of its rights hereunder or impair any rights, powers or remedies arising by virtue of any breach or default by Mortgagor. 

        (b)   If
Mortgagee (i) grants forbearance or an extension of time for the payment of any sums secured hereby; (ii) takes other or additional security for the payment of any
sums secured hereby; (iii) waives or does not exercise any right granted herein, in the Revolving Note or in the Security Documents; (iv) releases any part of the Premises from the lien of this
Mortgage or otherwise changes any of the terms, covenants, conditions or agreements of the Note, this Mortgage or of any Security Document; (v) consents to the filing of any map, plat or replat
affecting the Premises; (vi) consents to the granting of any easement or other right affecting the Premises; or (vii) makes or consents to any agreement subordinating the lien hereof, any such act or
omission shall not (except as specifically provided by Mortgagee in connection with any such action) release, discharge, modify, change or affect the original liability under the Note, this Mortgage
or any other obligation of Mortgagor or any subsequent purchaser of the Premises or any part thereof, or any maker, cosigner, endorser, surety or guarantor; nor shall any such act or omission preclude
Mortgagee from exercising any right, power or privilege herein granted or intended to be granted in the event of any default then made or of any subsequent default; nor, except as otherwise expressly
provided in an instrument or instruments executed by Mortgagee, shall the lien of this Mortgage be altered thereby. In the event of the sale or transfer by operation of law or otherwise of all or any
part of the Premises, Mortgagee, without notice, is hereby authorized and empowered to deal with any such vendee or transferee with reference to the Premises or the Indebtedness, or with reference to
any of the terms, covenants, conditions or agreements hereof, as fully and to the same extent as it might deal with the original parties hereto and without in any way releasing or discharging any
liabilities or obligations. 

        (c)   All
rights and remedies of Mortgagee shall be cumulative and may be exercised singly or concurrently. Notwithstanding anything herein contained to the contrary,
Mortgagor, being an experienced developer and participant in sophisticated real estate ventures, and having consulted with counsel of its choosing: (a) hereby waives trial by jury; (b) agrees that it
will not (i) at any time insist upon, or plead, or in any manner whatever claim or take any benefit or advantage of any stay or extension or moratorium law, any exemption from execution or sale of the
Premises or any part thereof, wherever enacted, now or at any time hereafter in force, which may affect the covenants and terms of performance of this Mortgage, (ii) claim, take or insist upon any
benefit or advantage of any law now or hereafter in force providing for the valuation or appraisal of the Premises, or any part thereof, prior to any sale or sales thereof which may be made pursuant
to any provision herein, or pursuant to the decree, judgment or order of any court of competent jurisdiction, or (iii) after any such sale or sales, claim or exercise any right under any statute
heretofore or hereafter enacted to redeem the property so sold or any part thereof; (c) hereby expressly waives all benefit or advantage of any such law or laws; and (d) covenants not to hinder, delay
or impede the execution of any power herein granted or delegated to Mortgagee, but to 

20

 

suffer
and permit the execution of every power as though no such law or laws had been made or enacted. Mortgagor, for itself and all who may claim under it, waives, to the extent that it lawfully may,
all right to have the Premises marshaled upon any foreclosure hereof. 

        2.23    Suits to Protect the Premises.    Mortgagee shall have the
power: 

        (a)   to
institute and maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Premises by any acts which may be unlawful or any
violation of this Mortgage, 

        (b)   to
preserve or protect its interests in the Premises and in the rents, issues, profits and revenues arising therefrom, and 

        (c)   to
restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if
the enforcement of or compliance with such enactment, rule or order would impair the security hereunder or be prejudicial to the interest of Mortgagee. 

        2.24    Mortgagee May File Proofs of Claim.    In the case of any
receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting Mortgagor, or any of its creditors or property, Mortgagee, to the extent
permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims of Mortgagee allowed in such proceedings for the
entire amount due and payable by Mortgagor under this Mortgage at the date of the institution of such proceedings and for any additional amount which may become due and payable by Mortgagor hereunder
after such date. 

        2.25    Prepayment.    If Mortgagee shall accelerate the Indebtedness
following the occurrence of an Event of Default, any payments received by Mortgagee following such acceleration (including voluntary payments made by Mortgagor and payments received by Mortgagee as a
result of the sale of the Premises at foreclosure) shall be deemed voluntary prepayments of the Note. There is no prepayment fee required under the Note. 

        2.26    Stamp and Excise Tax.    If required by law, Mortgagor shalll
pay documentary stamp taxes applicable to the full face amount of the Note. If any additional stamp or excise tax shall become applicable with respect to this Mortgage, the Note, any loan or credit
extended hereunder, or any other Security Document, including any modifications thereof, the Mortgagor shall promptly pay such tax in full (including interest and penalties, if any) and shall hold the
Mortgagee harmless with respect thereto. The Mortgagor's liability under this Paragraph 2.26 shall survive the repayment of the Indebtedness. 

        2.27    Cross-Collateralization.    Mortgagor hereby acknowledges that
the Premises and all other collateral securing the Revolving Note shall also secure and collateralize any and all other loans from Mortgagee (or any affiliate of Mortgagee), to Mortgagor. 

ARTICLE III  

        3.1    Credits Waived.    Mortgagor will not claim nor demand nor be
entitled to any credit or credits against the Indebtedness for the taxes assessed against the Premises or any part thereof, and no deductions shall otherwise be made or claimed from the taxable value
of the Premises or any part thereof by reason of this Mortgage or the Indebtedness secured hereby. 

        3.2    No Release.    Mortgagor agrees that in the event the Premises
are sold and Mortgagee enters into any agreement with the then owner of the Premises extending the time of payment of the Indebtedness, or otherwise modifying the terms hereof, the Mortgagor shall
continue to be liable to pay the Indebtedness according to the tenor of any such agreement unless expressly released and 

21

 

discharged
in writing by Mortgagee. Nothing in this Paragraph 3.2 shall be deemed to be a waiver of Paragraph 1.14 hereof. 

        3.3    Successors and Assigns.    The provisions and covenants of this
Mortgage shall run with the Land, shall be binding on Mortgagor, and shall inure to the benefit of and be binding upon Mortgagor and Mortgagee and their respective heirs, executors, legal
representatives, successors and permitted assigns. Whenever a reference is made in this Mortgage to Mortgagor or Mortgagee such reference shall be deemed to include a reference to the heirs,
executors, legal representatives, successors and permitted assigns thereof. 

        3.4    Terminology.    All personal pronouns used in this Mortgage
whether used in the masculine, feminine or neuter gender, shall include all other genders; the singular shall include the plural, and vice versa. Titles and Articles are for convenience only and
neither limit nor amplify the provisions of this Mortgage itself. 

        3.5    Severability.    If any provision of this Mortgage or the
application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Mortgage and the application of such provisions to other persons or
circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 

        3.6    Applicable Law.    Mortgagor agrees that this Mortgage shall be
construed, interpreted and enforced in accordance with the laws of the State of South Carolina, provided, however, that if any applicable
conflict or choice of law rules would choose the law of another state, Mortgagor waives such rules and agrees that South Carolina's substantive, procedural and constitutional law shall nonetheless
govern. 

        3.7    Notices, Demands and Requests.    All notices, requests and
other communications to either party hereunder shall be in writing and shall be given to such party at its address set forth on the first page hereof or at such other address as such party may
hereafter specify for the purpose of notice to Mortgagor or Mortgagee. Each such notice, request or other communication shall be effective (a) if given by mail, three (3) calendar days following the
date upon which such notice is deposited in the United States Mail with first class postage prepaid, addressed as aforesaid, provided that such mailing is by registered or certified mail, return
receipt requested, (b) if given by overnight delivery, one (1) calendar day following the date upon which such notice is deposited with a nationally recognized overnight delivery service such as
Federal Express or Airborne with all fees and charges prepaid, addressed as provided on the first page hereof, or (c) if given by any other means, when delivered at the address specified in this
Paragraph 3.7. The addresses set forth above may be changed as to any party by such party delivering notice to the other parties at least thirty (30) days prior to such change of address. 

        3.8    Time of the Essence.    Time is of the essence with respect to
each and every covenant, agreement and obligation of Mortgagor under this Mortgage. 

        3.9    Assignment by Mortgagee.    

        (a)   Mortgagee
shall have the right in its sole and absolute discretion at any time during the term of the loan evidenced by the Revolving Note to sell, assign, syndicate or
otherwise transfer and/or dispose of all or any portion of its interest in the loan evidenced by the Note, and Mortgagor agrees that Mortgagee may submit to Mortgagee's assignees the financial data
and all other information furnished to or to be furnished by or on behalf of Mortgagor to Mortgagee, whether pursuant to the application or the commitment for the loan evidenced by the Note, any other
document evidencing securing or setting forth the terms of the loan evidenced by the Revolving Note or otherwise. 

22

 

        (b)   In
the event Mortgagor, or its successors or assigns, asserts any claim (including without limitation, counterclaims and third party claims) or seeks any relief in any
way relating or pertaining to the loan evidenced by the Note, including any such claim relating to any act or omission by Mortgagee, or its successors or assigns, or the officers, directors,
shareholders, employees, agents or attorneys of any of the foregoing (i) such claim or relief may be sought or asserted only against the then holder and owner of the Revolving Note and the Mortgage,
(ii) Mortgagor, for Mortgagor and its successors and assigns, expressly covenants not to sue, make claim or seek relief against any prior holder of the Revolving Note or this Mortgage, or any officer,
director, shareholder, employee, agent or attorney of any past, present or future holder of the Revolving Note or this Mortgage, and (iii) Mortgagor shall not seek to
recover in connection with any such claim, and Mortgagor hereby waives its right to seek or recover any nominal, consequential, punitive or exemplary damages if being agreed that any damage award
should be limited to actual damages proved by Mortgagor. Those parties other than Mortgagee which are described in the subparagraph are intended beneficiaries hereof. Notwithstanding anything in this
Mortgage, the Revolving Note or any other document evidencing, securing, setting forth the terms of the loan evidenced by the Note, the terms of this subparagraph shall survive indefinitely,
notwithstanding any payment of the indebtedness secured hereby or any satisfaction, cancellation or release of this Mortgage and shall not be subject to any term or provision of any such document
limiting the liability of Mortgagor. 

        (c)   IN ANY ACTION OR PROCEEDING BETWEEN MORTGAGOR AND THE MORTGAGEE OR THE RESPECTIVE SUCCESSORS AND ASSIGNS TO ENFORCE OR DEFEND ANY RIGHTS,
REMEDIES IN ANY WAY RELATING TO THE PREMISES, THE LOAN EVIDENCED BY THE NOTE, OR ANY ACT OR OMISSION OF ANY PERSON OR ENTITY RELATING TO SUCH LOAN OR THE DOCUMENTATION FOR THE LOAN EVIDENCED BY THE
NOTE, MORTGAGOR AND ITS SUCCESSORS AND ASSIGNS HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A JURY TRIAL. MORTGAGOR WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH JURY TRIAL HAS BEEN WAIVED, WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. THE MORTGAGOR ACKNOWLEDGES THAT ITS WAIVER OF TRIAL BY JURY HAS BEEN MADE KNOWINGLY, INTENTIONALLY AND WILLINGLY BY MORTGAGOR AS PART OF A BARGAINED FOR LOAN TRANSACTION. MORTGAGOR HAS NOT
IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

        3.10    No Partnership or Joint Venture.    Nothing contained herein
or in the Revolving Note or any other document relating to the loan evidenced by the Note, nor the acts or omissions of the parties hereto, shall be construed to create a partnership or joint venture
between Mortgagor and Mortgagee. The relationship between Mortgagor and Mortgagee is the relationship of "debtor" and "creditor". Mortgagor shall indemnify and hold Mortgagee harmless from and against
any and all suits, action, claims, proceedings (including third party proceedings), damages, losses, liabilities, and expenses (including, without limitation, attorneys' fees) which may be incurred by
or asserted against Mortgagee with respect to any claim or assertion which if true, would be inconsistent with or contradict the statements made in the preceding two sentences. The provisions of this
Paragraph 3.10 shall survive the repayment of the Indebtedness. 

        3.11    Acknowledgements by Mortgagor.    Mortgagor acknowledges that
the information set forth on the cover hereof is incorporated herein by reference and that Mortgagor has received a true copy of this Mortgage. 

23

 

        3.12    Use of Name.    Mortgagee shall have the right to use the name
of Mortgagor or any of its affiliates, Borrower and the Premises (including the Golf Course) in any press release, advertisement or other promotional materials. 

        3.13    Jurisdiction.    Mortgagee irrevocably and unconditionally:
(a) agrees that any suit, action or other legal proceeding arising out of or relating to this Mortgage may, and to the extent permitted by the courts of the State of Florida shall be brought in the
courts of record of the State of South Carolina in Richland County or the United States District Court for the District of South Carolina, Columbia Division s(b) consents to the jurisdiction of each
such court and any such suit, action or proceedings; (c) waives any objection which it may have to the laying of venue of any such suit, action or proceeding in any of such courts; (d) agrees that
service of any court paper may be effected in such manner(s) as may be provided under applicable laws or court rules in the State of South Carolina. 

        3.14    Waiver of Appraisal Rights.    The laws of South Carolina
provide that in any real estate foreclosure proceeding a defendant against whom a personal judgment is taken or asked may within thirty days after the sale of the mortgaged property apply to the court
for an order of appraisal. The statutory appraisal value as approved by the court would be substituted for the high bid and may decrease the amount of any deficiency owing in connection with the
transaction. 

        3.15    WAIVER.    THE UNDERSIGNED HEREBY
WAIVES AND RELINQUISHES THE STATUTORY APPRAISAL RIGHTS WHICH MEANS THE HIGH BID AT THE JUDICIAL FORECLOSURE SALE WILL BE APPLIED TO THE DEBT REGARDLESS OF ANY APPRAISED VALUE OF THE MORTGAGED
PROPERTY. 

24

 

        IN
WITNESS WHEREOF, Mortgagor has executed this Mortgage under seal, as of the day and year first above written. 

	

 	
 	
GOLF TRUST OF AMERICA, L.P., a

Delaware limited partnership
	

/s/  NIKI P. WOOVIS      
 Print Name: Niki P. Woovis	
 	

By:	
 	

GTA GP, Inc., a Maryland

corporation, its General Partner
	

/s/  MATTHEW J. NORTON      
 Print Name:	
 	

By:	
 	

/s/  W. BRADLEY BLAIR, II      
 W. Bradley Blair, II
 President

	

 	
 	

Address:	
 	

c/o Golf Trust of America

14 N. Adger's Wharf

Charleston, SC 29401

25

   
STATE OF South Carolina

COUNTY OF Charleston 

        The
foregoing instrument was acknowledged before me this 18th day of March, 2004, by W. Bradley Blair, II, as President of GTA GP, Inc., a Maryland corporation, general partner of Golf
Trust of America, L.P., a Delaware limited partnership, on behalf of the corporation and limited partnership. He is personally known to me or has
produced            as identification. 

	

 	
 	

/s/  NIKI P. WOOVIS      
 NOTARY PUBLIC
	 	 	Name:	 	Niki P. Woovis
	 	 	My Commission Expires: November 6, 2010
	 	 	 	 	 

26

 
 

EXHIBIT "A"
  Legal Description    
    

 
 

EXHIBIT "B"
  Collateral    
    

	1.
	All
construction materials, vaults, gas, electric and other utility fixtures, radiators, heaters, engines, machinery, boilers, ranges, elevators, plumbing and heating fixtures,
draperies, carpeting and other floor coverings, fire extinguishers and any other safety equipment, washers, dryers, water heaters, water fountains, mirrors, mantels, air conditioning apparatus,
refrigerating plants, refrigerators, cooking apparatus and appurtenances, office equipment, office machines, office furnishings, snack bar equipment, furnishings, fixtures, inventory and supplies, pro
shop equipment furnishings, fixtures, inventory and supplies, golf equipment, inventory and supplies, golf clubs, golf carts, landscaping equipment, tools and supplies, sprinkler and irrigation
systems, facilities and equipment, valves, rotors, computer and other control systems, window screens, awnings and storm sashes, which are or shall be attached to the Improvements and all other
furnishings, furniture, goods which are or are to become fixtures, machinery, equipment, inventory, supplies, appliances and tangible personal property of every kind and nature whatsoever now or
hereafter owned by Mortgagor and located in, on or about, or used or intended to be used with or in connection with the use, operation or enjoyment of the Premises, and all attachments, additions,
improvements, after-acquired property, renewals, proceeds and replacements of any of the foregoing and all the right, title and interest of Mortgagor in any of the foregoing property which is subject
to or covered by any conditional sales contract, chattel mortgage or similar lien or claim, together with the benefit of any deposits or payments now or hereafter made by Mortgagor or on behalf of
Mortgagor, all of which are hereby declared and shall be deemed to be fixtures and accessions to the freehold and a part of the Premises as between the parties hereto and all persons claiming by,
through or under them, and which shall be deemed to be a portion of the security for the indebtedness herein described and to be secured by this Mortgage;

	2.
	Business
interruption insurance against loss of income arising out of damage or destruction by fire, lightning, hurricane, tornado, wind damage, vandalism, malicious mischief, and such
other hazards as are presently included in so-called "all risk extended coverage," naming the Mortgagee as a loss payable party, with a deductible acceptable to the Mortgagee in its sole discretion
and in an amount of coverage not less than $250,000.00 per golf course;

	3.
	Tees
and greens insurance in the aggregate amount of One Hundred Thousand Dollars ($100,000.00) on each Property, naming Mortgagee as loss payee and otherwise in form and content
acceptable to Mortgagee;

	4.
	All
now owned or hereafter acquired easements, rights-of-way, strips, gores of land, streets, ways, alleys, passages, sewer rights, waters, water courses, water rights and powers, all
estates, rights, titles, interests, privileges, liberties, tenements, hereditaments and appurtenances whatsoever, in any way belonging, relating or appertaining to the Premises or any part thereof, or
which hereafter shall in any way belong, relate or be appurtenant thereto, and the reversions, remainders, rents, issues, profits, revenues, deposit accounts, contract rights and general intangibles
(and all Accounts, Equipment, General Intangibles and Inventory as those terms are defined in Article 9 of the Uniform Commercial Code as enacted in the State of South Carolina of or arising from the
Premises (including without limitation all payments under room occupancy agreements, all leases or tenancies, proceeds of insurance, prepaid insurance premiums, condemnation payments, golf club
initiation fees and deposits, membership transfer fees, greens fees, golf cart fees, membership fees, membership dues, and accounts receivable arising from the use or operation of each pro shop, snack
bar restaurant and bar located on or about the Land and all other payments received or due from members or other users of the facilities located on the Land). Membership agreements and contracts,
plans and specifications, licenses, causes of action, claims, condemnation proceeds, profits, concessions, fees, lease guaranties, utility contracts, maintenance contracts and agreements, management
contracts and agreements, service contracts, negotiable instruments, letters of credit, policies and proceeds of insurance, cash, bank accounts, escrow funds and accounts, construction funds and
refunds of taxes or insurance premiums, and all the estate, right, title, interest, property, possession, claim and demand whatsoever at law, as well as in equity, of 

Mortgagor
of, in and to the same. Mortgagor and Mortgagee hereby agreeing that any and all payments described in this parenthetical clause are "proceeds, product, offsprings, rents or profits"
("Rents") for purposes of § 552(b) of the United States Bankruptcy Code, as amended (the "Bankruptcy
Code"). 

	5.
	Any
and all leases, subleases, rental agreements, occupancy agreements, licenses, concessions, entry fees, other agreements which grant a possessory interest in all or any part of the
Premises, together with all rents, issues, profits, revenues, proceeds, awards, accounts, security deposits and other benefits now or hereafter arising from the use and enjoyment of the Premises or
any part thereof. Mortgagor and Mortgagee hereby agreeing that any and all payments described in this parenthetical clause are Rents for purposes of § 552(b)of the Bankruptcy Code.

	6.
	All
of Mortgagor's right, title and interest in and to all water rights, riparian rights, irrigation rights, appropriative rights, water allocations, water stock and licenses and
permits relating to water use attributable to or arising in connection with the land and all minerals, oil, gas and other hydrocarbons located in or beneath the Land, along with all rights to surface
and subsurface entry, including, without limitation, all that certain consumptive use permits issued by water management districts or other governmental agencies attached hereto and made a part
hereof, and all of Mortgagor's right, title and interest in and to any and all licenses and permits pertaining to the use of reclaimed wastewater on the land and all development rights or credits,
oil, gas and mineral rights and all rights applicable or appurtenant to the Land.

	7.
	All
of Mortgagor's right, title and interest in and to all trade names, trademarks, service marks, logos, copyrights and goodwill related thereto which in any way now or hereafter
belong, relate or appertain to the Land or the Improvements or any part thereof, or are now or hereafter acquired by Mortgagor, including, without limitation, the use of the names,"Woodcreek" and
"Wildewood" and all other name(s) used in connection with the Land or the Improvements;

	8.
	Any
and all present and future attachments, accessions, replacements, additions, products and proceeds of any of the property listed in subparagraphs (1) through (5) above.

	9.
	All
of the water, sanitary and storm sewer systems now or hereafter owned by the Mortgagor which are now or hereafter located by, over, and/or upon the Land or any part and parcel
thereof, and which water systems include all water mains, service laterals, hydrants, valves and appurtenances, and which sewer systems include all sanitary sewer lines, including mains, laterals,
manholes and appurtenances.

	10.
	All
paving for streets, roads, walkways or entrance ways now or hereafter owned by the Mortgagor and which are now or hereafter located on the Land or any part or parcel thereof.

	11.
	All
of the Mortgagor's right, title and interest as seller in and to all agreements for the sale of the Land, or any part thereof, heretofore made and entered into, and in and to all
sale agreements hereafter made and entered into, by or on behalf of the Mortgagor, together with all deposits and payments in connection therewith, together with any and all receivables now or
hereafter due the Mortgagor with respect to such agreements.

	12.
	Any
and all awards or payments, including interest thereon, and the right to receive the same, as a result of: (a) the exercise of the right of eminent domain; (b) the alteration of
the grade of any street; or (c) any other injury to, taking of, or decrease in the value of the Land or personal property.

	13.
	All
of the right, title and interest of the Mortgagor in and to all unearned premiums accrued, accruing or to accrue under any and all insurance policies now or hereafter provided
pursuant to the terms of insurance agreements, and all proceeds of sums payable for the loss of or damage to: (a) the Land or personal property; or (b) rents, revenues, income, profits or proceeds
from service agreements or contracts, leases, franchises, concessions or licenses of or on any part of the Land.

	14.
	All
of the Mortgagor's interest in all utility security deposits or bonds on the Land or any part or parcel thereof. 

	15.
	All
licenses, liquor licenses, permits, approvals, certificates and agreements with or from all boards, agencies, departments, governmental or otherwise, relating directly or
indirectly to the ownership, use, operation and maintenance of the Premises, or the use, construction or development of the Improvements on the Land, whether heretofore or hereafter issued or
executed, including but not limited to those specifically set forth in and attached to that certain Certificate of Borrower and Guarantor dated of even date herewith.

	16.
	All
contracts, subcontracts, agreements, service agreements, warranties and purchase orders which heretofore or hereinafter executed by or on behalf of the Mortgagor, or heretofore or
hereinafter assigned to the Mortgagor, in connection with the use, operation and maintenance of the Premises, or the use or construction of development improvements on the Land.

	17.
	All
rights of the Mortgagor in and to all plans and specifications, designs, drawings and other information, materials and matters heretofore or hereafter prepared relating to the
Improvements or any construction on the Land;

	18.
	All
instruments, documents, chattel papers and general intangibles relating to or arising from the foregoing collateral and all cash and noncash proceeds and products thereof;

	19.
	All
refunds, rebates or credits in connection with a reduction in real estate taxes and assessments charged against the Premises as a result of tax certiorari or any applications or
proceedings for reduction; all revenues received by Mortgagor from the ownership and operation of the Premises, regardless of what such revenues may be called, including without limitation, all
proceeds, products, offspring, sales or profits of the Premises. 

 
 

EXHIBIT "C"
  Insurance Requirements    
    

	1.
	Insurance
against loss or damage by fire, lightning, hurricane, tornado, wind damage, vandalism and malicious mischief, such other hazards as are presently included in so-called "all
risk extended coverage" insurance policies, and insuring against such other insurable hazards as, under good insurance practices, from time to time are insured against for properties of similar
character and location; the amount of the foregoing insurance shall not be less than the full replacement value of the Premises including the Improvements and personal property thereon; and said
policies of insurance shall provide for a deductible acceptable to Mortgagee, breach of warranty coverage, and loss payee, mortgagee and replacement cost endorsements satisfactory to Mortgagee;

	2.
	Business
interruption insurance against loss of income arising out of damage or destruction by fire, lightning, hurricane, tornado, wind damage, vandalism, malicious mischief, and such
other hazards as are presently included in so-called "all risk extended coverage," naming the Mortgagee as a loss payable party, with a deductible acceptable to the Mortgagee in its sole discretion
and in an amount of coverage not less than $250,000.00 per golf course;

	3.
	Tees
and greens insurance in the aggregate amount of One Hundred Thousand and 00/100 Dollars ($100,000.00) per Property, naming Mortgagee as loss payee and otherwise in form and
content acceptable to Mortgagee;

	4.
	Comprehensive
general liability insurance, including bodily injury, death and property damage liability, death and property damage liability, insurance against any and all claims,
including all legal liability to the extent insurable and imposed upon Mortgagee and all court costs and attorneys fees and expenses, arising out of or connected with the possession, use, leasing,
operation, maintenance or condition of the Premises in an amount not less than Two Million Dollars ($2,000,000.00) on a combined single limit basis (on which the Mortgagee shall be named as an
additional insured;

	5.
	Flood
insurance (if the Premises are or become located in an area which is considered a flood risk by the U.S. Department of Housing and Urban Development) in an amount equal to or
greater than the lesser of (a) the principal balance of the Note, or (b) the maximum limit of coverage available for the Premises under the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be added; [The insurance coverage required pursuant to this Exhibit "C" may be effected under a
blanket policy or policies covering the Premises and other properties and assets not constituting a part of the Collateral; provided that any such blanket policy shall specify, except in the case of
public liability insurance, the portion of the total coverage of such policy that is allocated to the premises, and any sublimit in such blanket policy applicable to the Property, and shall in any
case comply in all other respects with the requirements of this Exhibit "C".

	6.
	During
the period in which construction of a clubhouse or other improvements at the Premises is ongoing, builder's risk and workers' compensation insurance in form, content and amount
acceptable to Mortgagee; and

	7.
	Such
other insurance on the Premises or any replacements or substitutions therefor in such amounts as may from time to time be reasonably required by the Mortgagee against other
insurable casualties which at the time are commonly insured against in the case of premises similarly situated, due regard being given to the height and type of the Improvements, their construction,
location, use and occupancy, or any replacements or substitutions therefor. 

QuickLinks

MORTGAGE SECURITY AGREEMENT AND FIXTURE FILING

COLLATERAL IS OR INCLUDES FIXTURES

MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING

EXHIBIT "A" Legal Description

EXHIBIT "B" Collateral

EXHIBIT "C" Insurance RequirementsEXHIBIT 10.1  

EMPLOYMENT AGREEMENT  

        THIS AGREEMENT, by and between Kevin G. Kerns (the "Employee") and Teledata Solutions, Inc., an Illinois corporation (the "Company"), is made as of
March 19, 1996. 

        In
consideration of the mutual covenants herein contained, and in consideration of the employment of Employee by the Company, the parties agree as follows: 

        1.    Duties and Scope of Employment.    

        (a)   Position.
The Company agrees to employ the Employee under the terms of this Agreement in the position of President and Chief Operating Officer. As President and Chief
Operating Officer, Employee shall report to the Chief Executive Officer and the Board of Directors of the Company. The primary duties and responsibilities of President and Chief Operating Officer are
defined in Exhibit A. Exhibit A is intended to demonstrate Employee's primary duties and responsibilities as envisioned by the Board of Directors as of the date hereof and is not intended to comprise
a definitive or unmodifiable list. Accordingly, Employee's responsibilities may be modified, reduced or expanded at any time to accommodate Company's needs, consistent with Employee's position as
President and Chief Operating Officer of the Company. 

        (b)   Obligations.
During the term of this Agreement, the Employee shall devote his full business efforts and time to the Company during normal working hours. 

        (c)   Director.
As long as the Employee serves as President, Employee shall be nominated to serve on the Company's Board of Directors. Employee agrees to submit his
resignation from the Board immediately if Employee ceases to be President and Chief Operating Officer. 

        (d)   Approval
Required for Change in President and Chief Operating Officer. Until the fourth anniversary of the date of this Agreement, removal of the position and/or title
of "President and Chief Operating Officer" from Employee shall require the approval of a majority of the Board of Directors, including the affirmative vote of the two directors elected solely by the
holders of Series A Convertible Preferred Stock. The existence of this provision shall in no way eliminate any of the Company's other obligations to Employee hereunder, including without
limitation severance payment obligations. 

        2.    Compensation.    

        (a)   Base
Salary and Bonus. Beginning on the effective date of this Agreement, the Employee shall be paid a base salary (the "Base Compensation") of $90,000, per year,
payable in accordance with the Company's standard payroll policies. The Board of Directors shall review Employee's performance and the Company's financial and operating results on at least an annual
basis and shall adjust Employee's base salary as it deems appropriate based on such review. 

        (b)   Bonus.
Employee shall also be eligible for a bonus of up to $35,000 for fiscal year 1996 based on the criteria set forth in Exhibit B. The bonus will be due and payable
on the 15th day of February, 1997. The Board of Directors shall set bonus levels and targets for years after fiscal year 1996 as it deems appropriate. In the event Employee's employment with the
Company terminates for any reason other than pursuant to Section 7(c) hereof (voluntary termination by the Employee) or 7(b)(ii) hereof (Termination for Cause), Employee shall be
entitled to receive a pro rated bonus for such year, determined by dividing the aggregate bonus that he would have earned for the entire year (assuming he had remained employed for the entire year and
the original revenue/milestone targets established for such year continued to apply) by the number of days (including weekends) during which he was employed by the Company during such year by 365.
Such bonus shall be paid on February 15 of the following year. If Employee's employment with the Company terminates pursuant to Section 7(c) hereof or Section 7(b)(ii) hereof,
Employee shall be deemed to have forfeited his entire bonus for such year and no such bonus shall be due or payable by the Company. 

        (c)   Stock.
Employee shall receive an incentive stock option, as described in the Stock Option Agreement attached hereto as Exhibit C (the "ISO Agreement"). 

        (d)   Vacation.
Employee shall be entitled to three (3) weeks paid vacation during each year of employment. Such vacation shall be taken at a time mutually convenient
for both the Company and the Employee. Unused vacation time may not be accrued from year to year during the term of this Agreement without the Company's prior written approval. In the event this
Agreement is terminated by either the Company or the Employee, the Employee shall be paid for any unused, accrued vacation time. 

1

 

        3.     Relocation
Expenses. The Company shall reimburse Employee for the direct moving costs incurred in relocating himself and his family and their household possessions
(including vehicles) to the Chicago area, including air fare for approximately 8 trips between Chicago and the Employee's current residence. In addition, the Company shall reimburse Employee for
reasonable housing expenses incurred for three months from the date of this Agreement or Employee's securing of permanent housing arrangements in the Chicago area, whichever is earlier, as well as any
other reasonable out-of-pocket expenses associated with Employee's relocation. The Company shall promptly make such reimbursement after receiving from Employee documentation of the expenses incurred.
The Company's total relocation reimbursement shall not exceed $10,000. 

        4.    Definitions. As used herein, the following definitions shall apply:    

        (a)   "Termination
for Cause" shall mean the termination of employment of Employee as a result of (i) act or acts of dishonesty undertaken by Employee and intended to
result in substantial gain or personal enrichment of Employee at the expense' of the Company, (ii) persistent failure by Employee to perform the duties and obligations of Employee's employment which
are not remedied in a reasonable period of time after receipt of written notice from the Company; (iii) the conviction of Employee of a felony; or (iv) Employee's continued breach of any
material term of this Agreement or a breach of the Noncompetition, Nondisclosure and Developments Agreement of even date herewith between the Company and Employee. 

        (b)   "Constructive
Termination" shall mean (i) a material reduction in Employee's salary or benefits not agreed to by Employee (except in connection with a decrease to
be applied because the Company's performance has decreased and which is also applied to other officers, and excluding the substitution of substantially equivalent compensation and benefits), or
(ii) a material change in Employee's responsibilities (other than as contemplated by, and consistent with the spirit of, Section 1(a)) not agreed to by Employee. 

        (c)   "Disability"
shall mean that the Employee, at the time notice is given, has been unable to perform his duties under this Agreement for a period of not less than six
(6) consecutive months or for a period of two hundred seventy (270) days in any three hundred sixty-five (365) day period as the result of his incapacity due to physical or mental illness. In
the event that the Employee resumes the performance of substantially all of his duties hereunder before the termination of his employment under Section 7(b)(iii) becomes effective, the notice
of termination shall automatically be deemed to have been revoked. 

        (d)   "Voluntary
Termination of Employment" shall mean Employee voluntarily terminates his employment with the Company, unless such termination occurs within three
(3) months following a Constructive Termination. 

        (e)   "Change
in Control" shall mean the occurrence of the following event: The stockholders of the Company approve a merger or consolidation of the Company with any other
corporation, other than as merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or all agreement for the sale or
disposition of the Company of all or substantially all the Company's assets. 

        5.    Employee Benefits.    

        (a)   General.
During the term of his employment under this Agreement, the Employee shall be entitled to the full benefits for which Employee is eligible under the employee
benefit plans and including (without limitation) pension plans, savings or profit-sharing plans, deferred compensation plans, supplemental retirement plans, stock option, incentive or other bonus
plans, life, disability, health, accident and other insurance programs, paid vacations and sabbatical, and similar plans or programs, subject in each case to the generally applicable terms and
conditions of the plan or program in question and to the determination of any committee or the Board of Directors administering such plan or program. 

        6.     Business
Expense and Travel. During the term of his employment under this Agreement, the Employee shall be authorized to incur necessary and reasonable travel,
entertainment and other business expenses in connection with his duties hereunder. The Company shall reimburse the Employee for such expenses upon presentation of an itemized accounting and
appropriate supporting documentation, all in accordance with the Company's generally applicable policies. 

2

 

        7.    Term of Employment.    

        (a)   Basic
Rule. The Company agrees to continue the Employee's employment, and the Employee agrees to remain in the employ of the Company, from the effective date of this
Agreement until the date when the Employee's employment terminates pursuant to the provisions of this Agreement. 

        (b)   Termination
by the Company. The Company may terminate Employee's employment at any time, for any reason or for no reason. 

          (i)  Termination
Without Cause. If the Company terminates Employee's employment during the term of this Agreement for any reason whatsoever, other than Voluntary Termination
of Employment, Termination for Cause, or termination as a result of Employee's Death or Disability, the provisions of Section 8(a) shall apply. 

         (ii)  Termination
for Cause. If the Company terminates Employee's employment for Cause during the term of this Agreement, the provisions of Section 8(b) shall apply. 

        (iii)  Termination
on Death or Disability. If the Company terminates Employee's employment as a result of Employee's Death or Disability, the provisions of Section
8(c) shall apply. 

        (c)   Voluntary
Termination by the Employee. The Employee may terminate his employment voluntarily by giving the Company sixty (60) days' advance notice in writing, at which
time the provisions of Section 9(b) shall apply. However, if the Employee terminates his employment within three (3) months following a Constructive Termination or within six
(6) months following a Change in Control, the provisions of Section 8(a) shall apply. 

        (d)   Waiver
of Notice. Any waiver of notice shall be valid only if it is made in writing and expressly refers to the applicable notice requirement in this Section 7. 

        8.    Payments Upon Termination of Employment.    

        (a)   Payments
Upon Termination Pursuant to Section 7(b)(i) and Constructive Termination. If, during the term of this Agreement, the Employee's employment is terminated
by the Company pursuant to Section 7(b)(i) or voluntarily by Employee within three (3) months following a Constructive Termination or within six (6) months of a Change in Control, the
Employee shall be entitled to receive the following: 

          (i)  Severance
Payment. The Company shall continue to pay to the Employee his Base Compensation for six (6) months following the date of Employee's actual termination
of employment (the "Severance Payment"). Such Base Compensation amount shall be the Base Compensation determined as of the commencement date of this Agreement, and as is agreed to in future years by
the Board of Directors. 

         (ii)  Method
of Payment. The Severance Payment shall be made in monthly installments. 

        (iii)  Payment
in Lieu of Contract Damages. The Severance Payment shall be in lieu of any further payments to the Employee and any further accrual of benefits with respect to
periods subsequent to the date of the employment termination. Notwithstanding, the preceding sentence, neither the Severance Payment nor any other payments under this Section 8(a) shall reduce
or offset any benefits the Employee may be entitled to under the specific terms of the benefit plans of the Company. 

        (b)   Termination
By Company for Cause or Voluntary Termination. If the Employee's employment is terminated pursuant to Section 7(b) (ii) or voluntarily (other
than within three (3) months following a Constructive Termination) pursuant to Section 7(c), no compensation or payments will be paid or provided to the Employee for the periods following the
date when such a termination of employment is effective. Notwithstanding the preceding sentence, the Employee's rights under the benefit plans and the ISO Agreement shall be determined under the
provisions of those plans and agreement. 

        (c)   Termination
on Death or Disability. If the Employee's employment is terminated because of Employee's Death or Disability (as defined in Section 4(d) herein), then the
Company shall continue to pay to the Employee or his estate, as the case may be, his Base Compensation for six (6) months following the date of Employee's actual termination of employment.
Employee shall also receive any severance and disability payments that are provided in the Company's standard benefit plans, which amounts shall offset and reduce the Base Compensation otherwise
payable under the preceding sentence. 

        9.    Noncompetition,
Nondisclosure and Developments. As a condition of employment, concurrently with the execution hereof, Employee agrees to execute the Noncompetition,
Nondisclosure and Developments Agreement set forth in Exhibit D. 

3

 

        10.    Successors.    

        (a)   Company's
Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company's business and/or assets shall assume this Agreement and agree expressly to perform this Agreement in the same manner and to the same extent as the Company would be
required to perform it in the absence of a succession. For all purposes under this Agreement, the term "Company" shall include any successor to the Company's business and/or assets which executes and
delivers the assumption agreement described in this subsection (a) or which becomes bound by this Agreement by operation of law. 

        (b)   Employee's
Successors. This Agreement and all rights of the Employee hereunder shall be binding upon, inure to the benefit of, and be enforceable by, the Employee's
personal or legal representatives, devises and legatees. Any purported or attempted assignment or transfer by the Employee of any of the Employee's duties, responsibilities or obligations hereunder
shall be void. 

        11.    Notice.
Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or
three (3) days after being mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Employee, mailed notices shall be addressed to him at
the home address which he most recently communicated to the Company in writing in accordance herewith (provided that no such change shall be effective until actually received by the Company). In the
case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Chief Executive Officer. 

        12.    Termination
of this Agreement. This Agreement shall terminate upon the earlier of (i) the date that all obligations of the parties hereunder have been satisfied,
(ii) four (4) years from the date of this Agreement. A termination of this Agreement pursuant to the preceding sentence shall be effective for all purposes, except that such termination
shall not affect (A) the payment or provision of compensation or benefits on account of a termination of employment occurring prior to the termination of this Agreement as contemplated herein,
or (B) the rights and obligations of the parties contained in ancillary agreements hereto or set forth in the Exhibits. No payments under this Agreement shall be required for any termination of
employment occurring after four (4) years from the date of this Agreement. 

        13.    Miscellaneous
Provisions. 

        (a) Waiver.
No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Employee
and by the Chief Executive Officer. No waiver by either party of any breach of, or of compliance with any condition or provision of this Agreement by the other party shall be considered a waiver of
any other condition or provision or of the same condition or provision at another time. 

        (b)   Whole
Agreement. No agreements, representations or understandings (whether oral or written and whether expressed or implied) that are not expressly set forth in this
Agreement or the Exhibits hereto have been made or entered into by either party with respect to the subject matter hereof. This Agreement shall not supercede any vesting provisions contained in the
ISO Agreement. This Agreement shall supersede and control in the event of any conflict between this Agreement and any other correspondence with the Company. 

        (c)   Choice
of Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Illinois. Any dispute or claim by one party against
the other arising out of the interpretation, making, performance, breach or termination of this Agreement shall be governed by the laws of the State of Illinois and shall be finally settled by binding
arbitration commenced and maintained in Cook County, Illinois under the Commercial Arbitration Rules of the American Arbitration Association by one arbitrator appointed in accordance with said
Rules. Judgment on the award rendered by the arbitrator may be entered in any Court having jurisdiction thereof. The arbitrator shall apply Illinois law to the merits of any dispute or claim, without
reference to rules of conflict of law. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to the state arbitration law. 

        (d)   Severability.
The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision
hereof, which shall remain in full force and effect. 

        (e)   No
Assignment of Benefits. To the extent permitted by law, the rights of any person to payments or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of law, 

4

 

including
(without limitation) bankruptcy, garnishment, attachment or other creditor's process, and any action in violation of this subsection (e) shall be void. 

        (f)    Employment
At Will; Limitation of Remedies. The Company and the Employee acknowledge that the Employee's employment is at will, as defined under applicable law. If the
Employee's employment terminates for any reason, the Employee shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement. 

        (g)   Employment
Taxes. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes. 

        (h)   Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same
instrument. 

        IN
WITNESS THEREOF, each of the parties has executed this Agreement, in the case of the Company by its President, as of the day and year first above written. 

	

 	
 	

"COMPANY"
	

 	
 	

TELEDATA SOLUTIONS, INC.
	

 	
 	

/s/  PATRICK K. BRADY      
 Patrick K. Brady

President
	

 	
 	

"EMPLOYEE"
	

 	
 	

/s/  KEVIN G. KERNS      
 Kevin G. Kerns

5

 
List of Exhibits  

Exhibit
A:    Duties & Responsibilities of President, COO

Exhibit B:    1996 Bonus Criteria

Exhibit C:    Stock Option Agreement

Exhibit D:    Noncompetition, Nondisclosure and Developments Agreement 

6

 
AMENDMENT NO. 1  

        This
Amendment No. 1 to Employment Agreement (the "Amendment") is made and entered into as of the 1st day of December, 2000, by and between Apropos Technology, Inc. (the
"Company") and Kevin G. Kerns ("Employee"). 

        WHEREAS,
the Company and Employee entered into an Employment Agreement dated as of January 1, 2000 (the "Employment Agreement"); and 

        WHEREAS,
the Company and Employee desire to amend the Employment Agreement as more specifically set forth herein. 

        NOW,
THEREFORE, in consideration of the mutual covenants herein contained, and in consideration of the employment of Employee by the Company, the parties agree as follows: 

	1.
	Compensation. Sections 2(a) and 2(b) of the Employment Agreement are amended and restated in their entirety as follows: 

"(a) Base
Salary and Bonus. Beginning on the effective date of this Agreement, the Employee shall be paid a base salary (the "Base Compensation") of $210,000 per year, payable in accordance
with the Company's standard payroll policies. The Board of Directors shall review Employee's performance and the Company's financial and operating results on at least an annual basis and shall adjust
Employee's base salary as it deems appropriate based on such review. 

(b) Bonus.
Employee shall also be eligible for a bonus of up to $125,000 for fiscal year 2000 and the first quarter of fiscal year 2001, based on the criteria set forth in Exhibit A. The
bonus will be due and payable on the 15th day of May, 2001. The Board of Directors shall set bonus levels and targets for years after fiscal year 2000 as it deems appropriate. In the event Employee's
employment with the Company terminates for any reason other than pursuant to Section 6(c) hereof (voluntary termination by the Employee) or 6(b)(ii) hereof (Termination for Cause),
Employee shall be entitled to receive a pro rated bonus for such year, determined by dividing the aggregate bonus that he would have earned for the entire year (assuming he had remained employed for
the entire year and the original revenue/milestone targets established for such year continued to apply) by the number of days (including weekends) during which he was employed by the Company during
such year by 365. Such bonus shall be paid within thirty (30) days of the end of the relevant measurement period. If Employee's employment with the Company terminates pursuant to
Section 6(c) hereof or Section 6(b)(ii) hereof, Employee shall be deemed to have forfeited his entire bonus for such year and no such bonus shall be due or payable by the
Company." 

	2.
	Miscellaneous.

	(a)
	The
 Employment Agreement shall remain in full force and effect except as expressly set forth herein.

	(b)
	This
 Amendment shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to the conflicts of law rules of such state.

	(c)
	This
 Amendment may be executed in one or more counterparts, each of which shall be deemed an original and all of which, together, shall constitute one and the same instrument.

	(d)
	Capitalized
 terms used herein, but not otherwise defined, shall have the meaning ascribed to them in the Employment Agreement. 

*
* * 

7

 

        IN
WITNESS WHEREOF, the undersigned have executed this Amendment this 1st day of December, 2000. 

	COMPANY:

APROPOS TECHNOLOGY, INC.
	

By:	
 	

/s/  KEITH L. CRANDELL      
	

 
	Its: Board Member	 

	EMPLOYEE:	 
	

/s/  KEVIN G. KERNS      
 Kevin G. Kerns	

 

8

 
EXHIBIT A  

        In the event that the Company's Share Price Increase (as defined below) for the four quarters ending March 31, 2001, is higher than the Share Price Increase
for each member of the Peer Group (as defined below) for the same period, then Employee shall be entitled to a bonus of $125,000. 

        In
the event that the Company's Share Price Increase for the four quarters ending March 31, 2001, is the second highest in the Peer Group, then Employee shall be entitled to a
bonus of $62,500. 

        Notwithstanding
anything herein to the contrary, Share Price Increases for any member of the Peer Group that has been the subject of a takeover or merger or, at March 31, 2001 is
rumored to be the subject of a takeover or merger, shall not be considered. 

        If
the Company's Share Price Increase for the four quarters ending March 31, 2001, as calculated above, is not the highest or second highest in the Peer Group, Employee shall not
be entitled to any bonus. 

        "Share
Price Increase" shall mean the amount equal to the difference between the respective Average Close Price (as defined below) for the month of April 2001 and the respective
Average Close Price for the month of April 2000, divided by the Average Close Price for the month of April 2000. 

        "Average
Close Price" shall mean the amount equal to the sum of the respective closing prices for all trading days during the calendar month divided by the number of trading days in such
calendar month. 

        "Peer
Group" shall mean Quintus Corporation, Aspect Communications Corporation, eShare Communications Inc., Interactive Intelligence Inc., Kana Communication, Inc.
and eGain Communications Corp. 

9

 
AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT  

        This agreement (this "Amendment No. 2") amends certain provisions of the Employment Agreement dated as of January 1, 2000, as amended by Amendment
No. 1 dated as of December 1, 2000 (the "Employment Agreement"), by and between Apropos Technology, Inc., an Illinois corporation (the "Company"), and Kevin G. Kerns (the "Employee"). 

        The
words "six (6) months" in Section 7(a)(i) of the Employment Agreement are hereby replaced with the words "twelve (12) months". 

        The
Employment Agreement shall remain in full force and effect except as expressly amended hereby. This Amendment No. 2 shall be governed by and construed in accordance with the laws of
the State of Illinois, without regard to the Conflict of law rules of such State. This Amendment No. 2 may be executed in one or more counterparts, each of which shall be deemed an original and
all of which, together, shall constitute one and the same instrument. 

        Agreed,
accepted to and made effective this 7th day of November, 2002, being the date this Amendment No. 2 was approved by the Compensation Committee of the Board of Directors of the
Company. 

	

APROPOS TECHNOLOGY, INC.	
 	

 
	

By:	
 	

/s/  GEORGE KOCH      
 Member of the Compensation Committee

of the Board of Directors of the Company	
 	

 
	

/s/  KEVIN G. KERNS      
 Kevin G. Kerns	
 	

 

10

 
AMENDMENT NO. 3 TO EMPLOYMENT AGREEMENT  

        This agreement (this "Amendment No. 3") amends certain provisions of the Employment Agreement dated as of January 1, 2000, as amended by Amendment
No. 1 dated as of December 1, 2000 and Amendment No. 2 dated as of November 7, 2000 (the "Employment Agreement"), by and between Apropos Technology, Inc., an Illinois corporation
(the "Company"), and Kevin G. Kerns (the "Employee"). 

        Each
use of the term "four (4) years" in Section 10 of the Employment Agreement shall be hereby replaced with the term "five (5) years". 

        The
Employment Agreement shall remain in full force and effect except as expressly amended hereby. This Amendment No. 3 shall be governed by and construed in accordance with the
laws of the State of Illinois, without regard to the conflict of law rules of such State. This Amendment No. 3 may be executed in one or more counterparts, each of which shall be deemed an
original and all of which, together, shall constitute one and the same instrument. 

        Agreed,
accepted to and made effective this 10 day of November, 2003, being the date this Amendment No. 3 was approved by the Compensation Committee of the Board of
Directors of the Company. 

	

APROPOS TECHNOLOGY, INC.	
 	

 
	

By:	
 	

/s/  KEITH CRANDELL      
 Member of the Compensation Committee

of the Board of Directors of the Company	
 	

 
	

/s/  KEVIN G. KERNS      
 Kevin G. Kerns	
 	

 

11

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