-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, RF0YlCQRSjkDOkYvPn0RaMFwR9qIaDjGF2xcIttAA0ShtnllGp++LzNBR8xECCRK a4sn1bB+W4Wa7qYc09aGog== 0000889812-94-000110.txt : 19941117 0000889812-94-000110.hdr.sgml : 19941117 ACCESSION NUMBER: 0000889812-94-000110 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941110 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PROPERTIES GROWTH FUND XXII CENTRAL INDEX KEY: 0000740156 STANDARD INDUSTRIAL CLASSIFICATION: 6500 IRS NUMBER: 942939418 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13418 FILM NUMBER: 94558892 BUSINESS ADDRESS: STREET 1: 5665 NORTHSIDE DRIVE STREET 2: SUITE 370 CITY: ATLANTA STATE: GA ZIP: 30328 BUSINESS PHONE: 4049169090 MAIL ADDRESS: STREET 1: 5665 NORTHSIDE DRIVE STREET 2: SUITE 370 CITY: ATLANTA STATE: GA ZIP: 30328 FORMER COMPANY: FORMER CONFORMED NAME: CENTURY PROPERTIES FUND XXI DATE OF NAME CHANGE: 19840918 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1994 ------------------ OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________to ___________ Commission file number 0-13418 ------- Century Properties Growth Fund XXII ----------------------------------- (Exact name of Registrant as specified in its charter) California 94-2939418 ----------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328 -------------------------------------------------------------------- (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code (404) 916-9090 N/A ------------------------------------------------------------------------- Former name, former address and fiscal year, if changed since last report. Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes _____ No _____ APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date __________________. 1 of 13 CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. Consolidated Balance Sheets September 30, December 31, 1994 1993 (Unaudited) (Audited) Assets Cash and cash equivalents $ 232,000 $ 341,000 Restricted cash 795,000 775,000 Cash investments - 1,187,000 Other assets 1,952,000 520,000 Real Estate: Real estate 127,667,000 127,614,000 Furnishings 11,962,000 11,626,000 Accumulated depreciation (42,942,000) (39,860,000) -------------- ------------ Net real estate 96,687,000 99,380,000 Deferred financing costs, net 798,000 792,000 -------------- ------------ Total assets $ 100,464,000 $102,995,000 -------------- ------------ -------------- ------------ Liabilities and Partners' Equity Accrued expenses and other liabilities 2,530,000 1,908,000 Notes payable 80,499,000 81,848,000 -------------- ------------ Total liabilities 83,029,000 83,756,000 -------------- ------------ Partners' equity (deficit): General partner (7,027,000) (6,814,000) Limited partners (82,848 units outstanding at September 30, 1994 and December 31, 1993) 24,462,000 26,053,000 -------------- ------------ Total partners' equity 17,435,000 19,239,000 -------------- ------------ Total liabilities and partners' equity $ 100,464,000 $102,995,000 -------------- ------------ -------------- ------------ See notes to consolidated financial statements. 2 of 13 CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994 Consolidated Statements of Operations (Unaudited) For the Nine Months Ended September 30 September 30, 1994 1993 Revenues: Rental $ 14,587,000 $ 13,735,000 Interest and other income 47,000 73,000 -------------- ------------ Total revenues 14,634,000 13,808,000 -------------- ------------ Expenses: Operating 7,326,000 6,915,000 Interest 5,609,000 5,777,000 Depreciation 3,082,000 3,114,000 General and administrative 421,000 545,000 -------------- ------------ Total expenses 16,438,000 16,351,000 -------------- ------------ Net loss $ (1,804,000) $ (2,543,000) -------------- ------------ -------------- ------------ Net loss per limited partnership unit $ (19) $ (27) -------------- ------------ -------------- ------------ See notes to consolidated financial statements. 3 of 13 CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994 Consolidated Statements of Operations (Unaudited) For the Nine Months Ended September 30 September 30, 1994 1993 Revenues: Rental $ 4,956,000 $ 4,646,000 Interest and other income 10,000 22,000 ----------- ----------- Total revenues 4,966,000 4,668,000 ----------- ----------- Expenses: Operating 2,544,000 2,485,000 Interest 1,897,000 1,931,000 Depreciation 1,030,000 980,000 General and administrative 47,000 160,000 ----------- ----------- Total expenses 5,518,000 5,556,000 ----------- ----------- Net loss $ (552,000) $ (888,000) ----------- ----------- ----------- ----------- Net loss per limited partnership unit $ (6) $ (9) ----------- ----------- ----------- ----------- See notes to consolidated financial statements. 4 of 13 CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994 Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended September 30 September 30, 1994 1993 Operating Activities: Net loss $(1,804,000) $(2,543,000) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 3,349,000 3,385,000 Financing costs paid (273,000) (71,000) Changes in operating assets and liabilities: Other assets (1,432,000) (131,000) Accrued expenses and other liabilities 622,000 265,000 ----------- ----------- Net cash provided by operating activities 462,000 905,000 ----------- ----------- Investing Activities: Additions to rental properties (389,000) (852,000) Purchase of cash investments - (1,188,000) Proceeds from cash investments 1,187,000 595,000 Restricted cash (increase) decrease (20,000) 8,000 ----------- ----------- Net cash provided by (used in) investing activities 778,000 (1,437,000) ----------- ----------- Financing Activities: Repayment of note on debt modification (805,000) 33,000 Notes payable principal payments (544,000) (442,000) ----------- ----------- Net cash (used in) financing activities (1,349,000) (409,000) ----------- ----------- Decrease in Cash and Cash Equivalents (109,000) (941,000) Cash and Cash Equivalents at Beginning of Period 341,000 2,236,000 ----------- ----------- Cash and Cash Equivalents at End of Period $ 232,000 $ 1,295,000 ----------- ----------- ----------- ----------- Supplemental Disclosure of Cash Flow Information: Interest paid in cash during the period $ 5,263,000 $ 5,485,000 ----------- ----------- ----------- ----------- See notes to consolidated financial statements. 5 of 13 CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. General The accompanying consolidated financial statements, footnotes and discussions should be read in conjunction with the consolidated financial statements, related footnotes and discussions contained in the Partnership's Annual Report for the year ended December 31, 1993. Certain accounts have been reclassified in order to conform to the current period. The financial information contained herein is unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial information have been included. All adjustments are of a normal recurring nature. The results of operations for the nine and three months ended September 30, 1994 and 1993 are not necessarily indicative of the results to be expected for the full year. 2. Transactions with Related Parties (a) Affiliates of the Managing General Partner ("MGP") received reimbursements of administrative expenses amounting to $136,000 during the nine months ended September 30, 1994. These reimbursements are primarily included in general and administrative expenses. (b) On August 10, 1994, NPI Property Management Corporation ("NPI Management") transferred its management agreement to NPI-AP Management, L.P. ("NPI-AP Management"), an affiliate of MGP. NPI Management and NPI-AP Management are entitled to receive a management fee equal to 5% of annual gross receipts from certain properties it manages. For the nine months ended September 30, 1994, NPI Management and NPI-AP Management received $563,000. These fees are included in operating expenses. 3. Notes Payable (a) The Partnership finalized a debt modification agreement with the Monterey Village Apartments mortgagee in January 1994. The terms of the loan include a seven year extension with a reduction in the interest rate from 10.50 percent to 8.25 percent and a 30 year amortization period in exchange for a principal payment of $805,000. In connection with the modification, the Partnership incurred extension fees and costs totalling $78,000. The amount of financing costs paid during the period ended September 30, 1994 was $53,000. (b) On September 1, 1994, the Partnership completed a debt modification agreement with the Cooper s Pointe Apartments mortgagee. The loan requires monthly payments of $46,000 at 8.25% and is being amortized over 20 years. The loan matures on August 31, 1999 with a balloon payment of $4,746,000. As specified in the loan documents, the Partnership is required to make monthly deposits of $7,000 to a replacement reserve for future capital improvements. The Partnership incurred costs and extension fees in connection with this modification of $49,000. 6 of 13 CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. Notes Payable (Continued) (c) On September 1, 1994, the Partnership completed a debt modification agreement with the Copper Mill Apartments mortgagee. The loan requires monthly payments of $31,000 at 8.25% and is being amortized over 20 years. The loan matures on August 31, 1999 with a balloon payment of $3,240,000. As specified in the loan documents, the Partnership is required to make monthly deposits of $5,000 to a replacement reserve for future capital improvements. The Partnership incurred costs and extension fees in connection with this modification of $121,000. The loans securing Copper Mill Apartments and Cooper Pointe Apartments are cross collateralized. The Partnership has balloon payments due as follows: Property Maturity Date Payment Hampton Greens Apartments 1/95 $5,750,000 Stoney Creek Apartments 1/95 $6,750,000 The Partnership has received a loan commitment to refinance the Hampton Greens, Stoney Creek, Wood Creek and Promontory Point Apartment notes. The Wood Creek and Promontory Point Apartments mortgages mature November 1995 and April 1997, respectively. In September 1994, the Partnership paid a $50,000 application fee in connection with the proposed refinancing of the four referenced properties. It is anticipated that these loan refinancings will be finalized in the fourth quarter of 1994. The ability to hold and operate these properties is dependent on the Partnership s ability to obtain refinancing or debt modification as required. 4. Subsequent Events On October 12, 1994, National Property Investors, Inc. ("NPI"), sold one-third of its stock to an affiliate of Apollo Real Estate Advisors, L.P. ("Apollo"). NPI is the parent of NPI Equity Investments, Inc., the entity which controls the Managing General Partner of the Partnership. On October 17, 1994, DeForest Ventures I L.P. ("DeForest I") offered to purchase up to 40,595 outstanding units of limited partnership interest (the "Units") of the Partnership, representing approximately 49% of the units outstanding, at a purchase price (the "Purchase Price") of $80 per unit, net to the seller in cash, without interest, upon the terms and conditions set forth in the offer to purchase (the "Offer"). Because of the conflict of interest inherent in the fact that MGP is an affiliate of the Purchaser, the Partnership in its Schedule 14D-9, filed with the Securities and Exchange Commission, made no recommendation and is remaining neutral as to whether Unitholders should tender their Units pursuant to the Offer. The majority limited partner of DeForest I is NPI-AP Management and the shareholders who control DeForest Capital I Corporation, the sole general partner of DeForest I, also control NPI. 7 of 13 CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. This item should be read in conjunction with the Consolidated Financial Statements and other Items contained elsewhere in this Report. Liquidity and Capital Resources The Fund holds investments in and operates residential real estate properties. The Fund receives rental income from its properties and is responsible for operating expenses, administrative expenses, capital improvements and debt service payments. As of November 1, 1994, one of the eleven properties originally purchased by the Fund was lost through foreclosure. All of the Fund's properties, except for its Cooper s Pointe property, generated positive cash flow from operations during the nine months ended September 30, 1994. The Fund uses working capital reserves from any undistributed cash flow from operations and refinancing proceeds as its primary source of liquidity. There have been no distributions since 1988. It is not currently anticipated that the Fund will make any distributions from operations in the near future. Liquidity based upon cash and cash equivalents experienced a $109,000 decrease at September 30, 1994, as compared to December 31, 1993. The Fund's $462,000 of cash from operating activities and $778,000 of cash from investing activities were more than offset by $1,349,000 of cash used in financing activities. Cash provided by operating activities included $273,000 of financing costs paid. The decrease in receivables and other assets and the increase in accrued expenses and other liabilities, when comparing September 30, 1994 to September 30, 1993, is primarily due to the timing of real estate tax payments and the prepayment of insurance premiums. The increase in cash from investing activities included $1,187,000 of proceeds from cash investments which was partially offset by $389,000 of additions to real estate and a $20,000 increase in restricted cash. As described in Item 1, Note 3, cash used in financing activities consisted of an $805,000 partial repayment of the mortgage encumbering the Fund's Monterey Village Apartments property, as well as $544,000 of notes payable principal payments. All other increases (decreases) in certain assets and liabilities are the result of the timing of receipt and payment of various operating activities. Working capital reserves are currently in a money market account or repurchase agreements secured by United States Treasury obligations. The Managing General Partner believes that, if market conditions remain relatively stable, cash flow from operations, when combined with working capital reserves, will be sufficient to fund required capital improvements and regular debt service payments in 1994 and the foreseeable future. In 1995 through 1997, the Fund will have to arrange refinancings or debt modifications. If necessary, the Fund could dispose of the properties with significant balloon payments, in order to reduce future cash requirements. If the notes with January 1995 balloon payments are not refinanced or extended, or the properties are not sold, the properties could be lost through foreclosure. If Hampton Greens and Stoney Creek Apartments are lost through foreclosure, the Fund would incur a loss of approximately $2,600,000 and $2,500,000, respectively. The Fund has received a loan commitment to refinance the properties. 8 of 13 CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources (Continued) As described in Note 4 to the consolidated financial statements, on October 17, 1994, DeForest Ventures I L.P. offered to purchase up to 40,595 outstanding units of limited partnership interests of the Partnership, representing approximately 49% of the units outstanding, at a purchase price of $80 per unit, net to the seller in cash, without interest, upon the terms and conditions set forth in the offer to purchase. The Managing General Partner believes that the tender offer will not have a significant impact on future operations or liquidity of the Fund. At this time, it appears that the investment objective of capital growth will not be attained and that investors will not receive a return of all of their invested capital. The extent to which invested capital is returned to investors is dependent upon the performance of the Fund's properties and the markets in which such properties are located and on the sales price of the remaining properties. In this regard, it is anticipated at this time that the remaining properties will be held longer than originally expected. The ability to hold and operate these properties is dependent on the Fund's ability to obtain refinancing or debt modification as required. Real Estate Market The national real estate market has suffered from the effects of the real estate recession including, but not limited to a downward trend in market values of existing residential properties. In addition, the bail out of the savings and loan associations and sales of foreclosed properties by auction reduced market values and caused a further restriction on the ability to obtain credit. As a result, the Fund's ability to refinance or sell its existing properties may be restricted. These factors caused a decline in market property values and serve to reduce market rental rates and/or sales prices. Compounding these difficulties are relatively low interest rates, which encourage existing and potential tenants to purchase homes. In addition, there has been a significant decline nationally in new household formation. Despite the above, the rental market appears to be experiencing a gradual strengthening and management anticipates that increases in revenue will generally exceed increases in expenses during 1994 and early 1995. Furthermore, management believes that the emergence of new institutional purchasers, including real estate investment trusts and insurance companies, should create a more favorable market value for the Fund's properties in the future. Results of Operations Nine Months Ended September 30, 1994 vs. September 30, 1993 Operating results improved by $739,000 for the nine months ended September 30, 1994, as compared to 1993, due to increases in revenues of $826,000 and in expenses of $87,000. Revenues increased by $826,000 for the nine months ended September 30, 1994, as compared to 1993, due to an increase of $852,000 in rental income, which was slightly offset by a decrease of $26,000 in interest and other income. Revenues increased primarily due to an increase in rental rates at Plantation Creek Apartments and improved occupancy at all the Fund's properties, except for Monterey Village Apartments and Four Winds Apartments. Occupancy at Promontory Pointe remained constant. Interest and other income decreased due to a decline in average working capital reserves available for investment. 9 of 13 CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Nine Months Ended September 30, 1994 vs. September 30, 1993 (Continued) Expenses increased by $87,000 for the nine months ended September 30, 1994, as compared to 1993, due to an increase of $411,000 in operating expenses, which was only partially offset by decreases of $168,000 in interest expense, $32,000 in depreciation expense and $124,000 in general and administrative expenses. Operating expenses increased due to maintenance and rent-up expenses at the Fund's Autumn Run, Monterey Village, Plantation Creek, Promontory Point, Wood Creek and Stony Creek Apartments, which were slightly offset by a decrease in maintenance and rent-up expenses at the Fund's Cooper's Pointe Apartments. Interest expense decreased primarily due to the partial repayment and lower interest rate resulting from the January 1994 debt modification on the mortgage encumbering the Fund's Monterey Village Apartments and the May 1993 reduction in the interest rate on the Cooper's Pointe Apartments mortgage from 9 percent to 8 1/4 percent. Depreciation expense decreased due to the effect of assets becoming fully depreciated which was only slightly offset by the under accrual during the three months ended September 30, 1993. General and administrative expenses declined due to the reduction in asset management costs effective July 1, 1994, which was partially offset by the increased costs associated with the management transition. Three Months Ended September 30, 1994 vs. September 30, 1993 Operating results improved by $336,000 for the three months ended September 30, 1994, as compared to 1993, due to increases in revenues of $298,000 along with a decrease in expenses of $38,000. Revenues increased by $298,000 for the three months ended September 30, 1994, as compared to 1993, due to an increase of $310,000 in rental income, which was slightly offset by a decrease of $12,000 in interest and other income. Revenues increased primarily due to an increase in rental rates at Plantation Creek Apartments and improved occupancy at all the Fund's properties, except for Four Winds Apartments, Promontory Point Apartments and Hampton Greens Apartments. Occupancy at Cooper s Pointe Apartments remained constant. Interest and other income decreased due to a decline in average working capital reserves available for investment. Expenses decreased by $38,000 for the three months ended September 30, 1994, as compared to 1993, due to an increase of $59,000 in operating expenses and $50,000 in depreciation expense, which was more than offset by decreases of $34,000 in interest expense and $113,000 in general and administrative expenses. Operating expenses increased due to maintenance and rent-up expenses at the Fund's Autumn Run, Monterey Village, Plantation Creek, Promontory Point, Wood Creek and Stoney Creek Apartments, which were slightly offset by decreases in maintenance and rent-up expenses at the Fund's Cooper's Pointe Apartments. Depreciation expense increased due to an under accrual during the three months ended September 30, 1993, which was partially offset by the effect of assets becoming fully depreciated. Interest expense decreased primarily due to a repayment and lower interest rate resulting from the January 1994 debt modification on the mortgage encumbering the Fund's Monterey Village Apartments property. General and administrative expenses declined due to the reduction in asset management costs effective July 1, 1994. 10 of 13 CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Properties A description of the properties in which the Fund has an ownership interest during the period covered by this Report, along with occupancy data, follows: CENTURY PROPERTIES GROWTH FUND XXII OCCUPANCY SUMMARY Average Occupancy Rate (%) ------------- Nine Months Three Months Ended Ended Number of Date of September 30, September 30, Name and Location Units Purchase 1994 1993 1994 1993 - - ----------------- ----- -------- ---- ---- ---- ---- Wood Creek Apartments 432 05/84 97 91 97 90 Mesa, Arizona Plantation Creek Apartments 484 06/84 97 90 97 93 Atlanta, Georgia Stoney Creek Apartments 364 06/85 93 91 95 92 Dallas, Texas Four Winds Apartments 350 09/85 94 96 94 96 Overland Park, Kansas Promontory Point Apartments 252 10/85 96 96 96 97 Austin, Texas Cooper's Pointe Apartments 192 11/85 94 92 94 94 Charleston, South Carolina Hampton Greens Apartments 309 12/85 95 94 95 96 Dallas, Texas Monterey Village Apartments 224 04/86 92 94 96 91 Rancho Cucamonga, California Autumn Run Apartments 320 06/86 97 89 98 96 Naperville, Illinois Copper Mill Apartments 192 09/86 97 95 99 97 Richmond, Virginia 11 of 13 CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994 PART II - OTHER INFORMATION Item 1. Legal Proceedings Lawrence M. Whiteside, on behalf of himself and all others similarly situated, v. Fox Capital Management Corporation et. al., Superior Court of the State of California, San Mateo County, Case No. 390018. In November, 1994, Lawrence Whiteside, a limited partner of Century Properties Fund XIX, a limited partnership affiliated with the Partnership, commenced an action in the Superior Court of California, County of San Mateo, against, among others, the Managing General Partner and certain of its affiliates. The action alleges, among other things, that the tender offer constitutes (a) a breach of the fiduciary duty owed to the limited partners of the Partnership, and (b) a breach of, or on inducement to breach, the provisions of the Partnership Agreement of the Partnership. The action, which has been brought as a class action on behalf of limited partners, seeks to the enjoin the tender offer as well as monetary damages in an unspecified amount. The Managing General Partner believes that the action is without merit. On November 3rd the Superior Court denied plaintiff's motion for a temporary restraining order with respect to the tender offer. A hearing on a motion for a preliminary injunction is scheduled to be heard on November 18th. Item 6. Exhibits and Reports on Form 8-K. a) Exhibits 1. Amended and Restated Note, made as of September 1, 1994, by Century Properties Growth Fund XXIII (the "Partnership") in favor of The Travelers Insurance Company ("Travelers") in the principal amount of $3,679,026.14. 2. Amended and Restated Deed of Trust, dated as of September 1, 1994, between the Partnership and Travelers with respect to Copper Mill Apartments. 3. Amended and Restated Note, made as of September 1, 1994, by the Partnership in favor of Travelers in the principal amount of $5,388,360.35. 4. Amended and Restated Mortgage, dated as of September 1, 1994 between the Partnership and Travelers with respect to Cooper's Pointe. b) On August 10, 1994, a Current Report on Form 8-K was filed with the Securities and Exchange Commission to provide the following disclosure: On August 10, 1994, National Property Investors, Inc. ("NPI"), the parent of NPI Equity Investments II, Inc. ("NPI Equity"), entered into an agreement with an affiliate of Apollo Real Estate Advisors, L.P. ("Apollo") to sell to Apollo up to one-third of the stock of NPI. 12 of 13 CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - SEPTEMBER 30, 1994 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CENTURY PROPERTIES GROWTH FUND XXII By: FOX PARTNERS IV, A California General Partnership, its general partner By: FOX CAPITAL MANAGEMENT CORPORATION, A California Corporation, its general partner /S/ARTHUR N. QUELER ------------------------------------------------- ARTHUR N. QUELER Executive Vice President, Treasurer, Secretary and Director (Principal Financial and Accounting Officer) 13 of 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information extracted from Century Properties Growth Fund XXII and is qualified in its entirety by reference to such financial statements. 1 9-MOS DEC-31-1994 JAN-01-1994 SEP-30-1994 232,000 0 0 0 0 0 139,629,000 (42,942,000) 100,464,000 0 0 0 0 0 17,435,000 100,464,000 0 14,587,000 0 10,408,000 0 0 5,609,000 (1,804,000) 0 (1,804,000) 0 0 0 (1,804,000) (19) (19)
EX-99.1 3 AMENDED AND RESTATED NOTE EXHIBIT 99.1 COPPER MILL THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO OBTAIN JUDGMENT AGAINST YOU WITHOUT FURTHER NOTICE. AMENDED AND RESTATED NOTE $3,679,026.14 As of September 1, 1994 WHEREAS, Century Properties Growth Fund XXII, a California limited partnership ("Maker") entered into and delivered to The Travelers Insurance Company ("Payee"), a Deed of Trust Note dated November 26, 1986 from Maker to Joseph W. Sprouls and Kandis A. Ulrich, trustees for the benefit of the Payee in the original principal sum of $3,750,000 which was modified by that certain First Amendment to Deed of Trust and Security Agreement dated as of June 16, 1987 between Maker and Payee, which was recorded in the clerk's office of the Circuit Court of Henrico, Virginia (collectively, the "Deed of Trust Note"); WHEREAS, Maker desires to modify, amend and restate in its entirety the terms and provisions of the Deed of Trust Note as hereinafter set forth in this Amended and Restated Note (this "Note"); NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Maker hereby represents, warrants and covenants as follows: A. As of the date hereof, the aggregate outstanding principal balance of this Note is $3,679,026.14 and accrued but unpaid interest thereon is $0. B. Maker (and the undersigned representatives of Maker) has the full power, authority and legal right to execute and deliver this Note and to observe and perform the terms and provisions of this Note. C. The indebtedness evidenced by this Note constitutes a valid, binding and enforceable obligation of Maker subject only to bankruptcy and equitable remedies. D. There exist no offsets, counterclaims or defenses to Maker's obligation to pay the indebtedness evidenced by this Note. E. This Note is given in replacement and substitution of, and evidences the same indebtedness as the Deed of Trust Note and does not evidence any new or additional indebtedness of Maker to Payee and is not intended as a novation of the Deed of Trust Note. F. The terms, covenants and provisions of this Note as amended and restated in their entirety read as follows: FOR VALUE RECEIVED, Maker promises to pay to Payee or order, at Payee's office, or at such other place as may be designated, from time to time, in writing by Payee, the principal sum of Three Million Six Hundred Seventy-Nine Thousand and Twenty-Six and 14/100 Dollars ($3,679,026.14) with interest thereon from the date of this Note to and including the date this Note is paid in full calculated in the manner hereinafter set forth. I. DEFINITIONS The following terms as used in this Note shall have the following meanings: 1.1 "Debt" shall mean collectively the entire unpaid Outstanding Principal Balance, together with all interest accrued and outstanding thereon and all other sums owing under this Note and the Deed of Trust. 1.2 "Deed of Trust" shall mean (i) a certain Amended and Restated Deed of Trust (the "First Deed of Trust") dated the date hereof by Maker to Douglas N. Beck and Virginia A. Davis, trustees for the benefit of Payee, intended to be recorded in the clerk's office of the Circuit Court of Henrico County, Virginia and constituting a first mortgage lien on a portion of the Premises located at 3400 Copper Mill Trace, Henrico County, Virginia and known as Copper Mill Apartments and (ii) a certain Subordinate Mortgage (the "Subordinate Mortgage") dated the date hereof by Maker to Payee, intended to be recorded in the RMC office for Charleston County, South Carolina and constituting a second mortgage lien on a portion of the Premises located at 2225 Greenridge Road, North Charleston, South Carolina and known as Cooper's Pointe Apartments. 1.3 "Default" shall have the meaning set forth in Section 3.2 hereof. 1.4 "Default Rate" shall mean five (5) percent (5%) per annum in excess of the Interest Rate but not in excess of the maximum interest rate permitted by law. 1.5 "Dollars" shall mean dollars in lawful currency of The United States of America. 1.6 "Escrow Agent" shall mean Lawyers Title Insurance Company. 1.7 "Interest Rate" shall mean eight and one-quarter (8.25%) percent per annum. 1.8 "Loan" shall mean the loan evidenced by this Note and secured by the other Loan Documents. 1.9 "Loan Documents" shall mean this Note, the First Deed of Trust, the Amended and Restated Assignment of Leases, Rents and Profits dated the date hereof from Maker to Payee, the Subordinate Mortgage, the Subordinate Assignment of Leases, Rents and Profits dated the date hereof from Maker to Payee, the Cash Management Letter dated the date hereof from Maker and Manager to Payee, the Copper Mill Reserve Agreement dated the date hereof between Maker and Payee, the Copper Mill Escrow Agreement dated the date hereof among Maker, Payee and Escrow Agent, the Copper Mill Manager's Liability Letter from Manager to Payee, the Copper Mill Guaranty of Payment dated the date hereof from Maker, Fox Partners IV, Fox Capital Management Corporation, NPI Equity Investments II, Inc. and Manager to Payee and the Copper Mill Hazardous Material Guaranty and Indemnification Agreement dated the date hereof from Maker, Fox Partners IV, Fox Capital Management Corporation, NPI Equity Investments II, Inc. and Manager to Payee, the Release Letter from Payee to Maker and any other documents or instruments now or hereafter executed in connection therewith. 1.10 "Loan Year" shall mean the period of twelve (12) consecutive calendar months commencing on September 1, 1994 and ending on August 31, 1995 and each period of twelve (12) consecutive calendar months thereafter to and including the Maturity Date. 1.11 "Manager" shall mean NPI-AP Management, L.P., a Delaware limited partnership. 1.12 "Maturity Date" shall mean August 31, 1999, or such earlier date the entire Outstanding Principal Balance and accrued and unpaid interest thereon, and any other sums which are due and payable pursuant to the terms and provisions of this Note, are due and payable by reason of the acceleration of the maturity of this Note. 1.13 "Original Principal Amount" shall mean Three Million Seven Hundred and Fifty Thousand Dollars ($3,750,000). 1.14 "Outstanding Principal Balance" shall mean the aggregate of all sums advanced by Payee to or for the benefit of Maker hereunder and not repaid. 1.15 "Payment Date" shall mean the first day of October, 1994 and the first day of each month thereafter during the Term hereof. 1.16 "Premises" shall mean those certain parcels of real estate and the improvements thereon (i) located on the real property described in Exhibit A to the Deed of Trust, and known as Copper Mill Apartments and located at 3400 Copper Mill Trace, Henrico County, Virginia and (ii) located on the real property described in Exhibit A to the Subordinate Mortgage and known as Cooper's Pointe Apartments and located at 2225 Greenridge Road, North Charleston, South Carolina. 1.17 "Rents" shall have the meaning set forth in the First Deed of Trust. 1.18 "Responsible Entities" shall mean (i) Maker, (ii) NPI Equity Investments II, Inc., a Florida corporation, (iii) Fox Partners IV, a California general partnership, and (iv) Fox Capital Management Corporation, a California corporation and their successors and assigns. 1.19 "Term" shall mean the period commencing on September 1, 1994 and ending on August 31, 1999. II. PAYMENT OF INTEREST AND PRINCIPAL 2.1 Payment of Interest and Principal. (a) Interest shall accrue on the Outstanding Principal Balance at the Interest Rate, commencing on the date hereof. (b) Interest and principal shall be payable in constant monthly installments of $31,347.72 per month and shall be paid on each Payment Date, and shall be applied first to the payment of interest at the Interest Rate and the balance to reduction of the Outstanding Principal Balance. 2.2 Prepayment. On any Payment Date and upon not less than thirty (30) days' prior written notice to Payee, Maker may prepay this Note in full or in part, without premium or penalty upon payment of (a) all interest accrued and unpaid on the Outstanding Principal Balance of this Note to and including the date of prepayment, and (b) all other sums then due under this Note, the First Deed of Trust and the other Loan Documents (other than the Subordinate Mortgage). Any partial prepayment of the Outstanding Principal Balance of this Note shall not affect the amount or times installment payments are due or payable as set forth in Section 2.1 of this Note and all partial prepayments shall be applied against the installment payments last coming due under this Note, in inverse order of maturity unless Payee in its sole and absolute discretion notifies Maker that Payee will apply such partial prepayments in a manner other than as set forth herein. 2.3 Default Interest. On and after the occurrence of a Default, as defined in this Note or the First Deed of Trust, any advance made by Payee under any Loan Document and any principal or accrued interest not paid when due shall bear interest at the Default Rate. 2.4 Principal and Interest at Maturity. The entire Outstanding Principal Balance and all accrued and unpaid interest thereon, and any and all other sums which are due and payable pursuant to the terms and provisions of the Note, the First Deed of Trust and all other Loan Documents shall be due and payable on the Maturity Date. 2.5 Calculation of Interest. All interest on this Note shall be calculated annually on the basis of twelve 30-day months, provided, however, that for portions of the Outstanding Principal Balance which are outstanding for less than a full calendar month, interest on such portion of the Outstanding Principal Balance shall be calculated on the basis of a 365-day year and the actual number of days elapsed in any portion of a month for which interest may be due on such portion of the Outstanding Principal Balance. 2.6 Payments after Default. All unpaid interest that has accrued on the Outstanding Principal Balance, and all unpaid payments of principal whether prior or subsequent to the occurrence of the Default, shall be paid at the time of, and as a condition precedent to, the curing of the Default. While any Default exists, Payee is expressly authorized to apply payments made to it as it may elect against any or all amounts, or portions thereof, then due and payable hereunder or under any of the other Loan Documents, whether towards interest, reduction of the Outstanding Principal Balance, or any combination thereof, unless, with respect to any voluntary payment made by Maker, Maker directs that such voluntary payment be applied as set forth in a notice sent concurrently with such payment, it being agreed and understood, however, that in no event or circumstance shall Payee be required to accept such payment nor shall such payment cure any Default then existing unless expressly agreed to by Payee. 2.7 Place of Payment. Payments and prepayments to be made under this Note are to be made at such place as the legal holder of this Note may from time to time designate. III. SECURITY, DEFAULTS AND REMEDIES 3.1 Security for Payment. The payment of this Note is secured by, among other things, the Deed of Trust. By this reference, the Deed of Trust is incorporated by reference as if fully set forth herein. 3.2 Occurrence of Default; Acceleration of Maturity Date. It is agreed that upon occurrence of any of the following events of default under this Note (a "Default"): (a) default in the payment of principal or interest on or before the fifth (5th) day after the same is due, or default in the due and punctual payment of Taxes and Premiums, as defined in the First Deed of Trust, or default in the performance or observance of any other covenant or agreement of Maker contained herein which is not cured within thirty (30) days from the date of such default, provided, however, that if Maker has commenced in good faith to cure such default during the aforesaid thirty (30) day period and proceeds with due diligence and continuity to completion of such cure, Maker shall have a maximum of an additional sixty (60) days (over and above the initial 30-day period) to cure such default; or (b) occurrence of any Default (as defined therein) under any of the Loan Documents, then, at any time thereafter, at the election of the holder or holders hereof and without additional notice to Maker, the Outstanding Principal Balance, together with accrued interest thereon, shall become at once due and payable at the place of payment as aforesaid, and Payee may proceed to exercise any rights and remedies available to Payee under the Deed of Trust and the other Loan Documents, and to exercise any other rights and remedies against Maker which Payee may have at law, in equity or otherwise. 3.3 Nature of Remedies. The remedies of Payee as provided herein or in the Deed of Trust or any of the other Loan Documents, shall be cumulative and concurrent, and may be pursued singularly, successively or together, at the sole discretion of Payee, and may be exercised as often as occasion therefor shall arise. Failure of Payee, for any period of time or on more than one occasion, to exercise its option to accelerate the Maturity Date of this Note shall not constitute a waiver of the right to exercise the same at any time thereafter or in the event of any subsequent Default. No act of omission or commission of Payee, including specifically any failure to exercise any right, remedy or recourse, shall be deemed to be a waiver or release of the same; any such waiver or release is to be effected only through a written document executed by Payee and then only to the extent specifically recited therein. A waiver or release in connection with any one event shall not be construed as a waiver or release of any subsequent event or as a bar to any subsequent exercise of Payee's rights or remedies hereunder. Notice of the exercise of any right or remedy granted to Payee by this Note is not required to be given. 3.4 Payment of Attorneys' Fees and Costs. If: (a) this Note or any Loan Document is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding; (b) if an attorney is retained to represent Payee in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors' rights and involving a claim under this Note or any of the Loan Documents; (c) if an attorney is retained to protect or enforce the lien of the Deed of Trust or the rights or remedies of Payee under any of the Loan Documents; or (d) if an attorney is retained to represent Payee in any other proceedings whatsoever in connection with this Note, the Deed of Trust, any of the Loan Documents or any property subject thereto, then Maker shall pay to Payee all reasonable attorneys' fees, disbursements, costs and expenses incurred in connection therewith, in addition to all other amounts due hereunder. 3.5 Late Charge. If any installment of interest, principal, Tax and Insurance Deposits or Reserves is not paid when due, Maker shall pay to Payee a late charge of four (4%) percent of the amount so overdue in order to defray part of the expense incident to handling such delinquent payment or payments. Such late charge shall be in addition to and separate from any increase in interest due hereunder as a result of calculation of interest due hereunder at the Default Rate. IV. OTHER GENERAL AGREEMENTS 4.1 Notices. Any notice which any party hereto may desire or may be required to give to any other party hereto shall be in writing, and shall be deemed given (i) if and when personally delivered, (ii) upon receipt if sent by a nationally recognized overnight courier, or (iii) on the third (3rd) business day after being deposited in United States registered or certified mail, return receipt requested, postage prepaid, addressed to a party at its address set forth below, or at such other place as such party may have designated to all other parties by notice in writing in accordance herewith: (a) If to Maker: 5665 Northside Drive, N.W. Suite 370 Atlanta, Georgia 30328 Attention: Arthur Queler With copies to: Post & Heymann 100 Jericho Quadrangle Suite 214 Jericho, New York 11753 Attention: William Post, Esq. and NPI Property Management Corporation 5665 Northside Drive, N.W. Suite 370 Atlanta, Georgia 30328 Attention: Arthur Queler (b) If to Payee: The Travelers Insurance Company c/o Travelers Realty Investment Company 461 Fifth Avenue New York, New York 10017 Attention: Real Estate Loan No. 204311 With copies to: The Travelers Insurance Company c/o Travelers Realty Investment Company One Tower Square - 2 SHS Hartford, Connecticut 06183-2020 Attention: Real Estate Loan No. 204311 and Battle Fowler 75 East 55th Street New York, New York 10022 Attention: Dean A. Stiffle, Esq. (W.F.S.) (Matter No. 10695.0136) Except as otherwise specifically required herein, notice of the exercise of any right or option granted to Payee by this Note is not required to be given. 4.2 Governing Law and Other Agreements. Maker agrees that: (a) this instrument and the rights and obligations of the parties hereunder shall be governed by the laws of the Commonwealth of Virginia, without reference to the conflict of law principles of such state; and (b) upon the Maturity Date, Payee shall not have any obligation to refinance the indebtedness evidenced by this Note or to extend further credit to Maker. MAKER AGREES TO SUBMIT TO PERSONAL JURISDICTION IN THE COMMONWEALTH OF VIRGINIA IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS NOTE AND IN FURTHERANCE OF SUCH AGREEMENT, THE MAKER HEREBY AGREES AND CONSENTS THAT WITHOUT LIMITING OTHER METHODS OF OBTAINING JURISDICTION, PERSONAL JURISDICTION OVER THE MAKER IN ANY SUCH ACTION OR PROCEEDING MAY BE OBTAINED WITHIN OR WITHOUT THE JURISDICTION OF ANY COURT LOCATED IN VIRGINIA AND THAT ANY PROCESS OR NOTICE OF MOTION OR OTHER APPLICATION TO ANY SUCH COURT IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING MAY BE SERVED UPON MAKER BY REGISTERED OR CERTIFIED MAIL TO OR BY PERSONAL SERVICE AT THE LAST KNOWN ADDRESS OF MAKER, WHETHER SUCH ADDRESS BE WITHIN OR WITHOUT THE JURISDICTION OF ANY SUCH COURT. 4.3 Interpretation. The headings of sections and paragraphs in this Note are for convenience only and shall not be construed in any way to limit or define the content, scope, or intent of the provisions hereof. As used in this Note, the singular shall include the plural, and masculine, feminine, and neuter pronouns shall be fully interchangeable, where the context so requires. The parties hereto intend and believe that each provision in this Note comports with all applicable law. However, if any provision in this Note is found by a court of law to be in violation of any applicable law, and if such court should declare such provision of this Note to be unlawful, void or unenforceable as written, then it is the intent of all parties to the fullest possible extent that it is legal, valid and enforceable, that the remainder of this Note shall be construed as if such unlawful, void or unenforceable provision were not contained therein, and that the rights, obligations and interests of Maker and the holder hereof under the remainder of this Note shall continue in full force and effect; provided, however, that if any provision of this Note which is found to be in violation of any applicable law concerns the imposition of interest hereunder, the rights, obligations and interests of Maker and Payee with respect to the imposition of interest hereunder shall be governed and controlled by the provisions of Paragraph 4.5 hereof. Time is of the essence of this Note. 4.4 Waiver. Maker and any and all others who are now or may become liable for all or part of the obligations of Maker under this Note including but not limited to the Responsible Entities (collectively the "Obligors") agree to be jointly and severally bound hereby and jointly and severally, to the extent permitted by law: (a) waive and renounce any and all redemption and exemption rights and the benefit of all valuation and appraisement privileges against the indebtedness evidenced by this Note or by any extension or renewal hereof; (b) waive presentment and demand for payment, notices of nonpayment and of dishonor, protest of dishonor, and notice of protest; (c) waive all notices in connection with the delivery and acceptance hereof and all other notices in connection with the performance, default, or enforcement of the payment hereof or hereunder; (d) waive any and all lack of diligence and delays in the enforcement of the payment hereof; (e) agree that the liability of each of the Obligors shall be unconditional and without regard to the liability of any other person or entity for the payment hereof, and shall not in any manner be affected by any indulgence or forbearance granted or consented to by Payee to any of them with respect hereto; (f) consent to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions hereof, and to the release of any security at any time given for the payment hereof, or any part thereof, with or without substitution, and to the release of any person or entity liable for the payment hereof; and (g) consent to the addition of any and all other makers, endorsers, guarantors, and other obligors for the payment hereof, and to the acceptance of any and all other security for the payment hereof, and agree that the addition of any such obligors or security shall not affect the liability of any of Maker for the payment hereof. 4.5 Excess Interest. The Deed of Trust and this Note are subject to the express condition that at no time shall Maker be obligated or required to pay interest on the principal balance due under this Note at a rate which could subject the holder of this Note to either civil or criminal liability as a result of being in excess of the maximum interest rate which Maker is permitted by law to contract or agree to pay. If by the terms of this Note or the Deed of Trust, Payee ever receives, collects or applies as interest any sum in excess of the maximum legal rate, such excess amount shall be applied to the reduction of the unpaid principal balance of this Note in the inverse order of maturity, and if this Note is paid in full, any remaining excess shall be refunded to Maker. In determining whether or not the interest paid or payable, under any specific contingency, exceeds the highest lawful rate, Payee and Maker shall, to the maximum extent permitted under the applicable law: characterize any nonprincipal payment as an expense, fee or premium rather than as interest; exclude voluntary prepayments and the effects thereof; and "spread" the total amount of interest throughout the entire term of this Note. Maker, and Payee, by its acceptance of this Note, recognize and agree that Maker's obligation to pay the principal and accrued interest on this Note is absolute and unconditional. 4.6 Successors, Payees and Assigns. Upon any endorsement, assignment, or other transfer of this Note by Payee or by operation of law, the term "Payee," as used herein, shall mean such endorsee, assignee, or other transferee or successor to Payee then becoming the holder of this Note. This Note shall inure to the benefit of Payee and its successors and assigns and shall be binding upon the undersigned and its successors and assigns. The term "Maker", as used herein, shall include the respective successors, assigns, legal and personal representatives, executors, administrators, devisees, legatees and heirs of Maker. 4.7 Prospective Participants. Maker acknowledges that Payee may after the date of this Note desire to sell and assign participation interests in the Loan to one or more domestic or foreign banks, insurance companies, pension funds, trusts or other institutional lenders or other persons, parties or investors (including, but not limited to, grantor trusts, owner trusts, special purpose corporations, REMICs, real estate investment trusts or other similar or comparable investment vehicles) as may be selected by Payee in its sole and absolute discretion and on terms and conditions satisfactory to Payee in its sole and absolute discretion (any such bank, insurance company, pension fund, trust or other institutional lender or other person, party or investor to whom a participation interest in the Loan is so sold and assigned is herein referred to as a "Participant"). Maker shall cooperate, and shall cause Manager and each guarantor, indemnitor and other person or party associated or connected with the Loan or the collateral therefor to cooperate, in all respects with Payee in connection with the sale of participation interests in the Loan in the manner contemplated by this paragraph, and shall, in connection therewith, execute and deliver such estoppels, certificates, instruments and documents as may be reasonably requested by Payee. It is agreed and understood that Maker shall not incur or be responsible for any costs, fees or expenses of any nature whatsoever as a result of Payee's sale of participation interests in all or any portion of the Loan in the manner contemplated by this paragraph more than two (2) times during any Loan Year. Maker grants to Payee, and shall cause Manager and each guarantor, indemnitor and other person or party associated or connected with the Loan or the collateral therefor to grant to Payee, the right to distribute on a confidential basis financial and other information concerning Maker, Manager, each such guarantor, indemnitor and other person or party and the property encumbered by the Deed of Trust and other pertinent information with respect to the Loan to any party who has purchased a participation interest in the Loan or who has expressed a serious interest in purchasing a participation interest in the Loan. Payee shall advise any such party that such information shall be treated as confidential. Any party to whom any such information is distributed and who declines to purchase a participation interest in the Loan shall be requested to return to Payee all such information distributed to it without retaining any copies thereof. It is agreed and understood that Payee shall in no event and under no circumstance have any liability as a result of any party's failure to follow the directions or advice of Maker in handling such confidential information. Maker shall execute and deliver, and shall cause Manager and each guarantor, indemnitor and other person or party associated or connected with the Loan or the collateral therefor to execute and deliver, such documents and instruments as may be reasonably necessary to split the Loan into two or more loans evidenced, secured and advanced by and pursuant to separate sets of notes, deeds of trust and other related loan documents to the full extent required by Payee to facilitate the sale of participation interests in the Loan in the manner contemplated by this paragraph, it being agreed that (i) any such splitting of the Loan will not adversely affect or diminish the rights of Payee as presently set forth in this Note, the Deed of Trust or the other Loan Documents and will not increase the respective obligations and liabilities of Maker, Manager or any such guarantor, indemnitor or other person or party above those presently set forth in this Note, the Deed of Trust or the other Loan Documents, (ii) the deeds of trust and other documents securing the Loan as so split will have such priority of lien as may be specified by Payee, and (iii) the retained interest of Payee in the Loan as so split shall be allocated to or among one or more of such separate loans in a manner specified by Payee in its sole and absolute discretion. If Maker shall default in the performance of its obligation as set forth in this paragraph, and if such default shall not be remedied by Maker within ten (10) business days after notice by Payee, Payee shall have the right in its discretion to declare the Debt immediately due and payable. Payee also reserves the right at any time during the term of the Loan and in its sole and absolute discretion to effect a so-called securitization of the Loan in such manner and on such terms and conditions as Payee shall deem to be appropriate in its sole and absolute discretion and with such domestic or foreign banks, insurance companies, pension funds, trusts or other institutional lenders or other persons, parties or investors (including, but not limited to, guarantor trusts, owner trusts, special purpose corporations, REMICs, real estate investment trusts or other similar or comparable investment vehicles) as may be selected by Payee in its sole and absolute discretion. 4.8 Limited Personal Liability. Without in any manner releasing, impairing or otherwise affecting this Note, the Deed of Trust or any of the other Loan Documents or the validity thereof or hereof or the lien thereof, there is no personal liability of Maker or any corporation, partnership or individual having a direct or indirect ownership interest in Maker, or any of their respective successors or assigns, hereunder or under any of the other Loan Documents, and no monetary or deficiency judgment shall be sought or enforced against Maker or any corporation, partnership or individual having a direct or indirect ownership interest in Maker, or any of their respective successors or assigns; provided, however, that a judgment may be sought against Maker or any corporation, partnership or individual having a direct or indirect ownership interest in Maker or any of their respective successors or assigns to the extent necessary to enforce the rights of Payee in, to, or against the Premises securing the Debt. Notwithstanding any of the foregoing, nothing contained in this Section shall be deemed to prejudice the rights of Payee to recover from the Responsible Entities (1) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Payee as a result of any material fraud or any material misrepresentation by any of the Responsible Entities or Manager, (2) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Payee as a result of breach of Maker's warranties, representations and covenants contained in Paragraph 5, Paragraph 9, Paragraph 17, Paragraph 37, Paragraph 44 or Paragraph 48 of the First Deed of Trust (3) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Payee as a result of intentional or negligent waste (whether financial or physical) of the Premises including, without limitation, failure by Maker to pay on or prior to the due date thereof all real estate taxes and assessments levied against the Premises, subject to Maker's right to contest the same as set forth in paragraph 5.B. of the First Deed of Trust it being agreed and understood that Maker's personal liability to pay real estate taxes and assessments levied against the Premises shall not exceed the Rents generated over such period of time to which such taxes and assessments pertain; (4) all Rents generated from the Premises received after any default under the Loan Documents or within one year before any default under the Loan Documents or after acceleration of the indebtedness evidenced and secured by the Loan Documents and not applied to payment of such indebtedness or to payment of the normal and customary operating expenses of the Premises; (5) all Rents from the Premises collected more than one (1) month in advance and all security deposits that are not held in a segregated escrow account and that are not delivered to Payee upon demand after the occurrence of a default under any of the Loan Documents, (6) all insurance proceeds and condemnation awards in respect of the Premises which are not applied in accordance with the provisions of the Loan Documents or all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Payee as a result of the failure by Maker to maintain the insurance coverage required in Paragraphs 7 and 8 of the First Deed of Trust, (7) all or any portion of the upfront fees, commitment fees and other costs and expenses incurred by Payee in connection with the closing of this transaction and required to be paid by Maker and not promptly reimbursed by Maker, or (8) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Payee under the Hazardous Material Guaranty and Indemnification Agreement dated the date hereof from the Responsible Entities and the Manager. The Responsible Entities agree to pay to Payee all amounts described in clauses (1) through (8) above on demand by Payee and agrees that they will be personally liable for payment of all such sums. Furthermore, nothing contained in the paragraph shall be deemed to prejudice the right of Payee to recover from the Manager all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Payee under that certain Manager's Liability Letter dated the date hereof from the Manager to Payee. 4.9 Confession of Judgment. Upon a Default, Maker authorizes any attorney admitted to practice before any court of record in the United States to appear on behalf of Maker in the Circuit Court for the City of Alexandria, Virginia or in the General District Court for the City of Alexandria, Virginia, or before the clerk thereof or prothonotary or other court official, and to confess judgment against Maker, without opportunity of Maker for prior hearing, in favor of Payee in the full amount due on this Note (including principal, accrued interest and any and all charges, fees and costs) plus reasonable attorneys' fees, disbursements and court costs. In addition to all other courts where jurisdiction and venue would be proper, Maker consents to the jurisdiction and venue of the Circuit Court for the City of Alexandria, Virginia or the General District Court for the City of Alexandria for the entry of said judgment. For the purpose of allowing Payee to file a confession of judgment in the Circuit Court for the City of Alexandria, Virginia or in the General District Court for the City of Alexandria, Virginia to recover any sums of money due under this Note, Maker hereby duly constitutes and appoints Virginia A. Davis its attorney in fact to confess judgment against Maker in the Circuit Court for the City of Alexandria, Virginia, or in the General District Court for the City of Alexandria, Virginia. Maker waives the benefit of any and every statute, ordinance, or rule of court which may be lawfully waived conferring upon Maker any right or privilege of exemption, homestead rights, stay of execution, of supplementary proceedings, or other relief from the enforcement or immediate enforcement of a judgment or related proceedings on a judgment. The authority and power to appear for and enter judgment against Maker shall not be exhausted by one or more exercises thereof, or by any imperfect exercise thereof, and shall not be extinguished by any judgment entered pursuant thereto; such authority and power may be exercised on one or more occasions from time to time, in the same jurisdiction, as often as the holder shall deem necessary or advisable. IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the day and year first above written. CENTURY PROPERTIES GROWTH FUND XXII, a California limited partnership By: Fox Partners IV, a California general partnership, Its General Partner By: Fox Capital Management Corporation, a California corporation, Its Managing General Partner By: Name: Title: [CORPORATE SEAL] STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) This instrument was acknowledged before me the day of September, 1994 by , the of Fox Capital Management Corporation, a California corporation on behalf of the corporation as managing general partner of Fox Partners IV, a California general partnership which is the general partner of Century Properties Growth Fund XXII, a California limited partnership. [NOTARIAL SEAL] ------------------------------- Notary Public in and for the State of ___________________ Notary public's printed name: ____________________________ My Commission Expires: __________________________ EX-99.2 4 AMENDED AND RESTATED DEED OF TRUST EXHIBIT 99.2 Copper Mill ================================================================================ CENTURY PROPERTIES GROWTH FUND XXII to THE TRAVELERS INSURANCE COMPANY ____________________________________ AMENDED AND RESTATED DEED OF TRUST (Fee) Douglas N. Beck and Virginia A. Davis, Trustees $3,679,026.14 ____________________________________ Dated: As of September 1, 1994 Location: Henrico County, Virginia THIS DEED OF TRUST PREPARED BY AND AFTER RECORDING PLEASE RETURN TO: Battle Fowler 75 East 55th Street New York, New York 10022 Attention: Walter F. Schleimer, Esq. ================================================================================ TABLE OF CONTENTS Page 1. Payment of Indebtedness and Performance of Covenants. . . . . . . . . . 8 2. Representation and Warranty of Title. . . . . . . . . . . . . . . . . . 8 3. Maintenance, Repair, Compliance with Law, Use, Etc. . . . . . . . . . . 9 4. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 5. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 6. Change in Tax Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . 14 7. Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . 15 8. Insurance Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . 17 9. Deposits for Taxes and Insurance Premiums . . . . . . . . . . . . . . . 18 10. Proceeds of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 19 11. Disbursement of Insurance Proceeds. . . . . . . . . . . . . . . . . . . 21 12. Condemnation and Eminent Domain . . . . . . . . . . . . . . . . . . . . 25 13. Assignment of Leases and Rents. . . . . . . . . . . . . . . . . . . . . 26 14. Observance of Lease Assignment. . . . . . . . . . . . . . . . . . . . . 28 15. Beneficiary's Performance of Grantor's Obligations. . . . . . . . . . . 29 16. Security Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 31 17. Restrictions on Transfer. . . . . . . . . . . . . . . . . . . . . . . . 35 18. Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 19. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 20. Right of Possession . . . . . . . . . . . . . . . . . . . . . . . . . . 48 21. Receiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 22. Foreclosure Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 23. Insurance During Foreclosure. . . . . . . . . . . . . . . . . . . . . . 51 24. Waiver of Right of Redemption and Other Rights. . . . . . . . . . . . . 52 25. Rights Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 26. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . 54 27. Effect of Extensions and Amendments . . . . . . . . . . . . . . . . . . 55 28. Execution of Separate Security Agreements, Financing Statements, Etc.; Estoppel Letter . . . . . . . . . . . . . . . . . . 55 29. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 30. Option to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . 56 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 32. Inspection of Premises and Records. . . . . . . . . . . . . . . . . . . 57 33. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . 57 34. Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . 58 35. Captions and Pronouns . . . . . . . . . . . . . . . . . . . . . . . . . 59 36. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 37. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . 60 38. Beneficiary Not A Joint Venturer. . . . . . . . . . . . . . . . . . . . 65 39. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 40. Consent Required of Beneficiary . . . . . . . . . . . . . . . . . . . . 66 41. Sole Discretion of Beneficiary. . . . . . . . . . . . . . . . . . . . . 67 42. No Oral Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 43. Absolute and Unconditional Obligation . . . . . . . . . . . . . . . . . 68 44. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 45. Limited Personal Liability. . . . . . . . . . . . . . . . . . . . . . . 69 46. Power of Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 47. WAIVER OF TRIAL BY JURY . . . . . . . . . . . . . . . . . . . . . . . . 77 48. Anti-Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 49. Usury Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 50. Related Party Contracts . . . . . . . . . . . . . . . . . . . . . . . . 78 51. Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 52. Concerning the Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 79 53. Trustee's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 54. Final Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 55. Recordation Tax Exemption . . . . . . . . . . . . . . . . . . . . . . . 80 56. Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Copper Mill AMENDED AND RESTATED DEED OF TRUST THIS AMENDED AND RESTATED DEED OF TRUST (this "Deed of Trust") made as of this 1st day of September, 1994, from CENTURY PROPERTIES GROWTH FUND XXII, a California limited partnership having an address at 5665 Northside Drive, N.W., Suite 370, Atlanta, Georgia 30328 ("Grantor"), to Douglas N. Beck, a resident of the City of Alexandria, Virginia and Virginia A. Davis, a resident of Fairfax County, Virginia ("Trustees"), for the benefit of THE TRAVELERS INSURANCE COMPANY, a Connecticut corporation having an address at One Tower Square, 2 SHS, Hartford, Connecticut 06183-2020 ("Beneficiary"), WHEREAS, Beneficiary made a loan in the original principal sum of $3,750,000 to Grantor which loan was evidenced by a Deed of Trust Note (the "Original Note") dated November 26, 1986 from Grantor to Beneficiary in the original principal sum of $3,750,000 and secured by (i) a Deed of Trust and Security Agreement (the "Original Deed of Trust") dated November 26, 1986 from Grantor to Joseph W. Sprouls and Kandis A. Ulrich, trustees for the benefit of Beneficiary filed of record on December 1, 1986 in Deed Book 2038, page 839 in the Clerk's office of the Circuit Court of Henrico County, Virginia, as amended by First Amendment to Deed of Trust and Security Agreement dated June 16, 1987 from Grantor to Beneficiary and (ii) an Assignment of Leases, Rents and Profits (the "Original Assignment") dated as of November 26, 1986 by Grantor to Beneficiary filed of record in Deed Book 2038, page 861 in the Clerk's Office of the Circuit Court of Henrico County, Virginia, encumbering the property known as Copper Mill Apartments in Henrico County, Virginia (the "Copper Mill Apartments"). WHEREAS, the Original Note was modified, amended and restated by a certain Amended and Restated Deed of Trust Note (the "Note") dated the date hereof between Grantor and Beneficiary in the original principal sum of $3,679,026.14; WHEREAS, to further secure the Note, Grantor delivered to Beneficiary a certain Subordinate Mortgage (as hereinafter defined); WHEREAS, the Original Assignment was modified, amended and restated by a certain Amended and Restated Assignment of Leases, Rents and Profits (the "Assignment") dated the date hereof between Grantor and Beneficiary; WHEREAS, a Subordinate Assignment of Leases, Rents and Profits (the "Subordinate Assignment") was entered into as of the date hereof between Grantor and Beneficiary; WHEREAS, Grantor and Beneficiary intend to modify, amend and restate the terms and provisions of the Original Deed of Trust as hereinafter set forth in this Deed of Trust; WHEREAS, the Note is to be secured by, inter alia, this Deed of Trust and the Subordinate Mortgage; WHEREAS, Grantor desires to set forth the terms and provisions of this Deed of Trust as hereinafter set forth; NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Grantor covenants, warrants and agrees as follows: W I T N E S S E T H : To secure the payment of the principal indebtedness under the Note of $3,679,026.14 (the "Outstanding Principal Balance") and interest and prepayment premiums, if any, on the principal indebtedness under the Note (and all replacements, renewals and extensions thereof, in whole or in part) according to its tenor and effect, and to secure the payment of all other sums which may be at any time due and owing or required to be paid under the Note, this Deed of Trust, the Assignment, the Subordinate Mortgage (as hereinafter defined), the Subordinate Assignment, the Cash Management Letter dated the date hereof from Grantor and NPI-AP Management, L.P. (the "Manager") to Beneficiary, the Copper Mill Reserve Agreement dated the date hereof between Grantor and Beneficiary, the Copper Mill Escrow Agreement dated the date hereof between Grantor, Beneficiary and Lawyers Title Insurance Corporation, the Copper Mill Manager's Liability Letter from the Manager to Beneficiary and the Copper Mill Guaranty of Payment dated the date hereof from Grantor, Fox Partners IV, Fox Capital Management Corporation, Manager and NPI Equity Investments II, Inc. to Beneficiary and the Copper Mill Hazardous Material Guaranty and Indemnification Agreement dated the date hereof from Grantor, Fox Partners IV, Fox Capital Management Corporation, NPI Equity Investments II, Inc. and Manager to Beneficiary, the Release Letter dated the date hereof from Beneficiary to Grantor and any other documents or instruments now or hereafter executed in connection with the Note or this Deed of Trust (the Note, this Deed of Trust and such other documents or instruments, collectively the "Loan Documents") and all replacements, renewals and extensions thereof, in whole or in part (collectively, the "Indebtedness Hereby Secured"); and to secure the performance and observance of all the covenants, agreements and provisions contained in this Deed of Trust, the Note and the other Loan Documents, and to charge the properties, interests and rights hereinafter described with such payment, performance and observance, and for other valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, Grantor DOES HEREBY GRANT, REMISE, RELEASE, LIEN, MORTGAGE, CONVEY, PLEDGE, ASSIGN and HYPOTHECATE unto Trustee and Beneficiary, its successors and assigns forever, the Land (as hereinafter defined) together with the following described property, rights and interests all of which are hereby pledged primarily and on a parity with the Land and not secondarily (and are, together with the Land, the "Premises"): THE LAND located in the County of Henrico, Virginia and legally described on Exhibit A attached hereto and made a part hereof (the "Land"); TOGETHER WITH all buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Land (including but not limited to all underground and other parking facilities located in or on the Land, all landscaped areas and areas utilized for recreational activities) and all fixtures, machinery, appliances, equipment, furniture, and personal property of every nature whatsoever now or hereafter owned by Grantor and located in or on, or attached to, or used or intended to be used in connection with or with the operation of, the Land, buildings, structures or other improvements, or in connection with any construction which may be conducted thereon, including all extensions, additions, improvements, betterments, renewals, substitutions, and replacements to and proceeds of any of the foregoing and all of the right, title and interest of Grantor in and to any such personal property or fixtures together with the benefit of any deposits or payments now or hereafter made on such personal property or fixtures by Grantor or on its behalf (the "Improvements"); except that this Deed of Trust shall not create a lien on any items of personal property which (i) are owned by tenants who are in possession pursuant to a Lease (as hereinafter defined), and (ii) may be removed by such tenants at the expiration or termination of such Lease; TOGETHER WITH all easements, rights of way, gores of land, streets, ways, alleys, passages, sewer rights, waters, water courses, water rights and powers, and all estates, rights, titles, interests, privileges, liberties, tenements, hereditaments and appurtenances whatsoever, in any way belonging, relating or appertaining to the Land, or which hereafter shall in any way belong, relate or be appurtenant thereto, and all of the coal, oil, gas and other minerals of every kind and character in and underlying the Land, whether now owned or hereafter acquired by Grantor, and the reversion and reversions, remainder and remainders, rents, issues and profits thereof, and all the estate, right, title, interest, property, possession, claim and demand whatsoever, at law as well as in equity, of Grantor of, in and to the same; TOGETHER WITH all rents, royalties, issues, profits, revenue, income, security deposits and other benefits generated from the Premises under the Leases (as such term is hereinafter defined) or otherwise to be applied against the Indebtedness Hereby Secured; TOGETHER WITH all right, title and interest of Grantor in and to any and all leases now or hereafter on or affecting the Premises whether written or oral and all agreements for use of the Premises (the "Leases"), together with all security therefor and all monies payable thereunder, subject, however, to the conditional permission hereinabove given to Grantor to collect the rentals under any such Lease; TOGETHER WITH all fixtures and articles of personal property now or hereafter owned by Grantor and forming a part of or used in connection with the Land or the Improvements or the operation thereof including, but without limitation, any and all air conditioners, antennae, appliances, apparatus, awnings, basins, bathtubs, bidets, boilers, bookcases, cabinets, carpets, coolers, curtains, dehumidifiers, disposals, doors, drapes, dryers, ducts, dynamos, elevators, engines, equipment, escalators, fans, fittings, floor coverings, furnaces, furnishings, furniture, hardware, heaters, humidifiers, incinerators, lighting, machinery, motor vehicles, motors, ovens, pipes, plumbing, pumps, radiators, ranges, recreational facilities, refrigerators, screens, security systems, shades, shelving, sinks, sprinklers, stokers, stoves, toilets, ventilators, wall coverings, washers, windows, window coverings, wiring, and all renewals, replacements or proceeds thereof or articles in substitution therefor, whether or not the same are or shall be attached to the Land or the Improvements in any manner; it being mutually agreed that all of the aforesaid property owned by Grantor and placed on the Land or the Improvements shall, so far as permitted by law, be deemed to be fixtures, a part of the realty, and security for the Indebtedness Hereby Secured; notwithstanding the agreement and declaration hereinabove expressed that certain articles of property form a part of the realty covered by this Deed of Trust and be appropriated to its use and deemed to be realty, to the extent that such agreement and declaration may not be effective and that any of said articles may constitute goods (as said term is used in the Code of Virginia (1950)), this instrument shall constitute a security agreement, creating a security interest in such goods, as collateral, in Beneficiary as a secured party and Grantor as debtor, all in accordance with said Code of Virginia (1950) as more particularly set forth in Paragraph 16 hereof; TOGETHER WITH all proceeds of the foregoing, including without limitation all judgments, awards of damages and settlements hereafter made resulting from condemnation proceeds or the taking of the Premises and/or the Improvements or any portion thereof under the power of eminent domain, any proceeds of any policies of insurance, maintained with respect to the Premises and/or the Improvements or proceeds of any sale, option or contract to sell the Premises and/or the Improvements or any portion thereof; and Grantor hereby authorizes, directs and empowers Beneficiary, at its option, on behalf of Grantor, or the successors or assigns of Grantor, to adjust, compromise, claim, collect and receive such proceeds, to give proper receipts and acquittances therefor, and, after deducting expenses of collection, to apply the net proceeds as a credit upon any portion, as selected by Beneficiary, of the Indebtedness Hereby Secured, notwithstanding the fact that the same may not then be due and payable or that the Indebtedness Hereby Secured is otherwise adequately secured; and TOGETHER WITH all right, title, and interest of Grantor in and to all executory contracts affecting the ownership, possession, operation, control and services furnished to the Premises (the "Executory Contracts"), provided, however, that permission is hereby given to Grantor so long as no Default has occurred hereunder and is continuing to exercise the rights and powers under the Executory Contracts and to enjoy the benefits thereunder; IN TRUST unto Trustee to secure the Indebtedness Hereby Secured and the performance and observance of all the covenants, agreements and provisions contained in this Deed of Trust, the Note and the other Loan Documents. PROVIDED, NEVERTHELESS, that if Grantor shall pay in full when due the Indebtedness Hereby Secured and shall duly and timely perform and observe all of the terms, provisions, covenants and agreements herein and in the Note and the other Loan Documents provided to be performed and observed by Grantor, then this Deed of Trust and the estate, right and interest of Beneficiary in the Premises shall cease and become void and of no effect, but shall otherwise remain in full force and effect. This Deed of Trust is given in replacement and substitution of the Original Deed of Trust and evidences the same indebtedness evidenced by the Original Note and secured by the Original Deed of Trust and does not evidence any new or additional indebtedness of Grantor to Beneficiary and is not intended as a novation of the Original Note or the Original Deed of Trust. GRANTOR FURTHER COVENANTS AND AGREES AS FOLLOWS: 1. Payment of Indebtedness and Performance of Covenants. Grantor shall (a) pay when due the Indebtedness Hereby Secured; and (b) duly and punctually perform and observe all of the terms, provisions, conditions, covenants and agreements on Grantor's part to be performed or observed as provided in the Note, this Deed of Trust and the other Loan Documents. Grantor shall have the privilege of making prepayment on the principal of the Note (in addition to the required payments thereunder) in accordance with the terms and conditions set forth in the Note but not otherwise. 2. Representation and Warranty of Title. At the time of the delivery of these presents, Grantor is seized of an indefeasible estate in fee simple in the portion of the Premises which constitutes real property and Grantor owns good title to the portion of the Premises which constitutes personal property subject only to the matters set forth on the title policy insuring the lien of this Deed of Trust and any additional matters approved in writing by Beneficiary; and has good right, full power and lawful authority to ASSIGN, RELEASE, LIEN, CONVEY, PLEDGE, HYPOTHECATE, MORTGAGE and grant a security interest in the same, in the manner and form aforesaid; that, except as set forth on the title policy insuring the lien of this Deed of Trust or consented to in writing by Beneficiary, the same is free and clear of all liens, charges, easements, covenants, conditions, restrictions and encumbrances whatsoever, including, as to the personal property and fixtures, security agreements, conditional sales contracts and anything of a similar nature; and that Grantor shall and will warrant and forever defend the title to the Premises against the claims of all persons whomsoever claiming by, through or under Grantor. Grantor also represents and warrants that (i) Grantor is now, and after giving effect to this Deed of Trust will be in, a solvent condition, (ii) the execution and delivery of this Deed of Trust by Grantor does not constitute a "fraudulent conveyance" within the meaning of Title 11 of the United States Code as now constituted or under any other applicable statute, and (iii) no bankruptcy or insolvency proceedings are pending or contemplated by or against Grantor. 3. Maintenance, Repair, Compliance with Law, Use, Etc. Grantor shall (a) promptly repair, restore, replace or rebuild (pursuant to plans and specifications approved by Beneficiary) any portion of the Improvements which may become damaged or be destroyed to be of at least equal value and of substantially the same character as prior to such damage or destruction (whether or not proceeds of insurance are available or sufficient for that purpose); (b) keep the Premises in good condition and repair, free from waste; (c) pay all operating costs of the Premises; (d) complete, within a reasonable time, any building or buildings or other Improvements now or at any time in the process of erection upon the Premises; (e) comply with all requirements of statutes, ordinances, rules, regulations, orders, decrees and other requirements of law relating to the Premises or any part thereof by any federal, state or local authority; (f) refrain from any action and correct any condition which would increase the risk of fire or other hazard to the Improvements or any portion thereof; (g) comply with any restrictions and covenants of record with respect to the Premises and the use thereof, and observe and comply with any conditions and requirements necessary to preserve and extend any and all rights, licenses, permits (including without limitation zoning variances, special exceptions and nonconforming uses), privileges, franchises and concessions that are applicable to the Premises or its use and occupancy; and (h) cause the Premises to be managed in a competent and professional manner. Without the prior written consent of Beneficiary (which consent may be granted or withheld in Beneficiary's sole discretion), Grantor shall not cause, suffer or permit any (i) material alterations of the Premises or the Improvements (including without limitation, landscaped and recreation areas and underground on-site paved parking areas and parking pavilion and/or structures) except as required by law or ordinance, (ii) change in the intended use or occupancy of the Premises for which the Improvements have been constructed including, without limitation, any change which would increase any fire or other hazard; (iii) zoning reclassification with respect to the Premises; (iv) unlawful use of, or nuisance to exist upon, the Premises; (v) granting of any easements, licenses, covenants, conditions or declarations of use against the Premises, other than use restrictions contained or provided for in Leases approved by Beneficiary; (vi) buildings or additions to any existing buildings or other structures to be erected on the Premises; or (vii) all or a portion of the Premises to be operated as a cooperative or condominium building or buildings in which the tenants or occupants participate in active ownership, control, or management of the Premises or any part thereof as tenant stockholder or otherwise. 4. Liens. (i) Prohibition. Subject to the provisions of Paragraph 5 hereof respecting Taxes (as hereinafter defined), Grantor shall not create or suffer or permit any mortgage, lien, charge or encumbrance to attach to or be filed against the Premises, whether such lien or encumbrance is inferior, at parity with or superior to the lien of this Deed of Trust, including mechanic's liens, materialmen's liens, or other claims for lien made by parties claiming to have provided labor or material with respect to the Premises (collectively, "Mechanic's Liens") and excepting only the lien of real estate taxes and assessments not due or delinquent, the permitted encumbrances set forth on the title policy insuring the lien of this Deed of Trust and any liens and encumbrances of Beneficiary pursuant to this Deed of Trust and the other Loan Documents. (ii) Contest of Mechanic's Liens Claims. Notwithstanding the foregoing prohibition against Mechanic's Liens, Grantor, or any party obligated to Grantor to do so, may in good faith and with due diligence contest the validity or amount of any Mechanic's Lien and defer payment and discharge thereof during the pendency of such contest, provided that: (i) such contest shall have the effect of preventing the sale or forfeiture of the Premises or any part thereof, or any interest therein, to satisfy such Mechanic's Lien; (ii) within ten (10) days after Grantor has been notified of the filing of such Mechanic's Lien, Grantor shall have notified Beneficiary in writing of Grantor's intention to contest such Mechanic's Lien or to cause such other party to contest such Mechanic's Lien; and (iii) Grantor either shall have obtained a title insurance endorsement over such Mechanic's Liens insuring Beneficiary against loss or damage by reason of the existence of such Mechanic's Liens or, at the option of Grantor, Grantor shall have deposited or caused to be deposited with Beneficiary at such place as Beneficiary may from time to time in writing appoint, and in the absence of such appointment, then at the place of payment designated in the Note, a sum of money which shall be sufficient in the judgment of Beneficiary to pay in full such Mechanic's Lien and all interest which might become due thereon, and shall keep on deposit an amount so sufficient at all times, increasing such amount to cover additional interest whenever, in the judgment of Beneficiary, such increase is advisable. Such deposits are to be held without any allowance of interest. If Grantor shall fail to maintain or cause to be maintained sufficient funds on deposit as hereinabove provided, shall fail to prosecute such contest or cause such contest to be prosecuted with due diligence or shall fail to pay or cause to be paid the amount of the Mechanic's Lien plus any interest finally determined to be due upon the conclusion of such contest, Beneficiary may, at its option, apply the money as deposited in payment of or on account of such Mechanic's Lien, or that part thereof then unpaid, together with all interest thereon. If the amount of money so deposited shall be insufficient for the payment in full of such Mechanic's Lien, together with all interest thereon, Grantor shall forthwith, upon demand, deposit with Beneficiary a sum which, when added to the funds then on deposit, shall be sufficient to make such payment in full. If the contest of the Mechanic's Lien claim is ultimately resolved in favor of the claimant, Beneficiary shall apply the money so deposited in full payment of such Mechanic's Lien or that part thereof then unpaid, together with all interest thereon (provided Grantor is not then in Default, as hereafter defined, under this Deed of Trust) when furnished with evidence satisfactory to Beneficiary of the amount of payment to be made. Any surplus monies remaining in the control of Beneficiary shall be paid to Grantor, provided Grantor is not then in Default hereunder. 5. Taxes. A. Payment. Grantor shall pay or cause to be paid when due and before any penalty attaches, all general and special taxes, assessments, water charges, sewer charges, and other fees, taxes, charges and assessments of every kind and nature whatsoever levied or assessed against the Premises or any part thereof or any interest therein or any obligation or instrument secured hereby, and all installments thereof (collectively, "Taxes"), whether or not assessed against Grantor, and Grantor shall furnish to Beneficiary receipts therefor as soon as reasonably possible, but in any event within thirty (30) days after the date the same are due; and shall discharge any claim or lien relating to Taxes upon the Premises, other than matters expressly permitted by the terms hereof. B. Contest. Grantor may, in good faith and with due diligence, contest or cause to be contested the validity or amount of any such Taxes, provided that: (a) such contest shall have the effect of preventing the collection of the Taxes so contested and the sale or forfeiture of the Premises or any part thereof or interest therein to satisfy the same; (b) Grantor has notified Beneficiary in writing of the intention of Grantor to contest the same or to cause the same to be contested before any Tax has been increased by any interest, penalties, or costs; and (c) Grantor has deposited or caused to be deposited with Beneficiary, at such place as Beneficiary may from time to time in writing designate, a sum of money (or other security acceptable to Beneficiary) that, when added to the monies or other security, if any, deposited with Beneficiary pursuant to Paragraph 9 hereof, is sufficient, in Beneficiary's judgment, to pay in full, or provide for payment in full of, such contested Tax and all penalties and interest that might become due thereon, and shall keep on deposit an amount or other security sufficient, in Beneficiary's judgment, to pay in full, or provide for payment in full of, such contested Tax, increasing such amount or other security to cover additional penalties and interest whenever, in Beneficiary's judgment, such increase is advisable. If Grantor fails to prosecute such contest with due diligence or fails to maintain sufficient funds or security on deposit as hereinabove provided, Beneficiary may, at its option, within ten (10) days following Beneficiary's written notice to Grantor (or such shorter period of time necessary in Beneficiary's opinion to prevent the collection of Taxes or the sale or forfeiture of the Premises or any part thereof or interest therein), apply the monies or liquidate any other security deposited with Beneficiary, in payment of, or on account of, such Taxes, or any portion thereof then unpaid, including all penalties and interest thereon. If the amount of the money and any such security so deposited is insufficient for the payment in full of such Taxes, together with all penalties and interest thereon, Grantor shall forthwith, upon demand, either deposit with Beneficiary a sum that, when added to such funds then on deposit, is sufficient to make such payment in full, or, if Beneficiary has applied funds on deposit on account of such Taxes, restore such deposit to an amount satisfactory to Beneficiary. Provided that Grantor is not then in default hereunder, Beneficiary shall, if so requested in writing by Grantor, after final disposition of such contest and upon Grantor's delivery to Beneficiary of an official bill for such Taxes, apply the money or security so deposited in full payment of such Taxes or that part thereof then unpaid, together with all penalties and interest thereon and return any excess to Grantor, unless Grantor has paid all such Taxes, together with all penalties and interest thereon, and has provided Beneficiary with evidence reasonably satisfactory to Beneficiary of such payment, in which event Beneficiary shall return such money or security to Grantor. All money held by Beneficiary pursuant to this Paragraph 5.B. shall be held without any allowance of interest thereon. C. Tax Services Contract. If Beneficiary elects, Grantor shall maintain, at Grantor's expense while any portion of the Indebtedness Hereby Secured is outstanding, a tax services contract issued by a tax reporting agency approved by Beneficiary, it being agreed and understood that Beneficiary shall not elect to maintain such tax service contract for so long as Grantor provides satisfactory evidence to Beneficiary of Grantor's continuing efforts to minimize or reduce taxes through proper and legal means. If Beneficiary does not elect to maintain a tax service contract, Grantor shall reimburse Beneficiary on demand for the cost of making annual tax searches. 6. Change in Tax Laws. If, by the laws of the United States of America, or of any state or municipality having jurisdiction over Beneficiary, Grantor or the Premises, any tax is imposed or becomes due in respect of the issuance of the Note or the recording of this Deed of Trust, Grantor shall pay such tax in the manner required by such law. If any law, statute, rule, regulation, order or court decree has the effect of deducting from the value of the Premises for the purpose of taxation any lien thereon, or imposing upon Beneficiary the payment of the whole or any part of the taxes required to be paid by Grantor, or changing in any way the laws relating to the taxation of mortgages or debts secured by mortgages or the interest of Beneficiary in the Premises, or the manner of collection of taxes, so as to affect this Deed of Trust, the Indebtedness Hereby Secured or Beneficiary, then, and in any such event, Grantor, upon demand by Beneficiary, shall pay such taxes, or reimburse Beneficiary therefor on demand, unless Beneficiary determines, in Beneficiary's sole and exclusive judgment, that such payment or reimbursement by Grantor is unlawful; in which event the Indebtedness Hereby Secured shall be due and payable within thirty (30) days after written demand by Beneficiary to Grantor. Nothing in this Paragraph 6 shall require Grantor to pay any income, franchise or excise tax imposed upon Beneficiary, excepting only such which may be levied against the income of Beneficiary as a complete or partial substitute for taxes required to be paid by Grantor pursuant hereto. 7. Insurance Coverage. Grantor will insure the Premises against such perils and hazards, and in such amounts and with such limits, as Beneficiary may from time to time require, and in any event will continuously maintain the following described policies of insurance without cost to Beneficiary (the "Insurance Policies"): (a) Property insurance against loss and damage by all risks of physical loss or damage, including fire, sprinkler leakage, windstorm and other risks covered by the so-called extended coverage endorsement covering the Improvements and the Personal Property in amounts not less than the full insurable replacement value of all Improvements, Personal Property, fixtures and equipment from time to time on the Premises, but in no event less than Three Million Six Hundred Seventy-Nine Thousand and Twenty-Six and 14/100 Dollars ($3,679,026.14) and bearing a replacement-cost agreed-amount endorsement; (b) Comprehensive general public liability against death, bodily injury and property damage with a combined single limit in an amount not less than One Million Dollars ($1,000,000) including a waiver of subrogation clause acceptable to Beneficiary, and naming Beneficiary as an additional insured; (c) Business interruption insurance including rental interruption insurance to cover loss of rental income, with the standard mortgagee's clauses in form and amounts satisfactory to Beneficiary, but in no event shall such policy be in an amount less than twelve (12) months' projected gross rental income from the Premises, with 90% co-insurance as a minimum; (d) An umbrella excess liability policy with a limit of not less than Four Million Dollars ($4,000,000) over primary insurance, which policy shall include, but not be limited to, automobile liability, and safeguarding of personalty, with coverages, risks insured, and waiver of subrogation clause acceptable to Beneficiary, and naming Beneficiary as an additional insured; (e) Steam boiler, machinery and pressurized vessel insurance, with 90% co-insurance as a minimum, and naming Beneficiary as an additional insured; (f) Earthquake insurance, with 90% co-insurance as a minimum, if available, and if required by Beneficiary; (g) If the Premises is located in a federal flood hazard area other than Zone C or Zone X as described in the Department of Housing and Urban Development, Federal Insurance Administration Special Flood Hazard Area Maps, flood insurance with 90% co-insurance as a minimum; and (h) The types and amounts of coverage as are customarily (i) maintained by owners or operators of like properties, or (ii) required by sophisticated institutional lenders in like transactions. 8. Insurance Policies. All Insurance Policies shall be in form, companies and amounts satisfactory to Beneficiary from time to time. An insurance company shall not be satisfactory unless such insurance company (a) has Best's general policyholder rating of "A-" or better and a financial rating of "Class VIII" or better; (b) is licensed in Virginia (or Beneficiary is furnished a service of suit endorsement) and has actively been in business for at least five (5) years; (c) if it is a mutual company, is a nonassessable company; and (d) does not provide insurance on any one building in excess of 10% of its policyholders' surplus (including capital). All Insurance Policies insuring against casualty and business interruption and other appropriate policies shall include non-contributing mortgagee endorsements in favor of and with loss payable to "The Travelers Insurance Company, its affiliates, subsidiaries, successors and assigns, as their interest may appear," as well as standard waiver of subrogation endorsements, shall provide that the coverage shall not be terminated or materially modified, nor a risk materially changed without thirty (30) days' advance written notice to Beneficiary and shall provide that no claims shall be paid thereunder without ten (10) days' advance written notice to Beneficiary. If a blanket policy is issued, a certified copy of said policy shall be furnished, together with a certificate indicating that Beneficiary is an additional insured under such policy in the designated amount. Grantor will deliver all Insurance Policies, premium prepaid for a period acceptable to Beneficiary and, in case of Insurance Policies about to expire, Grantor will deliver renewal or replacement policies not less than thirty (30) days prior to the date of expiration. The requirements of the preceding sentence shall apply to any separate policies of insurance taken out by Grantor concurrent in form or contributing in the event of loss with the Insurance Policies. 9. Deposits for Taxes and Insurance Premiums. In order to assure the payment of Taxes and premiums payable with respect to all Insurance Policies ("Premiums") as and when the same shall become due and payable: (a) Grantor shall deposit with Beneficiary on the first business day of each and every month, an amount equal to one-twelfth (1/12) of the Taxes and Premiums to become due upon the Premises between one and thirteen months after the date of such deposit; provided that in the case of the first such deposit, there shall be deposited in addition an amount which, when added to the aggregate amount of monthly deposits to be made hereunder with respect to Taxes and Premiums to become due and payable within thirteen months after such first deposit, will provide (without interest) a sufficient fund to pay such Taxes and Premiums, one month prior to the date when they are due and payable. The amounts of such deposits (herein generally called "Tax and Insurance Deposits") shall be based upon Beneficiary's estimate as to the amount of Taxes and Premiums. Grantor shall promptly, upon the demand of Beneficiary, make additional Tax and Insurance Deposits as Beneficiary may from time to time require due to (i) failure of Beneficiary to require, or failure of Grantor to make, Tax and Insurance Deposits in previous months, (ii) underestimation of the amounts of Taxes and/or Premiums, (iii) the particular due dates and amounts of Taxes and/or Premiums, or (iv) application of the Tax and Insurance Deposits pursuant to Paragraph 9(c) hereof. All Tax and Insurance Deposits shall be held by Beneficiary without any allowance of interest thereon. (b) Beneficiary will, out of the Tax and Insurance Deposits, upon the presentation to Beneficiary by Grantor of the bills therefor, pay the Taxes and Premiums or will, upon the presentation of receipted bills therefor, reimburse Grantor for such payments made by Grantor. If the total Tax and Insurance deposits on hand shall not be sufficient to pay all of the Taxes and Premiums when the same shall become due, then Grantor shall pay to Beneficiary on demand the amount necessary to make up the deficiency. (c) To the extent permitted under applicable law, upon a Default under this Deed of Trust, Beneficiary may, at its option, without being required so to do, apply any Tax and Insurance Deposits on hand to any of the Indebtedness Hereby Secured, in such order and manner as Beneficiary may elect. When the Indebtedness Hereby Secured has been fully paid, any remaining Tax and Insurance Deposits shall be paid to Grantor. All Tax and Insurance Deposits are hereby pledged as additional security for the Indebtedness Hereby Secured, and shall be held by Beneficiary irrevocably to be applied for the purposes for which made as herein provided, and shall not be subject to the direction or control of Grantor. (d) Provided no Default has occurred under the Deed of Trust, Beneficiary shall apply the Tax and Insurance Deposits to the payment of the Taxes or Premiums for the payment of which such Tax and Insurance Deposits were made. (e) The provisions of this Deed of Trust are for the benefit of Grantor and Beneficiary alone. No provision of this Deed of Trust shall be construed as creating in any party other than Grantor and Beneficiary, any rights in and to the Tax and Insurance Deposits or any rights to have the Tax and Insurance Deposits applied to payment of Taxes and Premiums. Beneficiary shall have no obligation or duty to any third party to collect Tax and Insurance Deposits. 10. Proceeds of Insurance. Grantor will give Beneficiary immediate notice of any loss or damage to the Premises, and: (a) In case of loss or damage covered by any of the Insurance Polices equal to or in excess of $25,000, Beneficiary (or, after entry of decree of foreclosure, the purchaser at the foreclosure sale or decree creditor, as the case may be) is hereby authorized at its option either (i) to settle and adjust any claim under such Insurance Policies without the consent of Grantor or (ii) allow Grantor to settle and adjust such claim without the consent of Beneficiary. In the case of loss or damage covered by any of the Insurance Policies less than $25,000, Beneficiary hereby authorizes Grantor to settle and adjust such claim without the consent of Beneficiary. In all cases Beneficiary shall, and is hereby authorized to, collect and receipt for all insurance proceeds; and the reasonable expenses incurred by Beneficiary in the adjustment and collection of insurance proceeds, if any shall be so much additional Indebtedness Hereby Secured, and shall be reimbursed to Beneficiary upon demand or, in the event and to the extent sufficient proceeds are available, shall be deducted by Beneficiary from said insurance proceeds prior to any other application thereof. If Grantor has settled and adjusted a claim under $25,000 covered by any of the Insurance Policies, Beneficiary shall release such proceeds of insurance to Grantor within thirty (30) days of receipt by Beneficiary of all information regarding such loss or damage reasonably requested by Beneficiary and evidence satisfactory to Beneficiary that such loss or damage has been restored, repaired, replaced or rebuilt in a manner satisfactory to Beneficiary and all costs in connection with such restoration have been paid in full. Each insurance company which has issued an Insurance Policy is hereby authorized and directed to make payment for all losses covered by an Insurance Policy to Beneficiary alone, and not to Beneficiary and Grantor jointly. (b) Except as set forth below, Beneficiary shall, in its sole discretion, elect to apply the proceeds of Insurance Policies consequent upon any casualty either (i) to reduce the Indebtedness Hereby Secured; or (ii) to reimburse Grantor for the cost of restoring, repairing, replacing or rebuilding (collectively, "Restoring") the loss or damage of the casualty, subject to the conditions and in accordance with the provisions of Paragraph 11 hereof. If Beneficiary elects to apply the proceeds of Insurance Policies to the Indebtedness Hereby Secured and such proceeds do not discharge that indebtedness in full, the entire Indebtedness Hereby Secured shall become immediately due and payable with interest thereon at the Default Rate (as defined in the Note). (c) If insurance proceeds are made available to Grantor as set forth in Paragraph 11 hereof, Grantor hereby covenants to restore, repair, replace or rebuild the Improvements, to be of at least equal value, and of substantially the same character as prior to such loss or damage, and Grantor shall pay all costs of such restoring, repairing, replacing or rebuilding. 11. Disbursement of Insurance Proceeds. (a) Notwithstanding anything to the contrary contained in Paragraph 10, if a loss or damage to the Premises which is covered by insurance, occurs other than within one year prior to the maturity date set forth in the Note, (i) if immediately prior to the loss or damage and during any period of repair and/or rebuilding, Grantor was not in default under the Loan Documents; (ii) if upon completion of the repairs, the rents receivable pursuant to Leases that remain in full force and effect shall be adequate to satisfy the debt service payable under the Note and to pay the taxes and operating expenses of the Premises; (iii) if not more than three buildings constituting a portion of the Improvements are damaged or destroyed in whole or in part at any one time; (iv) if all of the requirements of any regulatory authority having jurisdiction over Beneficiary will be satisfied after the repair or restoration, then Beneficiary, after first applying such insurance proceeds to the payment of all expenses incurred by Beneficiary in obtaining such proceeds, agrees to apply the balance of the insurance proceeds to reimburse Grantor for the cost of Restoring the Premises or any part thereof affected by an insured casualty, in accordance with the terms and conditions provided for in this paragraph. (b) If Beneficiary makes proceeds available for Restoring the Premises, Grantor shall be obligated to use such proceeds solely for restoring the Premises in accordance with this paragraph, unless Beneficiary otherwise specifies in writing. Application by Beneficiary of any insurance proceeds upon the Indebtedness Hereby Secured shall not excuse Grantor from making the regularly scheduled payments of principal and interest due under the Note, nor shall such application extend or reduce the amount of such payments. In addition, such application by Beneficiary of insurance proceeds upon the Indebtedness Hereby Secured may be made in such order or manner as Beneficiary may elect in its sole discretion; provided that no premium or penalty shall be payable in connection with any prepayment of the Indebtedness Hereby Secured made out of insurance proceeds as aforesaid; (c) If proceeds of insurance shall be made available to Grantor for the Restoring of the Premises, Grantor hereby covenants to restore the same in accordance with plans and specifications approved by Beneficiary, and Grantor shall cause to be prepared and presented to Beneficiary a certified construction statement, acceptable to Beneficiary, showing the total cost of the restoration or repair; to the extent such cost exceeds the available insurance proceeds, the amount of such excess cost shall be paid, in cash, to Beneficiary, before any disbursement is made by Beneficiary pursuant hereto, to be held in an account pursuant hereto (such insurance proceeds are hereinafter called the "Construction Funds"); (d) Any portion of the insurance proceeds remaining after payment in full of the Indebtedness Hereby Secured shall be paid to Grantor or as ordered by a court of competent jurisdiction; (e) In the event of foreclosure of the Deed of Trust or other transfer of title to the Premises in extinguishment of the Indebtedness Hereby Secured, all right, title and interest of Grantor in and to any insurance policies then in force shall pass to the purchaser or grantee, and Grantor hereby appoints Beneficiary its attorney-in-fact, in Grantor's name, to assign and transfer all such policies and proceeds to such purchaser or grantee; (f) The Construction Funds shall be made available to Grantor not more than once during any calendar month as the Restoring of the Premises progresses. The funds paid by Grantor to Beneficiary to pay all excess costs shall be disbursed prior to the disbursement of any insurance proceeds. No payment made prior to final completion of such Restoring shall exceed 90% of the value of the work performed from time to time; (g) There shall be delivered to Beneficiary, with such certificates, sworn statements and lien waivers in an amount at least equal to the amount of Construction Funds to be paid out to Grantor pursuant to each architect's certificate and dated as of the date of the disbursement to which they relate, provided that lien waivers may be delivered with respect to the amount of Construction Funds disbursed thirty (30) days subsequent to such disbursements if Beneficiary has received a title insurance endorsement satisfactory to Beneficiary insuring against mechanic's liens which may arise with respect to the disbursed Construction Funds; (h) There shall be delivered to Beneficiary such other evidence as Beneficiary may reasonably request, from time to time, during the Restoring work, as to the progress of the work, compliance with the approved plans and specifications, the cost of the work and the total amount needed to complete the work; (i) There shall be delivered to Beneficiary, at the sole expense of Grantor, such other evidence as Beneficiary may reasonably request from time to time, including, without limitation, updated title insurance endorsements, showing that there are no liens against the Premises arising in connection with the Restoring work, that the remaining Construction Funds are sufficient to complete the restoring work, and that the Loan Documents, including this Deed of Trust, are then still insured as a first lien on the Deed of Trust Premises; (j) If such Construction Funds are at any time determined by Beneficiary not to be adequate for completion of the Restoring work, Grantor shall immediately pay any deficiency to Beneficiary to be held and disbursed as Construction Funds and prior to any other funds then held by Beneficiary for disbursement pursuant hereto; (k) If Grantor at any time shall fail to promptly and fully perform the conditions and covenants set out above or if during the Restoring work a Default occurs under any of the Loan Documents, Beneficiary may, at its option, immediately cease making any further payments to Grantor for such Restoring work, and may further, at its option, apply the Construction Funds then in its possession either to the reduction of the Indebtedness Hereby Secured or to the Restoring of the Premises in the manner above provided and notwithstanding any such default or defaults, without affecting the lien of this Deed of Trust and the obligations hereunder. Construction Funds may be disbursed by Beneficiary directly or through a third party escrow agent, such as, but not limited to, a title insurance company, or its agent, as Beneficiary may determine in its sole discretion. Any excess Construction Funds shall be applied by Beneficiary against the Indebtedness Hereby Secured in such order or manner as Beneficiary may elect in its sole discretion; 12. Condemnation and Eminent Domain. Any and all awards (the "Awards") heretofore or hereafter made or to be made to the present, or any subsequent, owner of the Premises, by any governmental or other lawful authority for the taking by condemnation or eminent domain, of all or any part of the Premises (including any award from the United States government at any time after the allowance of a claim therefor, the ascertainment of the amount thereto, and the issuance of a warrant for payment thereof), or the proceeds from a sale in lieu of such condemnation or eminent domain are hereby assigned by Grantor to Beneficiary, which Awards Beneficiary is hereby authorized to collect and receive from the condemnation authorities, and Beneficiary is hereby authorized to give appropriate receipts and acquittances therefor. Grantor shall give Beneficiary immediate notice of the actual or threatened commencement of any condemnation or eminent domain proceedings affecting all or any part of the Premises and shall deliver to Beneficiary copies of any and all papers served in connection with any such proceedings. Grantor further agrees to make, execute, and deliver to Beneficiary, at any time upon request, free, clear, and discharged of any encumbrance of any kind whatsoever (except the rights of the holders of any junior mortgage loans expressly consented to in writing by Beneficiary, provided such rights are expressly subordinate to the rights of Beneficiary), any and all further assignments and other instruments deemed reasonably necessary by Beneficiary for the purpose of validly and sufficiently assigning all Awards and other compensation heretofore and hereafter made to Grantor for any taking, either permanent or temporary, under any such proceeding. If any portion of or interest in the Premises is taken by condemnation or eminent domain, either temporarily or permanently, and the remaining portion of the Premises is not, in the judgment of Beneficiary, a viable apartment complex of the same character than the same was prior to the taking, then, at the option of Beneficiary, the entire Indebtedness Hereby Secured shall immediately become due and payable. After deducting from the Award for such taking all of its expenses incurred in the collection and administration of the Award, including reasonable attorney's fees, Beneficiary shall be entitled to apply the net proceeds toward repayment of such portion of the Indebtedness Hereby Secured as it deems appropriate without affecting the lien of this Deed of Trust. In the event of any partial taking of parking spaces at the Premises, which in the judgment of the Beneficiary leaves the Premises as a viable apartment complex of the same character as prior to the taking; provided no Default has occurred and is then continuing, the Award, in respect of such taking of such parking spaces, shall be applied to reimburse Grantor for the cost of building additional parking spaces in locations approved by Beneficiary, and such Award shall be disbursed in the same manner as is provided in Paragraph 11 hereof for the application of insurance proceeds, provided that any surplus after payment of such costs shall be applied on account of the Indebtedness Hereby Secured. If the Award is not applied for reimbursement of such restoration costs, the Award shall be applied against the Indebtedness Hereby Secured, in such order or manner as Beneficiary shall elect. 13. Assignment of Leases and Rents. Grantor hereby absolutely and presently sells, assigns and transfers unto Beneficiary (subject to the license granted to Grantor below) all of the rents, royalties, issues, profits, revenue, income, security deposits and other benefits generated from the Premises under the Leases or otherwise and all of the rents, leases, issues and profits now due and which may hereafter become due under or by virtue of any Leases which may have been heretofore or may be hereafter made or agreed to by Grantor or the agents of any Grantor or which may be made or agreed to by Beneficiary under the powers herein granted (collectively the "Rents"), it being the intention hereby to establish an absolute transfer and assignment of all such Rents and Leases to Beneficiary and not merely the granting of a security interest. Notwithstanding the foregoing, Beneficiary hereby grants to Grantor a license to collect and retain the Rents. However, upon Default under the Note, this Deed of Trust or any other of the Loan Documents entered into for the Indebtedness Hereby Secured, the license to Grantor from Beneficiary shall thereupon terminate and thereafter Beneficiary shall be entitled to take possession of the Premises, and subject to the effect of any Leases, remove all persons therefrom and rent the Premises for Grantor's account and employ such agents and attorneys as may be necessary with respect thereto. Likewise, upon such Default, Beneficiary shall be entitled to the immediate appointment of a receiver of the Premises, without regard to the value of the Premises or the solvency of any person or persons primarily or contingently liable for the payment of the Indebtedness Hereby Secured, whether or not Beneficiary has an adequate remedy at law; and upon any such Default, whether or not a receiver has been sought or appointed, Beneficiary may collect all Rents, and apply the Rents so collected in their entirety to the extent of the Indebtedness Secured Hereby, after deducting Beneficiary's costs and expenses of collection of such Rents (including, without limitation, reasonable attorneys' fees and the costs and expenses of litigation). Upon payment in full and satisfaction of the Indebtedness Hereby Secured, this assignment of Rents shall terminate automatically. Grantor hereby irrevocably appoints Beneficiary its agent in its name and stead (with or without taking possession of the Premises as provided in Paragraph 20 hereof) to rent, lease or let all or any portion of the Premises to any party or parties at such rental and upon such terms as Beneficiary shall, in its reasonable discretion, determine, and to collect all of said Rents arising from or accruing at any time hereafter, and all now due or that may hereafter become due under each and every of the Leases, written or oral, or other tenancy existing, or which may hereafter exist on the Premises, with the rights and powers and subject to the same immunities, exoneration of liability and rights of recourse and indemnity as Beneficiary would have upon taking possession pursuant to the provisions of Paragraph 20 hereof. Grantor represents and agrees that no rent has been or will be paid by any person in possession of any portion of the Premises for more than one installment in advance and that the payment of none of the rents to accrue for any portion of said Premises has been or will be waived, released, reduced, discounted or otherwise discharged or compromised by Grantor except as may be permitted in the Assignment of Leases (as hereinafter defined). Grantor will not assign any of the rents or profits of the Premises, except to Beneficiary or a permitted purchaser or grantee of the Premises. Nothing herein contained shall be construed as constituting Beneficiary a "mortgagee-in-possession" in the absence of the taking of actual possession of the Premises by Beneficiary pursuant to Paragraph 20 hereof. Possession by a court-appointed receiver will not be considered possession by Beneficiary. In the exercise of the powers herein granted Beneficiary, no liability shall be asserted or enforced against Beneficiary, all such liability being expressly waived and released by Grantor. Grantor further agrees to assign and transfer to Beneficiary all future Leases upon all or any part of the Premises and to execute and deliver, at the request of Beneficiary, all such further assurances and assignments in the Premises as Beneficiary shall from time to time require. In the event Beneficiary requires that Grantor execute and record a separate Assignment of Rents or separate assignments of any of the Leases to Beneficiary, the terms and provisions of those assignments shall control in the event of a conflict between the terms of this Deed of Trust and the terms thereof. The remedies provided herein are in addition to the remedies provided to Beneficiary under any of the Loan Documents. 14. Observance of Lease Assignment. Grantor expressly covenants and agrees that if any lessee under any of the Leases transferred, sold or assigned to Beneficiary or if Grantor, as lessor therein, shall fail to perform and fulfill any term, covenant, condition or provision in said Lease, on its part to be performed or fulfilled at the times and in the manner in said Lease provided; or if Grantor shall enter into any Leases other than on a standard form previously approved by Beneficiary, for a term longer than one year and other than in the ordinary course of business on commercially prudent terms and provisions consistent with market rental rates for comparable residential projects in the area where the Premises is located and including no free rent periods without the prior written consent of Beneficiary or if Grantor shall permit or agree to any renewal, extension, compromise, settlement or termination or make any material change or modification of any kind or nature of or with respect to any of the Leases or the terms thereof (except that Grantor shall be entitled to terminate up to but not in excess of ten (10) residential Leases through customary non-payment proceedings in any given calendar month provided that such termination is in the ordinary course of business and is commercially prudent), without Beneficiary's prior written consent; or if Grantor shall suffer or permit to occur any breach or default under the provisions of any assignment of any Lease given as additional security for the payment of the Indebtedness Hereby Secured, which breach or default is not cured within the applicable grace period provided therein; then and in any such event, such breach or default shall constitute a Default hereunder and at the option of Beneficiary, and upon notice to Grantor, the Indebtedness Secured Hereby shall become due and payable as in the case of other Defaults. 15. Beneficiary's Performance of Grantor's Obligations. In case of Default, Beneficiary, either before or after acceleration of the Indebted- ness Hereby Secured or the foreclosure of the lien hereof or foreclosure sale, may, but shall not be required to, make any payment or perform any act herein required of Grantor (whether or not Grantor is personally liable therefor) in any form and manner deemed expedient to Beneficiary. Upon any such payment or performance of any such act, Beneficiary shall as soon as reasonably possible provide notice thereof to Grantor but its failure to do so shall not affect the rights of Beneficiary and the obligation of Grantor hereunder. Benefici- ary may, but shall not be required to, complete construction, furnishing and equipping of the Improvements and rent, operate and manage the Premises and such Improvements and pay operating costs and expenses, including management fees, of every kind and nature in connection therewith, so that the Premises shall be operational and usable for their intended purposes. All monies paid, and all expenses paid or incurred in connection therewith, including reasonable attorneys' fees and other monies advanced by Beneficiary to protect the Premises and the lien hereof, or to complete construction, furnishing and equipping or to rent, operate and manage the Premises or to pay any such operating costs and expenses thereof or to keep the Premises operational and usable for their intended purpose shall be so much additional Indebtedness Hereby Secured, whether or not the Indebtedness Hereby Secured, as a result thereof, shall exceed the face amount of the Note, and shall become immedi- ately due and payable on demand, and with interest thereon at the Default Rate (as such term is defined in the Note). Inaction of Beneficiary shall never be considered as a waiver of any right accruing to it on account of any Default nor shall the provisions of this Paragraph or any exercise by Beneficiary of its rights hereunder prevent any default from constituting a Default. Beneficiary, in making any payment hereby authorized (a) relating to Taxes, may do so according to any bill, statement or estimate, without inquiry into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof; (b) for the purchase, discharge, compromise or settlement of any lien, may do so without inquiry as to the validity or amount of any claim for lien which may be asserted; or (c) in connection with the completion of construction, furnishing or equipping of the Premises or the rental, operation, or management of the Premises or the payment of operating costs and expenses thereof, may do so in such amounts and to such persons as Beneficiary may deem appropriate. Nothing contained herein shall be construed to require Beneficiary to advance or expend monies for any purpose mentioned herein, or for any other purpose. 16. Security Agreement. Beneficiary and Grantor agree that this Deed of Trust shall constitute a Security Agreement within the meaning of the Code of Virginia (1950) (hereinafter the "Code") with respect to (i) any and all sums at any time on deposit for the benefit of Beneficiary or held by Beneficiary (whether deposited by or on behalf of Grantor or anyone else) pursuant to any of the provisions of the Deed of Trust and (ii) with respect to any personal property included in the granting clauses of this Deed of Trust and Exhibit B hereto, which personal property may not be deemed to be affixed to the Premises or may not constitute a "fixture" (within the meaning of Section 8.9-313 of the Code), (which property is hereinafter referred to as "Personal Property") and all replacements of such Personal Property, substitutions for such Personal Property, additions to such Personal Property, and the proceeds thereof (all of said Personal Property and the replacements, substitutions and additions thereto and the proceeds thereof being sometimes hereinafter collectively referred to as the "Collateral"), and that a security interest in and to the Collateral is hereby granted to Beneficiary, and the Collateral and all of Grantor's right, title and interest therein are hereby assigned to Beneficiary, all to secure payment of the Indebtedness Hereby Secured. All of the terms, provisions, conditions and agreements contained in this Deed of Trust pertain and apply to the Collateral as fully and to the same extent as to any other property comprising the Premises; and the following provisions of this Paragraph shall not limit the applicability of any other provision of this Deed of Trust but shall be in addition thereto: (a) Grantor (being the Debtor as that term is used in the Code) is and will be the true and lawful owner of the Collateral, subject to no liens, charges or encumbrances other than the lien hereof, other liens and encumbrances benefiting Beneficiary and no other party, and liens and encumbrances, if any, expressly permitted by this Deed of Trust (including, without limitation, those certain liens and encumbrances, if any, set forth on the title insurance policy insuring the lien of this Deed of Trust) or otherwise expressly consented to in writing by Beneficiary. (b) The Collateral is to be used by Grantor solely for business purposes. (c) The Collateral will be kept at the Premises, and, except for Obsolete Collateral (as hereinafter defined), will not be removed therefrom without the consent of Beneficiary (being the Secured Party as that term is used in the Code). The Collateral may be affixed to the Premises but will not be affixed to any other real estate. (d) The only persons having any interest in the Collateral are Grantor, Beneficiary and holders of interests, if any, expressly permitted hereby or otherwise expressly consented to in writing by Beneficiary. (e) No Financing Statement (other than Financing Statements showing Beneficiary as the sole secured party, or with respect to liens or encumbrances, if any, expressly permitted by this Deed of Trust or otherwise expressly consented to in writing by Beneficiary) covering any of the Collateral or any proceeds thereof is on file in any public Land Records except pursuant hereto; and Grantor will at its own cost and expense, upon demand, furnish to Beneficiary such further information and will execute and deliver to Beneficiary such financing statements and other documents in form satisfactory to Beneficiary and will do all such acts and things as Beneficiary may at any time or from time to time request or as may be necessary or appropriate to establish and maintain a perfected security interest in the Collateral as security for the Indebtedness Hereby Secured, subject to no other liens or encumbrances, other than liens or encumbrances benefiting Beneficiary and no other party and liens and encumbrances (if any) expressly permitted by this Deed of Trust; and Grantor will pay the cost of filing or recording such financing statements or other documents, and this instrument, in all public Land Records wherever filing or recording is deemed by Beneficiary to be necessary or desirable. (f) Upon Default hereunder, Beneficiary shall have the remedies of a secured party under the Code, including without limitation, the right to take immediate and exclusive possession of the Collateral, or any part thereof, and for that purpose may, so far as Grantor can give authority therefor, with or without judicial process, enter (if this can be done without breach of the peace), upon any place which the Collateral or any part thereof may be situated and remove the same therefrom (provided that if the Collateral is affixed to real estate, such removal shall be subject to the conditions stated in the Code); and Beneficiary shall be entitled to hold, maintain, preserve and prepare the Collateral for sale, until disposed of, or may propose to retain the Collateral subject to Grantor's right of redemption in satisfaction of Grantor's obligations, as provided in the Code. Beneficiary may render the Collateral unusable without removal and may dispose of the Collateral on the Premises. Beneficiary may require Grantor to assemble the Collateral and make it available to Beneficiary for its possession at a place to be designated by Beneficiary. Beneficiary will give Grantor reasonable notice of the time and place of any public sale of the Collateral or of the time after which any private sale or any other intended disposition thereof is to be made. The requirements of reasonable notice shall be met if such notice is mailed, by certified United States mail or equivalent, postage prepaid, to the address of Grantor hereinafter set forth at least ten (10) days before the time of the sale or disposition. Beneficiary may buy at any public sale and, if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations, Beneficiary may buy at private sale. Any such sale may be held as part of and in conjunction with any foreclosure sale of the Premises, the Premises including the Collateral to be sold as one lot if Beneficiary so elects. The net proceeds realized upon any such disposition, after deduction for the expenses of retaking, holding, preparing for sale, selling or the like and the attorneys' fees and legal expenses incurred by Beneficiary, shall be applied against the Indebtedness Hereby Secured in such order or manner as Beneficiary shall select. Beneficiary will account to Grantor for any surplus realized on such disposition. (g) The terms and provisions contained in this Paragraph 16 shall, unless the context otherwise requires, have the meanings and be construed as provided in the Code. (h) This Deed of Trust is intended to be a financing statement within the purview of Section 8.9-402(f) of the Code with respect to the Collateral and the goods described herein, which goods are or may become fixtures relating to the Premises. The addresses of Grantor (Debtor) and Beneficiary (Secured Party) are hereinafter set forth. The addresses of Grantor (Debtor) hereinafter set forth is the chief executive offices of Grantor (Debtor) (i.e. the place where in fact the Debtor conducts the main part of its business operations). This Deed of Trust is to be filed for record with the Clerk's Office of the Circuit Court of Henrico County, Virginia. (i) To the extent permitted by applicable law, the security interest created hereby is specifically intended to cover and include all Executory Contracts, any management agreement regarding the Premises and all Leases between Grantor (or its agent), as lessor, and various tenants named therein, as lessee, including all extended terms and all extensions and renewals of the terms thereof, as well as any amendments to or replacement of said Leases, together with all of the right, title and interest of Grantor, as lessor thereunder, including, without limiting the generality of the foregoing, the present and continuing right to make claim for, collect, receive and receipt for any and all of the rents, rent equivalents, income, revenues, issues and profits and moneys payable as damages or in lieu of the rent and moneys payable as the purchase price of the Premises or any part thereof or of awards or claims for money and other sums of money payable or receivable thereunder howsoever payable, and to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which Grantor or any lessor is or may become entitled to do under the Leases. Notwithstanding the foregoing, it is expressly understood and agreed that Beneficiary shall not exercise any of the rights or powers conferred upon it by this paragraph until a Default shall exist under this Deed of Trust. (j) Notwithstanding anything herein to the contrary, this Paragraph 16 shall not be deemed to apply to any items of personal property which (i) are owned by tenants who are in possession pursuant to a Lease and (ii) may be removed by such tenants at the expiration or termination of such Lease. 17. Restrictions on Transfer. Grantor shall not, without the prior written consent of Beneficiary, create, effect, contract for, consent to, suffer or permit any "Prohibited Transfer" (as hereinafter defined). Any conveyance, sale, assignment, transfer, lien, pledge, hypothecation, mortgage, security interest or other encumbrance or alienation (or any agreement to do any of the foregoing) of any of the following properties, rights or interests which occurs, is granted, accomplished, attempted or effectuated without the prior written consent of Beneficiary shall constitute a "Prohibited Transfer": (a) the Premises or any part thereof or interest therein, excepting only sales or other dispositions of Collateral (hereinafter called "Obsolete Collateral") no longer useful in connection with the operation of the Premises, provided that such Obsolete Collateral has been or is contemporaneously being replaced by Collateral of at least equal value and utility which is subject to the lien hereof with the same priority as with respect to the Obsolete Collateral; (b) any shares of capital stock of a corporate Grantor or a corporation which is a general partner in Grantor or a corporation which is a general partner of a partnership which is the general partner of Grantor, or any shares of capital stock of National Property Investors, Inc., a Delaware corporation ("NPI, Inc."), it being agreed and understood that a transfer of stock of NPI, Inc. shall not constitute a Prohibited Transfer hereunder so long as one of Michael Ashner, Martin Lifton, Steven Lifton and Arthur N. Queler is the chief operating officer of NPI, Inc. charged with the authority and power to direct the day-to-day operation and management of NPI, Inc. and so long as any one or more of the current shareholders of NPI, Inc. shall own at least a 5% interest in NPI, Inc. (c) any general partnership interests in Grantor or any partnership which is the general partner of Grantor; (d) 50% or more of the limited partnership interests or capital stock, as applicable, in Grantor, any general partner of Grantor or any general partner of the general partner of Grantor is transferred in any one calendar year; or (e) any general partner of Grantor or of Grantor's general partner shall cease to be a general partner thereof; in each case whether any such conveyance, sale, assignment, transfer, lien, pledge, mortgage, security interest, encumbrance or alienation is effected directly, indirectly, voluntarily or involuntarily, by operation of law or otherwise; provided, however, that the foregoing provisions of this Paragraph 17 shall not apply (i) to liens securing the Indebtedness Hereby Secured, (ii) to the lien of current taxes and assessments not in default, or (iii) to any transfers of the Premises, or part thereof, or interest therein, or shares of stock or partnership or joint venture interests, as the case may be, by or on behalf of an owner thereof who is deceased or declared judicially incompetent, to such owner's heirs, legatees, devisees, executors, administrators, estate or personal representatives, or (iv) to the lien created by the Subordinate Deed of Trust (the "Subordinate of Deed of Trust") dated the date hereof made by Grantor to Beneficiary in the principal amount of $5,388,360.35 securing that certain Amended and Restated Note made by Grantor to Beneficiary in connection with a loan made with respect to the Cooper's Pointe Apartments. Grantor shall not create, effect, contract for, consent to or permit any Prohibited Transfer unless otherwise agreed by Beneficiary. Notwithstanding the foregoing, provided that no default has occurred and is continuing under the Loan Documents, if the stock of NPI, Inc. is anticipated to be transferred to a bona fide third party and (i) one of Michael Ashner, Martin Lifton, Steven Lifton or Arthur N. Queler will not be the chief operating officer of NPI, Inc. charged with the authority and power to direct the day to day operation and management of NPI, Inc., or (ii) any one or more of the current shareholders of NPI, Inc. will not own at least 5% interest of NPI, Inc., Grantor shall use reasonable efforts to notify Beneficiary of such transfer prior to its occurrence. On the date of such transfer, Grantor shall provide Beneficiary with notice of such transfer. Grantor shall deliver to Beneficiary copies as evidence of the transfer, including stock certificates. The Loan shall, without further act or instrument, become immediately due and payable on the date which is one (1) year from the date of the transfer at which time the outstanding principal balance, accrued interest and all sums owing under the Loan shall be immediately due and payable. Nothing contained herein shall release Grantor from any liability under the Loan Documents, which shall continue unmodified and in full force and effect. Notwithstanding the foregoing, provided no default has occurred and is continuing under the Loan Documents, upon request of Grantor, Beneficiary shall consent to the transfer of the Premises to an Affiliate of Grantor provided that the Affiliate assumes all the obligations of Grantor and any guarantor or indemnitor under the Loan (including but not limited to the Responsible Entities) and enters and delivers all documents, instruments, legal opinions, title endorsements and such other items as Beneficiary may reasonably require in connection with such transfer. The term "Affiliate" shall mean any person or entity currently controlled by, under common control with, or controlling Grantor but shall not include Fox Realty Investors, Fox Associates '84 or Fox Partners '85. The consent by Beneficiary to any transfer under this paragraph shall not release Grantor or any of the Responsible Entities from any liability under the Loan Documents, which shall continue unmodified and in full force and effect. Any consent by Beneficiary permitting a transaction otherwise prohibited under this Paragraph 17 shall not constitute a consent to or waiver of any right, remedy or power of Beneficiary to withhold its consent on a subsequent occasion to a transaction not otherwise permitted by the provisions of this Paragraph 17, and notwithstanding the giving of such consent Grantor shall not engage in any "prohibited transaction" with any "party-in-interest" as such terms are defined in ERISA (as defined in Paragraph 44) or otherwise contravene the provisions of Paragraph 44. No such consent shall be considered by Beneficiary unless the appropriate service fees and legal fees are paid in advance and no such consent shall be given unless Grantor agrees, in addition to any other conditions to such consent imposed by Beneficiary, that immediately upon closing of the subject sale or transfer, Grantor will provide Beneficiary with a copy of the deed or other instrument conveying title to the Premises to the transferee and with an affidavit and agreement of indemnification regarding Internal Revenue Code Sections 1445 and 7701 in form satisfactory to Beneficiary executed by the transferee under oath. In determining whether or not to make the loan secured hereby, Beneficiary evaluated the background and experience of Grantor in owning and operating property such as the Premises, found it acceptable and relied and continues to rely upon same as the means of maintaining the value of the Premises which is Beneficiary's security for the Note. Grantor is well-experienced in borrowing money and owning and operating property such as the Premises, was ably represented by a licensed attorney at law in the negotiation and documentation of the loan secured hereby and bargained at arm's length and without duress of any kind for all of the terms and conditions of the loan, including this provision. Grantor recognizes that Beneficiary is entitled to keep its loan portfolio at current interest rates by either making new loans at such rates or collecting assumption fees and/or increasing the interest rate on a loan, the security for which is purchased by a party other than the original Grantor. Grantor further recognizes that any secondary junior financing placed upon the Premises (a) may divert funds which would otherwise be used to pay the Note secured hereby; (b) could result in acceleration and foreclosure by any such junior encumbrancer which would force Beneficiary to take measures and incur expenses to protect its security; (c) would detract from the value of the Premises should Beneficiary come into possession thereof with the intention of selling same; and (d) would impair Beneficiary's right to accept a deed in lieu of foreclosure, as a foreclosure by Beneficiary would be necessary to clear the title to the Premises. In accordance with the foregoing and for the purposes of (i) protecting Beneficiary's security, both of repayment and of value of the Premises; (ii) giving Beneficiary the full benefit of its bargain and contract with Grantor; (iii) allowing Beneficiary to raise the interest rate and collect assumption fees; and (iv) keeping the Premises free of subordinate financing liens, Grantor agrees that if this Paragraph 17 be deemed a restraint on alienation, that it is a reasonable one. 18. Defaults. If one or more of the following events (herein called "Defaults") shall occur: (a) Grantor shall default in the payment of principal or interest, Tax or Insurance Deposits or Reserves (as defined in the Reserve Agreement dated the date hereof between Beneficiary and Grantor) and such default continues past the fifth (5th) day after the same is due; (b) Grantor shall default in the due and punctual payment of Taxes or Premiums; (c) If any default shall exist for any reason other than the non-payment of money under the Note, under this Deed of Trust, or under any other Loan Documents which is not cured within the grace period provided for thereunder, and if no grace period is specified, within thirty (30) days from the date of such default, provided, however, that if Grantor has commenced in good faith to cure such default during the aforesaid thirty (30) day period and proceeds with due diligence and continuity to completion of such cure, Grantor shall have a maximum of an additional sixty (60) days (above and beyond the initial 30 day period) to cure such default; or (d) If any of the information contained in any documentation provided to Beneficiary by Grantor in conjunction with the Indebtedness Hereby Secured shall not be true, accurate and complete in all material respects or shall be misleading in any material respect; (e) If (and for the purpose of this Subparagraph 18(e) only, the term Grantor shall mean and include not only Grantor, but also any general partner in Grantor, any owner of more than ten percent (10%) of the stock in a corporate Grantor or corporate general partner of Grantor, and each person who, as guarantor, co-maker or otherwise, shall be or become liable for or obligated upon all or any part of the Indebtedness Hereby Secured or any of the covenants or agreements contained herein) any of the following shall occur: (i) Grantor shall file a voluntary petition in bankruptcy or for arrangement, reorganization or other relief under any chapter of the Federal Bankruptcy Code or any similar law, state or federal, now or hereafter in effect; (ii) Grantor shall file an answer or other pleading in any proceeding admitting insolvency, bankruptcy, or inability to pay its debts as they mature; (iii) Within ninety (90) days after the filing against Grantor of any involuntary proceeding under the Federal Bankruptcy Code or similar law, state or federal, now or hereafter in effect, such proceedings shall not have been dismissed; (iv) All or a substantial part of Grantor's assets are attached, seized, subjected to a writ or distress warrant, or are levied upon, unless such attachment, seizure, writ, warrant or levy is vacated within sixty (60) days; (v) Grantor shall make an assignment for the benefit of creditors or shall admit in writing its inability to pay its debts generally as they become due or shall consent to the appointment of a receiver or trustee or liquidator of all or the major part of its property, or the Premises; or (vi) An order appointing a receiver, trustee or liquidator of Grantor or all or a major part of Grantor's property or the Premises is not vacated within ninety (90) days following the entry thereof; (f) If a default, after passage of time or notice, as may be required, shall occur under any other deed of trust, whether subordinate or superior to this Deed of Trust, now or hereafter encumbering the Premises or any portion thereof, including but not limited to the Subordinate Deed of Trust; or (g) If a default, after passage of time or notice, as may be required, shall occur under a Subordinate Mortgage (the "Subordinate Mortgage") in the sum of $3,679,026.14 dated the date hereof from Grantor to Beneficiary encumbering certain property located at 2225 Greenridge Road, North Charleston, South Carolina and known as Cooper's Pointe Apartments; then Beneficiary is hereby authorized and empowered, at its option and without affecting the lien hereby created or the priority of said lien or any other right of Beneficiary hereunder, to declare, without further notice, all Indebtedness Hereby Secured to be immediately due and payable with interest thereon at the Default Rate, whether or not such Default be thereafter remedied by Grantor, and Beneficiary may immediately proceed to foreclose this Deed of Trust and/or to exercise any right, power or remedy provided by this Deed of Trust, the Note or any of the other Loan Documents or by law or in equity or any other document or instrument regulating, evidencing, securing or guarantying any of the Indebtedness Hereby Secured. 19. Remedies. (a) Upon the occurrence of any one or more Defaults, Beneficiary and/or Trustee may (but shall not be obligated), in addition to any rights or remedies available to it hereunder or under the other Loan Documents, take such action personally or by its agents or attorneys, with or without entry, and without notice, demand, presentment or protest (each and all of which are hereby waived), as it deems necessary or advisable to protect and enforce Beneficiary's rights and remedies against Grantor and in and to the Premises, including the following actions, each of which may be pursued concurrently or otherwise, at such time and in such order as Beneficiary may determine, in its sole discretion, without impairing or otherwise affecting its rights or remedies: (i) declare the entire balance of the Indebtedness Hereby Secured (including the entire principal balance thereof, all accrued and unpaid interest and any premium thereon and all other such sums secured hereby) to be immediately due and payable, and upon any such declaration the entire unpaid balance of the Indebtedness Hereby Secured shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by Grantor, anything in the Loan Documents to the contrary notwithstanding; or (ii) institute a proceeding or proceedings, judicial or otherwise, for the complete foreclosure of this Deed of Trust under any applicable provision of law; or (iii) subject to the provisions and restrictions of any applicable law, institute a proceeding or proceedings, judicial or otherwise, for the partial foreclosure of this Deed of Trust under any applicable provision of law for the portion of the Indebtedness Hereby Secured then due and payable, subject to the lien of this Deed of Trust continuing unimpaired and without loss of priority so as to secure the balance of the Indebtedness Hereby Secured not then due and payable; or (iv) cause any or all of the Premises to be sold under the power of sale hereby granted, and more fully described in Paragraph 46 of this Deed of Trust, in any manner permitted by applicable law. For any sale under the power of sale granted by this Deed of Trust, Trustee shall give all notices and make all advertisements required by law and then, upon the expiration of such time as is required by law, may sell the Premises, and all estate, right, title, interest, claim and demand of Grantor therein, and all rights of redemption thereof, at one or more sales, as an entirety or in parcels, with such elements of real and/or personal property (and, to the extent permitted by applicable law, may elect to deem all of the Premises to be real property for purposes thereof), and at such time or place and upon such terms as Trustee may deem expedient, or as may be required by applicable law. Upon any sale, Trustee shall execute and deliver to the purchaser or purchasers a trustee's deed or deeds conveying the property sold, and the recitals in the trustee's deed or deeds of any facts affecting the regularity or validity of the sale will be conclusive against all persons. In the event of a sale, by foreclosure or otherwise, of less than all of the Premises, this Deed of Trust shall continue as a lien and security interest on the remaining portion of the Premises; or (v) institute an action, suit or proceeding in equity for the specific performance of any of the provisions contained in the Loan Documents; or (vi) apply for the appointment of a receiver, custodian, trustee, liquidator or conservator of the Premises, to be vested with the fullest powers permitted under applicable law, and subject to the provisions and restrictions of any applicable law, ex parte and as a matter of right and without regard to or the necessity to disprove the adequacy of the security for the Indebtedness Hereby Secured or the solvency of Grantor or any other person liable for the payment of the Indebtedness Hereby Secured, and Grantor and each other person so liable waives or shall be deemed to have waived such necessity and consents or shall be deemed to have consented to such appointment; or (vii) subject to the provisions and restrictions of any applicable law, enter upon the Premises, and exclude Grantor and its agents and servants wholly therefrom, without liability for trespass, damages or otherwise, and take possession of all books, records and accounts relating thereto and all other Premises, and Grantor agrees to surrender possession of the Premises and of such books, records and accounts to Beneficiary on demand after the happening of any Default; and having and holding the same may use, operate, manage, preserve, control and otherwise deal therewith and conduct the business thereof, either personally or by its superintendents, managers, agents, servants, attorneys or receivers, without interference from Grantor; and upon each such entry and from time to time thereafter may, at the expense of Grantor and the Premises, without interference by Grantor and as Beneficiary may deem advisable, (i) either by purchase, repair or construction, maintain and restore the Premises, (ii) insure and reinsure the same, (iii) make all necessary or property repairs, renewals, replacements, alterations, additions, betterments and improvements thereto and thereon, (iv) in the event of casualty, complete the reconstruction of the Improvements and, in the course of such completion, may make such changes in the contemplated or completed Improvements as it may deem advisable, (v) in every such case in connection with the foregoing have the right to exercise all rights and powers of Beneficiary with respect to the Premises, either in Grantor's name or otherwise, including the right to make, terminate, cancel, enforce or modify Leases, obtain and evict tenants and subtenants on such terms as Beneficiary shall deem advisable and to take any actions described in subsection (ix) below of this Section; or (viii) subject to the provisions and restrictions of any applicable law, may, with or without the entrance upon the Premises, collect, receive, sue for and recover in its own name all Rents and cash collateral derived from the Premises, and after deducting therefrom all costs, expenses and liabilities of every character incurred by Beneficiary in collecting the same and in using, operating, managing, preserving and controlling the Premises, and otherwise in exercising Beneficiary's rights under subsection (vii) of this Paragraph, including all amounts necessary to pay impositions, insurance premiums and other charges in connection with the Premises, as well as compensation for the services of Beneficiary and its attorneys, agents and employees, to apply the remainder as provided in Paragraph 46(b); or (ix) release any portion of the Premises for such consideration as Beneficiary may require without, as to the remainder of the Premises, in any way impairing or affecting the lien or priority of this Deed of Trust, or improving the position of any subordinate lienholder with respect thereto, except to the extent that the Indebtedness Hereby Secured shall have been reduced by the actual monetary consideration, if any, received by Beneficiary for such release, and may accept by assignment, pledge or otherwise any other property in place thereof as Beneficiary may require without being accountable for so doing to any other lienholder; or (x) may take all actions permitted under the Uniform Commercial Code of the Commonwealth of Virginia; or (xi) may take any other action, or pursue any other right or remedy, as Beneficiary may have under applicable law, and Grantor does hereby grant the same to Beneficiary. In the event that Beneficiary shall exercise any of the rights or remedies set forth in subsections (vii) and (viii) of this Paragraph, Beneficiary shall not be deemed to have entered upon or taken possession of the Premises except upon the exercise of its option to do so evidenced by its demand and overt act for such purpose, nor shall it be deemed a beneficiary or mortgagee in possession by reason of such entry or taking possession. Beneficiary shall not be liable to account for any action taken pursuant to any such exercise other than for rents actually received by Beneficiary, nor liable for any loss sustained by Grantor resulting from any failure to let the Premises, or from any other act or omission of Beneficiary except to the extent such loss is caused by the willful misconduct or bad faith of such party. Grantor hereby consents to, ratifies and confirms the exercise by Beneficiary of said rights and remedies, and appoints Trustee and/or Beneficiary as its attorney-in-fact, which appointment shall be deemed to be coupled with an interest and irrevocable, for such purposes. (b) Upon a foreclosure sale of any portion or interest in the Premises, Trustee shall be entitled to a commission equal to five percent (5%) of the Indebtedness Hereby Secured. In the event any portion of the Premises is advertised for foreclosure sale and not sold, Trustee shall be entitled to a commission equal to two and one-half percent (2.5%) of the Indebtedness Hereby Secured. In any proceeding (whether judicial, by power of sale or otherwise) to foreclose this Deed of Trust or enforce any other remedy of Beneficiary under the Loan Documents, there shall be allowed and included as an addition to and a part of the Indebtedness Hereby Secured (in the decree for sale, if applicable, or other judgment or decree, if applicable) all expenditures and expenses (including, without limitation, the foregoing commissions) which may be paid or incurred in connection with the exercise by Trustee or Beneficiary of any of the rights and remedies provided or referred to in Paragraph 19(a), or any comparable provision of any other Loan Document, together with interest thereon at the Default Rate and the same shall be part of the Indebtedness Hereby Secured and shall be secured by this Deed of Trust. No party shall be required to accept payment in full of the Note unless accompanied by a tender of payment of such expenditures, expenses and commissions. 20. Right of Possession. When the Indebtedness Hereby Secured shall become due, whether by acceleration or otherwise, or in any case in which, under the provisions of this Deed of Trust, Beneficiary has a right to institute foreclosure proceedings, Grantor shall, forthwith upon demand of Beneficiary, surrender to Beneficiary, and Beneficiary shall be entitled to take actual possession of, the Premises or any part thereof, personally, by its agent or attorneys or be placed in possession pursuant to court order as mortgagee in possession or receiver, and Beneficiary, in its discretion, personally, by its agents or attorneys or pursuant to court order as mortgagee in possession or receiver, may enter upon and take and maintain possession of all or any part of the Premises, together with all documents, books, records, papers, and accounts of Grantor, including those accounts which were set up to hold any security deposits, or the then owner of the Premises relating thereto, and may exclude Grantor, such owner, and any agents and servants thereof wholly therefrom and may, on behalf of Grantor or such owner, or in its own name as Beneficiary and under the powers herein granted: (1) hold, operate, manage, and control all or any part of the Premises and conduct the business, if any, thereof, either personally or by its agents, with full power to use such measures, legal or equitable, as in its discretion may be deemed proper or necessary to enforce the payment or security of the rents, issues, deposits, profits, and avails of the Premises, including without limitation actions for recovery of rent, actions in forcible detainer, and actions in distress for rent, all without notice to Grantor; (2) cancel or terminate any Lease or sublease of all or any part of the Premises for any cause or on any ground that would entitle Grantor to cancel the same; (3) elect to disaffirm any Lease or sublease of all or any part of the Premises made subsequent to this Deed of Trust without Beneficiary's prior written consent; (4) extend or modify any then existing Leases and make new Leases of all or any part of the Premises, which extensions, modifications, and new Leases may provide for terms to expire, or for options to lessees to extend or renew terms to expire, beyond the maturity date of the loan evidenced by the Note and the issuance of a deed or deeds to a purchaser or purchasers at a foreclosure sale, it being understood and agreed that any such Leases, and the options or other such provisions to be contained therein, shall be binding upon Grantor, all persons whose interests in the Premises are subject to the lien hereof, and the purchaser or purchasers at any foreclosure sale, notwithstanding any redemption, reinstatement, discharge of the Indebtedness Hereby Secured, satisfaction of any foreclosure decree, or issuance of any certificate of sale or deed to any such purchaser; (5) make all necessary or proper repairs, decoration renewals, replacements, alterations, additions, betterments, and improvements in connection with the Premises as may seem judicious to Beneficiary, to insure and reinsure the Premises and all risks incidental to Beneficiary's possession, operation, and management thereof, and to receive all rents, issues, deposits, profits, and avails therefrom; and (6) apply the net income, after allowing a reasonable fee for the collection thereof and for the management of the Premises, to the payment of Taxes, Insurance Premiums and other charges applicable to the Premises, or in reduction of the Indebtedness Hereby Secured in such order and manner as Beneficiary shall select. Nothing herein contained shall be construed as constituting Beneficiary a mortgagee in possession in the absence of the actual taking of possession of the Premises. 21. Receiver. Upon the occurrence of a Default, a court of competent jurisdiction may appoint a receiver upon petition of Beneficiary, and Beneficiary shall be entitled to the appointment of a receiver at Beneficiary's sole option. Such appointment may be made either before or after sale, without notice, without regard to the solvency or insolvency of Grantor at the time of application for such receiver, and without regard to the then value of the Premises or whether the same shall be then occupied as a homestead or not; and Beneficiary hereunder or any employee or agent thereof may be appointed as such receiver. Such receiver shall have all powers and duties prescribed by law, including the power to make leases to be binding upon all parties, including Grantor, the purchaser at a sale pursuant to a judgment of foreclosure and any person acquiring an interest in the Premises after entry of a judgment of foreclosure. In addition, such receiver shall also have the power to extend or modify any then existing leases, which extensions and modifications may provide for terms to expire, or for options to lessees to extend or renew terms to expire, beyond the maturity date of the Note and beyond the date the issuance of a deed or deeds to a purchaser or purchasers at a foreclosure sale, it being understood and agreed that any such leases, and the options or other provisions to be contained therein, shall be binding upon Grantor and all the persons whose interest in the Premises are subject to the lien hereof and upon the purchaser or purchasers at any foreclosure sale, notwithstanding any redemption, reinstatement, discharge of the Indebtedness Hereby Secured, satisfaction of any foreclosure judgment, or issuance of any certificate of sale or deed to any purchaser. In addition, such receiver shall have the power to collect the rents, issues and profits of the Premises during the pendency of such foreclosure suit and, in case of a sale and deficiency, during the full statutory period of redemption, if any, whether there be a redemption or not, as well as during any further times when Grantor, except for the intervention of such receiver, would be entitled to collection of such rents, issues and profits, and such receiver shall have all other powers which may be necessary or are usual in such cases for the protection, possession, control, management and operation of the Premises during the whole of said period. The court may, from time to time, authorize the receiver to apply the net income from the Premises in payment in whole or in part of: (a) the Indebtedness Hereby Secured or the indebtedness secured by a decree foreclosing this Deed of Trust, or any tax, special assessment, or other lien which may be or become superior to the lien hereof or of such decree, provided such application is made prior to the foreclosure sale; or (b) the deficiency in case of a sale and deficiency. 22. Foreclosure Sale. The proceeds of any foreclosure sale of the Premises shall be distributed and applied in accordance with Paragraph 46 hereof and applicable law. 23. Insurance During Foreclosure. In case of an insured loss after foreclosure proceedings have been instituted, the proceeds of any Insurance Policy, if not applied in rebuilding or restoring the Improvements, as aforesaid, shall be used to pay the amount due in accordance with any decree of foreclosure that may be entered in any such proceedings, and the balance, if any, shall be paid as the court may direct. In the case of foreclosure of this Deed of Trust, the court, in its decree, may provide that the mortgagee's clause attached to each of the casualty Insurance Policies may be cancelled and that the decree creditor may cause a new loss clause to be attached to each of said casualty Insurance Policies making the loss thereunder payable to said decree creditor. In the event of foreclosure sale, provided such Insurance Policies are assignable, Beneficiary is hereby authorized, without the consent of Grantor, to assign any and all Insurance Policies to the purchaser at the sale, provided such Insurance Policies are assignable, or to take such other steps as Beneficiary may deem advisable to cause the interest of such purchaser to be protected by any of the Insurance Polices without credit or allowance to Grantor for prepaid premiums thereon. 24. Waiver of Right of Redemption and Other Rights. To the full extent permitted by law, Grantor hereby covenants and agrees that it will not at any time insist upon or plead, or in any manner whatsoever claim or take any advantage of, any stay, exemption or extension law or any so-called "Moratorium Law" now or at any time hereafter in force, nor claim, take or insist upon any benefit or advantage of or from any law now or hereafter in force providing for the valuation or appraisement of the Premises, or any part thereof, prior to any sale or sales thereof to be made pursuant to any provisions herein contained, or to any decree, judgment or order of any court of competent jurisdiction; or claim or exercise any rights under any statute now or hereafter in force to redeem the property, or any part thereof, or relating to the marshalling thereof, upon foreclosure sale or other enforcement hereof. To the full extent permitted by law, Grantor hereby expressly waives any and all rights to reinstatement and redemption, on its own behalf, on behalf of all persons claiming or having an interest (direct or indirect) by, through or under Grantor and on behalf of each and every person acquiring any interest in or title to the Premises subsequent to the date hereof, it being the intent hereof that any and all such rights of reinstatement and redemption (except the right to repay the Note in full by paying the entire Indebtedness Hereby Secured, including, but not limited to, the outstanding principal balance of the Note, any prepayment premium and all accrued and unpaid interest thereon prior to any foreclosure sale or conveyance in lieu thereof and thereby obtain a release of this Deed of Trust) of Grantor and such other persons, are and shall be deemed to be hereby waived to the full extent permitted by applicable law. To the full extent permitted by law (but subject to paragraph 45 of this Deed of Trust), Grantor agrees that it will not, by invoking or utilizing any applicable law or laws or otherwise, hinder, delay or impede the exercise of any right, power or remedy herein or otherwise granted or delegated to Beneficiary, but will suffer and permit the exercise of every such right, power and remedy as though no such law or laws have been or will have been made or enacted. To the full extent permitted by law, Grantor hereby agrees that no action for the enforcement of the lien or any provision hereof shall be subject to any defense which would not be good and valid in an action at law upon the Note. 25. Rights Cumulative. Each right, power and remedy herein conferred upon Beneficiary herein or in any of the other Loan Documents is cumulative and in addition to every other right, power or remedy, express or implied, now or hereafter provided by law or in equity, and each and every right, power and remedy herein set forth or otherwise so existing may be exercised from time to time as often and in such order as may be deemed expedient to Beneficiary. The exercise of one right, power or remedy shall not be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy; and no delay or omission of Beneficiary in the exercise of any right, power or remedy accruing hereunder or arising otherwise shall impair any such right, power or remedy, or be construed to be a wavier of any default or acquiescence therein. Except as otherwise specifically required herein, notice of the exercise of any right, remedy or power granted to Beneficiary by this Deed of Trust is not required to be given. If any provision of this Deed of Trust shall grant to Beneficiary any rights or remedies upon default of Grantor which are more limited than the rights that would otherwise be vested in Beneficiary under applicable law in the absence of said provisions, Beneficiary shall be vested with the rights granted in such applicable law to the full extent permitted by law. 26. Successors and Assigns. (a) Holder of the Note. This Deed of Trust and each and every covenant, agreement and other provision hereof shall be binding upon Grantor and its successors and assigns (including, without limitation, each and every record owner from time to time of the Premises or any other person having an interest therein), and shall inure to the benefit of Beneficiary and its successors and assigns. Wherever herein Beneficiary is referred to, such reference shall be deemed to include the holder from time to time of the Note, whether so expressed or not; and each such holder from time to time of the Note shall have and enjoy all of the rights, privileges, powers, options and benefits afforded hereby and hereunder, and may enforce all and every of the terms and provisions hereof, as fully and to the same extent and with the same effect as if such holder of the Note from time to time were herein by name specifically granted such rights, privileges, powers, options and benefits and was herein by name designated Beneficiary. (b) Covenants Run With Land; Successor Owners. All of the covenants of this Deed of Trust shall run with the Land and be binding on any successor owners of the Land. If the ownership of the Premises or any portion thereof becomes vested in a person or persons other than Grantor, Beneficiary may, without notice to Grantor, deal with such successor or successors in interest of Grantor with reference to this Deed of Trust and the Indebtedness Hereby Secured in the same manner as with Grantor without in any way releasing or discharging Grantor from its obligations hereunder. Grantor will give immediate written notice to Beneficiary of any conveyance, transfer or change of ownership of the Premises, but nothing in this Paragraph shall vary or negate the effect of the provisions of Paragraph 17 hereof. (c) Offsets, Counterclaims and Defenses. Any assignee of this Deed of Trust and the Note shall take the same free and clear of all offsets, counterclaims or defenses of any nature whatsoever which Grantor may have against any assignor of this Deed of Trust and the Note, and no such offset, counterclaim or defense shall be interposed or asserted by Grantor in any action or proceeding brought by any such assignee upon this Deed of Trust or the Note and any such right to interpose or assert any such offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Grantor. 27. Effect of Extensions and Amendments. If the payment of the Indebtedness Hereby Secured, or any part thereof, be extended or varied, or if any part of the security or guaranties therefor be released, all persons now or at any time hereafter liable therefor, or interested in the Premises, shall be held to assent to such extension, variation or release, and their liability, and the lien, and all provisions hereof, shall continue in full force and effect; the right of recourse against all such persons being expressly reserved by Beneficiary, notwithstanding any such extension, variation or release. Any person, firm or corporation taking a junior mortgage, or other lien upon the Premises or any part thereof or any interest therein, shall take the said lien subject to the rights of Beneficiary to amend, modify, extend or release the Note, this Deed of Trust, or any other document or instrument evidencing, securing or guarantying the Indebtedness Hereby Secured, in each and every case without obtaining the consent of the holder of such junior lien and without the lien of this Deed of Trust losing its priority over the rights of any such junior lien except as otherwise expressly provided in a separate Subordination Agreement by and between Beneficiary and the holder of such junior lien. 28. Execution of Separate Security Agreements, Financing Statements, Etc.; Estoppel Letter. Grantor will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, conveyances, notes, mortgages, security agreements, financing statements and assurances as Beneficiary shall reasonably require for the better assuring, conveying, mortgaging, assigning and confirming unto Beneficiary all property mortgaged hereby or property intended so to be, whether now owned by Grantor or hereafter acquired. Without limitation of the foregoing, Grantor will assign to Beneficiary, upon request, as further security for the Indebtedness Secured Hereby, its interests in all agreements, contracts, licenses and permits affecting the Premises, such assignments to be made by instruments reasonably satisfactory to Beneficiary, but no such assignment shall be construed as a consent by Beneficiary to any agreement, contract, license or permit or to impose upon Beneficiary any obligations with respect thereto. From time to time, Grantor will furnish within five (5) business days after Beneficiary's request a written and duly acknowledged statement of the Indebtedness Hereby Secured and whether any alleged offsets or defenses exist against the Indebtedness Hereby Secured. 29. Subrogation. If any part of the Indebtedness Hereby Secured is used directly or indirectly to pay off, discharge or satisfy, in whole or in part, any prior lien or encumbrance upon the Premises or any part thereof, then, to the extent permitted by law, Beneficiary shall be subrogated to the rights of the holder thereof in and to such other lien or encumbrance and any additional security held by such holder, and shall have the benefit of the priority of the same. 30. Option to Subordinate. At the option of Beneficiary, this Deed of Trust shall become subject and subordinate, in whole or in part (but not with respect to priority of entitlement to insurance proceeds or any award in condemnation) to any and all Leases of all or any part of the Premises upon the execution by Beneficiary and Trustee and recording thereof, at any time hereafter, in the Land Records of the Recorder of Deeds in and for the county wherein the Premises are situated, of a unilateral declaration to that effect. 31. Governing Law. The place of negotiation, execution and delivery of this Deed of Trust and the location of the Premises being the Commonwealth of Virginia, this Deed of Trust shall be construed and enforced according to the laws of the Commonwealth of Virginia, without reference to the conflicts of law principles of that commonwealth. GRANTOR AGREES TO SUBMIT TO PERSONAL JURISDICTION IN THE COMMONWEALTH OF VIRGINIA IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS DEED OF TRUST AND IN FURTHERANCE OF SUCH AGREEMENT, GRANTOR HEREBY AGREES AND CONSENTS THAT WITHOUT LIMITING OTHER METHODS OF OBTAINING JURISDICTION, PERSONAL JURISDICTION OVER THE GRANTOR IN ANY SUCH ACTION OR PROCEEDING MAY BE OBTAINED WITHIN OR WITHOUT THE JURISDICTION OF ANY COURT LOCATED IN VIRGINIA AND THAT ANY PROCESS OR NOTICE OF MOTION OR OTHER APPLICATION TO ANY SUCH COURT IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING MAY BE SERVED UPON THE GRANTOR BY REGISTERED OR CERTIFIED MAIL TO OR BY PERSONAL SERVICE AT THE LAST KNOWN ADDRESS OF GRANTOR, WHETHER SUCH ADDRESS BE WITHIN OR WITHOUT THE JURISDICTION OF ANY SUCH COURT. 32. Inspection of Premises and Records. Beneficiary and its representatives and agents shall have the right to inspect the Premises without notice and inspect and make copies of all books, records, and documents relating thereto upon five (5) days' prior written notice, at all reasonable times, and access shall be permitted for that purpose. Grantor shall keep and maintain full and correct books and records showing in detail the income and expenses of the Premises, and shall permit Beneficiary or its agents to examine such books, income tax returns and records and all supporting vouchers and data upon five (5) days' prior written notice, at any time and from time to time on request at the address hereinafter identified or at such other location as may be mutually agreed upon. 33. Financial Statements. Grantor shall, within forty-five (45) days after the close of each calendar year, furnish Beneficiary with an annual statement of all elements of income and expense from the operation of the Premises during such calendar year in form reasonably satisfactory to Beneficiary. Each annual statement shall be certified by a general partner of Grantor and will be on an income tax basis in accordance with sound accounting practices consistently applied or, at Grantor's option, in accordance with generally accepted accounting principles consistently applied (except for changes in application). Each annual statement shall include an annual rent schedule, including a schedule of each tenant having a percentage lease. Beneficiary shall have the right, upon prior notice to Grantor, to inspect and make copies of Grantor's books and records with respect to the Premises for the purpose of verifying any such schedule. In addition, within ninety (90) days after the close of each calendar year or as soon thereafter as reasonably practicable (but in no event later than one hundred twenty (120) days after the close of each calendar year), Grantor shall furnish Beneficiary with an annual financial statement of Grantor accompanied by an opinion of an independent certified public accountant stating that such annual statement presents fairly the financial condition of Grantor and has been prepared in accordance with generally accepted accounting principles consistently applied (except for changes in application with which such accountant concurs) and that the examination of such accountant in connection with such financial statement has been made in accordance with generally accepted auditing standards and included such tests of the accounting records and such other auditing procedures as were considered necessary in the circumstances. The statements shall be either addressed to Beneficiary or shall be accompanied by a written acknowledgement from the accountants preparing such statements that Beneficiary shall have whatever rights it would have if it were named as an addressee of such statements. Grantor shall provide to Beneficiary such other information as Beneficiary shall from time to time request relating to the financial condition of Grantor or the operation of the Premises. 34. Time of the Essence. Time is of the essence of the Note, this Deed of Trust, and any other Loan Documents. 35. Captions and Pronouns. The captions and headings of the various sections of this Deed of Trust are for convenience only, and are not to be construed as confining or limiting in any way the scope or intent of the provisions hereof. Whenever the context requires or permits, the singular shall include the plural, the plural shall include the singular, and the masculine, feminine and neuter shall be freely interchangeable. 36. Notices. Any notice, demand or other communication which any party hereto may desire or may be required to give to any other party hereto shall be in writing, and shall be deemed given (i) if and when personally delivered, (ii) upon receipt if sent by a nationally recognized overnight courier, or (iii) on the third (3rd) business day after being deposited in United States registered or certified mail, return-receipt requested, postage prepaid, addressed to a party at its address set forth below, or to such other address as the party to receive such notice may have designated to all other parties by notice in accordance herewith: (1) If to Beneficiary: The Travelers Insurance Company c/o Travelers Realty Investment Company 461 Fifth Avenue New York, New York 10017 Attn: Loan No. 204311 With copies to: The Travelers Insurance Company c/o Travelers Realty Investment Company One Tower Square, 2 SHS Hartford, Connecticut 06183-2020 Attn: Loan No. 204311 and Battle Fowler 75 East 55th Street New York, New York 10022 Attn: Dean A. Stiffle, Esq. (W.F.S.) Matter No. 10695.0136 (2) If to Grantor: 5665 Northside Drive, N.W., Suite 370 Atlanta, Georgia 30328 Attn: Arthur Queler With copies to: Post & Heymann 100 Jericho Quadrangle Suite 214 Jericho, New York 11753 Attn: William Post, Esq. and NPI Property Management Corporation 5665 Northside Drive, N.W., Suite 370 Atlanta, Georgia 30328 Attn: Arthur Queler Except as otherwise specifically required herein, notice of the exercise of any right, power or option granted to Beneficiary by this Deed of Trust is not required to be given. 37. Environmental Matters. For the purposes of this paragraph the following terms shall have the following meanings: (i) the term "Hazardous Material" shall mean any material or substance that, whether by its nature or use, is now or hereafter defined as a hazardous waste, hazardous substance, pollutant or contaminant under any Environmental Requirement, or which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and which is now or hereafter regulated under any Environmental Requirement, or which is or contains petroleum, gasoline, diesel fuel or another petroleum hydrocarbon product, (ii) the term "Environmental Requirements" shall collectively mean all present and future laws, statutes, ordinances, rules, regulations, orders, codes, licenses, permits, decrees, judgments, directives or the equivalent of or by any Governmental Authority and relating to or addressing the protection of the environment or human health including, without limitation, the Virginia Air Pollution Control Law, Va. Code Ann. Section 10.1-1300 et seq.; the Virginia State Water Control Law, Va. Code Ann. Section 62.1-44.2 et seq.; the Virginia Waste Management Act, Va. Code Ann. Section 10.1-1400 et. seq., and (iii) the term "Governmental Authority" shall mean the Federal government, or any state or other political subdivision thereof, or any agency, court or body of the Federal government, any state or other political subdivision thereof, exercising executive, legislative, judicial, regulatory or administrative functions. Grantor hereby represents and warrants to Beneficiary that to the best of Grantor's knowledge after diligent inquiry (i) no Hazardous Material is currently located at, on, in, under or about the Premises, (ii) no Hazardous Material is currently located at, in, on, under or about the Premises in a manner which violates any Environmental Requirement, or which requires cleanup or corrective action of any kind under any Environmental Requirement, (iii) no releasing, emitting, discharging, leaching, dumping or disposing of any Hazardous Material from the Premises onto or into any other property or from any other property onto or into the Premises has occurred or is occurring in violation of any Environmental Requirement, (iv) no notice of violation, lien, complaint, suit, order or other notice with respect to the Premises is presently outstanding under any Environmental Requirement, and (v) the Premises and the operation thereof are in full compliance with all Environmental Requirements. Grantor shall comply, and shall cause all tenants or other occupants of the Premises to comply, in all respects with all Environmental Requirements, and will not generate, store, handle, process, dispose of or otherwise use, and will not permit any tenant or other occupant of the Premises to generate, store, handle, process, dispose of or otherwise use, Hazardous Materials at, in, on, under or about the Premises in a manner that could lead or potentially lead to the imposition on Grantor, Beneficiary or the Premises of any liability or lien of any nature whatsoever under any Environmental Requirement. Grantor shall notify Beneficiary promptly in the event of any spill or other release of any Hazardous Material at, in, on, under or about the Premises which is required to be reported to a Governmental Authority under any Environmental Requirement, will promptly forward to Beneficiary copies of any notices received by Grantor relating to alleged violations of any Environmental Requirement and will promptly pay when due any fine or assessment against Beneficiary, Grantor or the Premises relating to any Environmental Requirement. If at any time it is determined that the operation or use of the Premises violates any applicable Environmental Requirement or that there are Hazardous Materials located at, in, on, under or about the Premises which, under any Environmental Requirement, require special handling in collection, storage, treatment or disposal, or any other form of cleanup or corrective action, Grantor shall, subject to Grantor's right to contest set forth below within thirty (30) days after receipt of notice thereof from any Governmental Authority or from Beneficiary, take, at its sole cost and expense, such actions as may be necessary to fully comply in all respects with all Environmental Requirements, provided, however, that if such compliance cannot reasonably be completed within such thirty (30) day period, Grantor shall commence such necessary action within such thirty (30) day period and shall thereafter diligently and expeditiously proceed to fully comply in all respects and in a timely fashion with all Environmental Requirements. Grantor may, in good faith and with due diligence, contest or cause to be contested any assertion that the operation or use of the Premises violates applicable Environmental Requirements or that there are Hazardous Materials located at, in or on, under or about the Premises provided that: i) such contest shall have the effect of preventing the sale or forfeiture of the Premises or any part thereof or interest, ii) Grantor has notified Beneficiary in writing of the intention of Grantor to contest the same or to cause the same to be contested, and iii) Grantor has deposited or caused to be deposited with Beneficiary in a non-interest bearing account, at such place as Beneficiary may from time to time in writing designate, a sum of money (or other security acceptable to Beneficiary) that, in Beneficiary's judgment, is sufficient to pay in full, or provide for payment in full of, such contested matters, any related clean-up costs and all penalties and interest that might become due thereon, and shall keep on deposit an amount or other security sufficient, in Beneficiary's judgment, to pay in full, or provide for payment in full of, such contested matters, any related clean-up costs, increasing such amount or other security to cover additional penalties and interest whenever, in Beneficiary's judgment, such increase is advisable. If Grantor fails to timely take, or to diligently and expeditiously proceed to complete in a timely fashion, any such action, Beneficiary, may, in its sole and absolute discretion, make advances or payments towards the performance or satisfaction of the same, but shall in no event be under any obligation to do so. All sums so advanced or paid by Beneficiary (including, without limitation, counsel and consultant fees and expenses, investigation and laboratory fees and expenses, and fines or other penalty payments) and all sums advanced or paid in connection with any judicial or administrative investigation or proceeding relating thereto, will immediately, upon demand, become due and payable from Grantor and shall bear interest at the Default Rate (as hereinafter defined) from the date any such sums are so advanced or paid by Beneficiary until the date any such sums are repaid by Grantor to Beneficiary. Grantor will execute and deliver, promptly upon request, such instruments as Beneficiary may deem useful or necessary to permit Beneficiary to take any such action, and such additional notes and mortgages, as Beneficiary may require to secure all sums so advanced or paid by Beneficiary. If a lien is filed against the Premises by any Governmental Authority resulting from the need to expend or the actual expending of monies arising from an action or omission, whether intentional or unintentional, of Grantor or for which Grantor is responsible, resulting in the releasing, spilling, leaking, leaching, pumping, emitting, pouring, emptying or dumping of any Hazardous Material into the waters or onto land located within or without the State where the Premises is located, then Grantor will, within thirty (30) days from the date that Grantor is first given notice that such lien has been placed against the Premises (or within such shorter period of time as may be specified by Beneficiary if such Governmental Authority has commenced steps to cause the Premises to be sold pursuant to such lien) either (a) pay the claim and remove the lien, or (b) furnish a cash deposit, bond, or such other security with respect thereto as is satisfactory in all respects to Beneficiary and is sufficient to effect a complete discharge of such lien on the Premises. Beneficiary may, at its option, at intervals of not less than one year, or more frequently if Beneficiary reasonably believes that a Hazardous Material or other environmental condition violates or threatens to violate any Environmental Requirement, cause an environmental audit of the Premises or portions thereof to be conducted to confirm Grantor's compliance with the provisions of this paragraph, and Grantor shall cooperate in all reasonable ways with Beneficiary in connection with any such audit. If such audit discloses that a violation of an Environmental Requirement exists, Grantor shall pay all costs and expenses incurred in connection with such audit, otherwise, the costs and expenses of such audit shall, notwithstanding anything to the contrary set forth in this paragraph, be paid by Beneficiary. If this Deed of Trust is foreclosed, or if the Premises is sold pursuant to the provisions of this Deed of Trust, or if Grantor tenders a deed or assignment in lieu of foreclosure or sale, Grantor shall deliver the Premises to the purchaser at foreclosure or sale or to Beneficiary, its nominee, or wholly owned subsidiary, as the case may be, in a condition that complies in all respects with all Environmental Requirements. Grantor will defend, indemnify, and hold harmless Beneficiary, its employees, agents, officers, and directors, from and against any and all claims, demands, penalties, causes of action, fines, liabilities, settlements, damages, costs, or expenses of whatever kind or nature, known or unknown, foreseen or unforeseen, contingent or otherwise (including, without limitation, counsel and consultant fees and expenses, investigation and laboratory fees and expenses, court costs, and litigation expenses) arising out of, or in any way related to, (i) any breach by Grantor of any of the provisions of this paragraph, (ii) the presence, disposal, spillage, discharge, emission, leakage, release, or threatened release of any Hazardous Material which is at, in, on, under, about, from or affecting the Premises, including, without limitation, any damage or injury resulting from any such Hazardous Material to or affecting the Premises or the soil, water, air, vegetation, buildings, personal property, persons or animals located on the Premises or on any other property or otherwise, (iii) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to any such Hazardous Material, (iv) any lawsuit brought or threatened, settlement reached, or order or directive of or by any Governmental Authority relating to such Hazardous Material, or (v) any violation of any Environmental Requirement. The obligations and liabilities of Grantor under this paragraph shall survive and continue in full force and effect and shall not be terminated, discharged or released, in whole or in part, irrespective of whether the Indebtedness Hereby Secured has been paid in full and irrespective of any foreclosure of this Deed of Trust, sale of the Premises pursuant to the provisions of this Deed of Trust or acceptance by Beneficiary, its nominee or wholly owned subsidiary of a deed or assignment in lieu of foreclosure or sale and irrespective of any other fact or circumstance of any nature whatsoever. 38. Beneficiary Not A Joint Venturer. Any provision hereof to the contrary notwithstanding, Beneficiary, by virtue of its acceptance of this Deed of Trust and the making of the loan secured hereby or any action taken pursuant hereto or contemplated hereby or by virtue of an affiliate of Beneficiary having an ownership interest in Grantor, shall not be deemed to be by such action or ownership a partner or joint venturer with Grantor or any guarantor or any other parties. Grantor shall indemnify Beneficiary against, shall hold Beneficiary harmless from, and shall reimburse Beneficiary for, any and all claims, demands, judgments, penalties, fines, liabilities, costs, damages and expenses, including court costs and attorneys' fees incurred by Beneficiary (prior to trial, at trial and on appeal) in any action against or involving Beneficiary resulting from such a construction of the parties and their relationship. Any inspection of the Premises, any review of any plans, contracts, subcontracts (including, without limitation, environmental reviews, audits, assessments and/or reports relating to the Premises), or any analysis of the Premises made by Beneficiary or any of its agents, architects or consultants is intended solely for the benefit of Beneficiary and shall not be deemed to create or form the basis of any warranty, representation, covenant, implied promise or liability to Grantor or any of its employees or agents, any guest or invitee upon the Premises, or any other person. 39. Expenses. Grantor agrees to pay any and all recording and filing fees, mortgage recording taxes, transfer taxes, title insurance premiums, escrow and other title company charges, reasonable attorneys' fees and disbursements (including the fees and expenses of outside counsel for Beneficiary and excluding fees and expenses of in-house counsel for Beneficiary), appraisal and survey fees, environmental engineer and consultant fees, consulting architect fees, if any, financial consultant fees, fees of other engineers and consultants, insurance costs and all other expenses in connection with the making of the loan evidenced by the Note. Beneficiary shall have the right, at its option, to pay any such expenses and upon such payment such expenses shall be deemed to be a part of the Indebtedness Hereby Secured and shall be payable on demand with interest at the Default Rate. 40. Consent Required of Beneficiary. Any consent by Beneficiary in any single instance shall not be deemed or construed to be Beneficiary's consent in any like matter arising at a subsequent date and the failure of Beneficiary to promptly exercise any right, power, remedy, consent or approval provided herein or at law or in equity shall not constitute or be construed as a waiver of the same nor shall Beneficiary be estopped from exercising such right, power, remedy, consent or approval at a later date. Any consent or approval requested of and granted by Beneficiary pursuant hereto shall be narrowly construed to be applicable only to Grantor and the matter identified in such consent or approval and no third party shall claim any benefit by reason thereof, and any such consent or approval shall not be deemed to constitute Beneficiary a venturer or partner with Grantor nor shall privity of contract be presumed to have been established with any such third party. If Beneficiary deems it to be in its best interest to retain the assistance of persons, firms or corporations (including, but not limited to, attorneys, appraisers, engineers, consultants and surveyors) with respect to a request for consent or approval, Grantor shall reimburse Beneficiary for all costs incurred in connection with the employment of such persons, firms or corporations. 41. Sole Discretion of Beneficiary. Except as may otherwise be expressly provided to the contrary, wherever pursuant to the Note, this Deed of Trust, or any other document or instrument now or hereafter executed and delivered in connection therewith or otherwise with respect to the loan secured hereby, Beneficiary exercises any right given to it to consent or not consent, or to approve or disapprove, or any arrangement or term is to be satisfactory to Beneficiary, the decision of Beneficiary to consent or not consent, or to approve or disapprove or to decide that arrangements or terms are satisfactory or not satisfactory, shall be in the sole and absolute discretion of Beneficiary and shall be final and conclusive. 42. No Oral Change. This Deed of Trust may only be modified, amended or changed by an agreement in writing signed by Grantor and Beneficiary, and may only be released, discharged or satisfied of record by an agreement in writing signed by Beneficiary. No waiver of any term, covenant or provision of this Deed of Trust shall be effective unless given in writing by Beneficiary and if so given by Beneficiary shall only be effective in the specific instance in which given. Grantor acknowledges that the Note, this Deed of Trust and the other documents and instruments executed and delivered in connection therewith or otherwise in connection with the loan secured hereby set forth the entire agreement and understanding of Grantor and Beneficiary with respect to the loan secured hereby and that no oral or other agreements, understanding, representation or warranties exist with respect to the loan secured hereby other than those set forth in the Note, this Deed of Trust and such other executed and delivered documents and instruments. 43. Absolute and Unconditional Obligation. Grantor acknowledges that Grantor's obligation to pay the Indebtedness Hereby Secured in accordance with the provision of the Note and this Deed of Trust is and shall at all times continue to be absolute and unconditional in all respects, and shall at all times be valid and enforceable irrespective of any other agreements or circumstances of any nature whatsoever which might otherwise constitute a defense to the Note or this Deed of Trust or the obligation of Grantor thereunder to pay the Indebtedness Hereby Secured or the obligations of any other person relating to the Note or this Deed of Trust or the obligations of Grantor under the Note or this Deed of Trust or otherwise with respect to the loan secured hereby, and Grantor absolutely, unconditionally and irrevocably waives any and all right to assert any defense, setoff, counterclaim or crossclaim of any nature whatsoever with respect to the obligation of Grantor to pay the Indebtedness Hereby Secured in accordance with the provisions of the Note and this Deed of Trust or the obligations of any other person relating to the Note or this Deed of Trust or obligations of Grantor under the Note or this Deed of Trust or otherwise with respect to the loan secured hereby in any action or proceeding brought by Beneficiary to collect the Indebtedness Hereby Secured, or any portion thereof, or to enforce, foreclose and realize upon the lien and security interest created by this Deed of Trust or any other document or instrument securing repayment of the Indebtedness Hereby Secured, in whole or in part. Nothing contained in this Paragraph 43 shall preclude Grantor from asserting any legal claim of Grantor based on the Note, this Deed of Trust or the other Loan Documents in a separate subsequent legal proceeding. 44. ERISA. Grantor covenants and agrees that during the term of the loan secured hereby, unless Beneficiary shall have previously consented in writing, (a) it will take no action which would cause it to become an "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended from time to time ("ERISA"), or a "governmental plan" as defined in Section 3(32) of ERISA, or its assets to become "plan assets" as defined in 29 C.F.R. Section 2510.3-101, or "assets of a governmental plan" subject to regulation under state statutes, and (b) it will not sell, assign or transfer the Premises, or any portion thereof or interest therein, to any transferee which does not execute and deliver to Beneficiary its written assumption of the obligations of this covenant. Grantor further covenants and agrees to protect, defend, indemnify and hold Beneficiary harmless from and against all loss, cost, damage and expense (including without limitation, all attorneys' fees and excise taxes, costs of correcting any prohibited transaction or obtaining an appropriate exemption) which Beneficiary may incur as a result of Grantor's breach of this covenant. This indemnity shall survive the extinguishment of the lien of the Deed of Trust by foreclosure or action in lieu thereof, and this covenant shall survive such extinguishment; furthermore, the foregoing indemnity shall supersede any limitations on Grantor's liability under the Note, the Deed of Trust, or any of the other Loan Documents. 45. Limited Personal Liability. Without in any manner releasing, impairing or otherwise affecting the Note, this Deed of Trust or any other Loan Documents or the validity thereof or hereof or the lien thereof, there is no personal liability of Grantor or any corporation, partnership or individual having a direct or indirect ownership interest in Grantor, or any of their respective successors or assigns, hereunder or under any of the other Loan Documents, and no monetary or deficiency judgment shall be sought or enforced against Grantor or any corporation, partnership or individual having a direct or indirect ownership interest in Grantor, or any of their respective successors or assigns; provided, however, that a judgment may be sought against Grantor or any corporation, partnership or individual having a direct or indirect ownership interest in Grantor or their respective successors or assigns to the extent necessary to enforce the rights of Beneficiary in, to, or against the Premises. Notwithstanding any of the foregoing, nothing contained in this Paragraph shall be deemed to prejudice the rights of Beneficiary to recover from Grantor, Fox Partners IV, Fox Capital Management Corporation and NPI Equity Investments II, Inc. and their successors and assigns (the "Responsible Entities") (1) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Beneficiary as a result of any material fraud or any material misrepresentation by any of the Responsible Entities or Manager, (2) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Beneficiary as a result of breach of Grantor's warranties, representations and covenants contained in Paragraph 5, Paragraph 9, Paragraph 17, Paragraph 37, Paragraph 44 or Paragraph 48 of this Deed of Trust, (3) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Beneficiary as a result of intentional or negligent waste (whether financial or physical) of the Premises including, without limitation, failure by Grantor to pay on or prior to the due date thereof all real estate taxes and assessments levied against the Premises, subject to Grantor's right to contest the same as set forth in paragraph 5(b) of this Deed of Trust, it being agreed and understood that Grantor's personal liability to pay real estate taxes and assessments levied against the Premises shall not exceed the Rents generated from the Premises over such period of time to which such taxes and assessments pertain; (4) all Rents generated from the Premises received after any default under the Loan Documents or within one year before any default under the Loan Documents or after acceleration of the indebtedness evidenced and secured by the Loan Documents and not applied to payment of such indebtedness or to payment of the normal and customary operating expenses of the Premises; (5) all Rents from the Premises collected more than one (1) month in advance and all security deposits that are not held in a segregated escrow account and that are not delivered to Beneficiary upon demand after the occurrence of a default under any of the Loan Documents, (6) all insurance proceeds and condemnation awards in respect of the Premises which are not applied in accordance with the provisions of the Loan Documents or all loss, damage, cost and expense (including reasonable attorneys fees and disbursements) incurred by Beneficiary as a result of the failure by Grantor to maintain the insurance coverage required in Paragraph 7 of this Deed of Trust, (7) all or any portion of the upfront fees, commitment fees and other costs and expenses incurred by Beneficiary in connection with the closing of this transaction and required to be paid by Grantor and not promptly reimbursed by Grantor, or (8) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred of Beneficiary under the Hazardous Material Guaranty and Indemnification Agreement dated the date hereof from the Responsible Entities and the Manager to Beneficiary. The Responsible Entities agree to pay to Beneficiary all amounts described in clauses (1) through (8) above on demand by Beneficiary and agrees that they will be personally liable for payment of all such sums. Furthermore, nothing contained in the paragraph shall be deemed to prejudice the right of Beneficiary to recover from the Manager all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Beneficiary under that certain Manager's Liability Letter dated the date hereof from the Manager to Beneficiary. 46. Power of Sale. (a) Subject to the provisions or other requirements of law, the following provisions shall apply to any sale or sales of the Premises under or by virtue of Section 19 or this Section 46, whether made under the power of sale herein granted or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale: (i) Upon the occurrence of a Default, Grantor (x) declares its assent to the passing of a decree for the sale of any or all of the Premises or any estate or interest therein by any equity court which may have jurisdiction over the sale of the Premises and (y) authorizes and empowers Trustee to take possession of any or all of the Premises and to sell any or all of the same or any estate or interest therein in accordance with the provisions of Va. Code Ann. Sections 55-59 to 55-59.4 and/or of any other applicable general or local law, rule or regulation of the United States of America or the Commonwealth of Virginia relating to or affecting deeds of trust or security agreements, including any amendments thereof or additions thereto. Neither the foregoing assent to decree nor the foregoing power of sale shall be exhausted in the event that such proceeding or sale is dismissed or cancelled before the Indebtedness Hereby Secured is paid in full. (ii) Trustee may conduct any number of sales from time to time. The power of sale set forth in Paragraph 19(a)(iv) hereof shall not be exhausted by any one or more such sales as to any part of the Premises which shall not have been sold, nor by any sale which is not completed or is defective in Beneficiary's opinion, until the Indebtedness Hereby Secured shall have been paid in full. (iii) Any sale may be postponed or adjourned by public announcement at the time and place appointed for such sale or for such postponed or adjourned sale without further notice. (iv) After each sale, Trustee, or an officer of any court empowered to do so, shall execute and deliver to the purchaser or purchasers at such sale a good and sufficient instrument or instruments granting, conveying, assigning and transferring all right, title and interest of Grantor in and to the property and rights sold and shall receive the proceeds of said sale or sales and apply the same as herein provided. Trustee and/or Beneficiary is hereby appointed the true and lawful attorney-in-fact of Grantor, which appointment is irrevocable and shall be deemed to be coupled with an interest, in Grantor's name and stead, to make all necessary conveyances, assignments, transfers and deliveries of the property and rights so sold, and for that purpose Trustee and/or Beneficiary may execute all necessary instruments of conveyance, assignment, transfer and delivery, and may substitute one or more persons with like power, Grantor hereby ratifying and confirming all that said attorney or any such substitute or substitutes shall lawfully do by virtue thereof. Nevertheless, Grantor, if requested by Trustee or Beneficiary, shall ratify and confirm any such sale or sales by executing and delivering to Beneficiary or such purchaser or purchasers all such instruments as may be advisable, in Beneficiary's judgment, for the purposes as may be designated in such request. (v) Any and all statements of fact or other recitals made in any of the instruments referred to in subsection (iii) of this Paragraph given by Beneficiary or Trustee as to nonpayment of the Indebtedness Hereby Secured, or as to the occurrence of any Default, or as to Beneficiary having declared all or any of the Indebtedness Hereby Secured to be due and payable, or as to the request to sell, or as to notice of time, place and terms of sale and of the property or rights to be sold having been duly given, or as to the refusal, failure or inability to act of Beneficiary, or as to the appointment of any substitute or successor Beneficiary or Trustee, or as to any other act or thing having been duly done by Grantor, Beneficiary, Trustee, or by such substitute or successor Beneficiary or Trustee, shall be taken as conclusive and binding against all persons as to evidence of the truth of the facts so stated and recited. Subject to the provisions and restrictions of any applicable law, Beneficiary and/or Trustee may appoint or delegate any one or more persons as agent to perform any act or acts necessary or incident to any sale so held, including the posting of notices and the conduct of sale, but in the name and on behalf of Beneficiary or Trustee, as the case may be. (vi) The receipt of Trustee for the purchase money paid at any such sale, or the receipt of any other person authorized to receive the same, shall be sufficient discharge therefor to any purchaser of any property or rights sold as aforesaid, and no such purchaser, or its representatives, grantees or assigns, after paying such purchase price and receiving such receipt, shall be bound to see to the application of such purchase price or any part thereof upon or for any trust or purpose of this Deed of Trust or, in any manner whatsoever, be answerable for any loss, misapplication or nonapplication of any such purchase money, or part thereof, or be bound to inquire as to the authorization, necessity, expediency or regularity of any such sale. (vii) Any such sale or sales shall operate to divest all of the estate, right, title, interest, claim and demand whatsoever, whether at law or in equity, of Grantor in and to the properties and rights so sold, and shall be a perpetual bar both at law and in equity against Grantor and any and all persons claiming or who may claim the same, or any part thereof or any interest therein, by, through or under Grantor to the fullest extent permitted by applicable law. (viii) Upon any such sale or sales, Beneficiary may bid for and acquire the Premises and, in lieu of paying cash therefor, may make settlement for the purchase price by crediting against the Indebtedness Hereby Secured the amount of the bid made therefor, after deducting therefrom the expenses of the sale, the cost of any enforcement proceeding hereunder and any other sums which Beneficiary is authorized to deduct under the terms hereof and under applicable law, to the extent necessary to satisfy such bid. (ix) In the event that Grantor, or any person claiming by, through or under Grantor, shall refuse or fail to surrender possession of the Premises after any sale thereof, then Grantor, or such person, shall be deemed a tenant at sufferance of the purchaser at such sale, subject to eviction by means of forcible entry and detainer proceedings or other like proceedings, or subject to any other right or remedy available hereunder or under applicable law. (x) Subject to the provisions and restrictions of any applicable law, upon any such sale, it shall not be necessary for Beneficiary, Trustee or any public officer acting under execution or order of the court to have present or constructive possession of any of the Premises. (xi) In the event of any sale referred to in this Paragraph, the entire Indebtedness Hereby Secured, if not previously due and payable, immediately thereupon shall, notwithstanding anything to the contrary herein or in the other Loan Documents, become due and payable. (xii) In the event a foreclosure hereunder shall be commenced by Trustee or Beneficiary, Trustee or Beneficiary may at any time before the sale of the Premises abandon the sale, and may institute suit for the collection of the Indebtedness Hereby Secured and/or for the foreclosure of this Deed of Trust, or in the event that Trustee or Beneficiary should institute a suit for collection of the Indebtedness Hereby Secured and/or for the foreclosure of this Deed of Trust, Trustee or Beneficiary may at any time before the entry of final judgment in said suit dismiss the same and sell the Premises in accordance with the provisions of this Deed of Trust. (b) Application of Proceeds. The purchase money, proceeds or avails of any sale referred to in Subsection (a) of this Paragraph, together with any other sums which may be held by Trustee or Beneficiary hereunder, whether under the provisions of Paragraph 19, this Paragraph 46 or otherwise, shall, except as herein expressly provided to the contrary, be applied as follows: First: To the payment of the costs and expenses of any such sale, including compensation to Trustee and/or Beneficiary, its agents and counsel, and of any judicial proceeding wherein the same may be made, and of all expenses, liabilities and advances made or incurred by Trustee and/or Beneficiary hereunder, together with interest thereon as provided herein, and all taxes, assessments and other charges, except any taxes, assessments or other charges subject to which the Premises shall have been sold. Second: To the payment of all taxes, levies, assessments and other charges, with costs and interest, if they have priority over the lien of this Deed of Trust, including the then due pro rata portion thereof for the calendar year. Third: To the payment of all expenditures of Beneficiary pursuant to the provisions of Paragraph 19 hereof not otherwise reimbursed, which expenditures under the terms hereof constitute Indebtedness Hereby Secured additional to the principal and interest evidenced by the Note in such order as Beneficiary shall elect with interest thereon as herein provided. Fourth: To the payment of all principal and interest remaining unpaid on the Note in such order as Beneficiary shall elect. Fifth: To the extent permitted by applicable law, to be set aside by Beneficiary as adequate security for the payment of sums which would have been paid by application under clauses First through Fourth above to Beneficiary, arising out of an obligation or liability with respect to which Grantor has agreed to indemnify Beneficiary, but which sums are not yet due and payable or liquidated. Sixth: To the payment of any liens of record inferior to this Deed of Trust under which sale is made, with lawful interest. Seventh: To the payment of the surplus, if any, to Grantor or whomsoever may be lawfully entitled to receive the same. 47. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY LAW, GRANTOR WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT TO FORECLOSE THIS DEED OF TRUST. 48. Anti-Forfeiture. Grantor represents and warrants to Beneficiary that there has not been committed by Grantor or any other person in occupancy of or involved with the operation or use of the Premises any act or omission affording the federal government or any state or local government the right of forfeiture as against the Premises or any part thereof or any monies paid in performance of Grantor's obligations under the Note or under any of the other Loan Documents. Grantor hereby covenants and agrees not to commit, permit or suffer to exist any act or omission affording such right of forfeiture. In furtherance thereof, Grantor hereby indemnifies Beneficiary and agrees to defend and hold Beneficiary harmless from and against any loss, damage or injury by reason of the breach of the covenants and agreements or the warranties and representations set forth in this Paragraph 48. Without limiting the generality of the foregoing, the filing of formal charges or the commencement of proceedings against Grantor or all or any part of the Premises under any federal or state law for which forfeiture of the Premises or any part thereof or of any monies paid in performance of Grantor's obligations under the Loan Documents is a potential result, shall, at the election of Beneficiary, constitute a Default hereunder without notice or opportunity to cure. 49. Usury Laws. This Deed of Trust and the Note are subject to the express condition that at no time shall Grantor be obligated or required to pay interest on the principal balance due under the Note at a rate which could subject the holder of the Note to either civil or criminal liability as a result of being in excess of the maximum interest rate which Grantor is permitted by law to contract or agree to pay. If by the terms of this Deed of Trust or the Note, Beneficiary ever receives, collects or applies as interest any sum in excess of the maximum legal rate, such excess amount shall be applied to the reduction of the unpaid principal balance of the Note in the inverse order of maturity, and if the Note is paid in full, any remaining excess shall be refunded to Grantor. In determining whether or not the interest paid or payable, under any specific contingency, exceeds the highest lawful rate, Beneficiary and Grantor shall, to the maximum extent permitted under the applicable law: characterize any nonprincipal payment as an expense, fee or premium rather than as interest; exclude voluntary prepayments and the effects thereof; and "spread" the total amount of interest throughout the entire term of the Note. Grantor, and Beneficiary by its acceptance of this Deed of Trust, recognize and agree that Grantor's obligation to pay the principal and accrued interest on the Note is absolute and unconditional. 50. Related Party Contracts. All agreements, contracts or other arrangements, whether written or oral, between Grantor and any Related Party, as hereinafter defined, shall be fully disclosed to Beneficiary, shall be required to be consented to by Beneficiary to be effective and shall provide for payments under such agreements, contracts and other arrangements that are market rate in the area where the Premises is located. The term "Related Party" shall mean any person or entity in which any of Michael Ashner, Martin Lifton, Steven Lifton or Arthur N. Queler or any relative (i.e., spouse, grandparent, parent, child, grandchild, sibling, aunt, uncle or cousin) has either an ownership or management interest either directly or indirectly. 51. Receipt. Grantor hereby acknowledges receipt of a true copy of this Deed of Trust without charge. 52. Concerning the Trustee. Trustee shall be under no duty to take any action hereunder except as expressly required hereunder or by law, or to perform any act which would involve Trustee in any expense or liability or to institute or defend any suit in respect hereof, unless properly indemnified to Trustee's reasonable satisfaction. Trustee, by acceptance of this Deed of Trust, covenants to perform and fulfill the trusts herein created, being liable, however, only for willful negligence or misconduct, and hereby waives any statutory fee and agrees to accept reasonable compensation, in lieu thereof, for any services rendered by Trustee in accordance with the terms hereof. Trustee may resign at any time upon giving thirty (30) days' notice to Grantor and to Beneficiary. Beneficiary may remove Trustee at any time or from time to time and select a successor trustee. In the event of the death, removal, resignation, refusal to act, or inability to act of Trustee, or in its sole discretion for any reason whatsoever or for no reason, Beneficiary may, without notice and without specifying any reason therefor and without applying to any court, select and appoint a successor trustee, by an instrument recorded wherever this Deed of Trust is recorded and all powers, rights, duties and authority of Trustee, as aforesaid, shall thereupon become vested in such successor. Such substitute trustee shall not be required to give bond for the faithful performance of the duties of Trustee hereunder unless required by Beneficiary. 53. Trustee's Fees. Grantor shall pay all costs, fees and expenses incurred by Trustee and Trustee's agents and counsel in connection with the performance by Trustee of Trustee's duties hereunder and all such costs, fees and expenses shall be secured by this Deed of Trust. 54. Final Agreement. THIS DEED OF TRUST REPRESENTS THE FINAL AGREEMENT BETWEEN GRANTOR AND BENEFICIARY AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF GRANTOR AND BENEFICIARY. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN GRANTOR AND BENEFICIARY. 55. Recordation Tax Exemption. This Deed of Trust is exempt from recordation tax under Va. Code Ann. Section 58.1-809. 56. Release. Grantor hereby releases and forever discharges Beneficiary, its agents, servants, employees, directors, officers, attorneys, affiliates, subsidiaries, successors and assigns and all persons, firms, corporations and organizations acting in its behalf of and from all damage, loss, claims, demands, liabilities, obligations, actions and causes of action whatsoever which Grantor may now have or claim to have against Beneficiary, as of the date hereof, whether presently known or unknown, and of every nature and extent whatsoever on account of or in any way touching, concerning, arising out of or founded upon the Loan Documents, including, without limitation, all such loss or damage of any kind heretofore sustained, or that may arise as a consequence of the dealings between the parties up to and including the date of execution hereof. This agreement and covenant on the part of Grantor is contractual, and not a mere recital. IN WITNESS WHEREOF, Grantor has executed and delivered this Deed of Trust the day and year first above written. Grantor: CENTURY PROPERTIES GROWTH FUND XXII, a California limited partnership By: Fox Partners IV, a California general partnership its General Partner By: Fox Capital Management Corporation, a California corporation, its Managing General Partner By: ________________________ Name: _________________ Title: _________________ [CORPORATE SEAL] STATE OF NEW YORK ) : s.s. COUNTY OF NEW YORK ) This instrument was acknowledged before me the day of September, 1994 by , the of Fox Capital Management Corporation, a California corporation on behalf of the corporation as managing general partner of Fox Partners IV, a California general partnership which is the general partner of Century Properties Growth Fund XXII, a California limited partnership. [NOTARIAL SEAL] ________________________________ Notary Public in and for the State of ____________________ Notary Public's printed name: ________________________________ My Commission Expires: _____________________________ Exhibit A [Copper Mill Legal Description] EXHIBIT "B" Description of Collateral All of the following property now or at any time hereafter owned by Debtor (as defined in Paragraph 16(a) of this Deed of Trust and also referred in this Exhibit B as "Debtor") or in which Debtor may now or at anytime hereafter have any interest or rights, together with all of Debtor's right, title and interest therein (excepting any items of personal property which (i) are owned by tenants who are in possession pursuant to leases or license agreements approved by Secured Party, and (ii) may be removed by such tenants at the expiration or termination of such lease or license agreements); 1. All fixtures and personal property now or hereafter owned by Debtor and attached to or contained in and used or useful in connection with the Premises or the Improvements, including without limitation any and all air conditioners, antennae, appliances, apparatus, awnings, basins, bathtubs, bidets, boilers, bookcases, cabinets, carpets, coolers, curtains, dehumidifiers, disposals, doors, drapes, dryers, ducts, dynamos, elevators, engines, equipment, escalators, fans, fittings, floor coverings, furnaces, furnishings, furniture, hardware, heaters, humidifiers, incinerators, kitchen equipment and utensils, lighting, machinery, motors, ovens, pipes, plumbing, pumps, radiators, ranges, recreational facilities, refrigerators, screens, security systems, shades, shelving, sinks, sprinklers, stokers, stoves, toilets, ventilators, wall coverings, washers, windows, window coverings, wiring, all renewals or replacements thereof or articles in substitution therefor; 2. Articles or parts now or hereafter affixed to the property described in Paragraph 1 above or used in connection with such property, any and all replacements for such property, and all other property of a similar type or used for similar purposes now or hereafter in or on the Premises or any of the Improvements; 3. Debtor's right, title, and interest in all personal property used or to be used in connection with the operation of the Premises or the conduct of business thereon, including without limitation business equipment and inventories located on the Premises or elsewhere, together with files, books of account, and other records, wherever located; 4. Debtor's right, title, and interest in and to any and all contracts now or hereafter relating to the Premises executed by any architects, engineers, consultants, or contractors, including all amendments, supplements, and revisions thereof, together with all Debtor's rights and remedies thereunder and the benefit of all covenants and warranties thereon, and also together with all drawings, designs, estimates, layouts, surveys' plats, plans, specifications and test results prepared by any architect, engineer, or contractor, including any amendments, supplements, and revisions thereof and the right to use and enjoy the same, as well as all building permits, environmental permits, approvals and licenses, other governmental or administrative permits, licenses, names, authorizations, agreements and rights relating to construction or operation of the Premises and/or the Improvements; 5. Debtor's right, title, and interest in and to any and all contracts now or hereafter relating to the operation of the Premises or the conduct of business thereon, including without limitation all management, leasing and other service contracts, the books and records, and the right to appropriate and use any and all trade names used or to be used in connection with such business; 6. Debtor's entire right, title, and interest in the rents, rent equivalents, issues, income, revenue, deposits (including without limitation, security deposits and utility deposits), and profits in connection with all leases, contracts, lettings, licenses, and other agreements made or agreed to by any person or entity (including without limitation, Debtor and Secured Party under the powers granted by this Deed of Trust and the other Loan Documents) with any person or entity pertaining to all or any part of the Premises, whether such agreements have been heretofore or are hereafter made; 7. Debtor's right, title, and interest in all sale contracts, earnest money deposits, proceeds of sale contracts, accounts receivable, and general intangibles relating to the Premises, excluding, however, any such right arising from a transfer permitted by the terms of Paragraph 17 of this Deed of Trust; 8. All rights in and proceeds from all fire and hazard, loss-of-income, and other non-liability insurance policies now or hereafter covering the Improvements, the use or occupancy thereof, or the business conducted thereon; 9. All awards or payments, including interest thereon, that may be made with respect to the Premises and/or the Improvements, whether from the right of the exercise of eminent domain (including any transfer made in lieu of the exercise of said right) or for any other injury to or decrease in value of the Premises and/or the Improvements; and 10. All proceeds from the sale, transfer, or pledge of any or all of the foregoing property. EX-99.3 5 AMENDED AND RESTATED NOTE EXHIBIT 99.3 COOPER'S POINTE AMENDED AND RESTATED NOTE $5,388,360.35 As of September 1, 1994 WHEREAS, Century Properties Growth Fund XXII, a California limited partnership ("Maker") entered into and delivered to The Travelers Insurance Company ("Payee"), a Mortgage Note dated November 27, 1985 from Maker to Payee in the original principal sum of $5,600,000, which was modified by that certain Modification of First Mortgage Real Estate Note, Mortgage and Security Agreement, and Assignment of Leases, Rents and Profits ("Modification Agreement") dated as of June 1, 1993 between Maker and Payee, and recorded in Book 229 at Page 272 in the RMC Office of Charleston County, South Carolina collectively (the "Mortgage Note"); WHEREAS, Maker desires to modify, amend and restate in its entirety the terms and provisions of the Mortgage Note as hereinafter set forth in this Amended and Restated Note (this "Note"); NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Maker hereby represents, warrants and covenants as follows: A. As of the date hereof, the aggregate outstanding principal balance of this Note is $5,388,360.35 and accrued but unpaid interest thereon is $0. B. Maker (and the undersigned representatives of Maker) has the full power, authority and legal right to execute and deliver this Note and to observe and perform the terms and provisions of this Note. C. The indebtedness evidenced by this Note constitutes a valid, binding and enforceable obligation of Maker subject only to bankruptcy and equitable remedies. D. There exist no offsets, counterclaims or defenses to Maker's obligation to pay the indebtedness evidenced by this Note. E. This Note is given in replacement and substitution of, and evidences the same indebtedness as the Mortgage Note and does not evidence any new or additional indebtedness of Maker to Payee and is not intended as a novation of the Mortgage Note. F. The terms, covenants and provisions of this Note as amended and restated in their entirety read as follows: FOR VALUE RECEIVED, Maker promises to pay to Payee or order, at Payee's office, or at such other place as may be designated, from time to time, in writing by Payee, the principal sum of Five Million Three Hundred Eighty-Eight Thousand Three Hundred and Sixty and 35/100 Dollars ($5,388,360.35), with interest thereon from the date of this Note to and including the date this Note is paid in full calculated in the manner hereinafter set forth. I. DEFINITIONS The following terms as used in this Note shall have the following meanings: 1.1 "Debt" shall mean collectively the entire unpaid Outstanding Principal Balance, together with all interest accrued and outstanding thereon and all other sums owing under this Note and the Mortgage. 1.2 "Default" shall have the meaning set forth in Section 3.2 hereof. 1.3 "Default Rate" shall mean five (5) percent (5%) per annum in excess of the Interest Rate but not in excess of the maximum interest rate permitted by law. 1.4 "Dollars" shall mean dollars in lawful currency of The United States of America. 1.5 "Escrow Agent" shall mean Old Republic National Title Insurance Company. 1.6 "Interest Rate" shall mean eight and one-quarter (8.25%) percent per annum. 1.7 "Loan" shall mean the loan evidenced by this Note and secured by the other Loan Documents. 1.8 "Loan Documents" shall mean this Note, the Mortgage, the Amended and Restated Assignment of Leases, Rents and Profits dated the date hereof from Maker to Payee, the Subordinate Deed of Trust, the Subordinate Assignment of Leases, Rents and Profits dated the date hereof from Maker to Payee, the Cash Management Letter dated the date hereof from Maker and Manager to Payee, the Cooper's Pointe Reserve Agreement dated the date hereof between Maker and Payee, the Cooper's Pointe Manager's Liability Letter from Manager to Payee, the Cooper's Pointe Guaranty of Payment dated the date hereof from Maker, Fox Partners IV, Fox Capital Management Corporation, NPI Equity Investments II, Inc. and Manager to Payee, the Cooper's Pointe Hazardous Material Guaranty and Indemnification Agreement dated the date hereof from Maker, Fox Partners IV, Fox Capital Management Corporation, NPI Equity Investments II, Inc. and Manager to Payee, the Release Letter from Payee to Maker and any other documents or instruments now or hereafter executed in connection therewith. 1.9 "Loan Year" shall mean the period of twelve (12) consecutive calendar months commencing on September 1, 1994 and ending on August 31, 1995 and each period of twelve (12) consecutive calendar months thereafter to and including the Maturity Date. 1.10 "Manager" shall mean NPI-AP Management, L.P., a Delaware limited partnership. 1.11 "Maturity Date" shall mean August 31, 1999, or such earlier date the entire Outstanding Principal Balance and accrued and unpaid interest thereon, and any other sums which are due and payable pursuant to the terms and provisions of this Note, are due and payable by reason of the acceleration of the maturity of this Note. 1.12 "Mortgage" shall mean (i) a certain Amended and Restated Mortgage (the "First Mortgage") dated the date hereof by Maker to Payee, intended to be recorded in the RMC office for Charleston County, South Carolina and constituting a first mortgage lien on a portion of the Premises described in Exhibit A attached hereto, located at 2225 Greenridge Road, North Charleston, South Carolina and known as Cooper's Pointe Apartments, and (ii) a certain Subordinate Deed of Trust (the "Subordinate Deed of Trust") dated the date hereof by Maker to Douglas N. Beck and Virginia A. Davis, as trustees for Payee, intended to be recorded in the clerk's office of the Circuit Court, Henrico County, Virginia and constituting a second mortgage lien on the Property described in Exhibit A attached thereto, known as Copper Mill Apartments and located at 3400 Copper Mill Trace, Henrico County, Virginia. 1.13 "Original Principal Amount" shall mean Five Million Three Hundred Eighty-Eight Thousand Three Hundred and Sixty and 35/100 Dollars ($5,388,360.35). 1.14 "Outstanding Principal Balance" shall mean the aggregate of all sums advanced by Payee to or for the benefit of Maker hereunder and not repaid. 1.15 "Payment Date" shall mean the first day of October, 1994 and the first day of each month thereafter during the Term hereof. 1.16 "Premises" shall mean those certain parcels of real estate and the improvements thereon (i) located on the real property described in Exhibit A to the Mortgage, known as Cooper's Pointe Apartments and located at 2225 Greenridge Road in North Charleston, South Carolina, and (ii) located on the real property described in Exhibit A to the Subordinate Deed of Trust, and known as Copper Mill Apartments, and located at 3400 Copper Mill Trace, Henrico County, Virginia. 1.17 "Rents" shall have the meaning set forth in the First Mortgage. 1.18 "Responsible Entities" shall mean (i) Maker, (ii) NPI Equity Investments II, Inc., a Florida corporation, (iii) Fox Partners IV, a California general partnership, and (iv) Fox Capital Management Corporation, a California corporation and their successors and assigns. 1.19 "Term" shall mean the period commencing on September 1, 1994 and ending on August 31, 1999. II. PAYMENT OF INTEREST AND PRINCIPAL 2.1 Payment of Interest and Principal. (a) Interest shall accrue on the Outstanding Principal Balance at the Interest Rate, commencing on the date hereof. (b) Interest and principal shall be payable in constant monthly installments of $45,912.37 per month and shall be paid on each Payment Date, and shall be applied first to the payment of interest at the Interest Rate and the balance to reduction of the Outstanding Principal Balance. 2.2 Prepayment. On any Payment Date and upon not less than thirty (30) days' prior written notice to Payee, Maker may prepay this Note in full or in part, without premium or penalty upon payment of (a) all interest accrued and unpaid on the Outstanding Principal Balance of this Note to and including the date of prepayment, and (b) all other sums then due under this Note, the Mortgage and the other Loan Documents (other than the Subordinate Deed of Trust). Any partial prepayment of the Outstanding Principal Balance of this Note shall not affect the amount or times installment payments are due or payable as set forth in Section 2.1 of this Note and all partial prepayments shall be applied against the installment payments last coming due under this Note, in inverse order of maturity unless Payee in its sole and absolute discretion notifies Maker that Payee will apply such partial prepayments in a manner other than as set forth herein. 2.3 Default Interest. On and after the occurrence of a Default, as defined in this Note or the Mortgage, any advance made by Payee under any Loan Document and any principal or accrued interest not paid when due shall bear interest at the Default Rate. 2.4 Principal and Interest at Maturity. The entire Outstanding Principal Balance and all accrued and unpaid interest thereon, and any and all other sums which are due and payable pursuant to the terms and provisions of the Note, the Mortgage and all of the other Loan Documents shall be due and payable on the Maturity Date. 2.5 Calculation of Interest. All interest on this Note shall be calculated annually on the basis of twelve 30-day months, provided, however, that for portions of the Outstanding Principal Balance which are outstanding for less than a full calendar month, interest on such portion of the Outstanding Principal Balance shall be calculated on the basis of a 365-day year and the actual number of days elapsed in any portion of a month for which interest may be due on such portion of the Outstanding Principal Balance. 2.6 Payments after Default. All unpaid interest that has accrued on the Outstanding Principal Balance, and all unpaid payments of principal whether prior or subsequent to the occurrence of the Default, shall be paid at the time of, and as a condition precedent to, the curing of the Default. While any Default exists, Payee is expressly authorized to apply payments made to it as it may elect against any or all amounts, or portions thereof, then due and payable hereunder or under any of the other Loan Documents, whether towards interest, reduction of the Outstanding Principal Balance, or any combination thereof, unless, with respect to any voluntary payment made by Maker, Maker directs that such voluntary payment be applied as set forth in a notice sent concurrently with such payment, it being agreed and understood, however, that in no event or circumstance shall Payee be required to accept such payment nor shall such payment cure any Default then existing unless expressly agreed to by Payee. 2.7 Place of Payment. Payments and prepayments to be made under this Note are to be made at such place as the legal holder of this Note may from time to time designate. III. SECURITY, DEFAULTS AND REMEDIES 3.1 Security for Payment. The payment of this Note is secured by, among other things, the Mortgage. By this reference, the Mortgage is incorporated by reference as if fully set forth herein. 3.2 Occurrence of Default; Acceleration of Maturity Date. It is agreed that upon occurrence of any of the following events of default under this Note (a "Default"): (a) default in the payment of principal or interest on or before the fifth (5th) day after the same is due, or default in the due and punctual payment of Taxes and Premiums, as defined in the First Mortgage, or default in the performance or observance of any other covenant or agreement of Maker contained herein which is not cured within thirty (30) days from the date of such default, provided, however, that if Maker has commenced in good faith to cure such default during the aforesaid thirty (30) day period and proceeds with due diligence and continuity to completion of such cure, Maker shall have a maximum of an additional sixty (60) days (over and above the initial 30-day period) to cure such default; or (b) occurrence of any Default (as defined therein) under any of the Loan Documents, then, at any time thereafter, at the election of the holder or holders hereof and without additional notice to Maker, the Outstanding Principal Balance, together with accrued interest thereon, shall become at once due and payable at the place of payment as aforesaid, and Payee may proceed to exercise any rights and remedies available to Payee under the Mortgage and the other Loan Documents, and to exercise any other rights and remedies against Maker which Payee may have at law, in equity or otherwise. 3.3 Nature of Remedies. The remedies of Payee as provided herein or in the Mortgage or any of the other Loan Documents, shall be cumulative and concurrent, and may be pursued singularly, successively or together, at the sole discretion of Payee, and may be exercised as often as occasion therefor shall arise. Failure of Payee, for any period of time or on more than one occasion, to exercise its option to accelerate the Maturity Date of this Note shall not constitute a waiver of the right to exercise the same at any time thereafter or in the event of any subsequent Default. No act of omission or commission of Payee, including specifically any failure to exercise any right, remedy or recourse, shall be deemed to be a waiver or release of the same; any such waiver or release is to be effected only through a written document executed by Payee and then only to the extent specifically recited therein. A waiver or release in connection with any one event shall not be construed as a waiver or release of any subsequent event or as a bar to any subsequent exercise of Payee's rights or remedies hereunder. Notice of the exercise of any right or remedy granted to Payee by this Note is not required to be given. 3.4 Payment of Attorneys' Fees and Costs. If: (a) this Note or any Loan Document is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding; (b) if an attorney is retained to represent Payee in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors' rights and involving a claim under this Note or any of the Loan Documents; (c) if an attorney is retained to protect or enforce the lien of the Mortgage or the rights or remedies of Payee under any of the Loan Documents; or (d) if an attorney is retained to represent Payee in any other proceedings whatsoever in connection with this Note, the Mortgage, any of the Loan Documents or any property subject thereto, then Maker shall pay to Payee all reasonable attorneys' fees, disbursements, costs and expenses incurred in connection therewith, in addition to all other amounts due hereunder. 3.5 Late Charge. If any installment of interest, principal, Tax and Insurance Deposits or Reserves is not paid when due, Maker shall pay to Payee a late charge of four (4%) percent of the amount so overdue in order to defray part of the expense incident to handling such delinquent payment or payments. Such late charge shall be in addition to and separate from any increase in interest due hereunder as a result of calculation of interest due hereunder at the Default Rate. IV. OTHER GENERAL AGREEMENTS 4.1 Notices. Any notice which any party hereto may desire or may be required to give to any other party hereto shall be in writing, and shall be deemed given (i) if and when personally delivered, (ii) upon receipt if sent by a nationally recognized overnight courier, or (iii) on the third (3rd) business day after being deposited in United States registered or certified mail, return receipt requested, postage prepaid, addressed to a party at its address set forth below, or at such other place as such party may have designated to all other parties by notice in writing in accordance herewith: (a) If to Maker: 5665 Northside Drive, N.W. Suite 370 Atlanta, Georgia 30328 Attention: Arthur Queler With copies to: Post & Heymann 100 Jericho Quadrangle Suite 214 Jericho, New York 11753 Attention: William Post, Esq. and NPI Property Management Corporation 5665 Northside Drive, N.W. Suite 370 Atlanta, Georgia 30328 Attention: Arthur Queler (b) If to Payee: The Travelers Insurance Company c/o Travelers Realty Investment Company 461 Fifth Avenue New York, New York 10017 Attention: Real Estate Loan No. 502191 With copies to: The Travelers Insurance Company c/o Travelers Realty Investment Company One Tower Square - 2 SHS Hartford, Connecticut 06183-2020 Attention: Real Estate Loan No. 502191 and Battle Fowler 75 East 55th Street New York, New York 10022 Attention: Dean A. Stiffle, Esq. (W.F.S.) (Matter No. 10695.0136) Except as otherwise specifically required herein, notice of the exercise of any right or option granted to Payee by this Note is not required to be given. 4.2 Governing Law and Other Agreements. Maker agrees that: (a) this instrument and the rights and obligations of the parties hereunder shall be governed by the laws of the State of South Carolina, without reference to the conflict of law principles of such state; and (b) upon the Maturity Date, Payee shall not have any obligation to refinance the indebtedness evidenced by this Note or to extend further credit to Maker. MAKER AGREES TO SUBMIT TO PERSONAL JURISDICTION IN THE STATE OF SOUTH CAROLINA IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS NOTE AND IN FURTHERANCE OF SUCH AGREEMENT, THE UNDERSIGNED HEREBY AGREES AND CONSENTS THAT WITHOUT LIMITING OTHER METHODS OF OBTAINING JURISDICTION, PERSONAL JURISDICTION OVER THE MAKER IN ANY SUCH ACTION OR PROCEEDING MAY BE OBTAINED WITHIN OR WITHOUT THE JURISDICTION OF ANY COURT LOCATED IN SOUTH CAROLINA AND THAT ANY PROCESS OR NOTICE OF MOTION OR OTHER APPLICATION TO ANY SUCH COURT IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING MAY BE SERVED UPON MAKER BY REGISTERED OR CERTIFIED MAIL TO OR BY PERSONAL SERVICE AT THE LAST KNOWN ADDRESS OF MAKER, WHETHER SUCH ADDRESS BE WITHIN OR WITHOUT THE JURISDICTION OF ANY SUCH COURT. 4.3 Interpretation. The headings of sections and paragraphs in this Note are for convenience only and shall not be construed in any way to limit or define the content, scope, or intent of the provisions hereof. As used in this Note, the singular shall include the plural, and masculine, feminine, and neuter pronouns shall be fully interchangeable, where the context so requires. The parties hereto intend and believe that each provision in this Note comports with all applicable law. However, if any provision in this Note is found by a court of law to be in violation of any applicable law, and if such court should declare such provision of this Note to be unlawful, void or unenforceable as written, then it is the intent of all parties to the fullest possible extent that it is legal, valid and enforceable, that the remainder of this Note shall be construed as if such unlawful, void or unenforceable provision were not contained therein, and that the rights, obligations and interests of Maker and the holder hereof under the remainder of this Note shall continue in full force and effect; provided, however, that if any provision of this Note which is found to be in violation of any applicable law concerns the imposition of interest hereunder, the rights, obligations and interests of Maker and Payee with respect to the imposition of interest hereunder shall be governed and controlled by the provisions of Paragraph 4.5 hereof. Time is of the essence of this Note. 4.4 Waiver. Maker and any and all others who are now or may become liable for all or part of the obligations of Maker under this Note including but not limited to the Responsible Entities (collectively the "Obligors") agree to be jointly and severally bound hereby and jointly and severally, to the extent permitted by law: (a) waive and renounce any and all redemption and exemption rights and the benefit of all valuation and appraisement privileges against the indebtedness evidenced by this Note or by any extension or renewal hereof; (b) waive presentment and demand for payment, notices of nonpayment and of dishonor, protest of dishonor, and notice of protest; (c) waive all notices in connection with the delivery and acceptance hereof and all other notices in connection with the performance, default, or enforcement of the payment hereof or hereunder; (d) waive any and all lack of diligence and delays in the enforcement of the payment hereof; (e) agree that the liability of each of the Obligors shall be unconditional and without regard to the liability of any other person or entity for the payment hereof, and shall not in any manner be affected by any indulgence or forbearance granted or consented to by Payee to any of them with respect hereto; (f) consent to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions hereof, and to the release of any security at any time given for the payment hereof, or any part thereof, with or without substitution, and to the release of any person or entity liable for the payment hereof; and (g) consent to the addition of any and all other makers, endorsers, guarantors, and other obligors for the payment hereof, and to the acceptance of any and all other security for the payment hereof, and agree that the addition of any such obligors or security shall not affect the liability of any of Maker for the payment hereof. 4.5 Excess Interest. (a) The Mortgage and this Note are subject to the express condition that at no time shall Maker be obligated or required to pay interest on the principal balance due under this Note at a rate which could subject the holder of this Note to either civil or criminal liability as a result of being in excess of the maximum interest rate which Maker is permitted by law to contract or agree to pay. If by the terms of the Mortgage or this Note, Maker is at any time required or obligated to pay interest on the principal balance due under this Note at a rate in excess of such maximum rate, the rate of interest under this Note shall be deemed to be immediately reduced to such maximum rate and the interest payable shall be computed at such maximum rate and all prior interest payments in excess of such maximum rate shall be applied and shall be deemed to have been payments in reduction of the principal balance of this Note. (b) The Maker warrants that the extension of credit evidenced by this Note is solely for business or commercial purposes and not for personal, family or agricultural purposes under the South Carolina Consumer Protection Act. 4.6 Successors, Payees and Assigns. Upon any endorsement, assignment, or other transfer of this Note by Payee or by operation of law, the term "Payee," as used herein, shall mean such endorsee, assignee, or other transferee or successor to Payee then becoming the holder of this Note. This Note shall inure to the benefit of Payee and its successors and assigns and shall be binding upon the undersigned and its successors and assigns. The term "Maker", as used herein, shall include the respective successors, assigns, legal and personal representatives, executors, administrators, devisees, legatees and heirs of Maker. 4.7 Prospective Participants. Maker acknowledges that Payee may after the date of this Note desire to sell and assign participation interests in the Loan to one or more domestic or foreign banks, insurance companies, pension funds, trusts or other institutional lenders or other persons, parties or investors (including, but not limited to, grantor trusts, owner trusts, special purpose corporations, REMICs, real estate investment trusts or other similar or comparable investment vehicles) as may be selected by Payee in its sole and absolute discretion and on terms and conditions satisfactory to Payee in its sole and absolute discretion (any such bank, insurance company, pension fund, trust or other institutional lender or other person, party or investor to whom a participation interest in the Loan is so sold and assigned is herein referred to as a "Participant"). Maker shall cooperate, and shall cause Manager and each guarantor, indemnitor and other person or party associated or connected with the Loan or the collateral therefor to cooperate, in all respects with Payee in connection with the sale of participation interests in the Loan in the manner contemplated by this paragraph, and shall, in connection therewith, execute and deliver such estoppels, certificates, instruments and documents as may be reasonably requested by Payee. It is agreed and understood that Maker shall not incur or be responsible for any costs, fees or expenses of any nature whatsoever as a result of Payee's sale of participation interests in all or any portion of the Loan in the manner contemplated by this paragraph more than two (2) times during any Loan Year. Maker grants to Payee, and shall cause Manager and each guarantor, indemnitor and other person or party associated or connected with the Loan or the collateral therefor to grant to Payee, the right to distribute on a confidential basis financial and other information concerning Maker, Manager, each such guarantor, indemnitor and other person or party and the property encumbered by the Mortgage and other pertinent information with respect to the Loan to any party who has purchased a participation interest in the Loan or who has expressed a serious interest in purchasing a participation interest in the Loan. Payee shall advise any such party that such information shall be treated as confidential. Any party to whom any such information is distributed and who declines to purchase a participation interest in the Loan shall be requested to return to Payee all such information distributed to it without retaining any copies thereof. It is agreed and understood that Payee shall in no event and under no circumstance have any liability as a result of any party's failure to follow the directions or advice of Maker in handling such confidential information. Maker shall execute and deliver, and shall cause Manager and each guarantor, indemnitor and other person or party associated or connected with the Loan or the collateral therefor to execute and deliver, such documents and instruments as may be reasonably necessary to split the Loan into two or more loans evidenced, secured and advanced by and pursuant to separate sets of notes, deeds of trust and other related loan documents to the full extent required by Payee to facilitate the sale of participation interests in the Loan in the manner contemplated by this paragraph, it being agreed that (i) any such splitting of the Loan will not adversely affect or diminish the rights of Payee as presently set forth in this Note, the Mortgage or the other Loan Documents and will not increase the respective obligations and liabilities of Maker, Manager or any such guarantor, indemnitor or other person or party above those presently set forth in this Note, the Mortgage or the other Loan Documents, (ii) the mortgages and other documents securing the Loan as so split will have such priority of lien as may be specified by Payee, and (iii) the retained interest of Payee in the Loan as so split shall be allocated to or among one or more of such separate loans in a manner specified by Payee in its sole and absolute discretion. If Maker shall default in the performance of its obligation as set forth in this paragraph, and if such default shall not be remedied by Maker within ten (10) business days after notice by Payee, Payee shall have the right in its discretion to declare the Debt immediately due and payable. Payee also reserves the right at any time during the term of the Loan and in its sole and absolute discretion to effect a so-called securitization of the Loan in such manner and on such terms and conditions as Payee shall deem to be appropriate in its sole and absolute discretion and with such domestic or foreign banks, insurance companies, pension funds, trusts or other institutional lenders or other persons, parties or investors (including, but not limited to, guarantor trusts, owner trusts, special purpose corporations, REMICs, real estate investment trusts or other similar or comparable investment vehicles) as may be selected by Payee in its sole and absolute discretion. 4.8 Limited Personal Liability. Without in any manner releasing, impairing or otherwise affecting this Note, the Mortgage or any of the other Loan Documents or the validity thereof or hereof or the lien thereof, there is no personal liability of Maker or any corporation, partnership or individual having a direct or indirect ownership interest in Maker, or any of their respective successors or assigns, hereunder or under any of the other Loan Documents, and no monetary or deficiency judgment shall be sought or enforced against Maker or any corporation, partnership or individual having a direct or indirect ownership interest in Maker, or any of their respective successors or assigns; provided, however, that a judgment may be sought against Maker or any corporation, partnership or individual having a direct or indirect ownership interest in Maker or any of their respective successors or assigns to the extent necessary to enforce the rights of Payee in, to, or against the Premises securing the Debt. Notwithstanding any of the foregoing, nothing contained in this Section shall be deemed to prejudice the rights of Payee to recover from the Responsible Entities (1) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Payee as a result of any material fraud or any material misrepresentation by any of the Responsible Entities or Manager, (2) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Payee as a result of breach of Maker's warranties, representations and covenants contained in Paragraph 5, Paragraph 9, Paragraph 17, Paragraph 37, Paragraph 44 or Paragraph 47 of the Mortgage, (3) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Payee as a result of intentional or negligent waste (whether financial or physical) of the Premises including, without limitation, failure by Maker to pay on or prior to the due date thereof all real estate taxes and assessments levied against the Premises, subject to Maker's right to contest the same as set forth in paragraph 5.B. of the Mortgage, it being agreed and understood that Maker's personal liability to pay real estate taxes and assessments levied against the Premises shall not exceed the Rents generated over such period of time to which such taxes and assessments pertain; (4) all Rents generated from the Premises received after any default under the Loan Documents or within one year before any default under the Loan Documents or after acceleration of the indebtedness evidenced and secured by the Loan Documents and not applied to payment of such indebtedness or to payment of the normal and customary operating expenses of the Premises; (5) all Rents from the Premises collected more than one (1) month in advance and all security deposits that are not held in a segregated escrow account and that are not delivered to Payee upon demand after the occurrence of a default under any of the Loan Documents, (6) all insurance proceeds and condemnation awards in respect of the Premises which are not applied in accordance with the provisions of the Loan Documents or all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Payee as a result of the failure by Maker to maintain the insurance coverage required in Paragraphs 7 and 8 of the Mortgage, (7) all or any portion of the upfront fees, commitment fees and other costs and expenses incurred by Payee in connection with the closing of this transaction and required to be paid by Maker and not promptly reimbursed by Maker, or (8) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Payee under the Hazardous Material Guaranty and Indemnification Agreement dated the date hereof from the Responsible Entities and the Manager. The Responsible Entities agree to pay to Payee all amounts described in clauses (1) through (8) above on demand by Payee and agrees that they will be personally liable for payment of all such sums. Furthermore, nothing contained in the paragraph shall be deemed to prejudice the right of Payee to recover from the Manager all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Payee under that certain Manager's Liability Letter dated the date hereof from the Manager to Payee. IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the day and year first above written. Mortgagor: CENTURY PROPERTIES GROWTH FUND XXII, a California limited partnership By: Fox Partners IV, a California general partnership, its General Partner By: Fox Capital Management Corporation, a California corporation, its Managing General Partner By: Name: Title: WITNESSES: [CORPORATE SEAL] _____________________ _____________________ STATE OF NEW YORK ) ) SS: COUNTY OF NEW YORK) PERSONALLY appeared before me ______________________, who, being by me duly sworn, says that (s)he saw the within named ____________. the ___________________ of FOX CAPITAL MANAGEMENT CORPORATION, a California corporation, Managing General Partner of FOX PARTNERS IV, a California general partnership, the sole general partner of CENTURY PROPERTIES GROWTH FUND XXII, a California limited partnership, sign, seal and as his act and deed deliver the foregoing instrument and that (s)he with _________ witnessed the execution delivery thereof. ---------------------- ---------------------- Witnesses SWORN to before me, this ____ day of ____________________, A.D. 1994 _____________________________(SEAL) Notary Public of New York My Commission Expires: _____________________ [NOTARIAL SEAL] EX-99.4 6 AMENDED AND RESTATED MORTGAGE EXHIBIT 99.4 COOPER'S POINTE CENTURY PROPERTIES GROWTH FUND XXII to THE TRAVELERS INSURANCE COMPANY ____________________________________ AMENDED AND RESTATED MORTGAGE (Fee) $5,388,360.35 ____________________________________ Dated: As of September 1, 1994 Street Address: 2225 Greenridge Road Town: North Charleston County: Charleston State: South Carolina THIS MORTGAGE PREPARED BY AND AFTER RECORDING PLEASE RETURN TO: Battle Fowler 75 East 55th Street New York, New York 10022 Attention: Walter F. Schleimer, Esq. TABLE OF CONTENTS Page 1. Payment of Indebtedness and Performance of Covenants . . . . . . . . 8 2. Representation and Warranty of Title . . . . . . . . . . . . . . . . 8 3. Maintenance, Repair, Compliance with Law, Use, Etc . . . . . . . . . 9 4. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 5. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 6. Change in Tax Laws . . . . . . . . . . . . . . . . . . . . . . . . . 15 7. Insurance Coverage . . . . . . . . . . . . . . . . . . . . . . . . . 15 8. Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . 17 9. Deposits for Taxes and Insurance Premiums. . . . . . . . . . . . . . 18 10. Proceeds of Insurance . . . . . . . . . . . . . . . . . . . . . . . 20 11. Disbursement of Insurance Proceeds. . . . . . . . . . . . . . . . . 21 12. Condemnation and Eminent Domain . . . . . . . . . . . . . . . . . . 25 13. Assignment of Leases and Rents. . . . . . . . . . . . . . . . . . . 27 14. Observance of Lease Assignment. . . . . . . . . . . . . . . . . . . 29 15. Mortgagee's Performance of Mortgagor's Obligations. . . . . . . . . 30 16. Security Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 31 17. Restrictions on Transfer. . . . . . . . . . . . . . . . . . . . . . 35 18. Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 19. Foreclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 20. Right of Possession . . . . . . . . . . . . . . . . . . . . . . . . 44 21. Receiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 22. Foreclosure Sale. . . . . . . . . . . . . . . . . . . . . . . . . . 47 23. Insurance During Foreclosure. . . . . . . . . . . . . . . . . . . . 48 24. Waiver of Right of Redemption and Other Rights. . . . . . . . . . . 48 25. Rights Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . 49 26. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . 50 27. Effect of Extensions and Amendments . . . . . . . . . . . . . . . . 51 28. Execution of Separate Security Agreements, Financing Statements, Etc.; Estoppel Letter . . . . . . . . . . . . . . . . 52 29. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 30. Option to Subordinate . . . . . . . . . . . . . . . . . . . . . . . 53 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 32. Inspection of Premises and Records. . . . . . . . . . . . . . . . . 53 33. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . 54 34. Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . 55 35. Captions and Pronouns . . . . . . . . . . . . . . . . . . . . . . . 55 36. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 37. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 56 38. Mortgagee Not A Joint Venturer. . . . . . . . . . . . . . . . . . . 61 39. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 40. Consent Required of Mortgagee . . . . . . . . . . . . . . . . . . . 62 41. Sole Discretion of Mortgagee. . . . . . . . . . . . . . . . . . . . 63 42. No Oral Change. . . . . . . . . . . . . . . . . . . . . . . . . . . 63 43. Absolute and Unconditional Obligation . . . . . . . . . . . . . . . 64 44. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 45. Limited Personal Liability. . . . . . . . . . . . . . . . . . . . . 65 46. WAIVER OF TRIAL BY JURY . . . . . . . . . . . . . . . . . . . . . . 67 47. Anti-Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . 68 48. Usury Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 49. Related Party Contracts . . . . . . . . . . . . . . . . . . . . . . 69 50. Final Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 69 51. Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Coopers Pointe AMENDED AND RESTATED MORTGAGE THIS AMENDED AND RESTATED MORTGAGE (this "Mortgage") made as of this 1st day of September, 1994, from CENTURY PROPERTIES GROWTH FUND XXII, a California limited partnership having an address at 5665 Northside Drive, N.W., Suite 370, Atlanta, Georgia 30328 ("Mortgagor"), in favor of THE TRAVELERS INSURANCE COMPANY, a Connecticut corporation having an address at One Tower Square, 2 SHS, Hartford, Connecticut 06183-2020 ("Mortgagee"), WHEREAS, Mortgagee made a loan in the original principal sum of $5,600,000 to Mortgagor which loan was evidenced by a Mortgage Note dated November 27, 1985 from Mortgagor to Mortgagee in the original principal sum of $5,600,000, as modified by that certain Modification and First Mortgage Real Estate Note, Mortgage and Security Agreement, and Assignment of Leases, Rents and Profits (the "Modification Agreement") dated as of June 1, 1993 between Mortgagor and Mortgagee and recorded in Book 229 at page 272 in the RMC Office for Charleston County, South Carolina (the "Original Note"), encumbering the property known as Cooper's Pointe Apartments in North Charleston, South Carolina (the "Cooper's Pointe Property"), WHEREAS, the Original Note was secured by a (i) Mortgage and Security Agreement dated November 27, 1985 from Mortgagor to Mortgagee filed of record in Book Z149 at page 323 in the RMC Office for Charleston County, South Carolina as modified by the Modification Agreement (the "Original Mortgage"), (ii) an Assignment of Leases, Rents and Profits dated as of November 27, 1985 by Mortgagor to Mortgagee filed of record in Book Z149 at page 919 in the RMC Office for Charleston County, South Carolina (the "Original Assignment"), and (iii) a Cash Management Agreement and a Pledge and Security Agreement (the "Original Security Agreements") both dated as of June 1, 1993 from Mortgagor to Mortgagee. WHEREAS, the Original Note was modified, amended and restated by a certain Amended and Restated Note (the "Note") dated the date hereof between Mortgagor and Mortgagee in the principal sum of $5,388,360.35; WHEREAS, the Original Assignment was modified, amended and restated in the Amended and Restated Assignment of Leases, Rents and Profits dated the date hereof between Mortgagor and Mortgagee (the "Assignment"); WHEREAS, to further secure the Note, Mortgagor delivered to Mortgagee a certain Subordinate Deed of Trust (as hereinafter defined); WHEREAS, a Subordinate Assignment of Leases, Rents and Profits was entered into as of the date hereof between Mortgagor and Mortgagee (the "Subordinate Assignment"); WHEREAS, Mortgagor and Mortgagee intend to modify, amend and restate the terms and provisions of the Original Mortgage and the Original Security Agreements as hereinafter set forth in this Mortgage; WHEREAS, the Note is to be secured, inter alia, by this Mortgage and the Subordinate Deed of Trust; WHEREAS, Mortgagor desires to set forth the terms and provisions of this Mortgage as hereinafter set forth; NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: W I T N E S S E T H : To secure the payment of the principal indebtedness under the Note of $5,388,360.35 (the "Outstanding Principal Balance") and interest and prepayment premiums, if any, on the principal indebtedness under the Note (and all replacements, renewals and extensions thereof, in whole or in part) according to its tenor and effect, and to secure the payment of all other sums which may be at any time due and owing or required to be paid under the Note, this Mortgage, the Assignment, the Subordinate Deed of Trust (as hereinafter defined), the Subordinate Assignment, the Cash Management Letter dated the date hereof from Mortgagor and NPI-AP Management, L.P. (the "Manager") to Mortgagee, the Cooper's Pointe Reserve Agreement dated the date hereof between Mortgagor and Mortgagee, the Cooper's Pointe Manager's Liability Letter from the Manager to Mortgagee, the Cooper's Pointe Guaranty of Payment dated the date hereof from Mortgagor, Fox Partners IV, Manager, Fox Capital Management Corporation and NPI Equity Investments II, Inc. to Mortgagee and the Cooper's Pointe Hazardous Material Guaranty and Indemnification Agreement dated the date hereof from Mortgagor, Fox Partners IV, Fox Capital Management Corporation, NPI Equity Investments II, Inc. and the Manager to Mortgagee, the Release Letter dated the date hereof from Mortgagee to Mortgagor and any other documents or instruments now or hereafter executed in connection with the Note or this Mortgage (the Note, the Mortgage and such other documents or instruments, referred to hereinafter collectively as the "Loan Documents") and all replacements, renewals and extensions thereof, in whole or in part (collectively, the "Indebtedness Hereby Secured"); and to secure the performance and observance of all the covenants, agreements and provisions contained in this Mortgage, the Note and the other Loan Documents, and to charge the properties, interests and rights hereinafter described with such payment, performance and observance, and for other valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, Mortgagor DOES HEREBY GRANT, REMISE, RELEASE, LIEN, MORTGAGE, CONVEY, PLEDGE, ASSIGN and HYPOTHECATE unto Mortgagee, its successors and assigns forever, the Land (as hereinafter defined) together with the following described property, rights and interests all of which are hereby pledged primarily and on a parity with the Land and not secondarily (and are, together with the Land, the "Premises"): THE LAND located in the County of Charleston, South Carolina and legally described on Exhibit A attached hereto and made a part hereof (the "Land"); TOGETHER WITH all buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Land (including but not limited to all underground and other parking facilities located in or on the Land, all landscaped areas and areas utilized for recreational activities) and all fixtures, machinery, appliances, equipment, furniture, and personal property of every nature whatsoever now or hereafter owned by Mortgagor and located in or on, or attached to, or used or intended to be used in connection with or with the operation of, the Land, buildings, structures or other improvements, or in connection with any construction which may be conducted thereon, including all extensions, additions, improvements, betterments, renewals, substitutions, and replacements to and proceeds of any of the foregoing and all of the right, title and interest of Mortgagor in and to any such personal property or fixtures together with the benefit of any deposits or payments now or hereafter made on such personal property or fixtures by Mortgagor or on its behalf (the "Improvements"); except that this Mortgage shall not create a lien on any items of personal property which (i) are owned by tenants who are in possession pursuant to a Lease (as hereinafter defined), and (ii) may be removed by such tenants at the expiration or termination of such Lease; TOGETHER WITH all easements, rights of way, gores of land, streets, ways, alleys, passages, sewer rights, waters, water courses, water rights and powers, and all estates, rights, titles, interests, privileges, liberties, tenements, hereditaments and appurtenances whatsoever, in any way belonging, relating or appertaining to the Land, or which hereafter shall in any way belong, relate or be appurtenant thereto, and all of the coal, oil, gas and other minerals of every kind and character in and underlying the Land, whether now owned or hereafter acquired by Mortgagor, and the reversion and reversions, remainder and remainders, rents, issues and profits thereof, 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; TOGETHER WITH all rents, royalties, issues, profits, revenue, income, security deposits and other benefits generated from the Premises under the Leases (as such term is hereinafter defined) or otherwise to be applied against the Indebtedness Hereby Secured; TOGETHER WITH all right, title and interest of Mortgagor in and to any and all leases now or hereafter on or affecting the Premises whether written or oral and all agreements for use of the Premises (the "Leases"), together with all security therefor and all monies payable thereunder, subject, however, to the conditional permission hereinabove given to Mortgagor to collect the rentals under any such Lease; TOGETHER WITH all fixtures and articles of personal property now or hereafter owned by Mortgagor and forming a part of or used in connection with the Land or the Improvements or the operation thereof including, but without limitation, any and all air conditioners, antennae, appliances, apparatus, awnings, basins, bathtubs, bidets, boilers, bookcases, cabinets, carpets, coolers, curtains, dehumidifiers, disposals, doors, drapes, dryers, ducts, dynamos, elevators, engines, equipment, escalators, fans, fittings, floor coverings, furnaces, furnishings, furniture, hardware, heaters, humidifiers, incinerators, lighting, machinery, motor vehicles, motors, ovens, pipes, plumbing, pumps, radiators, ranges, recreational facilities, refrigerators, screens, security systems, shades, shelving, sinks, sprinklers, stokers, stoves, toilets, ventilators, wall coverings, washers, windows, window coverings, wiring, and all renewals, replacements or proceeds thereof or articles in substitution therefor, whether or not the same are or shall be attached to the Land or the Improvements in any manner; it being mutually agreed that all of the aforesaid property owned by Mortgagor and placed on the Land or the Improvements shall, so far as permitted by law, be deemed to be fixtures, a part of the realty, and security for the Indebtedness Hereby Secured; notwithstanding the agreement and declaration hereinabove expressed that certain articles of property form a part of the realty covered by this Mortgage and be appropriated to its use and deemed to be realty, to the extent that such agreement and declaration may not be effective and that any of said articles may constitute goods (as said term is used in the Uniform Commercial Code of South Carolina), this instrument shall constitute a security agreement, creating a security interest in such goods, as collateral, in Mortgagee as a secured party and Mortgagor as debtor, all in accordance with said Uniform Commercial Code as more particularly set forth in Paragraph 16 hereof; TOGETHER WITH all proceeds of the foregoing, including without limitation all judgments, awards of damages and settlements hereafter made resulting from condemnation proceeds or the taking of the Premises and/or the Improvements or any portion thereof under the power of eminent domain, any proceeds of any policies of insurance, maintained with respect to the Premises and/or the Improvements or proceeds of any sale, option or contract to sell the Premises and/or the Improvements or any portion thereof; and Mortgagor hereby authorizes, directs and empowers Mortgagee, at its option, on behalf of Mortgagor, or the successors or assigns of Mortgagor, to adjust, compromise, claim, collect and receive such proceeds, to give proper receipts and acquittances therefor, and, after deducting expenses of collection, to apply the net proceeds as a credit upon any portion, as selected by Mortgagee, of the Indebtedness Hereby Secured, notwithstanding the fact that the same may not then be due and payable or that the Indebtedness Hereby Secured is otherwise adequately secured; and TOGETHER WITH all right, title, and interest of Mortgagor in and to all executory contracts affecting the ownership, possession, operation, control and services furnished to the Premises (the "Executory Contracts"), provided, however, that permission is hereby given to Mortgagor so long as no Default has occurred hereunder and is continuing to exercise the rights and powers under the Executory Contracts and to enjoy the benefits thereunder; TO HAVE AND TO HOLD the same, unto Mortgagee, its successors and assigns, in fee simple forever, for the purposes and upon the uses herein set forth, together with all right to possession of the Premises after the occurrence of any Default (as defined herein); TO HAVE AND TO HOLD the same, unto Mortgagee, its successors and assigns, in fee simple forever, for the purposes and upon the uses herein set forth, together with all right to possession of the Premises after the occurrence of any Default (as defined herein); and the Mortgagor covenants that it is lawfully seized and possessed of the Premises in fee simple and has good title to convey the same, that the same are encumbered except as set forth in the title policy insuring the lien of this Mortgage, and that the Mortgagor will warrant and defend the title thereto against the claims of all persons whatsoever; and Mortgagor hereby releases and waives all right under and by virtue of the Homestead Exemption Laws of the State of South Carolina; PROVIDED, NEVERTHELESS, that if Mortgagor shall pay in full when due the Indebtedness Hereby Secured and shall duly and timely perform and observe all of the terms, provisions, covenants and agreements herein and in the Note and the other Loan Documents provided to be performed and observed by Mortgagor, then this Mortgagor and the estate, right and interest of Mortgagee in the Premises shall cease and become void and of no effect, but shall otherwise remain in full force and effect. This Mortgage is given in replacement and substitution of the Original Mortgage and evidences the same indebtedness evidenced by the Original Note and secured by the Original Mortgage and does not evidence any new or additional indebtedness of Mortgagor to Mortgagee and is not intended as a novation of the Original Note or the Original Mortgage. MORTGAGOR FURTHER COVENANTS AND AGREES AS FOLLOWS: 1. Payment of Indebtedness and Performance of Covenants. Mortgagor shall (a) pay when due the Indebtedness Hereby Secured; and (b) duly and punctually perform and observe all of the terms, provisions, conditions, covenants and agreements on Mortgagor's part to be performed or observed as provided in the Note, this Mortgage and the other Loan Documents. Mortgagor shall have the privilege of making prepayment on the principal of the Note (in addition to the required payments thereunder) in accordance with the terms and conditions set forth in the Note but not otherwise. 2. Representation and Warranty of Title. At the time of the delivery of these presents, Mortgagor is seized of an indefeasible estate in fee simple in the portion of the Premises which constitutes real property and Mortgagor owns good title to the portion of the Premises which constitutes personal property subject only to the matters set forth on the title policy insuring the lien of this Mortgage and any additional matters approved in writing by Mortgagee; and has good right, full power and lawful authority to ASSIGN, RELEASE, LIEN, CONVEY, PLEDGE, HYPOTHECATE, MORTGAGE and grant a security interest in the same, in the manner and form aforesaid; that, except as set forth on the title policy insuring the lien of this Mortgage or consented to in writing by Mortgagee, the same is free and clear of all liens, charges, easements, covenants, conditions, restrictions and encumbrances whatsoever, including, as to the personal property and fixtures, security agreements, conditional sales contracts and anything of a similar nature; and that Mortgagor shall and will warrant and forever defend the title to the Premises against the claims of all persons whomsoever claiming by, through or under Mortgagor. Mortgagor also represents and warrants that (i) Mortgagor is now, and after giving effect to this Mortgage will be in, a solvent condition, (ii) the execution and delivery of this Mortgage by Mortgagor does not constitute a "fraudulent conveyance" within the meaning of Title 11 of the United States Code as now constituted or under any other applicable statute, and (iii) no bankruptcy or insolvency proceedings are pending or contemplated by or against Mortgagor. Mortgagor hereby releases and waives all rights under and by virtue of the Homestead Exemption Laws of the State of South Carolina to the extent permitted by law; 3. Maintenance, Repair, Compliance with Law, Use, Etc. Mortgagor shall (a) promptly repair, restore, replace or rebuild (pursuant to plans and specifications approved by Mortgagee) any portion of the Improvements which may become damaged or be destroyed to be of at least equal value and of substantially the same character as prior to such damage or destruction (whether or not proceeds of insurance are available or sufficient for that purpose); (b) keep the Premises in good condition and repair, free from waste; (c) pay all operating costs of the Premises; (d) complete, within a reasonable time, any building or buildings or other Improvements now or at any time in the process of erection upon the Premises; (e) comply with all requirements of statutes, ordinances, rules, regulations, orders, decrees and other requirements of law relating to the Premises or any part thereof by any federal, state or local authority; (f) refrain from any action and correct any condition which would increase the risk of fire or other hazard to the Improvements or any portion thereof; (g) comply with any restrictions and covenants of record with respect to the Premises and the use thereof, and observe and comply with any conditions and requirements necessary to preserve and extend any and all rights, licenses, permits (including without limitation zoning variances, special exceptions and nonconforming uses), privileges, franchises and concessions that are applicable to the Premises or its use and occupancy; and (h) cause the Premises to be managed in a competent and professional manner. Without the prior written consent of Mortgagee (which consent may be granted or withheld in Mortgagee's sole discretion), Mortgagor shall not cause, suffer or permit any (i) material alterations of the Premises or the Improvements (including without limitation, landscaped and recreation areas and underground on-site paved parking areas and parking pavilion and/or structures) except as required by law or ordinance, (ii) change in the intended use or occupancy of the Premises for which the Improvements have been constructed including, without limitation, any change which would increase any fire or other hazard; (iii) zoning reclassification with respect to the Premises; (iv) unlawful use of, or nuisance to exist upon, the Premises; (v) granting of any easements, licenses, covenants, conditions or declarations of use against the Premises, other than use restrictions contained or provided for in Leases approved by Mortgagee; (vi) buildings or additions to any existing buildings or other structures to be erected on the Premises; or (vii) all or a portion of the Premises to be operated as a cooperative or condominium building or buildings in which the tenants or occupants participate in active ownership, control, or management of the Premises or any part thereof as tenant stockholder or otherwise. 4. Liens. (i) Prohibition. Subject to the provisions of Paragraph 5 hereof respecting Taxes (as hereinafter defined), Mortgagor shall not create or suffer or permit any mortgage, lien, charge or encumbrance to attach to or be filed against the Premises, whether such lien or encumbrance is inferior, at parity with or superior to the lien of this Mortgage, including mechanic's liens, materialmen's liens, or other claims for lien made by parties claiming to have provided labor or material with respect to the Premises (collectively, "Mechanic's Liens") and excepting only the lien of real estate taxes and assessments not due or delinquent, the permitted encumbrances set forth on the title policy insuring the lien of this Mortgage and any liens and encumbrances of Mortgagee pursuant to this Mortgage and the other Loan Documents. (ii) Contest of Mechanic's Liens Claims. Notwithstanding the foregoing prohibition against Mechanic's Liens, Mortgagor, or any party obligated to Mortgagor to do so, may in good faith and with due diligence contest the validity or amount of any Mechanic's Lien and defer payment and discharge thereof during the pendency of such contest, provided that: (i) such contest shall have the effect of preventing the sale or forfeiture of the Premises or any part thereof, or any interest therein, to satisfy such Mechanic's Lien; (ii) within ten (10) days after Mortgagor has been notified of the filing of such Mechanic's Lien, Mortgagor shall have notified Mortgagee in writing of Mortgagor's intention to contest such Mechanic's Lien or to cause such other party to contest such Mechanic's Lien; and (iii) Mortgagor either shall have obtained a title insurance endorsement over such Mechanic's Liens insuring Mortgagee against loss or damage by reason of the existence of such Mechanic's Liens or, at the option of Mortgagor, Mortgagor shall have deposited or caused to be deposited with Mortgagee at such place as Mortgagee may from time to time in writing appoint, and in the absence of such appointment, then at the place of payment designated in the Note, a sum of money which shall be sufficient in the judgment of Mortgagee to pay in full such Mechanic's Lien and all interest which might become due thereon, and shall keep on deposit an amount so sufficient at all times, increasing such amount to cover additional interest whenever, in the judgment of Mortgagee, such increase is advisable. Such deposits are to be held without any allowance of interest. If Mortgagor shall fail to maintain or cause to be maintained sufficient funds on deposit as hereinabove provided, shall fail to prosecute such contest or cause such contest to be prosecuted with due diligence or shall fail to pay or cause to be paid the amount of the Mechanic's Lien plus any interest finally determined to be due upon the conclusion of such contest, Mortgagee may, at its option, apply the money as deposited in payment of or on account of such Mechanic's Lien, or that part thereof then unpaid, together with all interest thereon. If the amount of money so deposited shall be insufficient for the payment in full of such Mechanic's Lien, together with all interest thereon, Mortgagor shall forthwith, upon demand, deposit with Mortgagee a sum which, when added to the funds then on deposit, shall be sufficient to make such payment in full. If the contest of the Mechanic's Lien claim is ultimately resolved in favor of the claimant, Mortgagee shall apply the money so deposited in full payment of such Mechanic's Lien or that part thereof then unpaid, together with all interest thereon (provided Mortgagor is not then in Default, as hereafter defined, under this Mortgage) when furnished with evidence satisfactory to Mortgagee of the amount of payment to be made. Any surplus monies remaining in the control of Mortgagee shall be paid to Mortgagor, provided Mortgagor is not then in Default hereunder. 5. Taxes. A. Payment. Mortgagor shall pay or cause to be paid when due and before any penalty attaches, all general and special taxes, assessments, water charges, sewer charges, and other fees, taxes, charges and assessments of every kind and nature whatsoever levied or assessed against the Premises or any part thereof or any interest therein or any obligation or instrument secured hereby, and all installments thereof (collectively, "Taxes"), whether or not assessed against Mortgagor, and Mortgagor shall furnish to Mortgagee receipts therefor as soon as reasonably possible, but in any event within thirty (30) days after the date the same are due; and shall discharge any claim or lien relating to Taxes upon the Premises, other than matters expressly permitted by the terms hereof. B. Contest. Mortgagor may, in good faith and with due diligence, contest or cause to be contested the validity or amount of any such Taxes, provided that: (a) such contest shall have the effect of preventing the collection of the Taxes so contested and the sale or forfeiture of the Premises or any part thereof or interest therein to satisfy the same; (b) Mortgagor has notified Mortgagee in writing of the intention of Mortgagor to contest the same or to cause the same to be contested before any Tax has been increased by any interest, penalties, or costs; and (c) Mortgagor has deposited or caused to be deposited with Mortgagee, at such place as Mortgagee may from time to time in writing designate, a sum of money (or other security acceptable to Mortgagee) that, when added to the monies or other security, if any, deposited with Mortgagee pursuant to Paragraph 9 hereof, is sufficient, in Mortgagee's judgment, to pay in full, or provide for payment in full of, such contested Tax and all penalties and interest that might become due thereon, and shall keep on deposit an amount or other security sufficient, in Mortgagee's judgment, to pay in full, or provide for payment in full of, such contested Tax, increasing such amount or other security to cover additional penalties and interest whenever, in Mortgagee's judgment, such increase is advisable. If Mortgagor fails to prosecute such contest with due diligence or fails to maintain sufficient funds or security on deposit as hereinabove provided, Mortgagee may, at its option, within ten (10) days following Mortgagee's written notice to Mortgagor (or such shorter period of time necessary in Mortgagee's opinion to prevent the collection of Taxes or the sale or forfeiture of the Premises or any part thereof or interest therein), apply the monies or liquidate any other security deposited with Mortgagee, in payment of, or on account of, such Taxes, or any portion thereof then unpaid, including all penalties and interest thereon. If the amount of the money and any such security so deposited is insufficient for the payment in full of such Taxes, together with all penalties and interest thereon, Mortgagor shall forthwith, upon demand, either deposit with Mortgagee a sum that, when added to such funds then on deposit, is sufficient to make such payment in full, or, if Mortgagee has applied funds on deposit on account of such Taxes, restore such deposit to an amount satisfactory to Mortgagee. Provided that Mortgagor is not then in default hereunder, Mortgagee shall, if so requested in writing by Mortgagor, after final disposition of such contest and upon Mortgagor's delivery to Mortgagee of an official bill for such Taxes, apply the money or security so deposited in full payment of such Taxes or that part thereof then unpaid, together with all penalties and interest thereon and return any excess to Mortgagor, unless Mortgagor has paid all such Taxes, together with all penalties and interest thereon, and has provided Mortgagee with evidence reasonably satisfactory to Mortgagee of such payment, in which event Mortgagee shall return such money or security to Mortgagor. All money held by Mortgagee pursuant to this Paragraph 5.B. shall be held without any allowance of interest thereon. C. Tax Services Contract. If Mortgagee elects, Mortgagor shall maintain, at Mortgagor's expense while any portion of the Indebtedness Hereby Secured is outstanding, a tax services contract issued by a tax reporting agency approved by Mortgagee, it being agreed and understood that Mortgagee shall not elect to maintain such tax service contract for so long as Mortgagor provides satisfactory evidence to Mortgagee of Mortgagor's continuing efforts to minimize or reduce taxes through proper and legal means. If Mortgagee does not elect to maintain a tax service contract, Mortgagor shall reimburse Mortgagee on demand for the cost of making annual tax searches. 6. Change in Tax Laws. If, by the laws of the United States of America, or of any state or municipality having jurisdiction over Mortgagee, Mortgagor or the Premises, any tax is imposed or becomes due in respect of the issuance of the Note or the recording of this Mortgage, Mortgagor shall pay such tax in the manner required by such law. If any law, statute, rule, regulation, order or court decree has the effect of deducting from the value of the Premises for the purpose of taxation any lien thereon, or imposing upon Mortgagee the payment of the whole or any part of the taxes required to be paid by Mortgagor, or changing in any way the laws relating to the taxation of mortgages or debts secured by mortgages or the interest of Mortgagee in the Premises, or the manner of collection of taxes, so as to affect this Mortgage, the Indebtedness Hereby Secured or Mortgagee, then, and in any such event, Mortgagor, upon demand by Mortgagee, shall pay such taxes, or reimburse Mortgagee therefor on demand, unless Mortgagee determines, in Mortgagee's sole and exclusive judgment, that such payment or reimbursement by Mortgagor is unlawful; in which event the Indebtedness Hereby Secured shall be due and payable within thirty (30) days after written demand by Mortgagee to Mortgagor. Nothing in this Paragraph 6 shall require Mortgagor to pay any income, franchise or excise tax imposed upon Mortgagee, excepting only such which may be levied against the income of Mortgagee as a complete or partial substitute for taxes required to be paid by Mortgagor pursuant hereto. 7. Insurance Coverage. Mortgagor will insure the Premises against such perils and hazards, and in such amounts and with such limits, as Mortgagee may from time to time require, and in any event will continuously maintain the following described policies of insurance without cost to Mortgagee (the "Insurance Policies"): (a) Property insurance against loss and damage by all risks of physical loss or damage, including fire, sprinkler leakage, windstorm and other risks covered by the so-called extended coverage endorsement covering the Improvements and the Personal Property in amounts not less than the full insurable replacement value of all Improvements, Personal Property, fixtures and equipment from time to time on the Premises, but in no event less than Five Million Three Hundred Eighty-Eight Thousand Three Hundred and Sixty and 35/100 Dollars ($5,388,360.35) and bearing a replacement-cost agreed-amount endorsement; (b) Comprehensive general public liability against death, bodily injury and property damage with a combined single limit in an amount not less than One Million Dollars ($1,000,000) including a waiver of subrogation clause acceptable to Mortgagee, and naming Mortgagee as an additional insured; (c) Business interruption insurance including rental interruption insurance to cover loss of rental income, with the standard mortgagee's clauses in form and amounts satisfactory to Mortgagee, but in no event shall such policy be in an amount less than twelve (12) months' projected gross rental income from the Premises, with a 90% co-insurance as a minimum; (d) An umbrella excess liability policy with a limit of not less than Four Million Dollars ($4,000,000) over primary insurance, which policy shall include, but not be limited to, automobile liability, and safeguarding of personalty, with coverages, risks insured, and waiver of subrogation clause acceptable to Mortgagee, and naming Mortgagee as an additional insured; (e) Steam boiler, machinery and pressurized vessel insurance, with a 90% co-insurance as a minimum, and naming Mortgagee as an additional insured; (f) Earthquake insurance, with a 90% co-insurance as a minimum if available, and if required by Mortgagee. (g) If the Premises is located in a federal flood hazard area other than Zone C or Zone X as described in the Department of Housing and Urban Development, Federal Insurance Administration Special Flood Hazard Area Maps, flood insurance with a 90% co-insurance as a minimum; and (h) The types and amounts of coverage as are customarily (i) maintained by owners or operators of like properties, or (ii) required by sophisticated institutional lenders in like transactions. 8. Insurance Policies. All Insurance Policies shall be in form, companies and amounts satisfactory to Mortgagee from time to time. An insurance company shall not be satisfactory unless such insurance company (a) has Best's general policyholder rating of "A-" or better and a financial rating of "Class VIII" or better; (b) is licensed in South Carolina (or Mortgagee is furnished a service of suit endorsement) and has actively been in business for at least five (5) years; (c) if it is a mutual company, is a nonassessable company; and (d) does not provide insurance on any one building in excess of 10% of its policyholders' surplus (including capital). All Insurance Policies insuring against casualty and business interruption and other appropriate policies shall include non-contributing mortgagee endorsements in favor of and with loss payable to "The Travelers Insurance Company, its affiliates, subsidiaries, successors and assigns, as their interests may appear," as well as standard waiver of subrogation endorsements, shall provide that the coverage shall not be terminated or materially modified, nor a risk materially changed without thirty (30) days' advance written notice to Mortgagee and shall provide that no claims shall be paid thereunder without ten (10) days' advance written notice to Mortgagee. If a blanket policy is issued, a certified copy of said policy shall be furnished, together with a certificate indicating that Mortgagee is an additional insured under such policy in the designated amount. Mortgagor will deliver all Insurance Policies, premium prepaid for a period acceptable to Mortgagee and, in case of Insurance Policies about to expire, Mortgagor will deliver renewal or replacement policies not less than thirty (30) days prior to the date of expiration. The requirements of the preceding sentence shall apply to any separate policies of insurance taken out by Mortgagor concurrent in form or contributing in the event of loss with the Insurance Policies. 9. Deposits for Taxes and Insurance Premiums. In order to assure the payment of Taxes and premiums payable with respect to all Insurance Policies ("Premiums") as and when the same shall become due and payable: (a) Mortgagor shall deposit with Mortgagee on the first business day of each and every month, an amount equal to one-twelfth (1/12) of the Taxes and Premiums to become due upon the Premises between one and thirteen months after the date of such deposit; provided that in the case of the first such deposit, there shall be deposited in addition an amount which, when added to the aggregate amount of monthly deposits to be made hereunder with respect to Taxes and Premiums to become due and payable within thirteen months after such first deposit, will provide (without interest) a sufficient fund to pay such Taxes and Premiums, one month prior to the date when they are due and payable. The amounts of such deposits (herein generally called "Tax and Insurance Deposits") shall be based upon Mortgagee's estimate as to the amount of Taxes and Premiums. Mortgagor shall promptly, upon the demand of Mortgagee, make additional Tax and Insurance Deposits as Mortgagee may from time to time require due to (i) failure of Mortgagee to require, or failure of Mortgagor to make, Tax and Insurance Deposits in previous months, (ii) underestimation of the amounts of Taxes and/or Premiums, (iii) the particular due dates and amounts of Taxes and/or Premiums, or (iv) application of the Tax and Insurance Deposits pursuant to Paragraph 9(c) hereof. All Tax and Insurance Deposits shall be held by Mortgagee without any allowance of interest thereon. (b) Mortgagee will, out of the Tax and Insurance Deposits, upon the presentation to Mortgagee by Mortgagor of the bills therefor, pay the Taxes and Premiums or will, upon the presentation of receipted bills therefor, reimburse Mortgagor for such payments made by Mortgagor. If the total Tax and Insurance deposits on hand shall not be sufficient to pay all of the Taxes and Premiums when the same shall become due, then Mortgagor shall pay to Mortgagee on demand the amount necessary to make up the deficiency. (c) To the extent permitted under applicable law, upon a Default under this Mortgage, Mortgagee may, at its option, without being required so to do, apply any Tax and Insurance Deposits on hand to any of the Indebtedness Hereby Secured, in such order and manner as Mortgagee may elect. When the Indebtedness Hereby Secured has been fully paid, any remaining Tax and Insurance Deposits shall be paid to Mortgagor. All Tax and Insurance Deposits are hereby pledged as additional security for the Indebtedness Hereby Secured, and shall be held by Mortgagee irrevocably to be applied for the purposes for which made as herein provided, and shall not be subject to the direction or control of Mortgagor. (d) Provided no Default has occurred under the Mortgage, Mortgagee shall apply the Tax and Insurance Deposits to the payment of the Taxes or Premiums for the payment of which such Tax and Insurance Deposits were made. (e) The provisions of this Mortgage are for the benefit of Mortgagor and Mortgagee alone. No provision of this Mortgage shall be construed as creating in any party other than Mortgagor and Mortgagee, any rights in and to the Tax and Insurance Deposits or any rights to have the Tax and Insurance Deposits applied to payment of Taxes and Premiums. Mortgagee shall have no obligation or duty to any third party to collect Tax and Insurance Deposits. 10. Proceeds of Insurance. Mortgagor will give Mortgagee immediate notice of any loss or damage to the Premises, and: (a) In case of loss or damage covered by any of the Insurance Polices equal to or in excess of $25,000, Mortgagee (or, after entry of decree of foreclosure, the purchaser at the foreclosure sale or decree creditor, as the case may be) is hereby authorized at its option either (i) to settle and adjust any claim under such Insurance Policies without the consent of Mortgagor or (ii) allow Mortgagor to settle and adjust such claim without the consent of Mortgagee. In the case of loss or damage covered by any of the Insurance Policies less than $25,000, Mortgagee hereby authorizes Mortgagor to settle and adjust such claim without the consent of Mortgagee. In all cases Mortgagee shall, and is hereby authorized to, collect and receipt for all insurance proceeds; and the reasonable expenses incurred by Mortgagee in the adjustment and collection of insurance proceeds, if any shall be so much additional Indebtedness Hereby Secured, and shall be reimbursed to Mortgagee upon demand or, in the event and to the extent sufficient proceeds are available, shall be deducted by Mortgagee from said insurance proceeds prior to any other application thereof. If Mortgagor has settled and adjusted a claim under $25,000 covered by any of the Insurance Policies, Mortgagee shall release such proceeds of insurance to Mortgagor within thirty (30) days of receipt by Mortgagee of all information regarding such loss or damage reasonably requested by Mortgagee and evidence satisfactory to Mortgagee that such loss or damage has been restored, repaired, replaced or rebuilt in a manner satisfactory to Mortgagee and all costs in connection with such restoration have been paid in full. Each insurance company which has issued an Insurance Policy is hereby authorized and directed to make payment for all losses covered by an Insurance Policy to Mortgagee alone, and not to Mortgagee and Mortgagor jointly. (b) Except as set forth below, Mortgagee shall, in its sole discretion, elect to apply the proceeds of Insurance Policies consequent upon any casualty either (i) to reduce the Indebtedness Hereby Secured; or (ii) to reimburse Mortgagor for the cost of restoring, repairing, replacing or rebuilding (collectively, "Restoring") the loss or damage of the casualty, subject to the conditions and in accordance with the provisions of Paragraph 11 hereof. If Mortgagee elects to apply the proceeds of Insurance Policies to the Indebtedness Hereby Secured and such proceeds do not discharge that indebtedness in full, the entire Indebtedness Hereby Secured shall become immediately due and payable with interest thereon at the Default Rate (as defined in the Note) from the date of such application by Mortgagee. (c) If insurance proceeds are made available to Mortgagor as set forth in Paragraph 11 hereof, Mortgagor hereby covenants to restore, repair, replace or rebuild the Improvements, to be of at least equal value, and of substantially the same character as prior to such loss or damage, and Mortgagor shall pay all costs of such restoring, repairing, replacing or rebuilding. 11. Disbursement of Insurance Proceeds. (a) Notwithstanding anything to the contrary contained in Paragraph 10, if a loss or damage to the Premises which is covered by insurance, occurs other than within one year prior to the maturity date set forth in the Note, (i) if immediately prior to the loss or damage and during any period of repair and/or rebuilding, Mortgagor was not in default under the Loan Documents; (ii) if upon completion of the repairs, the rents receivable pursuant to Leases that remain in full force and effect shall be adequate to satisfy the debt service payable under the Note and to pay the taxes and operating expenses of the Premises; (iii) if not more than three buildings constituting a portion of the Improvements are damaged or destroyed in whole or in part at any one time; (iv) if all of the requirements of any regulatory authority having jurisdiction over Mortgagee will be satisfied after the repair or restoration, then Mortgagee, after first applying such insurance proceeds to the payment of all expenses incurred by Mortgagee in obtaining such proceeds, agrees to apply the balance of the insurance proceeds to reimburse Mortgagor for the cost of Restoring the Premises or any part thereof affected by an insured casualty, in accordance with the terms and conditions provided for in this paragraph. (b) If Mortgagee makes proceeds available for Restoring the Premises, Mortgagor shall be obligated to use such proceeds solely for restoring the Premises in accordance with this paragraph, unless Mortgagee otherwise specifies in writing. Application by Mortgagee of any insurance proceeds upon the Indebtedness Hereby Secured shall not excuse Mortgagor from making the regularly scheduled payments of principal and interest due under the Note, nor shall such application extend or reduce the amount of such payments. In addition, such application by Mortgagee of insurance proceeds upon the Indebtedness Hereby Secured may be made in such order or manner as Mortgagee may elect in its sole discretion; provided that no premium or penalty shall be payable in connection with any prepayment of the Indebtedness Hereby Secured made out of insurance proceeds as aforesaid; (c) If proceeds of insurance shall be made available to Mortgagor for the Restoring of the Premises, Mortgagor hereby covenants to restore the same in accordance with plans and specifications approved by Mortgagee, and Mortgagor shall cause to be prepared and presented to Mortgagee a certified construction statement, acceptable to Mortgagee, showing the total cost of the restoration or repair; to the extent such cost exceeds the available insurance proceeds, the amount of such excess cost shall be paid, in cash, to Mortgagee, before any disbursement is made by Mortgagee pursuant hereto, to be held in an account pursuant hereto (such insurance proceeds are hereinafter called the "Construction Funds"); (d) Any portion of the insurance proceeds remaining after payment in full of the Indebtedness Hereby Secured shall be paid to Mortgagor or as ordered by a court of competent jurisdiction; (e) In the event of foreclosure of the Mortgage or other transfer of title to the Premises in extinguishment of the Indebtedness Hereby Secured, all right, title and interest of Mortgagor in and to any insurance policies then in force shall pass to the purchaser or grantee, and Mortgagor hereby appoints Mortgagee its attorney-in-fact, in Mortgagor's name, to assign and transfer all such policies and proceeds to such purchaser or grantee; (f) The Construction Funds shall be made available to Mortgagor not more than once during any calendar month as the Restoring of the Premises progresses. The funds paid by Mortgagor to Mortgagee to pay all excess costs shall be disbursed prior to the disbursement of any insurance proceeds. No payment made prior to final completion of such Restoring shall exceed 90% of the value of the work performed from time to time; (g) There shall be delivered to Mortgagee, with such certificates, sworn statements and lien waivers in an amount at least equal to the amount of Construction Funds to be paid out to Mortgagor pursuant to each architect's certificate and dated as of the date of the disbursement to which they relate, provided that lien waivers may be delivered with respect to the amount of Construction Funds disbursed thirty (30) days subsequent to such disbursements if Mortgagee has received a title insurance endorsement satisfactory to Mortgagee insuring against mechanic's liens which may arise with respect to the disbursed Construction Funds; (h) There shall be delivered to Mortgagee such other evidence as Mortgagee may reasonably request, from time to time, during the Restoring work, as to the progress of the work, compliance with the approved plans and specifications, the cost of the work and the total amount needed to complete the work; (i) There shall be delivered to Mortgagee, at the sole expense of Mortgagor, such other evidence as Mortgagee may reasonably request from time to time, including, without limitation, updated title insurance endorsements, showing that there are no liens against the Premises arising in connection with the Restoring work, that the remaining Construction Funds are sufficient to complete the restoring work, and that the Loan Documents, including this Mortgage, are then still insured as a first lien on the Mortgage Premises; (j) If such Construction Funds are at any time determined by Mortgagee not to be adequate for completion of the Restoring work, Mortgagor shall immediately pay any deficiency to Mortgagee to be held and disbursed as Construction Funds and prior to any other funds then held by Mortgagee for disbursement pursuant hereto; (k) If Mortgagor at any time shall fail to promptly and fully perform the conditions and covenants set out above or if during the Restoring work a Default occurs under any of the Loan Documents, Mortgagee may, at its option, immediately cease making any further payments to Mortgagor for such Restoring work, and may further, at its option, apply the Construction Funds then in its possession either to the reduction of the Indebtedness Hereby Secured or to the Restoring of the Premises in the manner above provided and notwithstanding any such default or defaults, without affecting the lien of this Mortgage and the obligations hereunder. Construction Funds may be disbursed by Mortgagee directly or through a third party escrow agent, such as, but not limited to, a title insurance company, or its agent, as Mortgagee may determine in its sole discretion. Any excess Construction Funds shall be applied by Mortgagee against the Indebtedness Hereby Secured in such order or manner as Mortgagee may elect in its sole discretion; 12. Condemnation and Eminent Domain. Any and all awards (the "Awards") heretofore or hereafter made or to be made to the present, or any subsequent, owner of the Premises, by any governmental or other lawful authority for the taking by condemnation or eminent domain, of all or any part of the Premises (including any award from the United States government at any time after the allowance of a claim therefor, the ascertainment of the amount thereto, and the issuance of a warrant for payment thereof), or the proceeds from a sale in lieu of such condemnation or eminent domain are hereby assigned by Mortgagor to Mortgagee, which Awards Mortgagee is hereby authorized to collect and receive from the condemnation authorities, and Mortgagee is hereby authorized to give appropriate receipts and acquittances therefor. Mortgagor shall give Mortgagee immediate notice of the actual or threatened commencement of any condemnation or eminent domain proceedings affecting all or any part of the Premises and shall deliver to Mortgagee copies of any and all papers served in connection with any such proceedings. Mortgagor further agrees to make, execute, and deliver to Mortgagee, at any time upon request, free, clear, and discharged of any encumbrance of any kind whatsoever (except the rights of the holders of any junior mortgage loans expressly consented to in writing by Mortgagee, provided such rights are expressly subordinate to the rights of Mortgagee), any and all further assignments and other instruments deemed reasonably necessary by Mortgagee for the purpose of validly and sufficiently assigning all Awards and other compensation heretofore and hereafter made to Mortgagor for any taking, either permanent or temporary, under any such proceeding. If any portion of or interest in the Premises is taken by condemnation or eminent domain, either temporarily or permanently, and the remaining portion of the Premises is not, in the judgment of Mortgagee, a viable apartment complex of the same character than the same was prior to the taking, then, at the option of Mortgagee, the entire Indebtedness Hereby Secured shall immediately become due and payable. After deducting from the Award for such taking all of its expenses incurred in the collection and administration of the Award, including reasonable attorney's fees, Mortgagee shall be entitled to apply the net proceeds toward repayment of such portion of the Indebtedness Hereby Secured as it deems appropriate without affecting the lien of this Mortgage. In the event of any partial taking of parking spaces at the Premises, which in the judgment of the Mortgagee leaves the Premises as a viable apartment complex of the same character as prior to the taking; provided no Default has occurred and is then continuing, the Award, in respect of such taking of such parking spaces, shall be applied to reimburse Mortgagor for the cost of building additional parking spaces in locations approved by Mortgagee, and such Award shall be disbursed in the same manner as is provided in Paragraph 11 hereof for the application of insurance proceeds, provided that any surplus after payment of such costs shall be applied on account of the Indebtedness Hereby Secured. If the Award is not applied for reimbursement of such restoration costs, the Award shall be applied against the Indebtedness Hereby Secured, in such order or manner as Mortgagee shall elect. 13. Assignment of Leases and Rents. Mortgagor hereby absolutely and presently sells, assigns and transfers unto Mortgagee (subject to the license granted to Mortgagor below) all of the rents, royalties, issues, profits, revenue, income, security deposits and other benefits generated from the Premises under the Leases or otherwise and all of the rents, leases, issues, security deposits and profits now due and which may hereafter become due under or by virtue of any Leases which may have been heretofore or may be hereafter made or agreed to by Mortgagor or the agents of any Mortgagor or which may be made or agreed to by Mortgagee under the powers herein granted (collectively the "Rents"), it being the intention hereby to establish an absolute transfer and assignment of all such Rents and Leases to Mortgagee and not merely the granting of a security interest. Notwithstanding the foregoing, Mortgagee hereby grants to Mortgagor a license to collect and retain the Rents. However, upon Default under the Note, this Mortgage or any other of the Loan Documents entered into for the Indebtedness Hereby Secured, the license to Mortgagor from Mortgagee shall thereupon terminate and thereafter Mortgagee shall be entitled to take possession of the Premises, and subject to the effect of any Leases, remove all persons therefrom and rent the Premises for Mortgagor's account and employ such agents and attorneys as may be necessary with respect thereto. Likewise, upon such Default, Mortgagee shall be entitled to the immediate appointment of a receiver of the Premises, without regard to the value of the Premises or the solvency of any person or persons primarily or contingently liable for the payment of the Indebtedness Hereby Secured, whether or not Mortgagee has an adequate remedy at law; and upon any such Default, whether or not a receiver has been sought or appointed, Mortgagee may collect all Rents, and apply the Rents so collected in their entirety to the extent of the Indebtedness Secured Hereby, after deducting Mortgagee's costs and expenses of collection of such Rents (including, without limitation, reasonable attorneys' fees and the costs and expenses of litigation). Upon payment in full and satisfaction of the Indebtedness Hereby Secured, this assignment of Rents shall terminate automatically. Mortgagor hereby irrevocably appoints Mortgagee its agent in its name and stead (with or without taking possession of the Premises as provided in Paragraph 20 hereof) to rent, lease or let all or any portion of the Premises to any party or parties at such rental and upon such terms as Mortgagee shall, in its reasonable discretion, determine, and to collect all of said Rents arising from or accruing at any time hereafter, and all now due or that may hereafter become due under each and every of the Leases, written or oral, or other tenancy existing, or which may hereafter exist on the Premises, with the rights and powers and subject to the same immunities, exoneration of liability and rights of recourse and indemnity as Mortgagee would have upon taking possession pursuant to the provisions of Paragraph 20 hereof. Mortgagor represents and agrees that no rent has been or will be paid by any person in possession of any portion of the Premises for more than one installment in advance and that the payment of none of the rents to accrue for any portion of said Premises has been or will be waived, released, reduced, discounted or otherwise discharged or compromised by Mortgagor except as may be permitted in the Assignment of Leases (as hereinafter defined). Mortgagor will not assign any of the rents or profits of the Premises, except to Mortgagee or a permitted purchaser or grantee of the Premises. Nothing herein contained shall be construed as constituting Mortgagee a "mortgagee-in-possession" in the absence of the taking of actual possession of the Premises by Mortgagee pursuant to Paragraph 20 hereof. Possession by a court-appointed receiver will not be considered possession by Mortgagee. In the exercise of the powers herein granted Mortgagee, no liability shall be asserted or enforced against Mortgagee, all such liability being expressly waived and released by Mortgagor. Mortgagor further agrees to assign and transfer to Mortgagee all future Leases upon all or any part of the Premises and to execute and deliver, at the request of Mortgagee, all such further assurances and assignments in the Premises as Mortgagee shall from time to time require. In the event Mortgagee requires that Mortgagor execute and record a separate Assignment of Rents or separate assignments of any of the Leases to Mortgagee, the terms and provisions of those assignments shall control in the event of a conflict between the terms of this Mortgage and the terms thereof. The remedies provided herein are in addition to the remedies provided to Mortgagee under any of the Loan Documents. 14. Observance of Lease Assignment. Mortgagor expressly covenants and agrees that if any lessee under any of the Leases transferred, sold or assigned to Mortgagee or if Mortgagor, as lessor therein, shall fail to perform and fulfill any term, covenant, condition or provision in said Lease, on its part to be performed or fulfilled at the times and in the manner in said Lease provided; or if Mortgagor shall enter into any Leases other than on a standard form previously approved by Mortgagee, for a term longer than one year and other than in the ordinary course of business on commercially prudent terms and provisions consistent with market rental rates for comparable residential projects in the area where the Premises is located and including no free rent periods without the prior written consent of Mortgagee or if Mortgagor shall permit or agree to any renewal, extension, compromise, settlement or termination or make any material change or modification of any kind or nature of or with respect to any of the Leases or the terms thereof (except that Mortgagor shall be entitled to terminate up to but not in excess of ten (10) residential Leases through customary non-payment proceedings in any given calendar month provided that such termination is in the ordinary course of business and is commercially prudent), without Mortgagee's prior written consent; or if Mortgagor shall suffer or permit to occur any breach or default under the provisions of any assignment of any Lease given as additional security for the payment of the Indebtedness Hereby Secured, which breach or default is not cured within the applicable grace period provided therein; then and in any such event, such breach or default shall constitute a Default hereunder and at the option of Mortgagee, and upon notice to Mortgagor, the Indebtedness Secured Hereby shall become due and payable as in the case of other Defaults. 15. Mortgagee's Performance of Mortgagor's Obligations. In case of Default, Mortgagee, either before or after acceleration of the Indebtedness Hereby Secured or the foreclosure of the lien hereof or foreclosure sale, may, but shall not be required to, make any payment or perform any act herein required of Mortgagor (whether or not Mortgagor is personally liable therefor) in any form and manner deemed expedient to Mortgagee. Upon any such payment or performance of any such act, Mortgagee shall as soon as reasonably possible provide notice thereof to Mortgagor but its failure to do so shall not affect the rights of Mortgagee and the obligation of Mortgagor hereunder. Mortgagee may, but shall not be required to, complete construction, furnishing and equipping of the Improvements and rent, operate and manage the Premises and such Improvements and pay operating costs and expenses, including management fees, of every kind and nature in connection therewith, so that the Premises shall be operational and usable for their intended purposes. All monies paid, and all expenses paid or incurred in connection therewith, including reasonable attorneys' fees and other monies advanced by Mortgagee to protect the Premises and the lien hereof, or to complete construction, furnishing and equipping or to rent, operate and manage the Premises or to pay any such operating costs and expenses thereof or to keep the Premises operational and usable for their intended purpose shall be so much additional Indebtedness Hereby Secured, whether or not the Indebtedness Hereby Secured, as a result thereof, shall exceed the face amount of the Note, and shall become immediately due and payable on demand, and with interest thereon at the Default Rate (as such term is defined in the Note). Inaction of Mortgagee shall never be considered as a waiver of any right accruing to it on account of any Default nor shall the provisions of this Paragraph or any exercise by Mortgagee of its rights hereunder prevent any default from constituting a Default. Mortgagee, in making any payment hereby authorized (a) relating to Taxes, may do so according to any bill, statement or estimate, without inquiry into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof; (b) for the purchase, discharge, compromise or settlement of any lien, may do so without inquiry as to the validity or amount of any claim for lien which may be asserted; or (c) in connection with the completion of construction, furnishing or equipping of the Premises or the rental, operation, or management of the Premises or the payment of operating costs and expenses thereof, may do so in such amounts and to such persons as Mortgagee may deem appropriate. Nothing contained herein shall be construed to require Mortgagee to advance or expend monies for any purpose mentioned herein, or for any other purpose. 16. Security Agreement. Mortgagee and Mortgagor agree that this Mortgage shall constitute a Security Agreement within the meaning of the South Carolina Uniform Commercial Code (hereinafter the "Code") with respect to (i) any and all sums at any time on deposit for the benefit of Mortgagee or held by Mortgagee (whether deposited by or on behalf of Mortgagor or anyone else) pursuant to any of the provisions of the Mortgage and (ii) with respect to any personal property included in the granting clauses of this Mortgage and Exhibit B hereto, which personal property may not be deemed to be affixed to the Premises or may not constitute a "fixture" (within the meaning of Section 9-313 of the Code), (which property is hereinafter referred to as "Personal Property") and all replacements of such Personal Property, substitutions for such Personal Property, additions to such Personal Property, and the proceeds thereof (all of said Personal Property and the replacements, substitutions and additions thereto and the proceeds thereof being sometimes hereinafter collectively referred to as the "Collateral"), and that a security interest in and to the Collateral is hereby granted to Mortgagee, and the Collateral and all of Mortgagor's right, title and interest therein are hereby assigned to Mortgagee, all to secure payment of the Indebtedness Hereby Secured. All of the terms, provisions, conditions and agreements contained in this Mortgage pertain and apply to the Collateral as fully and to the same extent as to any other property comprising the Premises; and the following provisions of this Paragraph shall not limit the applicability of any other provision of this Mortgage but shall be in addition thereto: (a) Mortgagor (being the Debtor as that term is used in the Code) is and will be the true and lawful owner of the Collateral, subject to no liens, charges or encumbrances other than the lien hereof, other liens and encumbrances benefiting Mortgagee and no other party, and liens and encumbrances, if any, expressly permitted by this Mortgage (including, without limitation, those certain liens and encumbrances, if any, set forth on the title insurance policy insuring the lien of this Mortgage) or otherwise expressly consented to in writing by Mortgagee. (b) The Collateral is to be used by Mortgagor solely for business purposes. (c) The Collateral will be kept at the Premises, and, except for Obsolete Collateral (as hereinafter defined), will not be removed therefrom without the consent of Mortgagee (being the Secured Party as that term is used in the Code). The Collateral may be affixed to the Premises but will not be affixed to any other real estate. (d) The only persons having any interest in the Collateral are Mortgagor, Mortgagee and holders of interests, if any, expressly permitted hereby or otherwise expressly consented to in writing by Mortgagee. (e) No Financing Statement (other than Financing Statements showing Mortgagee as the sole secured party, or with respect to liens or encumbrances, if any, expressly permitted by this Mortgage or otherwise expressly consented to in writing by Mortgagee) covering any of the Collateral or any proceeds thereof is on file in any Uniform Commercial Code or public Land Records except pursuant hereto; and Mortgagor will at its own cost and expense, upon demand, furnish to Mortgagee such further information and will execute and deliver to Mortgagee such financing statements and other documents in form satisfactory to Mortgagee and will do all such acts and things as Mortgagee may at any time or from time to time request or as may be necessary or appropriate to establish and maintain a perfected security interest in the Collateral as security for the Indebtedness Hereby Secured, subject to no other liens or encumbrances, other than liens or encumbrances benefiting Mortgagee and no other party and liens and encumbrances (if any) expressly permitted by this Mortgage; and Mortgagor will pay the cost of filing or recording such financing statements or other documents, and this instrument, in any Uniform Commercial Code or public Land Records wherever filing or recording is deemed by Mortgagee to be necessary or desirable. (f) Upon Default hereunder, Mortgagee shall have the remedies of a secured party under the Code, including without limitation, the right to take immediate and exclusive possession of the Collateral, or any part thereof, and for that purpose may, so far as Mortgagor can give authority therefor, with or without judicial process, enter (if this can be done without breach of the peace), upon any place which the Collateral or any part thereof may be situated and remove the same therefrom (provided that if the Collateral is affixed to real estate, such removal shall be subject to the conditions stated in the Code); and Mortgagee shall be entitled to hold, maintain, preserve and prepare the Collateral for sale, until disposed of, or may propose to retain the Collateral subject to Mortgagor's right of redemption in satisfaction of Mortgagor's obligations, as provided in the Code. Mortgagee may render the Collateral unusable without removal and may dispose of the Collateral on the Premises. Mortgagee may require Mortgagor to assemble the Collateral and make it available to Mortgagee for its possession at a place to be designated by Mortgagee. Mortgagee will give Mortgagor reasonable notice of the time and place of any public sale of the Collateral or of the time after which any private sale or any other intended disposition thereof is to be made. The requirements of reasonable notice shall be met if such notice is mailed, by certified United States mail or equivalent, postage prepaid, to the address of Mortgagor hereinafter set forth at least ten (10) days before the time of the sale or disposition. Mortgagee may buy at any public sale and, if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations, Mortgagee may buy at private sale. Any such sale may be held as part of and in conjunction with any foreclosure sale of the Premises, the Premises including the Collateral to be sold as one lot if Mortgagee so elects. The net proceeds realized upon any such disposition, after deduction for the expenses of retaking, holding, preparing for sale, selling or the like and the attorneys' fees and legal expenses incurred by Mortgagee, shall be applied against the Indebtedness Hereby Secured in such order or manner as Mortgagee shall select. Mortgagee will account to Mortgagor for any surplus realized on such disposition. (g) The terms and provisions contained in this Paragraph 16 shall, unless the context otherwise requires, have the meanings and be construed as provided in the Code. (h) This Mortgage is intended to be a financing statement within the purview of Section 9-402(f) of the Code with respect to the Collateral and the goods described herein, which goods are or may become fixtures relating to the Premises. The addresses of Mortgagor (Debtor) and Mortgagee (Secured Party) are hereinafter set forth. The addresses of Mortgagor (Debtor) hereinafter set forth is the chief executive offices of Mortgagor (Debtor) (i.e. the place where in fact the Debtor conducts the main part of its business operations). This Mortgage is to be filed for record in the RMC office for Charleston County, South Carolina. (i) To the extent permitted by applicable law, the security interest created hereby is specifically intended to cover and include all Executory Contracts, any management agreement regarding the Premises and all Leases between Mortgagor (or its agent), as lessor, and various tenants named therein, as lessee, including all extended terms and all extensions and renewals of the terms thereof, as well as any amendments to or replacement of said Leases, together with all of the right, title and interest of Mortgagor, as lessor thereunder, including, without limiting the generality of the foregoing, the present and continuing right to make claim for, collect, receive and receipt for any and all of the rents, rent equivalents, income, revenues, issues and profits and moneys payable as damages or in lieu of the rent and moneys payable as the purchase price of the Premises or any part thereof or of awards or claims for money and other sums of money payable or receivable thereunder howsoever payable, and to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which Mortgagor or any lessor is or may become entitled to do under the Leases. Notwithstanding the foregoing, it is expressly understood and agreed that Mortgagee shall not exercise any of the rights or powers conferred upon it by this paragraph until a Default shall exist under this Mortgage. (j) Notwithstanding anything herein to the contrary, this Paragraph 16 shall not be deemed to apply to any items of personal property which (i) are owned by tenants who are in possession pursuant to a Lease and (ii) may be removed by such tenants at the expiration or termination of such Lease. 17. Restrictions on Transfer. Mortgagor shall not, without the prior written consent of Mortgagee, create, effect, contract for, consent to, suffer or permit any "Prohibited Transfer" (as hereinafter defined). Any conveyance, sale, assignment, transfer, lien, pledge, hypothecation, mortgage, security interest or other encumbrance or alienation (or any agreement to do any of the foregoing) of any of the following properties, rights or interests which occurs, is granted, accomplished, attempted or effectuated without the prior written consent of Mortgagee shall constitute a "Prohibited Transfer": (a) the Premises or any part thereof or interest therein, excepting only sales or other dispositions of Collateral (hereinafter called "Obsolete Collateral") no longer useful in connection with the operation of the Premises, provided that such Obsolete Collateral has been or is contemporaneously being replaced by Collateral of at least equal value and utility which is subject to the lien hereof with the same priority as with respect to the Obsolete Collateral; (b) any shares of capital stock of a corporate Mortgagor or a corporation which is a general partner in Mortgagor or a corporation which is a general partner of a partnership which is the general partner of Mortgagor, or any shares of capital stock of National Property Investors, Inc., a Delaware corporation ("NPI, Inc."), it being agreed and understood that a transfer of stock of NPI, Inc. shall not constitute a Prohibited Transfer hereunder so long as one of Michael Ashner, Martin Lifton, Steven Lifton and Arthur N. Queler is the chief operating officer of NPI, Inc. charged with the authority and power to direct the day-to-day operation and management of NPI, Inc. and so long as any one or more of the current shareholders of NPI, Inc. shall own at least a 5% interest in NPI, Inc. (c) any general partnership interests in Mortgagor or any partnership which is the general partner of Mortgagor; (d) 50% or more of the limited partnership interests or capital stock, as applicable, in Mortgagor, any general partner of Mortgagor or any general partner of the general partner of Mortgagor is transferred in any one calendar year; or (e) any general partner of Mortgagor or of Mortgagor's general partner shall cease to be a general partner thereof; in each case whether any such conveyance, sale, assignment, transfer, lien, pledge, mortgage, security interest, encumbrance or alienation is effected directly, indirectly, voluntarily or involuntarily, by operation of law or otherwise; provided, however, that the foregoing provisions of this Paragraph 17 shall not apply (i) to liens securing the Indebtedness Hereby Secured, (ii) to the lien of current taxes and assessments not in default, or (iii) to any transfers of the Premises, or part thereof, or interest therein, or shares of stock or partnership or joint venture interests, as the case may be, by or on behalf of an owner thereof who is deceased or declared judicially incompetent, to such owner's heirs, legatees, devisees, executors, administrators, estate or personal representatives, (iv) to the lien created by the Subordinate Mortgage (the "Subordinate Mortgage") dated the date hereof made by Mortgagor to Mortgagee in the principal amount of $3,679,026.14 securing that certain Amended and Restated Note made by Mortgagor to Mortgagee in connection with a loan made with respect to the Copper Mill Apartments. Mortgagor shall not create, effect, contract for, consent to or permit any Prohibited Transfer unless otherwise agreed by Mortgagee. Notwithstanding the foregoing, provided that no default has occurred and is continuing under the Loan Documents, if the stock of NPI, Inc. is anticipated to be transferred to a bona fide third party and (i) one of Michael Ashner, Martin Lifton, Steven Lifton or Arthur N. Queler will not be the chief operating officer of NPI, Inc. charged with the authority and power to direct the day to day operations and management of NPI, Inc., or (ii) any one or more of the current shareholders of NPI, Inc. will not own at least 5% interest of NPI, Inc., Mortgagor shall use reasonable efforts to notify Mortgagee of such transfer prior to its occurrence. On the date of such transfer, Mortgagor shall provide Mortgagee with notice of such transfer. Mortgagor shall deliver to Mortgagee copies as evidence of the transfer, including stock certificates. The Loan shall, without further act or instrument, become immediately due and payable on the date which is one (1) year from the date of the transfer at which time the outstanding principal balance, accrued interest and all sums owing under the Loan shall be immediately due and payable. Nothing contained herein shall release Mortgagor from any liability under the Loan Documents, which shall continue unmodified and in full force and effect. Notwithstanding the foregoing, provided no default has occurred and is continuing under the Loan Documents, upon request of Mortgagor, Mortgagee shall consent to the transfer of the Premises to an Affiliate of Mortgagor provided that the Affiliate assumes all the obligations of Mortgagor and any Guarantor or Indemnitor under the Loan (including but not limited to the Responsible Entities) and enters and delivers all documents, instruments, legal opinions, title endorsements and such other items as Mortgagee may reasonably require in connection with such transfer. The term "Affiliate" shall mean any person or entity currently controlled by, under common control with, or controlling Mortgagor, but shall not include Fox Realty Investors, Fox Associates '84 or Fox Partners '85. The consent by Mortgagee to any transfer under this paragraph shall not release Mortgagor or any of the Responsible Entities from any liability under the Loan Documents, which shall continue unmodified and in full force and effect. Any consent by Mortgagee permitting a transaction otherwise prohibited under this Paragraph 17 shall not constitute a consent to or waiver of any right, remedy or power of Mortgagee to withhold its consent on a subsequent occasion to a transaction not otherwise permitted by the provisions of this Paragraph 17, and notwithstanding the giving of such consent Mortgagor shall not engage in any "prohibited transaction" with any "party-in-interest" as such terms are defined in ERISA (as defined in Paragraph 44) or otherwise contravene the provisions of Paragraph 44. No such consent shall be considered by Mortgagee unless the appropriate service fees and legal fees are paid in advance and no such consent shall be given unless Mortgagor agrees, in addition to any other conditions to such consent imposed by Mortgagee, that immediately upon closing of the subject sale or transfer, Mortgagor will provide Mortgagee with a copy of the deed or other instrument conveying title to the Premises to the transferee and with an affidavit and agreement of indemnification regarding Internal Revenue Code Sections 1445 and 7701 in form satisfactory to Mortgagee executed by the transferee under oath. In determining whether or not to make the loan secured hereby, Mortgagee evaluated the background and experience of Mortgagor in owning and operating property such as the Premises, found it acceptable and relied and continues to rely upon same as the means of maintaining the value of the Premises which is Mortgagee's security for the Note. Mortgagor is well-experienced in borrowing money and owning and operating property such as the Premises, was ably represented by a licensed attorney at law in the negotiation and documentation of the loan secured hereby and bargained at arm's length and without duress of any kind for all of the terms and conditions of the loan, including this provision. Mortgagor recognizes that Mortgagee is entitled to keep its loan portfolio at current interest rates by either making new loans at such rates or collecting assumption fees and/or increasing the interest rate on a loan, the security for which is purchased by a party other than the original Mortgagor. Mortgagor further recognizes that any secondary junior financing placed upon the Premises (a) may divert funds which would otherwise be used to pay the Note secured hereby; (b) could result in acceleration and foreclosure by any such junior encumbrancer which would force Mortgagee to take measures and incur expenses to protect its security; (c) would detract from the value of the Premises should Mortgagee come into possession thereof with the intention of selling same; and (d) would impair Mortgagee's right to accept a deed in lieu of foreclosure, as a foreclosure by Mortgagee would be necessary to clear the title to the Premises. In accordance with the foregoing and for the purposes of (i) protecting Mortgagee's security, both of repayment and of value of the Premises; (ii) giving Mortgagee the full benefit of its bargain and contract with Mortgagor; (iii) allowing Mortgagee to raise the interest rate and collect assumption fees; and (iv) keeping the Premises free of subordinate financing liens, Mortgagor agrees that if this Paragraph 17 be deemed a restraint on alienation, that it is a reasonable one. 18. Defaults. If one or more of the following events (herein called "Defaults") shall occur: (a) Mortgagor shall default in the payment of principal or interest, Tax or Insurance Deposits or Reserves (as defined in the Reserve Agreement dated the date hereof between Mortgagee and Mortgagor) and such default continues past the fifth (5th) day after the same is due; (b) Mortgagor shall default in the due and punctual payment of Taxes or Premiums; (c) If any default shall exist for any reason other than the non-payment of money under the Note, under this Mortgage, or under any other Loan Documents which is not cured within the grace period provided for thereunder, and if no grace period is specified, within thirty (30) days from the date of such default, provided, however, that if Mortgagor has commenced in good faith to cure such default during the aforesaid thirty (30) day period and proceeds with due diligence and continuity to completion of such cure, Mortgagor shall have a maximum of an additional sixty (60) days (above and beyond the initial 30 day period) to cure such default; or (d) If any of the information contained in any documentation provided to Mortgagee by Mortgagor in conjunction with the Indebtedness Hereby Secured shall not be true, accurate and complete in all material respects or shall be misleading in any material respect; (e) If (and for the purpose of this Subparagraph 18(e) only, the term Mortgagor shall mean and include not only Mortgagor, but also any general partner in Mortgagor, any owner of more than ten percent (10%) of the stock in a corporate Mortgagor or corporate general partner of Mortgagor, and each person who, as guarantor, co-maker or otherwise, shall be or become liable for or obligated upon all or any part of the Indebtedness Hereby Secured or any of the covenants or agreements contained herein) any of the following shall occur: (i) Mortgagor shall file a voluntary petition in bankruptcy or for arrangement, reorganization or other relief under any chapter of the Federal Bankruptcy Code or any similar law, state or federal, now or hereafter in effect; (ii) Mortgagor shall file an answer or other pleading in any proceeding admitting insolvency, bankruptcy, or inability to pay its debts as they mature; (iii) Within ninety (90) days after the filing against Mortgagor of any involuntary proceeding under the Federal Bankruptcy Code or similar law, state or federal, now or hereafter in effect, such proceedings shall not have been dismissed; (iv) All or a substantial part of Mortgagor's assets are attached, seized, subjected to a writ or distress warrant, or are levied upon, unless such attachment, seizure, writ, warrant or levy is vacated within sixty (60) days; (v) Mortgagor shall make an assignment for the benefit of creditors or shall admit in writing its inability to pay its debts generally as they become due or shall consent to the appointment of a receiver or trustee or liquidator of all or the major part of its property, or the Premises; or (vi) An order appointing a receiver, trustee or liquidator of Mortgagor or all or a major part of Mortgagor's property or the Premises is not vacated within ninety (90) days following the entry thereof; (f) If a default, after passage of time or notice, as may be required, shall occur under any other mortgage, whether subordinate or superior to this Mortgage, now or hereafter encumbering the Premises or any portion thereof including, but not limited to, the Subordinate Mortgage; or (g) If a default, after passage of time or notice, as may be required, shall occur under that certain Subordinate Deed of Trust (the "Subordinate Deed of Trust") from Mortgagor to Raymond N. Beck and Virginia A. Davis, as Trustees for Mortgagee dated as of the date hereof in the sum of $5,388,360.35 encumbering property located in Henrico County, Virginia and known as Copper Mill Apartments and recorded in the Clerk's Office of the Circuit Court of Henrico County, Virginia; then Mortgagee is hereby authorized and empowered, at its option and without affecting the lien hereby created or the priority of said lien or any other right of Mortgagee hereunder, to declare, without further notice, all Indebtedness Hereby Secured to be immediately due and payable with interest thereon at the Default Rate, whether or not such Default be thereafter remedied by Mortgagor, and Mortgagee may immediately proceed to foreclose this Mortgage and/or to exercise any right, power or remedy provided by this Mortgage, the Note or any of the other Loan Documents or by law or in equity or any other document or instrument regulating, evidencing, securing or guarantying any of the Indebtedness Hereby Secured. 19. Foreclosure. When the Indebtedness Hereby Secured, or any part thereof, shall become due, whether by acceleration or otherwise, Mortgagee shall have the right to foreclose the lien hereof in accordance with the laws of the State of South Carolina and to exercise any other remedies of Mortgagee provided in the Note, this Mortgage or any of the other Loan Documents, or which Mortgagee may have at law, at equity or otherwise. In any suit to foreclose the lien hereof, there shall be allowed and included as additional Indebtedness Hereby Secured in the decree of sale, all reasonable expenditures and expenses authorized by law and all other expenditures and expenses which may be paid or incurred by or on behalf of Mortgagee for attorneys' fees, appraiser's fees, outlays for documentary and expert evidence, stenographer's charges, publication costs, and costs (which may be estimated as to items to be expended after entry of the decree) of procuring all such abstracts of title, title searches and examinations, title insurance policies, and similar data and assurances with respect to title as Mortgagee may deem necessary either to prosecute such suit or to evidence to bidders at sales which may be had pursuant to such decree the true conditions of the title to or the value of the Premises. All expenditures and expenses of the nature mentioned in this Paragraph, and such other expenses and fees as may be incurred in the protection of the Premises and rents and income therefrom and the maintenance of the lien of this Mortgage, including the fees of any attorney employed by Mortgagee in any litigation or proceedings affecting this Mortgage, the Note, the other Loan Documents or the Premises, including probate and bankruptcy proceedings, or in preparation of the commencement or defense of any proceedings or threatened suit or proceeding, or otherwise in dealing specifically therewith, shall be so much additional Indebtedness Hereby Secured and shall be immediately due and payable by Mortgagor, with interest thereon at the Default Rate until paid. 20. Right of Possession. When the Indebtedness Hereby Secured shall become due, whether by acceleration or otherwise, or in any case in which, under the provisions of this Mortgage, Mortgagee has a right to institute foreclosure proceedings, Mortgagor shall, forthwith upon demand of Mortgagee, surrender to Mortgagee, and Mortgagee shall be entitled to take actual possession of, the Premises or any part thereof, personally, by its agent or attorneys or be placed in possession pursuant to court order as mortgagee in possession or receiver, and Mortgagee, in its discretion, personally, by its agents or attorneys or pursuant to court order as mortgagee in possession or receiver, may enter upon and take and maintain possession of all or any part of the Premises, together with all documents, books, records, papers, and accounts of Mortgagor, including those accounts which were set up to hold any security deposits, or the then owner of the Premises relating thereto, and may exclude Mortgagor, such owner, and any agents and servants thereof wholly therefrom and may, on behalf of Mortgagor or such owner, or in its own name as Mortgagee and under the powers herein granted: (1) hold, operate, manage, and control all or any part of the Premises and conduct the business, if any, thereof, either personally or by its agents, with full power to use such measures, legal or equitable, as in its discretion may be deemed proper or necessary to enforce the payment or security of the rents, issues, deposits, profits, and avails of the Premises, including without limitation actions for recovery of rent, actions in forcible detainer, and actions in distress for rent, all without notice to Mortgagor; (2) cancel or terminate any Lease or sublease of all or any part of the Premises for any cause or on any ground that would entitle Mortgagor to cancel the same; (3) elect to disaffirm any Lease or sublease of all or any part of the Premises made subsequent to this Mortgage without Mortgagee's prior written consent; (4) extend or modify any then existing Leases and make new Leases of all or any part of the Premises, which extensions, modifications, and new Leases may provide for terms to expire, or for options to lessees to extend or renew terms to expire, beyond the maturity date of the loan evidenced by the Note and the issuance of a deed or deeds to a purchaser or purchasers at a foreclosure sale, it being understood and agreed that any such Leases, and the options or other such provisions to be contained therein, shall be binding upon Mortgagor, all persons whose interests in the Premises are subject to the lien hereof, and the purchaser or purchasers at any foreclosure sale, notwithstanding any redemption, reinstatement, discharge of the Indebtedness Hereby Secured, satisfaction of any foreclosure decree, or issuance of any certificate of sale or deed to any such purchaser; (5) make all necessary or proper repairs, decoration renewals, replacements, alterations, additions, betterments, and improvements in connection with the Premises as may seem judicious to Mortgagee, to insure and reinsure the Premises and all risks incidental to Mortgagee's possession, operation, and management thereof, and to receive all rents, issues, deposits, profits, and avails therefrom; and (6) apply the net income, after allowing a reasonable fee for the collection thereof and for the management of the Premises, to the payment of Taxes, Insurance Premiums and other charges applicable to the Premises, or in reduction of the Indebtedness Hereby Secured in such order and manner as Mortgagee shall select. Nothing herein contained shall be construed as constituting Mortgagee a mortgagee in possession in the absence of the actual taking of possession of the Premises. 21. Receiver. Upon the occurrence of a Default, a court of competent jurisdiction may appoint a receiver upon petition of Mortgagee, and Mortgagee shall be entitled to the appointment of a receiver at Mortgagee's sole option. Such appointment may be made either before or after sale, without notice, without regard to the solvency or insolvency of Mortgagor at the time of application for such receiver, and without regard to the then value of the Premises or whether the same shall be then occupied as a homestead or not; and Mortgagee hereunder or any employee or agent thereof may be appointed as such receiver. Such receiver shall have all powers and duties prescribed by law, including the power to make leases to be binding upon all parties, including Mortgagor, the purchaser at a sale pursuant to a judgment of foreclosure and any person acquiring an interest in the Premises after entry of a judgment of foreclosure. In addition, such receiver shall also have the power to extend or modify any then existing leases, which extensions and modifications may provide for terms to expire, or for options to lessees to extend or renew terms to expire, beyond the maturity date of the Note and beyond the date the issuance of a deed or deeds to a purchaser or purchasers at a foreclosure sale, it being understood and agreed that any such leases, and the options or other provisions to be contained therein, shall be binding upon Mortgagor and all the persons whose interest in the Premises are subject to the lien hereof and upon the purchaser or purchasers at any foreclosure sale, notwithstanding any redemption, reinstatement, discharge of the Indebtedness Hereby Secured, satisfaction of any foreclosure judgment, or issuance of any certificate of sale or deed to any purchaser. In addition, such receiver shall have the power to collect the rents, issues and profits of the Premises during the pendency of such foreclosure suit and, in case of a sale and deficiency, during the full statutory period of redemption, if any, whether there be a redemption or not, as well as during any further times when Mortgagor, except for the intervention of such receiver, would be entitled to collection of such rents, issues and profits, and such receiver shall have all other powers which may be necessary or are usual in such cases for the protection, possession, control, management and operation of the Premises during the whole of said period. The court may, from time to time, authorize the receiver to apply the net income from the Premises in payment in whole or in part of: (a) the Indebtedness Hereby Secured or the indebtedness secured by a decree foreclosing this Mortgage, or any tax, special assessment, or other lien which may be or become superior to the lien hereof or of such decree, provided such application is made prior to the foreclosure sale; or (b) the deficiency in case of a sale and deficiency. 22. Foreclosure Sale. The proceeds of any foreclosure sale of the Premises shall be distributed and applied in accordance with applicable law. The judgment of foreclosure or order confirming the sale shall provide for application of sale proceeds in the following order of priority: First, all items not covered by the provisions of Paragraph 19 hereof, which under the terms hereof constitute Indebtedness Hereby Secured additional to the principal and interest evidenced by the Note in such order as Mortgagee shall elect with interest thereon as herein provided; and Second, all principal and interest remaining unpaid on the Note in such order as Mortgagee shall elect. 23. Insurance During Foreclosure. In case of an insured loss after foreclosure proceedings have been instituted, the proceeds of any Insurance Policy, if not applied in rebuilding or restoring the Improvements, as aforesaid, shall be used to pay the amount due in accordance with any decree of foreclosure that may be entered in any such proceedings, and the balance, if any, shall be paid as the court may direct. In the case of foreclosure of this Mortgage, the court, in its decree, may provide that the mortgagee's clause attached to each of the casualty Insurance Policies may be cancelled and that the decree creditor may cause a new loss clause to be attached to each of said casualty Insurance Policies making the loss thereunder payable to said decree creditor. In the event of foreclosure sale, provided such Insurance Policies are assignable, Mortgagee is hereby authorized, without the consent of Mortgagor, to assign any and all Insurance Policies to the purchaser at the sale, provided such Insurance Policies are assignable, or to take such other steps as Mortgagee may deem advisable to cause the interest of such purchaser to be protected by any of the Insurance Polices without credit or allowance to Mortgagor for prepaid premiums thereon. 24. Waiver of Right of Redemption and Other Rights. To the full extent permitted by law, Mortgagor hereby covenants and agrees that it will not at any time insist upon or plead, or in any manner whatsoever claim or take any advantage of, any stay, exemption or extension law or any so-called "Moratorium Law" now or at any time hereafter in force, prior to any sale or sales thereof to be made pursuant to any provisions herein contained, or to any decree, judgment or order of any court of competent jurisdiction; or claim or exercise any rights under any statute now or hereafter in force to redeem the property, or any part thereof, or relating to the marshalling thereof, upon foreclosure sale or other enforcement hereof. To the full extent permitted by law, Mortgagor hereby expressly waives any and all rights to reinstatement and redemption, on its own behalf, on behalf of all persons claiming or having an interest (direct or indirect) by, through or under Mortgagor and on behalf of each and every person acquiring any interest in or title to the Premises subsequent to the date hereof, it being the intent hereof that any and all such rights of reinstatement and redemption (except the right to repay the Note in full by paying the entire Indebtedness Hereby Secured, including, but not limited to, the outstanding principal balance of the Note, any prepayment premium and all accrued and unpaid interest thereon prior to any foreclosure sale or conveyance in lieu thereof and thereby obtain a release of this Mortgage) of Mortgagor and such other persons, are and shall be deemed to be hereby waived to the full extent permitted by applicable law. To the full extent permitted by law (but subject to paragraph 45 of this Mortgage), Mortgagor agrees that it will not, by invoking or utilizing any applicable law or laws or otherwise, hinder, delay or impede the exercise of any right, power or remedy herein or otherwise granted or delegated to Mortgagee, but will suffer and permit the exercise of every such right, power and remedy as though no such law or laws have been or will have been made or enacted. To the full extent permitted by law, Mortgagor hereby agrees that no action for the enforcement of the lien or any provision hereof shall be subject to any defense which would not be good and valid in an action at law upon the Note. 25. Rights Cumulative. Each right, power and remedy herein conferred upon Mortgagee herein or in any of the other Loan Documents is cumulative and in addition to every other right, power or remedy, express or implied, now or hereafter provided by law or in equity, and each and every right, power and remedy herein set forth or otherwise so existing may be exercised from time to time as often and in such order as may be deemed expedient to Mortgagee. The exercise of one right, power or remedy shall not be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy; and no delay or omission of Mortgagee in the exercise of any right, power or remedy accruing hereunder or arising otherwise shall impair any such right, power or remedy, or be construed to be a wavier of any default or acquiescence therein. Except as otherwise specifically required herein, notice of the exercise of any right, remedy or power granted to Mortgagee by this Mortgage is not required to be given. If any provision of this Mortgage shall grant to Mortgagee any rights or remedies upon default of Mortgagor which are more limited than the rights that would otherwise be vested in Mortgagee under applicable law in the absence of said provisions, Mortgagee shall be vested with the rights granted in such applicable law to the full extent permitted by law. 26. Successors and Assigns. (a) Holder of the Note. This Mortgage and each and every covenant, agreement and other provision hereof shall be binding upon Mortgagor and its successors and assigns (including, without limitation, each and every record owner from time to time of the Premises or any other person having an interest therein), and shall inure to the benefit of Mortgagee and its successors and assigns. Wherever herein Mortgagee is referred to, such reference shall be deemed to include the holder from time to time of the Note, whether so expressed or not; and each such holder from time to time of the Note shall have and enjoy all of the rights, privileges, powers, options and benefits afforded hereby and hereunder, and may enforce all and every of the terms and provisions hereof, as fully and to the same extent and with the same effect as if such holder of the Note from time to time were herein by name specifically granted such rights, privileges, powers, options and benefits and was herein by name designated Mortgagee. (b) Covenants Run With Land; Successor Owners. All of the covenants of this Mortgage shall run with the Land and be binding on any successor owners of the Land. If the ownership of the Premises or any portion thereof becomes vested in a person or persons other than Mortgagor, Mortgagee may, without notice to Mortgagor, deal with such successor or successors in interest of Mortgagor with reference to this Mortgage and the Indebtedness Hereby Secured in the same manner as with Mortgagor without in any way releasing or discharging Mortgagor from its obligations hereunder. Mortgagor will give immediate written notice to Mortgagee of any conveyance, transfer or change of ownership of the Premises, but nothing in this Paragraph shall vary or negate the effect of the provisions of Paragraph 17 hereof. (c) Offsets, Counterclaims and Defenses. Any assignee of this Mortgage and the Note shall take the same free and clear of all offsets, counterclaims or defenses of any nature whatsoever which Mortgagor may have against any assignor of this Mortgage and the Note, and no such offset, counterclaim or defense shall be interposed or asserted by Mortgagor in any action or proceeding brought by any such assignee upon this Mortgage or the Note and any such right to interpose or assert any such offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Mortgagor. 27. Effect of Extensions and Amendments. If the payment of the Indebtedness Hereby Secured, or any part thereof, be extended or varied, or if any part of the security or guaranties therefor be released, all persons now or at any time hereafter liable therefor, or interested in the Premises, shall be held to assent to such extension, variation or release, and their liability, and the lien, and all provisions hereof, shall continue in full force and effect; the right of recourse against all such persons being expressly reserved by Mortgagee, notwithstanding any such extension, variation or release. Any person, firm or corporation taking a junior mortgage, or other lien upon the Premises or any part thereof or any interest therein, shall take the said lien subject to the rights of Mortgagee to amend, modify, extend or release the Note, this Mortgage, or any other document or instrument evidencing, securing or guarantying the Indebtedness Hereby Secured, in each and every case without obtaining the consent of the holder of such junior lien and without the lien of this Mortgage losing its priority over the rights of any such junior lien except as otherwise expressly provided in a separate Subordination Agreement by and between Mortgagee and the holder of such junior lien. 28. Execution of Separate Security Agreements, Financing Statements, Etc.; Estoppel Letter. Mortgagor will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, conveyances, notes, mortgages, security agreements, financing statements and assurances as Mortgagee shall reasonably require for the better assuring, conveying, mortgaging, assigning and confirming unto Mortgagee all property mortgaged hereby or property intended so to be, whether now owned by Mortgagor or hereafter acquired. Without limitation of the foregoing, Mortgagor will assign to Mortgagee, upon request, as further security for the Indebtedness Secured Hereby, its interests in all agreements, contracts, licenses and permits affecting the Premises, such assignments to be made by instruments reasonably satisfactory to Mortgagee, but no such assignment shall be construed as a consent by Mortgagee to any agreement, contract, license or permit or to impose upon Mortgagee any obligations with respect thereto. From time to time, Mortgagor will furnish within five (5) business days after Mortgagee's request a written and duly acknowledged statement of the Indebtedness Hereby Secured and whether any alleged offsets or defenses exist against the Indebtedness Hereby Secured. 29. Subrogation. If any part of the Indebtedness Hereby Secured is used directly or indirectly to pay off, discharge or satisfy, in whole or in part, any prior lien or encumbrance upon the Premises or any part thereof, then, to the extent permitted by law, Mortgagee shall be subrogated to the rights of the holder thereof in and to such other lien or encumbrance and any additional security held by such holder, and shall have the benefit of the priority of the same. 30. Option to Subordinate. At the option of Mortgagee, this Mortgage shall become subject and subordinate, in whole or in part (but not with respect to priority of entitlement to insurance proceeds or any award in condemnation) to any and all Leases of all or any part of the Premises upon the execution by Mortgagee and recording thereof, at any time hereafter, in the Land Records of the Recorder of Deeds in and for the county wherein the Premises are situated, of a unilateral declaration to that effect. 31. Governing Law. The place of negotiation, execution and delivery of this Mortgage and the location of the Premises being the State of South Carolina, this Mortgage shall be construed and enforced according to the laws of the State of South Carolina, without reference to the conflicts of law principles of that state. MORTGAGOR AGREES TO SUBMIT TO PERSONAL JURISDICTION IN THE STATE OF SOUTH CAROLINA IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS MORTGAGE AND IN FURTHERANCE OF SUCH AGREEMENT, MORTGAGOR HEREBY AGREES AND CONSENTS THAT WITHOUT LIMITING OTHER METHODS OF OBTAINING JURISDICTION, PERSONAL JURISDICTION OVER THE MORTGAGOR IN ANY SUCH ACTION OR PROCEEDING MAY BE OBTAINED WITHIN OR WITHOUT THE JURISDICTION OF ANY COURT LOCATED IN SOUTH CAROLINA AND THAT ANY PROCESS OR NOTICE OF MOTION OR THE APPLICATION TO ANY SUCH COURT IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING MAY BE SERVED UPON MORTGAGOR BY REGISTERED OR CERTIFIED MAIL TO OR BY PERSONAL SERVICE AT THE LAST KNOWN ADDRESS OF MORTGAGOR, WHETHER SUCH ADDRESS BE WITHIN OR WITHOUT THE JURISDICTION OF ANY SUCH COURT. 32. Inspection of Premises and Records. Mortgagee and its representatives and agents shall have the right to inspect the Premises without notice and inspect and make copies of all books, records, and documents relating thereto upon five (5) days' prior written notice, at all reasonable times, and access shall be permitted for that purpose. Mortgagor shall keep and maintain full and correct books and records showing in detail the income and expenses of the Premises, and shall permit Mortgagee or its agents to examine such books, income tax returns and records and all supporting vouchers and data upon five (5) days' prior written notice, at any time and from time to time on request at the address hereinafter identified or at such other location as may be mutually agreed upon. 33. Financial Statements. Mortgagor shall, within forty-five (45) days after the close of each calendar year, furnish Mortgagee with an annual statement of all elements of income and expense from the operation of the Premises during such calendar year in form reasonably satisfactory to Mortgagee. Each annual statement shall be certified by a general partner of Mortgagor and will be on an income tax basis in accordance with sound accounting practices consistently applied or, at Mortgagor's option, in accordance with generally accepted accounting principles consistently applied (except for changes in application). Each annual statement shall include an annual rent schedule, including a schedule of each tenant having a percentage lease. Mortgagee shall have the right, upon prior notice to Mortgagor, to inspect and make copies of Mortgagor's books and records with respect to the Premises for the purpose of verifying any such schedule. In addition, within ninety (90) days after the close of each calendar year or as soon thereafter as reasonably practicable (but in no event later than one-hundred twenty (120) days after the close of each calendar year), Mortgagor shall furnish Mortgagee with an annual financial statement of Mortgagor accompanied by an opinion of an independent certified public accountant stating that such annual statement presents fairly the financial condition of Mortgagor and has been prepared in accordance with generally accepted accounting principles consistently applied (except for changes in application with which such accountant concurs) and that the examination of such accountant in connection with such financial statement has been made in accordance with generally accepted auditing standards and included such tests of the accounting records and such other auditing procedures as were considered necessary in the circumstances. The statements shall be either addressed to Mortgagee or shall be accompanied by a written acknowledgement from the accountants preparing such statements that Mortgagee shall have whatever rights it would have if it were named as an addressee of such statements. Mortgagor shall provide to Mortgagee such other information as Mortgagee shall from time to time request relating to the financial condition of Mortgagor or the operation of the Premises. 34. Time of the Essence. Time is of the essence of the Note, this Mortgage, and any other Loan Documents. 35. Captions and Pronouns. The captions and headings of the various sections of this Mortgage are for convenience only, and are not to be construed as confining or limiting in any way the scope or intent of the provisions hereof. Whenever the context requires or permits, the singular shall include the plural, the plural shall include the singular, and the masculine, feminine and neuter shall be freely interchangeable. 36. Notices. Any notice, demand or other communication which any party hereto may desire or may be required to give to any other party hereto shall be in writing, and shall be deemed given (i) if and when personally delivered, (ii) upon receipt if sent by a nationally recognized overnight courier, or (iii) on the third (3rd) business day after being deposited in United States registered or certified mail, return-receipt requested, postage prepaid, addressed to a party at its address set forth below, or to such other address as the party to receive such notice may have designated to all other parties by notice in accordance herewith: (1) If to Mortgagee: The Travelers Insurance Company c/o Travelers Realty Investment Company 461 Fifth Avenue New York, New York 10017 Attn: Loan No. 502191 With copies to: The Travelers Insurance Company c/o Travelers Realty Investment Company One Tower Square, 2 SHS Hartford, Connecticut 06183-2020 Attn: Loan No. 502191 and Battle Fowler 75 East 55th Street New York, New York 10022 Attn: Dean A. Stiffle, Esq. (W.F.S.) Matter No. 10695.0136 (2) If to Mortgagor: 5665 Northside Drive, N.W., Suite 370 Atlanta, Georgia 30328 Attn: Arthur Queler With copies to: Post & Heymann 100 Jericho Quadrangle Suite 214 Jericho, New York 11753 Attn: William Post, Esq. and NPI Property Management Corporation 5665 Northside Drive, N.W., Suite 370 Atlanta, Georgia 30328 Attn: Arthur Queler Except as otherwise specifically required herein, notice of the exercise of any right, power or option granted to Mortgagee by this Mortgage is not required to be given. 37. Environmental Matters. For the purposes of this paragraph the following terms shall have the following meanings: (i) the term "Hazardous Material" shall mean any material or substance that, whether by its nature or use, is now or hereafter defined as a hazardous waste, hazardous substance, pollutant or contaminant under any Environmental Requirement, or which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and which is now or hereafter regulated under any Environmental Requirement, or which is or contains petroleum, gasoline, diesel fuel or another petroleum hydrocarbon product, (ii) the term "Environmental Requirements" shall collectively mean all present and future laws, statutes, ordinances, rules, regulations, orders, codes, licenses, permits, decrees, judgments, directives or the equivalent of or by any Governmental Authority and relating to or addressing the protection of the environment or human health, and (iii) the term "Governmental Authority" shall mean the Federal government, or any state or other political subdivision thereof, or any agency, court or body of the Federal government, any state or other political subdivision thereof, exercising executive, legislative, judicial, regulatory or administrative functions. Mortgagor hereby represents and warrants to Mortgagee that to the best of Mortgagor's knowledge after diligent inquiry (i) no Hazardous Material is currently located at, on, in, under or about the Premises, (ii) no Hazardous Material is currently located at, in, on, under or about the Premises in a manner which violates any Environmental Requirement, or which requires cleanup or corrective action of any kind under any Environmental Requirement, (iii) no releasing, emitting, discharging, leaching, dumping or disposing of any Hazardous Material from the Premises onto or into any other property or from any other property onto or into the Premises has occurred or is occurring in violation of any Environmental Requirement, (iv) no notice of violation, lien, complaint, suit, order or other notice with respect to the Premises is presently outstanding under any Environmental Requirement, and (v) the Premises and the operation thereof are in full compliance with all Environmental Requirements. Mortgagor shall comply, and shall cause all tenants or other occupants of the Premises to comply, in all respects with all Environmental Requirements, and will not generate, store, handle, process, dispose of or otherwise use, and will not permit any tenant or other occupant of the Premises to generate, store, handle, process, dispose of or otherwise use, Hazardous Materials at, in, on, under or about the Premises in a manner that could lead or potentially lead to the imposition on Mortgagor, Mortgagee or the Premises of any liability or lien of any nature whatsoever under any Environmental Requirement. Mortgagor shall notify Mortgagee promptly in the event of any spill or other release of any Hazardous Material at, in, on, under or about the Premises which is required to be reported to a Governmental Authority under any Environmental Requirement, will promptly forward to Mortgagee copies of any notices received by Mortgagor relating to alleged violations of any Environmental Requirement and will promptly pay when due any fine or assessment against Mortgagee, Mortgagor or the Premises relating to any Environmental Requirement. If at any time it is determined that the operation or use of the Premises violates any applicable Environmental Requirement or that there are Hazardous Materials located at, in, on, under or about the Premises which, under any Environmental Requirement, require special handling in collection, storage, treatment or disposal, or any other form of cleanup or corrective action, Mortgagor shall, subject to Mortgagor's right to contest set forth below within thirty (30) days after receipt of notice thereof from any Governmental Authority or from Mortgagee, take, at its sole cost and expense, such actions as may be necessary to fully comply in all respects with all Environmental Requirements, provided, however, that if such compliance cannot reasonably be completed within such thirty (30) day period, Mortgagor shall commence such necessary action within such thirty (30) day period and shall thereafter diligently and expeditiously proceed to fully comply in all respects and in a timely fashion with all Environmental Requirements. Mortgagor may, in good faith and with due diligence, contest or cause to be contested any assertion that the operation or use of the Premises violates applicable Environmental Requirements or that there are Hazardous Materials located at, in or on, under or about the Premises provided that: i) such contest shall have the effect of preventing the sale or forfeiture of the Premises or any part thereof or interest, ii) Mortgagor has notified Mortgagee in writing of the intention of Mortgagor to contest the same or to cause the same to be contested, and iii) Mortgagor has deposited or caused to be deposited with Mortgagee in a non-interest bearing account, at such place as Mortgagee may from time to time in writing designate, a sum of money (or other security acceptable to Mortgagee) that, in Mortgagee's judgment, is sufficient to pay in full, or provide for payment in full of, such contested matters, any related clean-up costs and all penalties and interest that might become due thereon, and shall keep on deposit an amount or other security sufficient, in Mortgagee's judgment, to pay in full, or provide for payment in full of, such contested matters, any related clean-up costs, increasing such amount or other security to cover additional penalties and interest whenever, in Mortgagee's judgment, such increase is advisable. If Mortgagor fails to timely take, or to diligently and expeditiously proceed to complete in a timely fashion, any such action, Mortgagee, may, in its sole and absolute discretion, make advances or payments towards the performance or satisfaction of the same, but shall in no event be under any obligation to do so. All sums so advanced or paid by Mortgagee (including, without limitation, counsel and consultant fees and expenses, investigation and laboratory fees and expenses, and fines or other penalty payments) and all sums advanced or paid in connection with any judicial or administrative investigation or proceeding relating thereto, will immediately, upon demand, become due and payable from Mortgagor and shall bear interest at the Default Rate (as hereinafter defined) from the date any such sums are so advanced or paid by Mortgagee until the date any such sums are repaid by Mortgagor to Mortgagee. Mortgagor will execute and deliver, promptly upon request, such instruments as Mortgagee may deem useful or necessary to permit Mortgagee to take any such action, and such additional notes and mortgages, as Mortgagee may require to secure all sums so advanced or paid by Mortgagee. If a lien is filed against the Premises by any Governmental Authority resulting from the need to expend or the actual expending of monies arising from an action or omission, whether intentional or unintentional, of Mortgagor or for which Mortgagor is responsible, resulting in the releasing, spilling, leaking, leaching, pumping, emitting, pouring, emptying or dumping of any Hazardous Material into the waters or onto land located within or without the State where the Premises is located, then Mortgagor will, within thirty (30) days from the date that Mortgagor is first given notice that such lien has been placed against the Premises (or within such shorter period of time as may be specified by Mortgagee if such Governmental Authority has commenced steps to cause the Premises to be sold pursuant to such lien) either (a) pay the claim and remove the lien, or (b) furnish a cash deposit, bond, or such other security with respect thereto as is satisfactory in all respects to Mortgagee and is sufficient to effect a complete discharge of such lien on the Premises. Mortgagee may, at its option, at intervals of not less than one year, or more frequently if Mortgagee reasonably believes that a Hazardous Material or other environmental condition violates or threatens to violate any Environmental Requirement, cause an environmental audit of the Premises or portions thereof to be conducted to confirm Mortgagor's compliance with the provisions of this paragraph, and Mortgagor shall cooperate in all reasonable ways with Mortgagee in connection with any such audit. If such audit discloses that a violation of an Environmental Requirement exists, Mortgagor shall pay all costs and expenses incurred in connection with such audit, otherwise, the costs and expenses of such audit shall, notwithstanding anything to the contrary set forth in this paragraph, be paid by Mortgagee. If this Mortgage is foreclosed, or if the Premises is sold pursuant to the provisions of this Mortgage, or if Mortgagor tenders a deed or assignment in lieu of foreclosure or sale, Mortgagor shall deliver the Premises to the purchaser at foreclosure or sale or to Mortgagee, its nominee, or wholly owned subsidiary, as the case may be, in a condition that complies in all respects with all Environmental Requirements. Mortgagor will defend, indemnify, and hold harmless Mortgagee, its employees, agents, officers, and directors, from and against any and all claims, demands, penalties, causes of action, fines, liabilities, settlements, damages, costs, or expenses of whatever kind or nature, known or unknown, foreseen or unforeseen, contingent or otherwise (including, without limitation, counsel and consultant fees and expenses, investigation and laboratory fees and expenses, court costs, and litigation expenses) arising out of, or in any way related to, (i) any breach by Mortgagor of any of the provisions of this paragraph, (ii) the presence, disposal, spillage, discharge, emission, leakage, release, or threatened release of any Hazardous Material which is at, in, on, under, about, from or affecting the Premises, including, without limitation, any damage or injury resulting from any such Hazardous Material to or affecting the Premises or the soil, water, air, vegetation, buildings, personal property, persons or animals located on the Premises or on any other property or otherwise, (iii) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to any such Hazardous Material, (iv) any lawsuit brought or threatened, settlement reached, or order or directive of or by any Governmental Authority relating to such Hazardous Material, or (v) any violation of any Environmental Requirement. The obligations and liabilities of Mortgagor under this paragraph shall survive and continue in full force and effect and shall not be terminated, discharged or released, in whole or in part, irrespective of whether the Indebtedness Hereby Secured has been paid in full and irrespective of any foreclosure of this Mortgage, sale of the Premises pursuant to the provisions of this Mortgage or acceptance by Mortgagee, its nominee or wholly owned subsidiary of a deed or assignment in lieu of foreclosure or sale and irrespective of any other fact or circumstance of any nature whatsoever. 38. Mortgagee Not A Joint Venturer. Any provision hereof to the contrary notwithstanding, Mortgagee, by virtue of its acceptance of this Mortgage and the making of the loan secured hereby or any action taken pursuant hereto or contemplated hereby or by virtue of an affiliate of Mortgagee having an ownership interest in Mortgagor, shall not be deemed to be by such action or ownership a partner or joint venturer with Mortgagor or any guarantor or any other parties. Mortgagor shall indemnify Mortgagee against, shall hold Mortgagee harmless from, and shall reimburse Mortgagee for, any and all claims, demands, judgments, penalties, fines, liabilities, costs, damages and expenses, including court costs and attorneys' fees incurred by Mortgagee (prior to trial, at trial and on appeal) in any action against or involving Mortgagee resulting from such a construction of the parties and their relationship. Any inspection of the Premises, any review of any plans, contracts, subcontracts (including, without limitation, environmental reviews, audits, assessments and/or reports relating to the Premises), or any analysis of the Premises made by Mortgagee or any of its agents, architects or consultants is intended solely for the benefit of Mortgagee and shall not be deemed to create or form the basis of any warranty, representation, covenant, implied promise or liability to Mortgagor or any of its employees or agents, any guest or invitee upon the Premises, or any other person. 39. Expenses. Mortgagor agrees to pay any and all recording and filing fees, mortgage recording taxes, transfer taxes, title insurance premiums, escrow and other title company charges, reasonable attorneys' fees and disbursements (including the fees and expenses of outside counsel for Mortgagee and excluding fees and expenses of in-house counsel for Mortgagee), appraisal and survey fees, environmental engineer and consultant fees, consulting architect fees, if any, financial consultant fees, fees of other engineers and consultants, insurance costs and all other expenses in connection with the making of the loan evidenced by the Note. Mortgagee shall have the right, at its option, to pay any such expenses and upon such payment such expenses shall be deemed to be a part of the Indebtedness Hereby Secured and shall be payable on demand with interest at the Default Rate. 40. Consent Required of Mortgagee. Any consent by Mortgagee in any single instance shall not be deemed or construed to be Mortgagee's consent in any like matter arising at a subsequent date and the failure of Mortgagee to promptly exercise any right, power, remedy, consent or approval provided herein or at law or in equity shall not constitute or be construed as a waiver of the same nor shall Mortgagee be estopped from exercising such right, power, remedy, consent or approval at a later date. Any consent or approval requested of and granted by Mortgagee pursuant hereto shall be narrowly construed to be applicable only to Mortgagor and the matter identified in such consent or approval and no third party shall claim any benefit by reason thereof, and any such consent or approval shall not be deemed to constitute Mortgagee a venturer or partner with Mortgagor nor shall privity of contract be presumed to have been established with any such third party. If Mortgagee deems it to be in its best interest to retain the assistance of persons, firms or corporations (including, but not limited to, attorneys, appraisers, engineers, consultants and surveyors) with respect to a request for consent or approval, Mortgagor shall reimburse Mortgagee for all costs incurred in connection with the employment of such persons, firms or corporations. 41. Sole Discretion of Mortgagee. Except as may otherwise be expressly provided to the contrary, wherever pursuant to the Note, this Mortgage, or any other document or instrument now or hereafter executed and delivered in connection therewith or otherwise with respect to the loan secured hereby, Mortgagee exercises any right given to it to consent or not consent, or to approve or disapprove, or any arrangement or term is to be satisfactory to Mortgagee, the decision of Mortgagee to consent or not consent, or to approve or disapprove or to decide that arrangements or terms are satisfactory or not satisfactory, shall be in the sole and absolute discretion of Mortgagee and shall be final and conclusive. 42. No Oral Change. This Mortgage may only be modified, amended or changed by an agreement in writing signed by Mortgagor and Mortgagee, and may only be released, discharged or satisfied of record by an agreement in writing signed by Mortgagee. No waiver of any term, covenant or provision of this Mortgage shall be effective unless given in writing by Mortgagee and if so given by Mortgagee shall only be effective in the specific instance in which given. Mortgagor acknowledges that the Note, this Mortgage and the other documents and instruments executed and delivered in connection therewith or otherwise in connection with the loan secured hereby set forth the entire agreement and understanding of Mortgagor and Mortgagee with respect to the loan secured hereby and that no oral or other agreements, understanding, representation or warranties exist with respect to the loan secured hereby other than those set forth in the Note, this Mortgage and such other executed and delivered documents and instruments. 43. Absolute and Unconditional Obligation. Mortgagor acknowledges that Mortgagor's obligation to pay the Indebtedness Hereby Secured in accordance with the provision of the Note and this Mortgage is and shall at all times continue to be absolute and unconditional in all respects, and shall at all times be valid and enforceable irrespective of any other agreements or circumstances of any nature whatsoever which might otherwise constitute a defense to the Note or this Mortgage or the obligation of Mortgagor thereunder to pay the Indebtedness Hereby Secured or the obligations of any other person relating to the Note or this Mortgage or the obligations of Mortgagor under the Note or this Mortgage or otherwise with respect to the loan secured hereby, and Mortgagor absolutely, unconditionally and irrevocably waives any and all right to assert any defense, setoff, counterclaim or crossclaim of any nature whatsoever with respect to the obligation of Mortgagor to pay the Indebtedness Hereby Secured in accordance with the provisions of the Note and this Mortgage or the obligations of any other person relating to the Note or this Mortgage or obligations of Mortgagor under the Note or this Mortgage or otherwise with respect to the loan secured hereby in any action or proceeding brought by Mortgagee to collect the Indebtedness Hereby Secured, or any portion thereof, or to enforce, foreclose and realize upon the lien and security interest created by this Mortgage or any other document or instrument securing repayment of the Indebtedness Hereby Secured, in whole or in part. Nothing contained in this Paragraph 43 shall preclude Mortgagor from asserting any legal claim of Mortgagor based on the Note, this Mortgage or the other Loan Documents in a separate subsequent legal proceeding. 44. ERISA. Mortgagor covenants and agrees that during the term of the loan secured hereby, unless Mortgagee shall have previously consented in writing, (a) it will take no action which would cause it to become an "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended from time to time ("ERISA"), or a "governmental plan" as defined in Section 3(32) of ERISA, or its assets to become "plan assets" as defined in 29 C.F.R. Section 2510.3-101, or "assets of a governmental plan" subject to regulation under state statutes, and (b) it will not sell, assign or transfer the Premises, or any portion thereof or interest therein, to any transferee which does not execute and deliver to Mortgagee its written assumption of the obligations of this covenant. Mortgagor further covenants and agrees to protect, defend, indemnify and hold Mortgagee harmless from and against all loss, cost, damage and expense (including without limitation, all attorneys' fees and excise taxes, costs of correcting any prohibited transaction or obtaining an appropriate exemption) which Mortgagee may incur as a result of Mortgagor's breach of this covenant. This indemnity shall survive the extinguishment of the lien of the Mortgage by foreclosure or action in lieu thereof, and this covenant shall survive such extinguishment; furthermore, the foregoing indemnity shall supersede any limitations on Mortgagor's liability under the Note, the Mortgage, or any of the other Loan Documents. 45. Limited Personal Liability. Without in any manner releasing, impairing or otherwise affecting the Note, this Mortgage or any other Loan Documents or the validity thereof or hereof or the lien thereof, there is no personal liability of Mortgagor or any corporation, partnership or individual having a direct or indirect ownership interest in Mortgagor, or any of their respective successors or assigns, hereunder or under any of the other Loan Documents, and no monetary or deficiency judgment shall be sought or enforced against Mortgagor or any corporation, partnership or individual having a direct or indirect ownership interest in Mortgagor, or any of their respective successors or assigns; provided, however, that a judgment may be sought against Mortgagor or any corporation, partnership or individual having a direct or indirect ownership interest in Mortgagor or their respective successors or assigns to the extent necessary to enforce the rights of Mortgagee in, to, or against the Premises. Notwithstanding any of the foregoing, nothing contained in this Paragraph shall be deemed to prejudice the rights of Mortgagee to recover from Mortgagor, Fox Partners IV, Fox Capital Management Corporation and NPI Equity Investments II, Inc. and their successors and assigns (the "Responsible Entities") (1) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Mortgagee as a result of any material fraud or any material misrepresentation by any of the Responsible Entities or the Manager, (2) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Mortgagee as a result of breach of Mortgagor's warranties, representations and covenants contained in Paragraph 5, Paragraph 9, Paragraph 17, Paragraph 37, Paragraph 44 or Paragraph 48 of this Mortgage, (3) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Mortgagee as a result of intentional or negligent waste (whether financial or physical) of the Premises including, without limitation, failure by Mortgagor to pay on or prior to the due date thereof all real estate taxes and assessments levied against the Premises, subject to Mortgagor's right to contest the same as set forth in paragraph 5.B. of this Mortgage, it being agreed and understood that Mortgagor's personal liability to pay real estate taxes and assessments levied against the Premises shall not exceed the Rents generated from the Premises over such period of time to which such taxes and assessments pertain; (4) all Rents generated from the Premises received after any default under the Loan Documents or within one year before any default under the Loan Documents or after acceleration of the indebtedness evidenced and secured by the Loan Documents and not applied to payment of such indebtedness or to payment of the normal and customary operating expenses of the Premises; (5) all Rents from the Premises collected more than one (1) month in advance and all security deposits that are not held in a segregated escrow account and that are not delivered to Mortgagee upon demand after the occurrence of a default under any of the Loan Documents, (6) all insurance proceeds and condemnation awards in respect of the Premises which are not applied in accordance with the provisions of the Loan Documents or all loss, damage, cost and expense (including reasonable attorneys fees and disbursements) incurred by Mortgagee as a result of the failure by Mortgagor to maintain the insurance coverage required in Paragraph 7 of this Mortgage, (7) all or any portion of the upfront fees, commitment fees and other costs and expenses incurred by Mortgagee in connection with the closing of this transaction and required to be paid by Mortgagor and not promptly reimbursed by Mortgagor, or (8) all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred of Mortgagee under the Hazardous Material Guaranty and Indemnification Agreement dated the date hereof from the Responsible Entities and the Manager. The Responsible Entities agree to pay to Mortgagee all amounts described in clauses (1) through (8) above on demand by Mortgagee and agrees that they will be personally liable for payment of all such sums. Furthermore, nothing contained in the paragraph shall be deemed to prejudice the right of Mortgagee to recover from the Manager all loss, damage, cost and expense (including reasonable attorneys' fees and disbursements) incurred by Mortgagee under that certain Manager's Liability Letter dated the date hereof from the Manager to Mortgagee. 46. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY LAW, MORTGAGOR WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT TO FORECLOSE THIS MORTGAGE. 47. Anti-Forfeiture. Mortgagor represents and warrants to Mortgagee that there has not been committed by Mortgagor or any other person in occupancy of or involved with the operation or use of the Premises any act or omission affording the federal government or any state or local government the right of forfeiture as against the Premises or any part thereof or any monies paid in performance of Mortgagor's obligations under the Note or under any of the other Loan Documents. Mortgagor hereby covenants and agrees not to commit, permit or suffer to exist any act or omission affording such right of forfeiture. In furtherance thereof, Mortgagor hereby indemnifies Mortgagee and agrees to defend and hold Mortgagee harmless from and against any loss, damage or injury by reason of the breach of the covenants and agreements or the warranties and representations set forth in this Paragraph 48. Without limiting the generality of the foregoing, the filing of formal charges or the commencement of proceedings against Mortgagor or all or any part of the Premises under any federal or state law for which forfeiture of the Premises or any part thereof or of any monies paid in performance of Mortgagor's obligations under the Loan Documents is a potential result, shall, at the election of Mortgagee, constitute a Default hereunder without notice or opportunity to cure. 48. Usury Laws. (a) This Mortgage and the Note are subject to the express condition that at no time shall Mortgagor be obligated or required to pay interest on the principal balance due under the Note at a rate which could subject the holder of the Note to either civil or criminal liability as a result of being in excess of the maximum interest rate which Mortgagor is permitted by law to contract or agree to pay. If by the terms of this Mortgage or the Note, Mortgagor is at any time required or obligated to pay interest on the principal balance due under the Note at a rate in excess of such maximum rate, the rate of interest under the Note shall be deemed to be immediately reduced to such maximum rate and the interest payable shall be computed at such maximum rate and all prior interest payments in excess of such maximum rate shall be applied and shall be deemed to have been payments in reduction of the principal balance of the Note. (b) Mortgagor warrants that the extension of credit evidenced by the Note and secured hereby is solely for business or commercial purposes and not for personal, family, household or agricultural purposes under the South Carolina Consumer Protection Act. 49. Related Party Contracts. All agreements, contracts or other arrangements, whether written or oral, between Mortgagor and a Related Party, as hereinafter defined, shall be fully disclosed to Mortgagee, shall be required to be consented to by Mortgagee to be effective and shall provide for payments under such agreements, contracts and other arrangements that are market rate in the area where the Premises is located. The term "Related Party" shall mean any person or entity in which any of Michael Ashner, Martin Lifton, Steven Lifton or Arthur N. Queler or any relative (i.e., spouse, grandparent, parent, child, grandchild, sibling, aunt, uncle or cousin) has either an ownership or management interest either directly or indirectly. 50. Final Agreement. THIS MORTGAGE REPRESENTS THE FINAL AGREEMENT BETWEEN MORTGAGOR AND MORTGAGEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF MORTGAGOR AND MORTGAGEE. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN MORTGAGOR AND MORTGAGEE. 51. Release. Mortgagor hereby releases and forever discharges Mortgagee, its agents, servants, employees, directors, officers, attorneys, affiliates, subsidiaries, successors and assigns and all persons, firms, corporations and organizations acting in its behalf of and from all damage, loss, claims, demands, liabilities, obligations, actions and causes of action whatsoever which Mortgagor may now have or claim to have against Mortgagee, as of the date hereof, whether presently known or unknown, and of every nature and extent whatsoever on account of or in any way touching, concerning, arising out of or founded upon the Loan Documents, including, without limitation, all such loss or damage of any kind heretofore sustained, or that may arise as a consequence of the dealings between the parties up to and including the date of execution hereof. This agreement and covenant on the part of Mortgagor is contractual, and not a mere recital. IN WITNESS WHEREOF, Mortgagor has have executed and delivered this Mortgage as of the day and year first above written. Mortgagor: CENTURY PROPERTIES GROWTH FUND XXII, a California limited partnership By: FOX PARTNERS IV, a California general partnership, Its General Partner By: FOX CAPITAL MANAGEMENT CORPORATION, a California corporation, its Managing General Partner By: Name: Title: [CORPORATE SEAL] WITNESSES: _____________________ _____________________ STATE OF NEW YORK ) ) SS: COUNTY OF NEW YORK ) PERSONALLY appeared before me ______________________, who, being by me duly sworn, says that (s)he saw the , the of FOX CAPITAL MANAGEMENT CORPORATION, a California corporation, managing general partner of FOX PARTNERS IV, a California general partnership, the sole general partner of CENTURY PROPERTIES GROWTH FUND XXII, a California limited partnership, sign, seal and as his act and deed, deliver the foregoing instrument and that (s)he with ____________________ witnessed the execution and delivery thereof. -------------------- -------------------- Witnesses SWORN to before me, this ____ day of September, A.D. 1994 _____________________________(SEAL) Notary Public of New York My Commission Expires: _____________________ [NOTARIAL SEAL] Exhibit A [Cooper's Pointe Legal Description] EXHIBIT "B" Description of Collateral All of the following property now or at any time hereafter owned by Debtor (as defined in Paragraph 16(a) of this Mortgage and also referred in this Exhibit B as "Debtor") or in which Debtor may now or at anytime hereafter have any interest or rights, together with all of Debtor's right, title and interest therein (excepting any items of personal property which (i) are owned by tenants who are in possession pursuant to leases or license agreements approved by Secured Party, and (ii) may be removed by such tenants at the expiration or termination of such lease or license agreements); 1. All fixtures and personal property now or hereafter owned by Debtor and attached to or contained in and used or useful in connection with the Premises or the Improvements, including without limitation any and all air conditioners, antennae, appliances, apparatus, awnings, basins, bathtubs, bidets, boilers, bookcases, cabinets, carpets, coolers, curtains, dehumidifiers, disposals, doors, drapes, dryers, ducts, dynamos, elevators, engines, equipment, escalators, fans, fittings, floor coverings, furnaces, furnishings, furniture, hardware, heaters, humidifiers, incinerators, kitchen equipment and utensils, lighting, machinery, motors, ovens, pipes, plumbing, pumps, radiators, ranges, recreational facilities, refrigerators, screens, security systems, shades, shelving, sinks, sprinklers, stokers, stoves, toilets, ventilators, wall coverings, washers, windows, window coverings, wiring, all renewals or replacements thereof or articles in substitution therefor; 2. Articles or parts now or hereafter affixed to the property described in Paragraph 1 above or used in connection with such property, any and all replacements for such property, and all other property of a similar type or used for similar purposes now or hereafter in or on the Premises or any of the Improvements; 3. Debtor's right, title, and interest in all personal property used or to be used in connection with the operation of the Premises or the conduct of business thereon, including without limitation business equipment and inventories located on the Premises or elsewhere, together with files, books of account, and other records, wherever located; 4. Debtor's right, title, and interest in and to any and all contracts now or hereafter relating to the Premises executed by any architects, engineers, consultants, or contractors, including all amendments, supplements, and revisions thereof, together with all Debtor's rights and remedies thereunder and the benefit of all covenants and warranties thereon, and also together with all drawings, designs, estimates, layouts, surveys' plats, plans, specifications and test results prepared by any architect, engineer, or contractor, including any amendments, supplements, and revisions thereof and the right to use and enjoy the same, as well as all building permits, environmental permits, approvals and licenses, other governmental or administrative permits, licenses, names, authorizations, agreements and rights relating to construction or operation of the Premises and/or the Improvements; 5. Debtor's right, title, and interest in and to any and all contracts now or hereafter relating to the operation of the Premises or the conduct of business thereon, including without limitation all management, leasing and other service contracts, the books and records, and the right to appropriate and use any and all trade names used or to be used in connection with such business; 6. Debtor's entire right, title, and interest in the rents, rent equivalents, issues, income, revenue, deposits (including without limitation, security deposits and utility deposits), and profits in connection with all leases, contracts, lettings, licenses, and other agreements made or agreed to by any person or entity (including without limitation, Debtor and Secured Party under the powers granted by this Mortgage and the other Loan Documents) with any person or entity pertaining to all or any part of the Premises, whether such agreements have been heretofore or are hereafter made; 7. Debtor's right, title, and interest in all sale contracts, earnest money deposits, proceeds of sale contracts, accounts receivable, and general intangibles relating to the Premises, excluding, however, any such right arising from a transfer permitted by the terms of Paragraph 17 of this Mortgage; 8. All rights in and proceeds from all fire and hazard, loss-of-income, and other non-liability insurance policies now or hereafter covering the Improvements, the use or occupancy thereof, or the business conducted thereon; 9. All awards or payments, including interest thereon, that may be made with respect to the Premises and/or the Improvements, whether from the right of the exercise of eminent domain (including any transfer made in lieu of the exercise of said right) or for any other injury to or decrease in value of the Premises and/or the Improvements; and 10. All proceeds from the sale, transfer, or pledge of any or all of the foregoing property. -----END PRIVACY-ENHANCED MESSAGE-----