ECP Commercial I LLC v. Boaz Shopping Center LLC et al

Filing 1

Agreed ORDER Appointing Receiver. $46.00; Receipt Number 073196. by Thomas Anderson, United States District Judge, Western District of Tennessee on 2/19/2016. (Attachments: # 1 Exhibit 1 Part 1, # 2 Exhibit 1 Part 2, # 3 Exhibit 1 Part 3, # 4 Exhibit 1 Part 4, # 5 Exhibit 1 Part 5, # 6 Exhibit 1 Part 6, # 7 Exhibit 2) (dbera, )

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ARTICLE 15 OTHER COVENANTS 15.1 Borrower further covenants and agrees as follows: (a) Opening of Loan on or Prior to Loan Opening Date. All conditions precedent to the Opening of the Loan shall be complied with on or prior to the Loan Opening Date. If the Loan Opening Date has not occurred on or before ninety (90) days from the date of this Agreement, Lender may at its sole option terminate Lender's obligation to fund the Loan by written notice to Borrower. (b) Construction of Improvements. The Improvements shall be constructed and fully equipped in a good and workmanlike manner with materials of high quality, strictly in accordance with the Plans and Specifications (or in accordance with any changes therein that may be approved in writing by Lender or as to which Lender's approval is not required), and such construction and equipping will be commenced on or before the Construction Commencement Date and prosecuted with due diligence and continuity in accordance with the Construction Schedule and fully completed not later than the Completion Date. The Completion Date shall be extended in writing by Lender by the number of days resulting from any Unavoidable Delay in the construction of the Project, (but under no circumstances shall Lender be obligated to extend the Completion Date beyond thirty (30) days), provided that Lender shall not be obligated to grant any such extension unless (a) Borrower gives notice of such delay to Lender within ten (1 0) days of learning of the event resulting in such delay, (b) after giving effect to the consequences of such delay, the Loan shall remain "In Balance" and (c) such delay is permitted under each of the Leases, or Borrower obtains a written extension from each Tenant whose Lease does not permit such delay. (c) Changes in Plans and Specifications. No changes will be made in the Plans and Specifications without the prior written approval of Lender. (d) Inspection by Lender. Borrower will cooperate with Lender in arranging for inspections by representatives of Lender of the progress of the Construction from time to time including an examination of (i) the Improvements, (ii) all materials to be used in the Construction, (iii) all plans and shop drawings which are or may be kept at the construction site, (iv) any contracts, bills of sale, statements, receipts or vouchers in connection with the Improvements, (v) all work done, labor perforn1ed, materials furnished in and about the Improvements, (vi) all books, contracts and records with respect to the Improvements, and (vii) any other documents relating to the Improvements or the Construction. Borrower shall cooperate with Lender's Consultant to enable him to perform his functions hereunder and will promptly comply with Lender's requirements and remove any dissatisfaction regarding the Construction of the Improvements or the progress thereof. (e) Mechanics' Liens and Contest Thereof. Borrower will not suffer or permit any mechanics' lien claims to be tiled or otherwise asserted against the Project or any funds due to the General Contractor, and will promptly discharge the same in case of the filing of any claims for lien or proceedings for the enforcement thereof, provided, however, that Borrower shall have the right to contest in good faith and with reasonable diligence the validity of any such lien or claim provided that Borrower posts a statutory lien bond which removes such lien from title to Loan Agreement 33 Mayodan the Project within twenty (20) days of written notice by Lender to Borrower of the existence of the lien.) Lender will not be required to make any further disbursements of the proceeds of the Loan until any mechanics' lien claims have been removed and Lender may, at its option, restrict disbursements to reserve sufficient sums to pay 150% ofthe lien. (f) Settlement of Mechanics' Lien Claims. If Borrower shall fail promptly either (i) to discharge any such lien, or (ii) post a statutory lien bond in the manner provided in Section 15.1 (e) Lender may, at its election (but shall not be required to), procure the release and discharge of any such claim and any judgment or decree thereon and, further, may in its sole discretion effect any settlement or compromise of the same, or may furnish such security or indemnity to the Title Insurer, and any amounts so expended by Lender, including premiums paid or security furnished in connection with the issuance of any surety company bonds, shall be deemed to constitute disbursement of the proceeds of the Loan hereunder. In settling, compromising or discharging any claims for lien, Lender shall not be required to inquire into the validity or amount of any such claim. (g) Renewal of Insurance. Borrower shall cause insurance policies to be maintained in compliance with Exhibit F at all times. Borrower shall timely pay all premiums on all insurance policies required hereunder, and as and when additional insurance is required, from time to time, during the progress of Construction, and as and when any policies of insurance may expire, furnish to Lender, premiums prepaid, additional and renewal insurance policies with companies, coverage and in amounts satisfactory to Lender in accordance with Section 8.1 (h). Payment of Taxes. Borrower shall pay all real estate taxes and assessments and (h) charges of every kind upon the Project before the same become delinquent, provided, however, that Borrower shall have the right to pay such tax under protest or to otherwise contest any such tax or assessment, but only if (i) such contest has the effect of preventing the collection of such taxes so contested and also of preventing the sale or forfeiture of the Project or any part thereof or any interest therein, (ii) Borrower has notified Lender of Borrower's intent to contest such taxes, and (iii) Borrower has deposited security in form and amount satisfactory to Lender, in its sole discretion, and has increased the amount of such security so deposited promptly after Lender's request therefor. If Borrower fails to commence such contest or, having commenced to contest the same, and having deposited such security required by Lender for its full amount, shall thereafter fail to prosecute such contest in good faith or with due diligence, or, upon adverse conclusion of any such contest, shall fail to pay such tax, assessment or charge, Lender may, at its election (but shall not be required to), pay and discharge any such tax, assessment or charge, and any interest or penalty thereon, and any amounts so expended by Lender shall be deemed to constitute disbursements of the Loan proceeds hereunder (even if the total amount of disbursements would exceed the face amount of the Note). Borrower shall furnish to Lender evidence that taxes are paid at least five (5) days prior to the last date for payment of such taxes and before imposition of any penalty or accrual of interest. (i) Tax and Insurance Escrow Accounts. Borrower shall, following the written request of Lender or upon the occurrence of any Event of Default, make insurance and tax escrow deposits, in amounts reasonably detennined by Lender from time to time as being needed to pay taxes and insurance premiums when due, in an interest bearing escrow account held by Lender in Lender's name and under its sole dominion and control. All payments deposited in the Loan Agreement 34 Mayodan escrow account, and all interest accruing thereon, are pledged as additional collateral for the Loan. Notwithstanding Lender's holding of the escrow account, nothing herein shall obligate Lender to pay any insurance premiums or real property taxes with respect to any portion of the Project unless the Event of Default has been cured to the satisfaction of Lender. If the Event of Default has been satisfactorily cured, Lender shall make available to Borrower such funds as may be deposited in the escrow account from time to time for Borrower's payment of insurance premiums or real property taxes due with respect to the Project. G) Personal Property. All of Borrower's personal property, fixtures, attaclunents and equipment delivered upon, attached to or used in connection with the Construction or the operation of the Project shall always be located at the Project and shall be kept free and clear of all liens, encumbrances and security interests. (k) Leasing Restrictions. Intentionally omitted. (1) Defaults Under Required Contracts. Borrower will not suffer or permit any breach or default to occur in any of Borrower's obligations under any of the Required Contracts nor suffer or permit the same to terminate by reason of any failure of Borrower to meet any requirement of any Required Contract. Borrower shall notify Lender promptly in writing in the event any party commits a default under a Required Contract. (m) Lender's Attorneys' Fees for Enforcement of Agreement. In case of any default or Event of Default hereunder, Borrower (in addition to Lender's attorneys' fees, if any, to be paid pursuant to Section 7.3) will pay Lender's attorneys' and paralegal fees (including, without limitation, any attorney and paralegal fees and costs incurred in connection with any litigation or bankruptcy or administrative hearing and any appeals therefrom and any post-judgment enforcement action including, without limitation, supplementary proceedings) in connection with the enforcement of this Agreement; without limiting the generality of the foregoing, if at any time or times hereafter Lender employs counsel (whether or not any suit has been or shall be filed and whether or not other legal proceedings have been or shall be instituted) for advice or other representation with respect to the Project, this Agreement, or any of the other Loan Documents, or to protect, collect, lease, sell, take possession of, or liquidate any of the Project, or to attempt to enforce any security interest or lien in any portion of the Project, or to enforce any rights of Lender or Borrower's obligations hereunder, then in any of such events all of the attorneys' fees arising from such services, and any expenses, costs and charges relating thereto (including fees and costs of paralegals), shall constitute an additional liability owing by Borrower to Lender, payable on demand. (n) Appraisals. Lender shall have the right to obtain a new or updated Appraisal of the Project from time to time. Borrower shall cooperate with Lender in this regard. If the Appraisal is obtained to comply with this Agreement or any applicable law or regulatory requirement, or bank policy promulgated to comply therewith, or if an Event of Default exists, Borrower shall pay for any such Appraisal upon Lender's request. (o) Furnishing Information. Borrower and Guarantors shall deliver or cause to be delivered to Lender Guarantor's annual financial statements and a completed Certificate of Compliance in the form of Exhibit K attached hereto within one hundred and twenty (120) days Loan Agreement 35 Mayodan after the date that such statements were last provided to Lender with respect to the Guarantors. All such financial statements shall be in a format approved in writing by Lender in Lender's sole discretion. Each financial statement shall be certified as true, complete and correct by its preparer and by the Guarantor to whom it relates. Borrower shall deliver to Lender with respect to Guarantor annual Federal Income Tax Returns within ten (1 0) days after timely filing. Borrower and the Guarantor shall provide such additional financial information as Lender reasonably requires. Borrower shall during regular business hours permit Lender or any of its agents or representatives to have access to and examine all of its books and records regarding the development and operation of the Project. If any such financial statement or other report or infonnation described in this subsection is not delivered to Lender as provided above, Borrower agrees to pay a late charge to Lender in the amount of $500 per item per day. (p) Sign and Publicity. Upon Lender's request, Borrower shall promptly erect a sign approved in advance by Lender in a conspicuous location on the Project during the Construction indicating that the financing for the Project is provided by Lender. Lender reserves the right to publicize the making of the Loan. (q) Lost Note. Upon Lender's furnishing to Borrower an affidavit to such effect, Borrower shall, if the Note is mutilated, destroyed, lost or stolen, deliver to Lender, m substitution therefor, a new note containing the same terms and conditions as the Note. (r) Indemnification. Borrower shall indemnify Lender, including each party owning an interest in the Loan and their respective officers, directors, employees and consultants (each, an "Indemnified Party") and defend and hold each Indemnified Party harmless from and against all claims, injury, damage, loss and liability, cost and expense (including attorneys' fees, costs and expenses) of any and every kind to any persons or property by reason of (i) the Construction; (ii) the operation or maintenance of the Project; (iii) any breach of representation or warranty, default or Event of Default under this Agreement or any other Loan Document or Related Document; or (iv) any other matter arising in connection with the Loan, Borrower, Guarantor or Tenant, or the Project. No Indemnified Party shall be entitled to be indemnified against its own gross negligence or willful misconduct. The foregoing indemnification shall survive repayment of the Loan and shall continue to benefit Lender following any assignment of the Loan with respect to matters arising or accruing prior to such assignment. (s) No Additional Debt. Except for the Loan, Borrower shall not mcur any indebtedness (whether personal or nonrecourse, secured or unsecured) other than customary trade payables paid within sixty (60) days after they are incurred. (t) Compliance With Laws. Borrower shall comply with all applicable requirements (including applicable Laws) of any Governmental Authority having jurisdiction over Borrower or the Project. (u) Organizational Documents. Borrower shall not, without the prior written consent of Lender, permit or suffer (i) a material amendment or modification of its organizational documents, (ii) the admission of any new member, partner or shareholder, or (iii) any dissolution or tennination of its existence. Loan Agreement 36 A1ayodan (v) Furnishing Reports. Upon Lender's request, Borrower shall provide Lender with copies of all inspections, reports, test results and other infonnation received by any Borrower, which in any way relate to the Project or any part thereof (w) Management Contracts. Borrower shall not enter into, modify, amend, terminate or cancel any management contracts for the Project or agreements with agents or brokers, without the prior written approval of Lender. (x) Furnishing Notices. Borrower shall provide Lender with copies of all material notices pertaining to the Project received by Borrower from any Governmental Authority or insurance company within seven (7) days after such notice is received. (y) Construction Contracts. Borrower shall not enter into, modify, amend, tenninate or cancel any contracts for the Construction, without the prior written approval of Lender, which approval shall not be unreasonably withheld. Borrower will furnish Lender promptly after execution thereof executed copies of all contracts between Borrower, architects, engineers and contractors and all subcontracts between the General Contractor or contractors and all of their subcontractors and suppliers, which contracts and subcontracts may not have been furnished pursuant to Section 9.1 (a) at the time of the Opening of the Loan. (z) Correction of Defects. Within five (5) days after Borrower acquires knowledge of or receives notice of a defect in the Improvements or any departure from the Plans and Specifications, or any other requirement of this Agreement, Borrower will proceed with diligence to correct all such defects and departures. (aa) Hold Disbursements in Trust. Borrower shall receive and hold in trust for the sole benefit of Lender (and not for the benefit of any other person, including, but not limited to, contractors or any subcontractors) all advances made hereunder directly to Borrower, for the purpose of paying costs of the Construction in accordance with the Budget. Borrower shall use the proceeds of the Loan solely for the payment of costs as specified in the Budget. Borrower will pay all other costs, expenses and fees relating to the acquisition, equipping, use and operation of the Project. (bb) Foundation Survey. Not later than thirty (30) days after completion of the foundation with respect to the Improvements, Borrower shall furnish to Lender a survey of the Land with the foundation of the Improvements located thereon, and also satisfying the requirements set forth in Section 8.1(c). (cc) Alterations. Without the prior written consent of Lender, Borrower shall not make any material alterations to the Project (other than completion of the Construction in accordance with the Plans and Specifications). (dd) Cash Distributions. Borrower shall not make any distributions to partners, members or shareholders, provided that after completion of Construction and achievement of breakeven operations Borrower may so distribute Monthly Excess Cash Flow not needed to pay Operating Expenses or amount payable under the Loan Documents. (ee) Loan Agreement Net Cash Flow Deposit. Intentionally omitted. 37 Mayodan (ff) Conduit Program. Lender shall have the right to make the first offer, and to match Borrower's best offer, with respect to placing the Loan into a conduit program or a construction loan program. 15.2 Authorized Representative. Borrower hereby appoints Jeff Fanner, Jr. as its Authorized Representative for purposes of dealing with Lender on behalf of Borrower in respect of any and all matters in connection with this Agreement, the other Loan Documents, and the Loan. The Authorized Representative shall have the power, in his discretion, to give and receive all notices, monies, approvals, and other documents and instruments, and to take an other action on behalf of Borrower. All actions by the Authorized Representative shall be final and binding on Borrower. Lender may rely on the authority given to the Authorized Representative until actual receipt by Lender of a duly authorized resolution substituting a different person as the Authorized Representative. No more than on person shall serve as Authorized Representative at any given time. ARTICLE 16 CASUALTIES AND CONDEMNATION 16.1 Lender's Election to Apply Proceeds on Indebtedness. (a) Subject to the provisions of Section 16.l(b) below, Lender may elect to collect, retain and apply upon the indebtedness of Borrower under this Agreement or any of the other Loan Documents all proceeds of insurance or condemnation (individually and collectively referred to as "Proceeds") after deduction of all expenses of collection and settlement, including attorneys' and adjusters' fees and charges. Any proceeds remaining after repayment of the indebtedness under the Loan Documents shall be paid by Lender to Borrower. (b) Notwithstanding anything in Section 16.l(a) to the contrary, in the event of any casualty to the Improvements or any condemnation of part of the Project, Lender agrees to make available the Proceeds to restoration of the Improvements if (i) no Event of Default exists, (ii) all Proceeds are deposited with Lender, (iii) in Lender's reasonable judgment, the amount of Proceeds available for restoration of the Improvements (together with undisbursed proceeds of the Loan, if any, allocated for the cost of the Construction and any sums or other security acceptable to Lender deposited with Lender by Borrower for such purpose) is sufficient to pay the full and complete costs of such restoration, (iv) no material Leases in effect at the time of such casualty or condemnation are or will be terminated nor rent decreased as a result of such casualty or condemnation, (v) if the cost of restoration exceeds ten percent (1 0%) of the Loan Amount, in Lender's sole determination after completion of restoration the Loan Amount will not exceed 75% of the fair market value of the Project, (vi) in Lender's reasonable determination, the Project can be restored to an architecturally and economically viable project in compliance with applicable Laws, (vii) each Guarantor reaffirms its Guaranty in writing, and (viii) in Lender's reasonable detennination, such restoration is likely to be completed not later than three months prior to the Maturity Date. Loan Agreement 38 Mayodan 16.2 Borrower's Obligation to Rebuild and Use of Proceeds Therefor. In case Lender does not elect to apply or does not have the right to apply the Proceeds to the indebtedness, as provided in Section 16.1 above, Borrower shall: (a) Proceed with diligence to make settlement with insurers or the appropriate governmental authorities and cause the Proceeds to be deposited with Lender; (b) In the event of any delay in making settlement with insurers or the appropriate governmental authorities or effecting collection of the Proceeds, deposit with Lender the full amount required to complete construction as aforesaid; (c) In the event the Proceeds and the available proceeds of the Loan are insufficient to assure the Lender that the Loan will be In Balance, promptly deposit with Lender any amount necessary to place the Loan In Balance; and (d) Promptly proceed with the assumption of construction of the Improvements, including the repair of all damage resulting from such fire, condemnation or other cause and restoration to its former condition. Any request by Borrower for a disbursement by Lender of Proceeds and funds deposited by Borrower shall be treated by Lender as if such request were for an advance of the Loan hereunder, and the disbursement thereof shall be conditioned upon Borrower's compliance with and satisfaction of the same conditions precedent as would be applicable under this Agreement for an advance of the Loan. ARTICLE 17 ASSIGNMENTS BY LENDER AND BORROWER 17.1 Assignments and Participations. Lender may from time to time sell the Loan and the Loan Documents (or any interest therein) and may grant participations in the Loan. Borrower agrees to cooperate with Lender's efforts to do any of the foregoing and to execute all documents reasonably required by Lender in connection therewith which do not materially adversely affect Borrower's rights under the Loan Documents. 17.2 Prohibition of Assignments and Transfers by Borrower. Borrower shall not assign or attempt to assign its rights under this Agreement and any purported assignment shall be void. Without the prior written consent of Lender, in Lender's sole discretion, Borrower shall not suffer or permit (a) any change in the management (whether direct or indirect) of the Project, or (b) any Transfer. Loan Agreement 39 Mayodan 17.3 Prohibition of Transfers in Violation of ERISA. In addition to the prohibitions set forth in Section 17.2 above, Borrower shall not assign, sell, pledge, encumber, transfer, hypothecate or otherwise dispose of its interest or rights in this Agreement or in the Project, or attempt to do any of the foregoing or suffer any of the foregoing, nor shall any party owning a direct or indirect interest in Borrower assign, sell, pledge, mortgage, encumber, transfer, hypothecate or otherwise dispose of any of its rights or interest (direct or indirect) in Borrower, attempt to do any of the foregoing or suffer any of the foregoing, if such action would cause the Loan, or the exercise of any of Lender's rights in connection therewith, to constitute a prohibited transaction under ERISA or the Internal Revenue Code or otherwise result in Lender being deemed in violation of any applicable provision of ERISA. Borrower agrees to indemnify and hold Lender free and harmless from and against all losses, costs (including attorneys' fees and expenses), taxes, damages (including consequential damages) and expenses Lender may suffer by reason of the investigation, defense and settlement of claims and in obtaining any prohibited transaction exemption under ERISA necessary or desirable in Lender's sole judgment or by reason of a breach of the foregoing prohibitions. The foregoing indemnification shall be a recourse obligation of Borrower and shall survive repayment of the Note, notwithstanding any limitations on recourse contained herein or in any of the Loan Documents. 17.4 Successors and Assigns. Subject to the foregoing restrictions on transfer and assignment contained in this Article 17, this Agreement shall inure to the benefit of and shall be binding on the parties hereto and their respective successors and permitted assigns. ARTICLE 18 TIME OF THE ESSENCE 18.1 Time is of the Essence. Borrower agrees that time is of the essence under this Agreement. ARTICLE 19 EVENTS OF DEFAULT The occurrence of any one or more of the following shall constitute an "Event of Default" as said term is used herein: (a) Failure of Borrower (i) (A) to make any principal payment when due, (B) to pay any interest within ten (1 0) days after the date when due or (C) to observe or perform any of the other covenants or conditions by Borrower to be performed under the terms of this Agreement or any other Loan Document concerning the payment of money, for a period of ten ( 10) days after Loan Agreement 40 Mayodan written notice from Lender that the same is due and payable; or (ii) for a period of thirty (30) days after written notice from Lender, to observe or perform any non-monetary covenant or condition contained in this Agreement or any other Loan Documents; provided that if any such failure concerning a non-monetary covenant or condition is susceptible to cure and cannot reasonably be cured within said thirty (30) day period, then Borrower shall have an additional sixty (60) day period to cure such failure and no Event of Default shall be deemed to exist hereunder so long as (Y) Borrower commences such cure within the initial thirty (30) day period and diligently and in good faith pursues such cure to completion within such resulting ninety (90) day period from the date of Lender's notice, and (Z) the existence of such default will not result in any Tenant having the right to terminate its Lease due to such default; and provided further that if a different notice or grace period is specified under any other subsection of this Section 19.1 with respect to a particular breach, or if another subsection of this Section 19.1 applies to a particular breach and does not expressly provide for a notice or grace period the specific provision shall control. (b) The disapproval by Lender or Lender's Consultant at any time of any construction work and failure of Borrower to cause the same to be corrected to the satisfaction of Lender within the cure period provided in Section 19.1(a)(ii) above. (c) A delay in the Construction or a discontinuance for a period of fifteen (15) days after written notice from Lender concerning such delay or discontinuance (other than Unavoidable Delays), or in any event a delay in the Construction so that the same is not, in Lender's judgment (giving due consideration to the assessment of Lender's Consultant), likely to be completed on or before the Completion Date. (d) The bankruptcy or insolvency of the General Contractor and failure of Borrower to procure a contract with a new contractor satisfactory to Lender within thirty (30) days from the occurrence of such bankruptcy or insolvency. (e) Any Transfer or other disposition in violation of Sections 17.2 or 17.3. (f) Any material default by Borrower under the terms of any Required Contract following the expiration of any applicable notice and cure period, provided that if the Required Contract does not provide a notice and cure period, then the notice and cure period provided in (a)(i) above will apply to any such monetary default, and the notice and cure period provided in (a)(ii) will apply to any such non-monetary default (which respective periods shall commence upon written notice of default from Lender or the non-defaulting party under the Required Contract, whichever occurs first). If any warranty, representation, statement, report or certificate made now or (g) hereafter by Borrower or any Guarantor is untrue or incorrect at the time made or delivered, provided that if such breach is reasonably susceptible of cure, then no Event of Default shall exist so long as Borrower cures said breach (i) within the notice and cure period provided in (a)(i) above for a breach that can be cured by the payment of money or (ii) within the notice and cure period provided in (a)(ii) above for any other breach. Loan Agreement 41 Mayodan (h) Borrower or any Guarantor shall commence a voluntary case concerning Borrower or such Guarantor under the Bankruptcy Code; or an involuntary proceeding is commenced against Borrower or any Guarantor under the Bankruptcy Code and relief is ordered against Borrower or such Guarantor, or the petition is controverted but not dismissed or stayed within sixty (60) days after the commencement of the case, or a custodian (as defined in the Bankruptcy Code) is appointed for or takes charge of all or substantially all of the property of Borrower or any Guarantor; or the Borrower or any Guarantor commences any other proceedings under any reorganization, arrangement, readjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar Law of any jurisdiction whether now or hereafter in effect relating to the Borrower or any Guarantor; or there is commenced against Borrower or any Guarantor any such proceeding which remains undismissed or unstayed for a period of sixty (60) days; or the Borrower or any Guarantor fails to controvert in a timely manner any such case under the Bankruptcy Code or any such proceeding, or any order of relief or other order approving any such case or proceeding is entered; or the Borrower or any Guarantor by any act or failure to act indicates its consent to, approval of, or acquiescence in any such case or proceeding or the appointment of any custodian or the like of or for it for any substantial part of its property or suffers any such appointment to continue undischarged or unstayed for a period of sixty (60) days. (i) Borrower or any Guarantor 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 of its property or the major part thereof or if all or a substantial part of the assets of Borrower or any Guarantor are attached, seized, subjected to a writ or distress warrant, or are levied upon, or come into the possession of any receiver, trustee, custodian or assignee for the benefit of creditors. If Borrower is enjoined, restrained or in any way prevented by any court order from constructing or operating the Project. (j) (k) Failure by Borrower to make any Deficiency Deposit with Lender within the time and in the manner required by Article 11 hereof. (1) One or more final, unappealable judgments are entered (i) against Borrower in amounts aggregating in excess of $100,000 or (ii) against any Guarantor in amounts aggregating in excess of $250,000, and said judgments are not stayed or bonded over within thirty (30) days after entry. If Borrower or any Guarantor shall fail to pay any debt owed by it or is in default (m) under any agreement with Lender or any other party (other than a failure or default for which Borrower's maximum liability does not exceed $100,000 and Guarantor's maximum liability does not exceed $250,000) and such failure or default continues after any applicable grace period specified in the instrument or agreement relating thereto. If a Material Adverse Change occurs with respect to Borrower, the Project or any (n) Guarantor or any potential purchaser under a Required Contract. Loan Agreement 42 Mayodan (o) The occurrence of any other event or circumstance denominated as an Event of Default in this Agreement or under any of the other Loan Documents and the expiration of any applicable grace or cure periods, if any, specified for such Event of Default herein or therein, as the case may be. (p) Failure of the Guarantors to meet the minimum net worth test and the minimum liquidity test set forth in 8.1 (x) on each anniversary of the date of this Agreement occurring during the term of the Loan. ARTICLE 20 LENDER'S REMEDIES IN EVENT OF DEFAULT 20.1 Remedies Conferred Upon Lender. Upon the occurrence of any Event of Default, Lender may pursue any one or more of the following remedies concurrently or successively, it being the intent hereof that none of such remedies shall be to the exclusion of any other: (a) Take possession of the Project and complete the Construction and do anything which is necessary or appropriate in its sole judgment to fulfill the obligations of Borrower under this Agreement and the other Loan Documents, including either the right to avail itself of and procure perfonnance of existing contracts or let any contracts with the same contractors or others. Without restricting the generality of the foregoing and for the purposes aforesaid, Borrower hereby appoints and constitutes Lender its lawful attorney-in-fact with full power of substitution in the Project to complete the Construction in the name of Borrower; to use unadvanced funds remaining under the Note or which may be reserved, escrowed or set aside for any purposes hereunder at any time, or to advance funds in excess of the face amount of the Note, to complete the Construction; to make changes in the Plans and Specifications which shall be necessary or desirable to complete the Construction in substantially the manner contemplated by the Plans and Specifications; to retain or employ new general contractors, subcontractors, architects, engineers and inspectors as shall be required for said purposes; to pay, settle or compromise all existing bills and claims, which may be liens or security interests, or to avoid such bills and claims becoming liens against the Project; to execute all applications and certificates in the name of Borrower prosecute and defend all actions or proceedings in connection with the Improvements or Project; to take action and require such performance as it deems necessary under any of the Bonds to be furnished hereunder and to make settlements and compromises with the surety or sureties thereunder, and in connection therewith, to execute instruments of release and satisfaction; and to do any and every act which the Borrower might do in its own behalf; it being understood and agreed that this power of attorney shall be a power coupled with an interest and cannot be revoked; (b) Withhold further disbursement of the proceeds of the Loan and/or tenninate Lender's obligations to make fmther disbursements hereunder; (c) Loan Agreement Declare the Note to be immediately due and payable; 43 Mayodan (d) Use and apply any monies or letters of credit deposited by Borrower with Lender, regardless of the purposes for which the same was deposited, to cure any such default or to apply on account of any indebtedness under this Agreement which is due and owing to Lender; and (e) Exercise or pursue any other remedy or cause of action permitted under this Agreement or any other Loan Documents, or conferred upon Lender by operation of Law. Notwithstanding the foregoing, upon the occurrence of any Event of Default under Section 19.1 (h) with respect to Borrower, all amounts evidenced by the Note shall automatically become due and payable, without any presentment, demand, protest or notice of any kind to Borrower. ARTICLE 21 GENERAL PROVISIONS 21.1 Captions. The captions and headings of various Articles, Sections and subsections of this Agreement and Exhibits pertaining hereto are for convenience only and are not to be considered as defining or limiting in any way the scope or intent of the provisions hereof. 21.2 Modification; Waiver. No modification, waiver, amendment or discharge of this Agreement or any other Loan Document shall be valid unless the same is in writing and signed by the party against which the enforcement of such moditJ.cation, waiver, amendment or discharge is sought. 21.3 Governing Law. Irrespective of the place of execution and/or delivery, this Agreement shall be governed by, and shall be construed in accordance with, the laws of the State of Ohio. 21.4 Acquiescence Not to Constitute Waiver of Lender's Requirements. Each and every covenant and condition for the benefit of Lender contained in this Agreement may be waived by Lender, provided, however, that to the extent that Lender may have acquiesced in any noncompliance with any construction or nonconstruction conditions precedent to the Opening of the Loan or to any subsequent disbursement of Loan proceeds, such acquiescence shall not be deemed to constitute a waiver by Lender of such requirements with respect to any future disbursements of Loan proceeds. 21.5 Disclaimer by Lender. This Agreement is made for the sole benefit of Borrower and Lender, and no other person or persons shall have any benefits, rights or remedies under or by reason of this Agreement, or by reason of any actions taken by Lender pursuant to this Agreement. Lender shall not be liable to any contractors, subcontractors, supplier, architect, engineer, tenant or other party for labor or Loan A<>reement '" 44 Mayodan services performed or materials supplied in connection with the Construction. Lender shall not be liable for any debts or claims accruing in favor of any such parties against Borrower or others or against the Project. Lender, by making the Loan or taking any action pursuant to any of the Loan Documents, shall not be deemed a partner or a joint venturer with Borrower or fiduciary of Borrower. No payment of funds directly to a contractor or subcontractor or provider of services shall be deemed to create any third-party beneficiary status or recognition of same by the Lender. Without limiting the generality of the foregoing: (a) Lender shall have no liability, obligation or responsibility whatsoever with respect to the Construction. Any inspections of the Construction made by or through Lender are for purposes of administration of the Loan only and neither Borrower nor any third party is entitled to rely upon the same with respect to the quality, adequacy or suitability of materials or workmanship, conformity to the Plans and Specifications, state of completion or otherwise; (b) Lender neither undertakes nor assumes any responsibility or duty to Borrower to select, review, inspect, supervise, pass judgment upon or inform Borrower of any matter in connection with the Project, including matters relating to the quality, adequacy or suitability of: (i) the Plans and Specifications, (ii) architects, contractors, subcontractors and material suppliers employed or utilized in connection with the Construction, or the workmanship of or the materials used by any of them, or (iii) the progress or course of Construction and its conformity or nonconformity with the Plans and Specifications; Borrower shall rely entirely upon its own judgment with respect to such matters, and any review, inspection, supervision, exercise of judgment or supply of information to Borrower by Lender in connection with such matters is for the protection of Lender only, and neither Borrower nor any third party is entitled to rely thereon; and (c) Lender owes no duty of care to protect Borrower, Guarantor, or any Tenant against negligent, faulty, inadequate or defective building or construction. 21.6 Partial Invalidity; Severability. If any of the provisions of this Agreement, or the application thereof to any person, party or circumstances, shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such provision or provisions to persons, parties or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and every provision of this At,JTeement shall be valid and enforceable to the fullest extent permitted by law. 21.7 Definitions Include Amendments. Definitions contained in this Agreement which identify documents, including, but not limited to, the Loan Documents, shall be deemed to include all amendments and supplements to such documents from the date hereof, and all future amendments, modifications, and supplements thereto entered into from time to time to satisfy the requirements of this Agreement or otherwise with the consent of Lender. Reference to this Agreement contained in any of the foregoing documents shall be deemed to include all amendments and supplements to this Agreement. Loan Agreement 45 Mayodan 21.8 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 21.9 Entire Agreement. This Agreement, taken together with all of the other Loan Documents and all certificates and other documents delivered by Borrower to Lender, embody the entire agreement and supersede all prior agreements, written or oral, relating to the subject matter hereof. 21.10 Waiver of Damages. In no event shall Lender be liable to Borrower for punitive, exemplary or consequential damages, including, without limitation, lost profits, whatever the nature of a breach by Lender of its obligations under this Agreement or any of the Loan Documents, and Borrower for itself and its Guarantors waive all claims for punitive, exemplary or consequential damages. 21.11 Claims Against Lender. Lender shall not be in default under this Agreement, or under any other Loan Documents, unless a written notice specifically setting forth the claim of Borrower shall have been given to Lender within three (3) months after Borrower first had knowledge of the occurrence of the event which Borrower alleges gave rise to such claim and Lender does not remedy or cure the default, if any there be, promptly thereafter. Borrower waives any claim, set-off or defense against Lender arising by reason of any alleged default by Lender as to which Borrower does not give such notice timely as aforesaid. Borrower acknowledges that such waiver is or may be essential to Lender's ability to enforce its remedies without delay and that such waiver therefore constitutes a substantial part of the bargain between Lender and Borrower with regard to the Loan. No Guarantor or Tenant is intended to have any rights as a third-party beneficiary of the provisions ofthis Section 21.11. 21.12 Jurisdiction. TO THE GREATEST EXTENT PERMITTED BY LAW, BORROWER HEREBY WAIVES ANY AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY LENDER. WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS AGREEMENT (EACH, A "PROCEEDING"), BORROWER IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION IN THE COUNTY OF HAMILTON AND STATE OF OHIO, AND (B) W AlVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAlVES ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY. NOTHING IN THIS AGREEMENT SHALL PRECLUDE LENDER FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR Loan Agreement 46 Mayodan MORE JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION. BORROWER FURTHER AGREES AND CONSENTS THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN ANY OHIO STATE OR UNITED STATES COURT SITTING IN THE COUNTY OF HAMILTON MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO BORROWER AT THE ADDRESS INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF BORROWER SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED. 21.13 Set-Offs. After the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably authorizes and directs Lender from time to time to charge Borrower's accounts and deposits with Lender (or its Affiliates), and to pay over to Lender an amount equal to any amounts from time to time due and payable to Lender hereunder, under the Note or under any other Loan Document. Borrower hereby grants to Lender a security interest in and to all such accounts and deposits maintained by the Borrower with Lender (or its Affiliates). ARTICLE 22 NOTICES Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three Business Days after mailing (c) if by Federal Express or other reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by telecopier on the day of transmission so long as copy is sent on the same day by overnight courier as set forth below: Loan Agreement 47 Mayodan If to Borrower: TYLER SHOPPING CENTER LLC PULASKI SHOPPING CENTER LLC SHAWNEE SHOPPING CENTER LLC FT. DODGE SHOPPING CENTER LLC KEOKUK SHOPPING CENTER LLC WEST BURLINGTON SHOPPING CENTER LLC MARSHALLTOWN SHOPPING CENTER LLC OSKALOOSA SHOPPING CENTER LLC 5851 Ridge Bend Road Memphis, Tennessee 3 8120 Attention: JeffH. Fanner, Jr. Telephone: (901) 685-2300 Facsimile: (901) 685-2354 If to Lender: KeyBank National Association 580 Walnut Street, 2nd Floor Cincinnati, Ohio 45202 Attention: Kurt Reiber Telephone: (513) 762-8215 Facsimile: (513) 762-8450 With a copy to: Thompson Hine LLP 312 Walnut Street Suite 1400 Cincinnati, Ohio 45202 Attention: Stephen M. King Telephone: (513) 352-6746 Facsimile: (513) 241-4771 or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice. Lender shall send to each Guarantor (at its notice address set forth in each respective Guaranty) a copy of any notice which is required to be sent to Borrower under Section 19 prior to the occurrence of an Event of Default, and Lender shall accept a cure by any Guarantor within the time periods set forth in Section 19 as a cure by Borrower. Loan Agreement 48 Mayodan ARTICLE 23 WAIVER OF JURY TRIAL BORROWER AND LENDER EACH WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS OR RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS AGREEMENT AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. ARTICLE 24 OHIO PROVISIONS 24.1 Lender's Attorneys' Fees. With respect to any agreement by Borrower in this Agreement or in any other Loan Document to pay Lender's attorneys' fees and disbursements incurred in connection with the Loan, Borrower agrees that each Loan Document is a "contract of indebtedness" and that the attorneys' fees and disbursements referenced are those which are a reasonable amount, all as contemplated by Ohio Revised Code Section 1301.21, as such Section may hereafter be amended. Borrower further agrees that the indebtedness incurred in connection with the Loan is not incurred for purposes that are primarily personal, family or household and confirms that the total amount owed on the contract of indebtedness exceeds One Hundred Thousand and Noll 00 Dollars ($1 00,000.00). 24.2 Notice of Commencement. Borrower shall file an appropriate Notice of Commencement pursuant to Section 1311.04 of the Ohio Revised Code in the office of the county recorder in the county where the Land is located after the recording of the Mortgage and other Loan Documents prior to the commencement of any construction, demolition or renovation activities on or to the Land. Loan Agreement 49 Mayodan EXECUTED as of the date first set forth above. BORROWER: TYLER SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware li ited liability company, Its: By: Its: Manager Organizational ID/Number: J t, 7 9 b 8 3 PULASKI SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, : , CJi/Ji;{ Its: Manager Organizational ID/Number: 3 h / k:, 907 SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, : , ~iiliiicy romp~y, Its: Manager Organizational ID/Number: FT DODGE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Mana er By: rmer, III Its: Manager Organizational ID/Number: 3& 7 lh 7b KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, By: t illi.l£;1!{: Its: Manager Its: (JJ:/) Organizational ID/Number: WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: By Its: {iJ/Jl!/ J&fft::!f Manager Organizational ID/Number: MARSHALLTOWN SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: M~er By Its: ~~b.4 Manager Organizational ID/Number: 3 '1 P3 .:?OC( OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, ~:: 9/{iJL'-!{ Its: Manager J(p 7 9~ 6 e?--- EXHIBIT A Legal Description of Land Loan Agreement 56 Mayodan EXHIBIT B Pennitted Exceptions EXHIBIT C Title Requirements 1. Title Insurance Company Requirements. The maximum single risk (i.e., the amount insured under any one policy) by a title insurer may not exceed 25% of that insurer's surplus and statutory reserves. Reinsurance must be obtained by closing for any policy exceeding such amount. 2. Loan Policy Forms. Standard 1992 American Land Title Association ("ALTA") form of loan title insurance policy, or the 1970 (amended October 17, 1970) ALTA loan form policies must be used. 3. Insurance Amount. The amount insured must equal at least the original principal amount ofthe Loan. 4. Named Insured. The named insured under the Title Policy must be substantially the same as the following: "KeyBank National Association, and its respective successors and assigns." 5. Creditors' Rights. Any "creditors' rights" exception or other exclusion from coverage for voidable transactions under bankruptcy, fraudulent conveyance, or other debtor protection laws or equitable principles must be removed by either an endorsement or a written waiver. 6. Arbitration. In the event that the form policy which is utilized includes a compulsory arbitration provision, the insurer must agree that such compulsory arbitration provisions do not apply to any claims by or on behalf of the insured. Please note that the 1987 and 1992 ALTA form loan policies include such provisions. 7. Date of Policy. The effective date of the Title Policy must be as of the date and time of the closing. 8. Legal Description. The legal description of the property contained in the Title Policy must confonn to (a) the legal description shown on the survey of the property, and (b) the legal description contained in the Mortgage. In any event, the Title Policy must be endorsed to provide that the insured legal description is the same as that shown on the survey. 9. Easements. Each Title Policy shall insure, as separate parcels: (a) all appurtenant easements and other estates benefiting the property, and (b) all other rights, title, and interests of the borrower in real property under reciprocal easement agreements, access agreements, operating agreements, and at,rreements containing covenants, conditions, and restrictions relating to the Project. I 0. Exceptions to Coverage. With respect to the exceptions, the following applies: a) Each Title Policy shall afford the broadest coverage available in the state in which the subject property is located. b) The "standard" exceptions (such as for parties in possession or other matters not shown on public records) must be deleted. c) The "standard" exception regarding tenants in possession under residential leases, should also be deleted. For commercial properties, a rent roll should be attached in lieu of the general exception. d) The standard survey exception to the Title Policy must be deleted. survey reading reflecting the current survey should be incorporated. e) Any exception for taxes, assessments, or other lienable items must expressly insure that such taxes, assessments, or other items are not yet due and payable. f) Any lien, encumbrance, condition, restriction, or easement of record must be listed in the Title Policy, and the Title Policy must affinnatively insure that the improvements do not encroach upon the insured easements or insure against all loss or damage due to such encroachment g) The Title Policy may not contain any exception for any filed or unfiled mechanics' or materialmen's liens. h) In the event that a comprehensive endorsement has been issued and any Schedule B exceptions continue to be excluded from the coverage provided through that endorsement, then a detennination must be made whether such exceptions would be acceptable to Bank. In the event that it is detennined that such exception is acceptable, a written explanation regarding the acceptability must be submitted as part of the delivery ofthe loan documents. Instead, a If Schedule B indicates the presence of any easements that are not located on the survey, the Title Policy must provide affinnative insurance against any loss resulting from the exercise by the holder of such easement of its right to use or maintain that easement. ALTA Form 103.1 or an equivalent endorsement is required for this purpose. 11. Endorsements. With respect to endorsements, the following applies: a) Each Title Policy must include an acceptable environmental protection lien endorsement on ALTA Fonn 8.1. Please note that Fonn 8.1 may take exception for an entire statute which contains one or more specific sections under which environmental protection liens could take priority over the Mortgage; provided, however, that such specific sections under which the lien could arise must also be referenced. -2- b) Each Title Policy must contain an endorsement which provides that the insured legal description is the same as shown on the survey. c) Each Title Policy must contain a comprehensive endorsement (ALTA Form 9) if a lien, encumbrance, condition, restriction, or easement is listed in Schedule B to the title insurance policy. d) Lender may require the following endorsements where applicable and available: -access -address -assessments -assignment of leases and rents -assignment of loan documents -contiguity -doing business 12. -single tax lot -subdivision -tie in -usury -zoning (ALTA 3.1with parking) Other Coverages. Each Title Policy shall insure the following by endorsement or affinnative insurance to the extent such coverage is not afforded by the ALTA Form 9 or its equivalent in a particular jurisdiction: a) that no conditions, covenants, or restrictions of record affecting the property: (i) (ii) (iii) (iv) b) 13. -due execution -first loss -last dollar -leasehold -mineral rights -mortgage tax -reverter have been violated, create lien rights which prime the insured mortgage, contain a right of reverter or forfeiture, a right of reentry, or power of tennination, or if violated in the future would result in the lien created by the insured mortgage or title to the property being lost, forfeited, or subordinated; and that except for temporary interference resulting solely from maintenance, repair, replacement, or alteration of lines, facilities, or equipment located in easements and rights of way taken as certain exceptions to each Title Policy, such exceptions do not and shall not prevent the use and operation of the Property or the improvements as used and operated on the effective date of the Title Policy. Informational Matters. The Policy must include, as an informational note, the following: a) b) 14. The recorded plat number together with recording information; and The property parcel number or the tax identification number, as applicable. Delivery of Copies. Legible copies of all easements, encumbrances, or other restrictions shown as exceptions on the Title Policy must be delivered with the first draft of the title commitment. -3- EXHIBIT D Form of Survey Certification CERTIFICATION FOR SURVEYS I hereby certify to KeyBank National Association, its successors and assigns, and Thompson Hine LLP, and Title Insurance Company that the survey prepared by me entitled " " was actually made upon the ground, that the property has unrestricted ingress and egress to and from _ _ _ _ _ _ _ _ _ Road/Street and such streets are completed, dedicated and accepted for public maintenance and use by the public body having jurisdiction over the same; that the property does not lie within flood hazard areas in accordance with the documents entitled "Department of Housing and Urban Development, Federal Insurance Administration - Special Flood Hazard Area Maps"; and that the survey is made in accordance with the "Minimum Standard Detail Requirements for Land Title Surveys" jointly established and adopted by ALTA and ACSM in 2005 for Class A Urban Survey and includes Items 1-4, 6-11 and 13 of Table A. EXHIBIT E LIBOR NOTICE ELECTION NOTICE OF LIBOR FUNDING ELECTION John Bertleff KeyBank National Association 127 Public Square, 8th Floor OH-01-27-0839 Cleveland, Ohio 44114 Date: Mr. Bertleff: Reference is made to the Promissory Note dated as of , 20_ made by TYLER SHOPPING CENTER LLC, a Delaware limited liability company, PULASKI SHOPPING CENTER LLC, a Delaware limited liability company, SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company, FT. DODGE SHOPPING CENTER LLC, a Delaware limited liability company, KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company, WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company, MARSHALLTOWN SHOPPING CENTER LLC, a Delaware limited liability company, OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company (collectively, the "Borrower"), in favor or KeyBank National Association (the "Note"). The undersigned hereby gives notice pursuant to Section 5.1 of the Loan Agreement referenced in the Note of its desire for a LIBOR FUNDING ELECTION of a portion of the proceeds of the loan evidenced by the Note. As set forth in Section 2.1 of the Loan Agreement, the LIB OR Rate Interest Period shall be a period of one, two or three months. The Following are the details of the LIBOR funding election to be set up as of the commencement date specified below: 1. (select one) The LIBOR Rate Interest Period is: One month, two months, or three months 2. The LIBOR funding commencement date is: 3. The LIBOR funding period expires: 4. The LIBOR funding principal amount is: 5. The LIBOR funding rate is LIBOR plus 2.0%), or The sources for the above LIBOR are as follows (Choose as appropriate): Prime Note Outstanding Balance: Draw # Advance: Interest due: Current LIBOR maturing _ __ Current LIBOR maturing _ __ Total: The next LIBOR FUNDING ELECTION NOTIFICATION date is - - - BORROWER: TYLER SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Fanner, III Its: Manager PULASKI SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: By: Manager JeffH. Farmer, III Its: Manager SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Fanner, III Its: Manager FT DODGE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Farmer, III Its: Manager KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Farmer, III Its: Manager WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JetiH. Farmer, III Its: Manager MARSHALL TOWN SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JefiH. Farmer, IH Its: Manager OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: letT H. Farmer, III Its: Manager EXHIBIT F Insurance Requirements Borrower shall obtain and keep in full force and effect either builder's risk insurance (the "Builder's Risk Insurance policy") coverage or permanent All Perils insurance coverage as appropriate, satisfactory to Lender, on the Project. All insurance policies shall be issued by carriers with a Best's Insurance Reports policy holder's rating of A and a financial size category of Class X and shall include a standard mortgage clause (without contribution) in favor of and acceptable to Lender. The policies shall provide for the following, and any other coverage that Lender may from time to time deem necessary: a) Coverage Against All Peril and/or Builders Risk in the amount of I 00% of the replacement cost of all Improvements located or to be located on the Land. If the policy is written on a CO-INSURANCE basis, the policy shall contain an AGREED AMOUNT ENDORSEMENT as evidence that the coverage is in an amount sufficient to insure the full amount of the mortgage indebtedness. "KeyBank National Association and its successors and assigns" shall be named as the "Mortgagee" and "Loss Payee". b) Public liability coverage in a minimum amount of not less than $2,000,000 per occurrence and $5,000,000 in the aggregate. "KeyBank National Association and its successors and assigns" shall be named as an "Additional Insured". c) Rent loss or business interruption coverage in a minimum amount approved by Lender of not less than the appraised rentals for a minimum of six months. d) Flood hazard coverage in a minimum amount available, if the premises are located in a special flood hazard area ("Flood Hazard Area") as designated by the Federal Emergency Management Agency on its Flood Hazard Boundary Map and Flood Insurance Rate Maps, and the Department of Housing and Urban Development, Federal Insurance Administration, Special Flood Hazard Area Maps. e) Workers Compensation and Disability insurance as required by law. t) Such other types and amounts of insurance with respect to the premises and the operation thereof which are commonly maintained in the case of other property and buildings similar to the premises in nature, use, location, height, and type of construction, as may from time to time be required by the mortgagee. Each policy shall provide that it may not be canceled, reduced or terminated without at least thirty (30) days prior written notice to Lender. EXHIBIT G Architect's Certificate hereby certifies for the The finn of benefit of Key Bank National Association that: The finn has been employed by TYLER SHOPPING CENTER LLC, a Delaware limited liability company, PULASKI SHOPPING CENTER LLC, a Delaware limited liability company, SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company, FT. DODGE SHOPPING CENTER LLC, a Delaware limited liability company, KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company, WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company, MARSHALL TOWN SHOPPING CENTER LLC, a Delaware limited liability company, OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company pursuant to a contract dated _ _ _ _ _ _ _ _ to provide architectural and engineering services commonly known as - - - - - - - - - - - - - - which is located at - - - - - - - - - - - - The contract provides for the following services: preparation of plans and specifications Pre-qualification of contractors Contract administration and supervision of construction Tenant space design The finn is duly licensed and in good standing under laws of the state of - - - - - License No. - - - - - - - The foundations were designed in accordance with the recommendations contained in a soil report dated which was prepared by _ _ _ _ _ _ _ _ _ _ _ __ The following are all of the permits or governmental agency approvals required for the construction and occupancy of the building: Issuing Agency Excavation Pennit Foundation Pennit Building Pern1it EPA- Water EPA- Sewer EPA Air Date Issued Cert. Of Occupancy Bldg. Cert. Of Occupancy- Tenant Other (Specify) All utilities necessary for the operation of the project are available with sufficient capacity at the boundaries of the project. If utility services must be brought to site, please explain: The plans listed on the attached Schedule I comprise all of the plans which will be necessary for the complete construction of the project, excepting tenant space designs, and when the project is built in accordance therewith the project will (excepting completion of tenant improvements) be ready for occupancy. The plans are complete and contain all detail necessary for construction. Calculations of the gross building and the net rentable building area are attached as Schedule II. The plans (and the project will, when constructed in accordance therewith) comply with all applicable building, zoning, land use, subdivision, environmental, fire, safety and other applicable governmental laws, statutes, codes, ordinances, rules and regulations. The attached Schedule III, establishing a timetable for completion of the project and showing on a monthly basis the anticipated progress of the work, is realistic and can be adhered to. The following design drawings or plans have been or will be prepared by other designers or contractors. Type of Plans Name of Preparing Firm The Specifications are: _ _ _ _ _ _ _ _ _ _ _ _ _ _ shown on plans _ _ _ _ _ _ _ _ _ _ _ _ _ _ Bound separately EXHIBIT H Initial Budget EXHIBIT I Borrower's Certificate KeyBank National Association 580 Walnut Street 2nd Floor Cincinnati, Ohio 45202 ATTN: REAL ESTATE CAPITAL SERVICES RE: Application for Disbursement or confinnation of equity contribution in connection with a $4,875,000.00 loan to TYLER SHOPPING CENTER LLC, a Delaware limited liability company, PULASKI SHOPPING CENTER LLC, a Delaware limited liability company, SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company, FT. DODGE SHOPPING CENTER LLC, a Delaware limited liability company, KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company, WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company, MARSHALL TOWN SHOPPING CENTER LLC, a Delaware limited liability company, OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company (collectively, the "Borrower"). 1. Pursuant to that certain Loan Agreement dated August 25, 2006 (the "Loan Agreement") between Borrower and KeyBank National Association ("Lender"), Borrower (a) hereby requests a Loan disbursement as indicated on the Soft and Hard Cost Requisition attached hereto. We acknowledge that this amount is subject to inspection, verification, and available funds. (b) acknowledges and confirms an equity contribution as indicated on the Soft and Hard Cost Requisition attached hereto. Funding Instructions 2. This Borrower's Certificate is to be utilized only in satisfaction of costs and charges with respect to the Project and Improvements thereon as shown on the Soft and Hard Cost Requisition Fom1, dated , attached hereto. 3. The Borrower agrees to provide, if requested by Lender, a Vendor Payee Listing showing the name and the amount currently due each party to whom Borrower is obligated for labor, material and/or services supplies. This information would be provided in support of the disbursements set forth in paragraph 2(a) hereof. 4. The Borrower also certifies and agrees that: (a) (b) No Event of Default as defined in the Loan Agreement, nor any event, circumstance or condition which with notice or the passage of time or both would be an Event of Default, has occurred and is continuing and; (c) All Change Orders or changes to the Schedule of Values have been submitted to and approved by Lender to the extent required under the Loan Agreement; (d) All funds previously disbursed have been used for the purposes as set forth in the Loan Agreement; (e) All outstanding claims for labor, materials and/or services furnished prior to this draw period have been paid or will be paid from the proceeds of this disbursement; (f) All construction prior to the date of this Borrower's Certificate has been accomplished in accordance with the Plans and Specifications approved by Lender; (g) All sums advanced by Lender will be used solely for the purpose of paying costs of the Project owing as shown on the attached Soft and Hard Cost Requisition and no disbursement requested hereunder has been the basis for any prior disbursement of the Loan; (h) There are no liens outstanding against the subject project or its equipment except for Lender's liens and security interests as agreed upon in the Loan Agreement; (i) The amount of undisbursed Loan proceeds and/or approved equity requirement remaining is sufficient to pay the cost of completing the Project in accordance with the Plans and Specifications and Budget approved by Lender as modified by Lender in approved Changed Orders; U) All representations and warTanties contained in the Loan Agreement are true and correct as of the date hereof. (k) 5. It has complied with all duties and obligations required to date to be carried out and performed by it pursuant to the terms of the Loan Agreement; The undersigned understands that this certification is made for the purpose of inducing Lender to make a disbursement to Borrower and that, in making such disbursement, Lender will rely upon the accuracy of the matters stated in this Certificate. Disbursement of the loan proceeds hereby requested are subject to the receipt by Lender, in those states where applicable, of a certificate from the issuing title company stating that no claims have been filed of record which adversely affects the title of Borrower to the Project, subsequent to the filing of the Lender's Mortgage. 6. The terms used in this Borrower's Certificate have the same meanmg and definitions as those set forth in the Loan Agreement. 7. The Borrower, or authorized signer, certifies that the statements made in this Borrower's Certificate and any documents submitted herewith and identified herein are true and has duly caused this Borrower's Certificate to be signed on its behalf by the undersigned Authorized Representative. BORROWER: TYLER SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Farmer, III Its: Manager PULASKI SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Farmer, III Its: Manager SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Farmer, III Its: Manager FT DODGE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JetTH. Fanner, III Its: Manager KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Fanner, III Its: Manager WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Fanner, III Its: Manager MARSHALLTOWN SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: Jeff H. Farmer, III Its: Manager OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: J etl H. Fanner, III Its: Manager EXHIBIT J Soft And Hard Cost Requisition Fonn EXHIBIT K Certificate of Compliance KeyBank National Association 127 Public Square Cleveland, Ohio 44114 Re: Loan Agreement dated as of August 25, 2006 (as amended, modified, supplemented, restated, or renewed, from time to time, the "Agreement"), between TYLER SHOPPING CENTER LLC, a Delaware limited liability company, PULASKI SHOPPING CENTER LLC, a Delaware limited liability company, SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company, FT. DODGE SHOPPING CENTER LLC, a Delaware limited liability company, KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company, WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company, MARSHALLTOWN SHOPPING CENTER LLC, a Delaware limited liability company, OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company (collectively, the "Borrower"), and KEYBANK NATIONAL ASSOCIATION ("Lender"). Reference is made to the Agreement. Capitalized terms used in this Certificate (including schedules and other attachments hereto, this "Certificate") without definition have the meanings specified in the Agreement. Pursuant to applicable provisions of the Agreement, the undersigned, being the Authorized Representative designated in the Agreement, hereby certifies to the Lender that the information furnished in the attached schedules, including, without limitation, each of the calculations listed below are true, correct and complete in all material respects as of the last day of the fiscal periods subject to the financial statements and associated covenants being delivered to the Lender pursuant to the Agreement together with this Certificate (such statements the "Financial Statements" and the periods covered thereby the "reporting period") and for such reporting periods. The undersigned hereby further certifies to the Lender that: 1. Compliance with Financial Covenants. As shown below, the Borrower 1s m full compliance with the Financial Covenants contained in the Agreement. A. Covenant: Jeff H. Farmer, Jr. shall, as a continuing obligation throughout the term of the Loan maintain, on an ongoing basis, a minimum net worth of $10,000,000.00 and a minimum net cash flow of $1,000,000.00 and maintain a minimum liquidity level of $1 ,500,000.00. Calculation: Guarantor Net Worth Total Assets Total Liabilities Note: Potentially listed on guarantor financial statement as Net Worth, Shareholder Equity, Retained Earnings or Member Equity. See attached financial statement Compliance? (Yes or No) 2. Review of Condition. The undersigned has reviewed the terms of the Agreement, including, but not limited to, the representations and warranties of the Borrower and Guarantors set forth in the Agreement and the covenants of the Borrower set forth in the Agreement, and has made, or caused to be made under his or her supervision, a review in reasonable detail of the transactions and condition of the Borrower and Guarantors through the reporting periods. 3. Representations and Warranties. To the undersigned's actual knowledge, the representations and warranties of the Borrower and Guarantors contained in the Loan Documents, including those contained in the Agreement, are true and accurate in all material respects as of the date hereof and were true and accurate in all material respects at all times during the reporting period except as expressly noted on Schedule A hereto. 4. Covenants. To the undersigned's actual knowledge, during the reporting period, the Borrower observed and performed all of the respective covenants and other agreements under the Agreement and the Loan Documents, and satisfied each of the conditions contained therein to be observed, perfonncd or satisfied by the Borrower, except as expressly noted on Schedule A hereto. 5. No Event ofDefault. To the undersigned's actual knowledge, no Event of Default exists as of the date hereof or existed at any time during the reporting period, except as expressly noted on Schedule A hereto. IN WITNESS WHEREOF, this Certificate is executed by the undersigned this _ _ day of - - - - - - - - - -,200_ BORROWER: TYLER SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: Jeff H. Farmer, III Its: Manager PULASKI SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Fanner, III Its: Manager SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Farmer, III Its: Manager FT DODGE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Farmer, III Its: Manager KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Farmer, III Its: Manager WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Farmer, III Its: Manager MARSHALLTOWN SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JeffH. Farmer, III Its: Manager OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Manager By: JetiH. Farmer, III Its: Manager EXHIBIT L Intentionally omitted PROMISSORY NOTE U.S. $4,875,000.00 As of August FOR VALUE RECEIVED, TYLER SHOPPING CENTER LLC, a Delaware limited liability company, PULASKI SHOPPING CENTER LLC, a Delaware limited liability company, SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company, FT. DODGE SHOPPING CENTER LLC, a Delaware limited liability company, KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company, WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company, MARSHALLTOWN SHOPPING CENTER LLC, a Delaware limited liability company, OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company, each having an address at 5851 Ridge Bend Road, Memphis, Tennessee 38120 (collectively, the "Maker"), jointly and severally, hereby promises to pay to the order ofKEYBANK NATIONAL ASSOCIATION, a national banking association ("Payee"), having an address at 580 Walnut Street, 2"d Floor, Cincinnati, Ohio 45202, the principal sum of Four Million Eight Hundred Seventy-Five Thousand and 00/100 Dollars ($4,875,000.00) or so much thereof as may be advanced from time to time, and interest from the date hereof on the balance of principal from time to time outstanding, in United States currency, at the rates and at the times hereinafter described. This Note is issued by Maker pursuant to that certain Construction Loan Agreement of even date herewith (the "Loan Agreement") entered into between Payee and Maker. This Note evidences of the Loan (as defined in the Loan Agreement). Payment of this Note is governed by the Loan Agreement, the terms ofwhich are incorporated herein by express reference as if fully set forth herein. Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Loan Agreement. Interest. The principal amount hereof outstanding from time to time shall 1. bear interest until paid in full at the Applicable Rate. 2. Monthly Payments. Interest only shall be payable in arrears on the first (1st) day of each calendar month after the date hereof commencing on the first day of the second calendar month after the date hereof up to and including the Maturity Date in the amount of all interest accrued during the immediately preceding calendar month. Notwithstanding the foregoing, in the event the Extension Option is exercised, during the Extension Term, on the first (1st) day of every calendar month Borrower shall make monthly principal and interest payments based on a term of twenty-five (25) years and the assumed interest rate used in determining the Debt Service Coverage Ratio in connection with the exercise of the Extension Option. All payments on account of the indebtedness evidenced by this Note shall be made to Payee not later than 11 :00 a.m. Cincinnati, Ohio time on the day when due in lawful money of the United States and shall be first applied to late charges, costs of collection or enforcement and other similar amounts due, if any, under this Note and any of the other Loan Documents, then to interest due and payable hereunder and the remainder to principal due and payable hereunder. 3. Maturity Date. The indebtedness evidenced hereby shall mature on the Maturity Date. On the Maturity Date, the entire outstanding principal balance hereof, together Promissory Note EXHIBIT 12 Mayodan with accrued and unpaid interest and all other sums evidenced by this Note, shall, if not sooner paid, become due and payable. 4. General Provisions. (a) Regardless ofwhether an Adjusted LIBOR Rate would otherwise then be in effect, in the event (i) the principal balance hereof is not paid when due whether by acceleration or upon the Maturity Date or (ii) an Event of Default exists, then the principal balance hereof shall bear interest from and after the Default Rate. In addition, for any installment (exclusive of the payment due upon the Maturity Date) which is not paid within ten (10) days after the due date thereof a late charge equal to the greater of (a) ten percent (10%) ofthe amount of such installment or (b) $25 shall be due and payable to the holder of this Note on demand to cover the extra expense involved in handling delinquent payments. (b) Maker agrees that the obligation evidenced by this Note is an exempt transaction under the Truth-in-Lending Act, 15 U.S.C. § 1601, et seq. (c) The parties hereto intend and believe that each provision in this Note comports with all applicable local, state and federal laws and judicial decisions. However, if any provision or provisions, or if any portion of any provision or provisions, in this Note is found by a court oflaw to be in violation of any applicable local, state or federal ordinance, statute, law, administrative or judicial decision, or public policy, and if such court should declare such portion, provision or provisions of this Note to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such portion, provision or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder of this Note shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were not contained therein, and that the rights, obligations and interest of Maker and the holder or holders hereof under the remainder of this Note shall continue in full force and effect. All agreements herein are expressly limited so that in no contingency or event whatsoever, whether by reason of advancement of the proceeds hereof, acceleration of maturity of the unpaid principal balance hereof, or otherwise, shall the amount paid or agreed to be paid to the holders hereof for the use, forbearance or detention of the money to be advanced hereunder exceed the highest lawful rate permissible under applicable usury laws. If, from any circumstances whatsoever, the fulfillment of any provision hereof, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law which a court of competent jurisdiction may deem applicable hereto, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity and if from any circumstance the holder hereof shall ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance due hereunder and not to the payment of interest. (d) This Note and all provisions hereof shall be binding upon Maker and all persons claiming under or through Maker, and shall inure to the benefit of Payee, Promiss01y Note 2 Mayodan together with its successors and assigns, including each owner and holder from time to time of this Note. (e) Time is of the essence as to all dates set forth herein. (f) Maker agrees that its liability shall not be in any manner affected by any indulgence, extension of time, renewal, waiver, or modification granted or consented to by Payee; and Maker consents to any indulgences and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and to any substitution, exchange or release of the collateral, or any part thereof, with or without substitution, and agrees to the addition or release of any makers, endorsers, guarantors, or sureties, all whether primarily or secondarily liable, without notice to Maker and without affecting its liability hereunder. (g) Maker hereby waives and renounces for itself, its successors and assigns, all rights to the benefits of any statute of limitations and any moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension, redemption, appraisement, or exemption and homestead laws now provided, or which may hereafter be provided, by the laws of the United States and of any state thereof against the enforcement and collection of the obligations evidenced by this Note. (h) If this Note is placed in the hands of attorneys for collection or is collected through any legal proceedings, Maker promises and agrees to pay, in addition to the principal, interest and other sums due and payable hereon, all costs of collecting or attempting to collect this Note, including all reasonable attorneys' fees and disbursements. (i) All parties now or hereafter liable with respect to this Note, whether Maker, principal, surety, guarantor, endorsee or otherwise hereby severally waive presentment for payment, demand, notice of nonpayment or dishonor, protest and notice of protest. No failure to accelerate the indebtedness evidenced hereby, acceptance of a past due installment following the expiration of any cure period provided by this Note, any Loan Document or applicable law, or indulgences granted from time to time shall be construed (i) as a novation of this Note or as a reinstatement ofthe indebtedness evidenced hereby or as a waiver of such right of acceleration or of the right of Payee thereafter to insist upon strict compliance with the terms of this Note, or (ii) to prevent the exercise of such right of acceleration or any other right granted hereunder or by any Laws. Maker hereby expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing. (j) Maker hereby expressly acknowledges that the loan evidenced by this Note is a "business loan" within the meaning of Chapter 1343 of the Ohio Revised Code. (k) With respect to any agreement by Borrower in this Note or in any other Loan Document to pay Payee's attorneys' fees and disbursements incurred in connection with the Loan, Borrower agrees that each Loan Document is a "contract of indebtedness" Promissory Note 3 Mayodan and that the attorneys' fees and disbursements referenced are those which are a reasonable amount, all as contemplated by Ohio Revised Code Section 1301.21, as such Section may hereafter be amended. Borrower further agrees that the indebtedness incurred in connection with the Loan is not incurred for purposes that are primarily personal, family or household and confirms that the total amount owed on the contract of indebtedness exceeds One Hundred Thousand and No/1 00 Dollars ($1 00,000.00). (1) THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. (m) MAKER AND PAYEE EACH WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE AND THE OTHER LOAN DOCUMENTS OR RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS NOTE AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. 5. Tax-Deferred Exchange Provisions. Intentionally omitted. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Promissory Note 4 Mayodan Maker has delivered this Note as of the day and year first set forth above. TYLER SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Mniler Its: By: Its: JiRiff:! Manager PULASKI SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, ::, Its: ~- _1[k Je~Fer,lii Manager SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Ma~ger 'iul ~ By: Jef£!~1 Its: Manager FT DODGE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: By: Its: Promissmy Note M7Vi1LI Jefftf{p~ Manager 5 Mayodan KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, : , f{//fk1: Its: Manager WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, ::, a;;:;u ,?C J!i-Jy;;:;:]n Its: Manager MARSHALLTOWN SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Mr;ger By: Its: ~Iff:![; Manager OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: By: Its: Promissory Note Manager 6 Mayodan BK:01294 PG:1984 FILED ROCKINGHAM COUNTY REBECCA B. CIPRIANI REGISTER OF DEEDS Aug 29, 2006 09:16:25 am $102.00 RECORDING $2.00 PROBATE EXCISE TAX NONSTAND BOOK 01294 PAGES 1984-2014 INSTRUMENT# 12162 ALS Maximum Principal Indebtedness is $4,875,000.00 CONSTRUCTION DEED OF TRUST ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING MADE BY TYLER SHOPPING CENTER LLC, A DELAWARE LIMITED LIABILITY COMPANY, PULASKI SHOPPING CENTER LLC, ADELAWARE LIMITED LIABILITY COMPANY, SHAWNEE SHOPPING CENTER LLC, ADELA WARE LIMITED LIABILITY COMPANY, FT. DODGE SHOPPING CENTER LLC, A DELAWARE LIMITED LIABILITY COMPANY, KEOKUK SHOPPING CENTER LLC, A DELAWARE LIMITED LIABILITY COMPANY, WEST BURLINGTON SHOPPING CENTER LLC, ADELAWARE LIMITED LIABILITY COMPANY, MARSHALLTOWN SHOPPING CENTER LLC, ADELAWARE LIMITED LIABILITY COMPANY, OSKALOOSA SHOPPING CENTER LLC, ADELA WARE LIMITED LIABILITY COMPANY collectively as Grantor to LA WYERS TITLE INSURANCE CORPORATION, as Trustee for the benefit of KEYBANK NATIONAL ASSOCIATION as Beneficiary --- Dated as of: August 25._, 2006 PREPARED BY AND UPON RECORDATION RETURN TO: Tracy L. Hawkins, Esq. Thompson Hine LLP 312 Walnut Street, 14th Floor Cincinnati, Ohio 45202 /l;lru~/ To'- TSn~w.131-Vlt1J 1 S'»'vYJ.... JhtN'u.. lLP fJo&ax ;;(..19.27 (} ~ G-lu~sbf)y\...11 , -J{C!- Z 7 v-~o EXHIBIT 13 BK:01294 PG:1985 CONSTRUCTION DEED OF TRUST ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Deed of Trust") is made as of August :J..r_, 2006, by TYLER SHOPPING CENTER LLC, a Delaware limited liability company, PULASKI SHOPPING CENTER LLC, a Delaware limited liability company, SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company, FT. DODGE SHOPPING CENTER LLC, a Delaware limited liability company, KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company, WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company, MARSHALL TOWN SHOPPING CENTER LLC, a Delaware limited liability company, OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company (collectively, the "Grantor") whose address is 5851 Ridge Bend Road, Memphis, Tennessee 38120, in favor of Lawyers Title Insurance Corporation, its successors and assi!plS ("Trustee") whose address is d f-/puJor,£ t"' Sc::f. I H 3 '-/ F ttt~f/e. vdfe m~ll 1\Rlt'l or the benefit ofKEYBANK NATIONAL ASSOCIATION, its successors and s ("Beneficiary") whose address is 580 Walnut Street, 2nd Floor, Cincinnati, Ohio 45202. I. Grant and Secured Obligations. 1.1. Grant. For the purpose of securing payment and performance of the Secured Obligations defined and described in Section 1.2 below, Grantor hereby irrevocably and unconditionally grants, bargains, sells, conveys, mortgages, assigns, transfers, pledges, warrants and sets over to Trustee, with power of sale and with right of entry and possession, all estate, right, title and interest which Grantor now has or may later acquire in and to the following property (all or any part of such property, or any interest in all or any part of it, as the context may require, the "Property"): (a) Grantor's interest in the real property located in the City of Mayodan, Rockingham County, North Carolina, as described in Exhibit A, together with all existing and future easements and rights affording access to it (the "Premises"); (b) All buildings, structures and improvements now located or later to be constructed on the Premises (the "Improvements"); together with (c) All existing and future appurtenances, privileges, easements, franchises and tenements of the Premises, including all minerals, oil, gas, other hydrocarbons and associated substances, sulphur, nitrogen, carbon dioxide, helium and other commercially valuable substances which may be in, under or produced from any part of the Premises, all development rights and credits, air rights, water, water rights (whether riparian, appropriative or otherwise, and whether or not appurtenant) and water stock, and any Premises lying in the streets, roads or avenues, open or proposed, in front of or adjoining the Premises and Improvements; together with (d) All existing and future leases, subleases, subtenancies, licenses, occupancy agreements and concessions ("leases") relating to the use and enjoyment of all or any part of the Premises and Improvements, and any and all guaranties and other supporting Mortgage Mayodan BK: 01294 PG: 1986 obligations or other agreements relating to or made in connection with any of such leases; together with (e) All real property and improvements on it, and all appurtenances and other property and interests of any kind or character, whether described in Exhibit A or not, which may be reasonably necessary or desirable to promote the present and any reasonable future beneficial use and enjoyment of the Premises and Improvements; together with (f) All goods, materials, supplies, chattels, furniture, fixtures, equipment and machinery now or later to be attached to, placed in or on, or used in connection with the use, enjoyment, occupancy or operation of all or any part ofthe Premises and Improvements, whether stored on the Premises or elsewhere, including all pumping plants, engines, pipes, ditches and flumes, and also all gas, electric, cooking, heating, cooling, air conditioning, lighting, refrigeration and plumbing fixtures and equipment, all of which shall be considered to the fullest extent of the law to be real property for purposes of this Deed ofTrust and any manufacturer's warranties with respect thereto; together with (g) All building materials, equipment, work in process or other personal property of any kind, whether stored on the Premises or elsewhere, which have been or later will be acquired for the purpose ofbeing delivered to, incorporated into or installed in or about the Premises or Improvements; together with (h) All of Grantor's interest in and to all operating accounts, the Loan funds, whether disbursed or not, all reserves set forth in the Budget, and any other bank accounts of Grantor; together with (i) All rights to the payment of money, accounts, accounts receivable, reserves, deferred payments, refunds, cost savings, payments and deposits, whether now or later to be received from third parties (including all earnest money sales deposits) or deposited by Grantor with third parties (including all utility deposits), contract rights, or other agreements of sale or purchase (including, but not limited to, the Required Contracts as defined in the Loan Agreement or any other agreement of sale regarding an outlot to be developed on the Land), general intangibles, development and use rights, governmental permits and licenses, applications, architectural and engineering plans, specifications and drawings, as-built drawings, chattel paper, instruments, documents, notes, drafts and letters of credit (other than letters of credit in favor of Beneficiary), which arise from or relate to construction on the Premises or to any business now or later to be conducted on it, or to the Premises and Improvements generally and any builder's or manufacturer's warranties with respect thereto; together with (j) All insurance policies pertaining to the Premises and all proceeds, including all claims to and demands for them, of the voluntary or involuntary conversion of any of the Premises, Improvements or the other property described above into cash or liquidated claims, including proceeds of all present and future fire, hazard or casualty insurance policies and all condemnation awards or payments now or later to be made by any public body or decree by any court of competent jurisdiction for any taking or in Mortgage 2 Mayodan BK:01294 PG: 1987 connection with any condemnation or eminent domain proceeding, and all causes of action and their proceeds for any damage or injury to the Premises, Improvements or the other property described above or any part of them, or breach of warranty in connection with the construction of the Improvements, including causes of action arising in tort, contract, fraud or concealment of a material fact; together with (k) All of Grantor's rights in and to all Interest Rate Agreements; (I) All books and records pertaining to any and all of the property described above, including computer-readable memory and any computer hardware or software necessary to access and process such memory ("Books and Records"); together with (m) All proceeds of, additions and accretions to, substitutions and replacements for, and changes in any of the property described above. Capitalized terms used above and elsewhere in this Deed of Trust without definition have the meanings given them in the Loan Agreement referred to in Subsection 1.2{a)(iii) below. 1.2. Secured Obligations. (a) Grantor makes the grant, conveyance, and mortgage set forth in Section 1.1 above, and grants the security interest set forth in Section 3 below for the purpose of securing the following obligations (the "Secured Obligations") in any order of priority that Beneficiary may choose: (i) Payment of all obligations at any time owing under a promissory note (the "Note") bearing even date herewith, payable by Grantor as maker in the stated principal amount of Four Million Eight Hundred Seventy-Five and 001100 Dollars ($4,875,000.00) to the order of Beneficiary; and Payment and performance of all obligations of Grantor under this (ii) Deed ofTrust; and Payment and performance of all obligations of Grantor under a (iii) Construction Loan Agreement bearing even date herewith between Grantor as "Borrower" and Beneficiary as "Lender" (the "Loan Agreement"); and (iv) Payment and performance of any obligations of Grantor under any Loan Documents which are executed by Grantor; and Payment and performance of all obligations of Grantor arising (v) from any Interest Rate Agreements. Interest Rate Agreements shall mean an interest rate hedging program through the purchase by Grantor from Beneficiary of an interest rate swap, cap, or such other interest rate protection product with respect to the Note; and (vi) Payment and perfonnance of all future advances and other obligations that Grantor or any successor in ownership of all or part of the Property may agree to pay and/or perfonn (whether as principal, surety or Mortgage 3 Mayodan BK:01294 PG: 1988 guarantor) for the benefit of Beneficiary, when a writing evidences the parties' agreement that the advance or obligation be secured by this Deed of Trust; and (vii) Payment and performance of all modifications, amendments, extensions, and renewals, however evidenced, of any of the Secured Obligations; (viii) Payment of any and all amounts advanced by Beneficiary with respect to the Property for the payment of taxes, assessments, insurance premiums or costs incurred for the protection of the Property, together with interest at the Default Rate; and (ix) Any and all loans, advances, debts, liabilities, obligations, covenants and duties now or in the future owed by Grantor, Jeff H. Farmer, Jr., The Spectra Group, Inc., or any Related Borrower (as such term is defined in the Loan Agreement) to Beneficiary, or any direct or indirect subsidiary or any Affiliate (as such term is defined in the Loan Agreement) of Beneficiary, or any parent or related party to Beneficiary, of any kind or nature, present or future, whether direct or indirect, absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, whether or not (i) evidenced by any other note or guaranty or other instrument, (ii) arising under any agreement, instrument or document, (iii) for the payment of money, (iv) arising by reason of any extension of credit, opening of a letter of credit, loan, equipment lease or guaranty, or (v) arising under any interest or current swap, future, option or other interest rate protection or similar agreement, including without limitation, an Interest Rate Agreement (as defined in the Loan Agreement). (b) All persons who may have or acquire an interest in all or any part of the Property will be considered to have notice of, and will be bound by, the terms of the Secured Obligations and each other agreement or instrument made or entered into in connection with each of the Secured Obligations. Such terms include any provisions in the Note or the Loan Agreement which permit borrowing, repayment and reborrowing, or which provide that the interest rate on one or more of the Secured Obligations may vary from time to time. 2. Assignment of Rents. 2.1. Assignment. Grantor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary all rents, royalties, issues, profits, revenue, income, accounts, proceeds and other benefits of the Property (including, but not limited to, any due under the Required Contracts, as such term is define din the Loan Agreement), whether now due, past due or to become due, including all prepaid rents and security deposits (some or all collectively, as the context may require, "Rents"). This is an absolute assignment, not an assignment for security only. 2.2. Grant of License. Beneficiary hereby confers upon Grantor a license ("License") to collect and retain the Rents as they become due and payable, so long as no Event of Default, as defined in Section 6.2 below, shall exist and be continuing. If an Event of Default has occurred and is continuing, Beneficiary shall have the right, which it may choose to exercise in Mortgage 4 Mayodan BK:01294 PG:1989 its sole discretion, to terminate this License without notice to or demand upon Grantor, and without regard to the adequacy of Beneficiary's security under this Deed of Trust. 2.3. Collection and Application of Rents. Subject to the License granted to Grantor under Section 2.2 above, Beneficiary has the right, power and authority to collect any and all Rents. Grantor hereby appoints Beneficiary its attorney-in-fact to perform any and all of the following acts, if and at the times when Beneficiary in its sole discretion may so choose: (a) Demand, receive and enforce payment of any and all Rents; or (b) Give receipts, releases and satisfactions for any and all Rents; or (c) Sue either in the name of Grantor or in the name ofBeneficiary for any and all Rents. Beneficiary and Grantor agree that the mere recordation of the assignment granted herein entitles Beneficiary immediately to collect and receive rents upon the occurrence of an Event of Default, as defined in Section 6.2, without first taking any acts of enforcement under applicable law, such as, but not limited to, providing notice to Grantor, filing foreclosure proceedings, or seeking and/or obtaining the appointment of a receiver. Further, Beneficiary's right to the Rents does not depend on whether or not Beneficiary takes possession of the Property as permitted under Subsection 6.3(c). In Beneficiary's sole discretion, Beneficiary may choose to collect Rents either with or without taking possession of the Property. Beneficiary shall apply all Rents collected by it in the manner provided under Section 6.6. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity. 2.4. Beneficiary Not Responsible. Under no circumstances shall Beneficiary have any duty to produce Rents from the Property. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession ofthe Premises and Improvements, unless Beneficiary agrees in writing to the contrary, Beneficiary is not and shall not be deemed to be: (a) (b) lease; or A "Beneficiary in possession" for any purpose; or Responsible for performing any of the obligations of the lessor under any (c) Responsible for any waste committed by lessees or any other parties, any dangerous or defective condition of the Property, or any negligence in the management, upkeep, repair or control of the Property; or (d) Liable in any manner for the Property or the use, occupancy, enjoyment or operation of all or any part of it. 2.5. Leasing. Grantor shall not accept any deposit or prepayment of rents under the leases for any rental period exceeding one (1) month without Beneficiary's prior written consent. Mortgage 5 Mayodan BK: 01294 PG: 1990 Grantor shall not lease the Property or any part of it except strictly in accordance with the Loan Agreement. 3. Grant of Security Interest. 3.1. Security Agreement. The parties intend for this Deed of Trust to create a lien on the Property, and an absolute assignment of the Rents, all in favor of Beneficiary. The parties acknowledge that some of the Property and some or all of the Rents may be determined under applicable law to be personal property or fixtures. To the extent that any Property or Rents may be determined to be personal property, Grantor as debtor hereby grants Beneficiary and Trustee as secured parties a security interest in all of Grantor's right, title and interest in all such Property and Rents, whether now owned or existing or hereafter acquired, to secure payment and performance of the Secured Obligations. This Deed ofTrust constitutes a security agreement under the Uniform Commercial Code (as defined in Section 8.8) covering all such Property and Rents. 3.2. Financing Statements. Grantor hereby authorizes Beneficiary to file, on behalf of Grantor and without its signature, one or more financing statements and such other documents as Beneficiary may from time to time require to perfect or continue the perfection of Beneficiary's security interest in any Property or Rents. As provided in Section 5.9 below, Grantor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. In case Grantor fails to execute any financing statements or other documents for the perfection or continuation of any security interest, Grantor hereby irrevocably appoints Beneficiary as its true and lawful attorney-in-fact which power of attorney is coupled with an interest to execute any such documents on its behalf. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall never be construed as in any way derogating from or impairing this Deed ofTrust or the rights or obligations of the parties under it. 4. Fixture Filing. This Deed of Trust constitutes a financing statement filed as a fixture filing under Article 9 of the Uniform Commercial Code in the State in which the Property is located, as amended or recodified from time to time, covering any Property which now is or later may become fixtures attached to the Premises or Improvements. The description of the Property in this Deed of Trust includes goods which are or are to become fixtures on the Premises and/or Improvements of which Grantor is the record owner. For this purpose, the respective addresses of Grantor, as debtor, and Beneficiary and Trustee, as secured parties, are as set forth in the preambles ofthis Deed ofTrust. 5. Rights and Duties of the Parties. 5.1. Representations and Warranties. Grantor represents and warrants that: (a) Grantor lawfully, possesses and holds fee simple title to all of the Premises and the Improvements and has not encumbered or assigned any of its business interests and rights under, in and to the Premises or Improvements; Mortgage 6 Mayodan BK: 01294 PG: 1991 (b) all Property; Grantor has or will have good title to, and is and will be the sole owner of, (c) Grantor has the full and unlimited power, right and authority to encumber the Property and assign the Rents; (d) This Deed of Trust creates a first and prior lien on the Property; (e) The Property includes all property and rights which may be reasonably necessary or desirable to promote the present and any reasonable future beneficial use and enjoyment of the Premises and Improvements; (f) Grantor owns any Property which is personal property free and clear of any security agreements, reservations of title or conditional sales contracts, and there is no financing statement affecting such personal property on file in any public office; and Grantor is a limited liability company formed under the laws of the State of Delaware and will not change the state of its formation or transfer the Collateral, or any portion thereof (except as permitted by Section 6.1(b)), to an entity formed in another state. Grantor's exact legal name is as shown in this Deed of Trust and Grantor will not change its legal name. Grantor's organization number is 4170464 and Grantor will not change its organization number. 5.2. Taxes, and Assessments. Grantor shall pay prior to delinquency all taxes, levies, charges and assessments, in accordance with Section 15.1 {h) of the Loan Agreement. 5.3. Performance of Secured Obligations. Grantor shall promptly pay and perform each Secured Obligation in accordance with its terms. 5.4. Liens, Charges and Encumbrances. Grantor shall immediately discharge any lien on the Property which Beneficiary has not consented to in writing in accordance with the terms of Section 15.1(c) of the Loan Agreement. 5.5. Damages and Insurance and Condemnation Proceeds. In the event of any casualty or condemnation of the Property, the provisions of Article 16 of the Loan Agreement shall govern. 5.6. Maintenance and Preservation of Property. (a) Grantor shall insure the Property as required by the Loan Agreement and keep the Property in good condition and repair. (b) Grantor shall not remove or demolish the Property or any part of it, or alter, restore or add to the Property, or initiate or allow any change or variance in any zoning or other Premises use classitlcation which affects the Property or any part of it, except as permitted or required by the Loan Agreement or with Beneficiary's express prior written consent in each instance If all or part of the Property becomes damaged or destroyed, Grantor shall (c) promptly and completely repair and/or restore the Property in a good and workmanlike A1ortgage 7 Mayodan BK: 01294 PG: 1992 manner in accordance with sound building practices, regardless of whether or not Beneficiary agrees to disburse Proceeds or other sums to pay costs of the work of repair or reconstruction under Article 16 of the Loan Agreement. (d) Grantor shall not commit or allow any act upon or use of the Property which would violate: (i) any applicable Laws or order of any Governmental Authority, whether now existing or later to be enacted and whether foreseen or unforeseen; or (ii) any public or private covenant, condition, restriction or equitable servitude affecting the Property. Grantor shall not bring or keep any article on the Property or cause or allow any condition to exist on it, if that could invalidate or would be prohibited by any insurance coverage required to be maintained by Grantor on the Property or any part of it under the Loan Agreement. (e) Grantor shall not commit or allow waste of the Property, including those acts or omissions characterized under the Loan Agreement as waste which arises out of Hazardous Material. (f) Grantor shall perform all other acts which from the character or use ofthe Property may be reasonably necessary to maintain and preserve its value. 5.7. Releases, Extensions, Modifications and Additional Security. From time to time, Beneficiary may perform any of the following acts without incurring any liability or giving notice to any person: (a) Release any person liable for payment of any Secured Obligation; (b) Extend the time for payment, or otherwise alter the terms of payment, of any Secured Obligation; (c) Accept additional real or personal property of any kind as security for any Secured Obligation, whether evidenced by deeds of trust, mortgages, security agreements or any other instruments of security; (d) Alter, substitute or release any property securing the Secured Obligations; (e) Consent to the making of any plat or map of the Property or any part of it; (f) Property; or Join in granting any easement or creating any restriction affecting the (g) Join in any subordination or other agreement affecting this Deed of Trust or the lien of it; or (h) Release the Property or any part of it. 5.8. Release. When all of the Secured Obligations have been paid in full and all fees and other sums owed by Grantor under this Deed of Trust and the other Loan Documents have been received, Beneficiary and Trustee shall release this Deed of Trust, the lien created thereby, Mortgage 8 Mayodan BK: 01294 PG: 1993 and all notes and instruments evidencing the Secured Obligations. Grantor shall pay any costs of preparation and recordation of such release. 5.9. Compensation, Exculpation, Indemnification. (a) Grantor agrees to pay fees in the maximum amounts legally permitted, or reasonable fees as may be charged by Beneficiary when the law provides no maximum limit, for any services that Beneficiary or Trustee may render in connection with this Deed of Trust, including providing a statement of the Secured Obligations or providing the release pursuant to Section 5.8 above. Grantor shall also pay or reimburse all of Beneficiary's and Trustee's costs and expenses which may be incurred in rendering any such services. Grantor further agrees to pay or reimburse Beneficiary for all costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including any rights or remedies afforded to Beneficiary and Trustee under Section 6.3, whether any lawsuit is filed or not, or in defending any action or proceeding arising under or relating to this Deed of Trust, including attorneys' fees and other legal costs, costs of any Foreclosure Sale (as defined in Subsection 6.3{i) below) and any cost of evidence oftitle. If Beneficiary and/or Trustee, as required by applicable law, chooses to dispose of Property through more than one Foreclosure Sale, Grantor shall pay all costs, expenses or other advances that may be incurred or made by Beneficiary and/or Trustee in each of such Foreclosure Sales. In any suit to foreclose the lien hereof or enforce any other remedy of Trustee or Beneficiary under this Deed of Trust or the Note, there shall be allowed and included as additional indebtedness in the decree for sale or other judgment or decree all expenditures and expenses which may be paid or incurred by or on behalf of Trustee and Beneficiary for reasonable attorneys' costs and fees (including the costs and fees of paralegals), survey charges, appraiser's fees, inspecting engineer's and/or architect's fees, fees for environmental studies and assessments and all additional expenses incurred by Trustee and Beneficiary with respect to environmental matters, outlays for documentary and expert evidence, stenographers' 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, Torrens certificates and similar data and assurances with respect to title as Trustee and Beneficiary may deem reasonably necessary either to prosecute such suit or to evidence to bidders at any sale which may be had pursuant to such decree the true condition of the title to, the value of or the environmental condition of the Property. All expenditures and expenses of the nature in this Subsection mentioned, and such expenses and fees as may be incurred in the protection of the Property and maintenance of the lien ofthis Deed of Trust, including the fees of any attorney (including the costs and fees of paralegals) employed by Trustee or Beneficiary in any litigation or proceeding affecting this Deed of Trust, the Note or the Property, including probate and bankruptcy proceedings, or in preparation for the commencement or defense of any proceeding or threatened suit or proceeding, shall be immediately due and payable by Grantor, with interest thereon at the Default Rate and shall be secured by this Deed of Trust. (b) Neither Beneficiary nor Trustee shall be directly or indirectly liable to Grantor or any other person as a consequence of any of the following: Mortgage 9 Mayodan BK: 01294 PG: 1994 (i) Beneficiary's or Trustee's exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary and/or Trustee in this Deed of Trust; (ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of Grantor under any agreement related to the Property or under this Deed of Trust; or (iii) Any loss sustained by Grantor or any third party resulting from Beneficiary's failure to lease the Property, or from any other act or omission of Beneficiary in managing the Property, after an Event of Default, unless the loss is caused by the willful misconduct and bad faith of Beneficiary. Grantor hereby expressly waives and releases all liability of the types described above, and agrees that no such liability shall be asserted against or imposed upon Beneficiary or Trustee. (c) Grantor agrees to indemnify Beneficiary and Trustee against and hold them harmless from all losses, damages, liabilities, claims, causes of action, judgments, court costs, attorneys' fees and other legal expenses, cost of evidence of title, cost of evidence of value, and other costs and expenses which they may suffer or incur: In performing any act required or permitted by this Deed of Trust (i) or any of the other Loan Documents or by law; (ii) Because of any failure of Grantor to perform any of its obligations; or (iii) Because of any alleged obligation of or undertaking by Beneficiary and/or Trustee to perform or discharge any of the representations, warranties, conditions, covenants or other obligations in any document relating to the Property other than the Loan Documents. This agreement by Grantor to indemnify Beneficiary and Trustee shall survive the release and cancellation of any or all of the Secured Obligations and the full or partial release of this Deed ofTrust. (d) Grantor shall pay all obligations to pay money arising under this Section 5.9 immediately upon demand by Beneficiary. Each such obligation shall be added to, and considered to be part of, the principal of the Note, and shall bear interest from the date the obligation arises at the Default Rate. 5.1 0. Defense and Notice of Claims and Actions. At Grantor's sole expense, Grantor shall protect, preserve and defend the Property and title to and right of possession of the Property, and the security of this Deed of Trust and the rights and powers of Beneficiary created under it, against all adverse claims. Grantor shall give Beneficiary prompt notice in writing if any claim is asserted which does or could affect any such matters, or if any action or proceeding is commenced which alleges or relates to any such claim. Mortgage 10 Mayodan BK: 01294 PG: 1995 5 .11. Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust or with the proceeds of any loan secured by this Deed of Trust. 5.12. Site Visits, Observation and Testing. Beneficiary and its agents and representatives shall have the right at any reasonable time to enter and visit the Property for the purpose of performing appraisals, observing the Property, taking and removing soil or groundwater samples, and conducting tests on any part of the Property. Beneficiary has no duty, however, to visit or observe the Property or to conduct tests, and no site visit, observation or testing by Beneficiary, its agents or representatives shall impose any liability on any of Beneficiary, its agents or representatives. In no event shall any site visit, observation or testing by Beneficiary, its agents or representatives be a representation that Hazardous Material are or are not present in, on or under the Property, or that there has been or shall be compliance with any law, regulation or ordinance pertaining to Hazardous Material or any other applicable governmental law. Neither Grantor nor any other party is entitled to rely on any site visit, observation or testing by any of Beneficiary, its agents or representatives. Neither Beneficiary, its agents or representatives owe any duty of care to protect Grantor or any other party against, or to inform Grantor or any other party of, any Hazardous Material or any other adverse condition affecting the Property. Beneficiary shall give Grantor reasonable notice before entering the Property. Beneficiary shall make reasonable efforts to avoid interfering with Grantor's use of the Property in exercising any rights provided in this Section 5.12. 5.13. Notice of Change. Grantor shall give Beneficiary prior written notice of any change in: (a) the location of its place of business or its chief executive office if it has more than one place ofbusiness; (b) the location ofanyofthe Property, including the Books and Records; and (c) Grantor's name or business structure. Unless otherwise approved by Beneficiary in writing, all Property that consists of personal property (other than the Books and Records) will be located on the Premises and all Books and Records will be located at Grantor's place of business or chief executive office if Grantor has more than one place of business. 6. Accelerating Transfers, Default and Remedies. 6.1. Accelerating Transfers. (a) "Accelerating Transfer" means any Transfer not expressly permitted under Article 17 of the Loan Agreement. (b) Grantor acknowledges that Beneficiary is making one or more advances under the Loan Agreement in reliance on the expertise, skill and experience of Grantor; thus, the Secured Obligations include material elements similar in nature to a personal service contract. In consideration of Beneficiary's reliance, Grantor agrees that Grantor shall not make any Accelerating Transfer, unless the transfer is preceded by Beneficiary's express written consent to the particular transaction and transferee. Beneficiary may withhold such consent in its sole discretion. If any Accelerating Transfer occurs, Beneficiary in its sole discretion may declare all of the Secured Obligations to be immediately due and payable, and Beneficiary may invoke any rights and remedies provided by Section 6.3 of this Deed ofTrust. Mortgage 11 Mayodan BK:01294 PG:1996 6.2. Events of Default. Grantor will be in default under this Deed of Trust upon the occurrence of any one or more of the following events (some or all collectively, "Events of Default;" any one singly, an "Event of Default"). (a) Failure of Grantor (i) (x) to pay any of the principal of the Loan when due, (y) to pay interest within ten (1 0) days after the date when due or (z) to observe or perform any of the other covenants or conditions by Grantor to be performed under the terms of this Deed of Trust or any of the other Loan Documents concerning the payment of money for a period of ten (1 0) days after written notice from Beneficiary that the same is due and payable; or (ii) for a period of thirty (30) days after written notice from Beneficiary, to observe or perform any non-monetary covenant or condition contained in this Deed of Trust or any of the other Loan Documents; provided that if any such failure concerning a non-monetary covenant or condition is susceptible to cure but cannot reasonably be cured within said thirty (30) day period, then Grantor shall have an additional sixty (60) day period to cure such failure and no Event of Default shall be deemed to exist hereunder so long as (x) Grantor commences such cure within the initial thirty (30) day period and diligently and in good faith pursues such cure to completion within such resulting ninety (90) day period from the date of Beneficiary's notice, and (y) the existence of such uncured default will not result in any tenant under a Lease having the right to terminate such Lease due to such uncured default; and provided further that if a different notice or grace period is specified under Article 19 of the Loan Agreement (or elsewhere in this Deed of Trust or the Loan Agreement) in which such particular breach will become an Event of Default, the specific provision shall control; or (b) An "Event of Default" occurs under the Loan Agreement or any other Loan Document. 6.3. Remedies. At any time after an Event of Default, Beneficiary shall be entitled to invoke any and all of the rights and remedies described below, in addition to all other rights and remedies available to Beneficiary at law or in equity. All of such rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. (a) Acceleration. Beneficiary may declare any or all of the Secured Obligations to be due and payable immediately. (b) Receiver. Beneficiary shall, as a matter of right, without notice and without giving bond to Grantor or anyone claiming by, under or through Grantor, and without regard for the solvency or insolvency of Grantor or the then value of the Property, to the extent permitted by applicable law, be entitled to have a receiver appointed for all or any part of the Property and the Rents, and the proceeds, issues and profits thereof, with the rights and powers referenced below and such other rights and powers as the court making such appointment shall confer, and Grantor hereby consents to the appointment of such receiver and shall not oppose any such appointment. Such receiver shall have all powers and duties prescribed by applicable law, all other powers which are necessary or usual in such cases for the protection, possession, control, management and operation of the Property, and such rights and powers as Beneficiary Mortgage 12 Mayodan BK: 01294 PG: 1997 would have, upon entering and taking possession of the Property under subsection (c) below. (c) Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing all of Grantor's or the then owner's Books and Records; entering into, enforcing, modifying or canceling leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Beneficiary; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Grantor shall assemble all of the Property that has been removed from the Premises and make all of it available to Beneficiary at the site of the Premises. Grantor hereby irrevocably constitutes and appoints Beneficiary as Grantor's attorney-in-fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Grantor's name on any instruments. (d) Cure; Protection of Security. Beneficiary may cure any breach or default ofGrantor, and if it chooses to do so in connection with any such cure, Beneficiary may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust, including, without limitation, completing construction of the improvements at the Property contemplated by the Loan Agreement. Such other things may include: appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Beneficiary under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary's sole judgment is or may be senior in priority to this Deed of Trust, such judgment of Beneficiary or to be conclusive as among the parties to this Deed of Trust; obtaining insurance and/or paying any premiums or charges for insurance required to be carried under the Loan Agreement; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary. Beneficiary may take any of the actions permitted under this Subsection 6.3(d) either with or without giving notice to any person. Any amounts expended by Beneficiary under this Subsection 6.3(d) shall be secured by this Deed of Trust. (e) Uniform Commercial Code Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the Uniform Commercial Code in the State in which the Property is located. (f) Foreclosure; Lawsuits. Upon the occurrence of any one or more of the above-mentioned Events of Default, and, on application of Beneficiary, it shall be lawful for, and the duty of, Trustee to sell all or any portion of the Property at public auction for cash after having first given such notice as to commencement of foreclosure proceedings and having obtained such findings and leave of court as may then be required by law and Afortgage 13 Mayodan BK: 01294 PG: 1998 having given such notice and having advertised the time and place of such sale in such manner as may then be required by law, and upon such sale and any resale to convey title to the purchaser. Beneficiary and/or Trustee, as permitted or required by applicable law, or its nominee may bid and become the purchaser of all or any part of the Property at any foreclosure or other sale hereunder, and the amount of Beneficiary's and/or Trustee's, as permitted or required by applicable law, successful bid shall be credited on the Secured Obligations. Without limiting the foregoing, Beneficiary and/or Trustee, as permitted or required by applicable law, may proceed by a suit or suits in law or equity, whether for specific performance of any covenant or agreement herein contained or in aid of the execution of any power herein granted, or for any foreclosure under the judgment or decree of any court of competent jurisdiction. In addition to the right provided in Section 6.3(a), upon, or at any time after the filing of a complaint to foreclose this Deed of Trust, Beneficiary and/or Trustee, as permitted or required by applicable law, shall be entitled to the appointment of a receiver of the Property by the court in which such complaint is filed, and Grantor hereby consents to such appointment. (g) Other Remedies. Beneficiary may exercise all rights and remedies contained in any other instrument, document, agreement or other writing heretofore, concurrently or in the future executed by Grantor or any other person or entity in favor of Beneficiary in connection with the Secured Obligations or any part thereof, without prejudice to the right of Beneficiary thereafter to enforce any appropriate remedy against Grantor. Beneficiary shall have the right to pursue all remedies afforded to a Beneficiary under applicable law, and shall have the benefit of all of the provisions of such applicable law, including all amendments thereto which may become effective from time to time after the date hereof. (h) Sale of Personal Property. Beneficiary and/or Trustee, as required by applicable law, shall have the discretionary right to cause some or all of the Property, which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law. (i) For purposes of this power of sale, Beneficiary and/or Trustee, as required by applicable law, may elect to treat as personal property any Property which is intangible or which can be severed from the Premises or Improvements without causing structural damage. If it chooses to do so, Beneficiary and/or Trustee, as required by applicable law, may dispose of any personal property, in any manner permitted by Article 9 of the Uniform Commercial Code of the state in which the Property is located, including any public or private sale, or in any manner permitted by any other applicable law. In connection with any sale or other disposition of such Property, (ii) Grantor agrees that the following procedures constitute a commercially reasonable sale: Beneficiary shall mail written notice of the sale to Grantor not later than thirty (30) days prior to such sale. Beneficiary will publish notice of the sale in a local daily newspaper of general circulation. Upon receipt of any written request, Beneficiary will make the Property available to any bona fide prospective purchaser for inspection during reasonable business hours. Without limiting any other provisions of this Deed of Trust, Beneficiary and/or Trustee, as permitted or lvfortgage 14 Mayodan BK: 01294 PG: 1999 required by applicable law, shall have the right to conduct any such sale on Grantor's Property, and Beneficiary and/or Trustee, as permitted or required by applicable law, shall have such right of possession ofthe Property as shall be necessary or convenient for such purpose or any other purpose under this Section 6.3. Beneficiary and/or Trustee, as permitted or required by applicable law, may sell the Property without giving any warranties relating to title, possession, quiet enjoyment, merchantability, fitness or the like as to the Property and may specifically disclaim any warranties, which shall not be considered to adversely affect the commercial reasonableness of any sale of the Property. Beneficiary and/or Trustee, as required by applicable law, has no obligation to clean up or otherwise prepare the Property for sale. Notwithstanding, Beneficiary shall be under no obligation to consummate a sale if, in its judgment, none of the offers received by it equals the fair value of the Property offered for sale. The foregoing procedures do not constitute the only procedures that may be commercially reasonable. (i) Single or Multiple Foreclosure Sales. If the Property consists of more than one lot, parcel or item of property, Beneficiary and/or Trustee, as required by applicable law, may: (i) Designate the order in which the lots, parcels and/or items shall be sold or disposed of or offered for sale or disposition; and (ii) Elect to dispose of the lots, parcels and/or items through a single consolidated sale or disposition to be held or made under or in connection with judicial proceedings, or by virtue of a judgment and decree of foreclosure and sale; or through two or more such sales or dispositions; or in any other manner Beneficiary may deem to be in its best interests (any such sale or disposition, a "Foreclosure Sale;" and any two or more, "Foreclosure Sales"). If Beneficiary and/or Trustee chooses to have more than one Foreclosure Sale, Beneficiary and/or Trustee at its option may cause the Foreclosure Sales to be held simultaneously or successively, on the same day, or on such different days and at such different times and in such order as Beneficiary and/or Trustee may deem to be in its best interests. No Foreclosure Sale shall terminate or affect the liens of this Deed of Trust on any part of the Property which has not been sold, until all of the Secured Obligations have been paid in full. 6.4. Credit Bids. At any Foreclosure Sale, any person, including Grantor or Beneficiary, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law. Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the sales price of the property against the following obligations: (a) First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Grantor is obligated to pay or reimburse Beneficiary and Trustee under Section 5.9 of this Deed ofTrust; and Mortgage 15 Mayodan BK:01294 PG:2000 (b) Second, all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose. 6.5. Application of Foreclosure Sale Proceeds. Beneficiary shall apply the proceeds of any Foreclosure Sale in the following manner, subject to the provisions of North Carolina General Statutes Section 45-21.31 regarding the application of foreclosure sale proceeds: (a) First, to pay the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Grantor is obligated to reimburse Beneficiary or Trustee under Section 5.9 of this Deed of Trust; (b) Second, to pay the portion of the Secured Obligations attributable to any sums expended or advanced by Beneficiary under the terms of this Deed of Trust which then remain unpaid; (c) Third, to pay all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose; and (d) Fourth, to remit the remainder, if any, to the person or persons entitled to it. 6.6. Application of Rents and Other Sums. Beneficiary shall apply any and all Rents collected by it, and any and all sums other than proceeds of a Foreclosure Sale which Beneficiary may receive or collect under Section 6.3 above, in the following manner: (a) First, to pay the portion of the Secured Obligations attributable to the costs and expenses of operation and collection that may be incurred by Beneficiary or any receiver; (b) Second, to pay all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose; and (c) Third, to remit the remainder, if any, to the person or persons entitled to it. Beneficiary shall have no liability for any funds which it does not actually receive. 7. The Trustee. 7 .1. Certain Rights. With the approval of Beneficiary, Trustee shall have the right to take any and all of the following actions: (i) to select, employ and consult with counsel (who may be, but need not be, counsel for Beneficiary) upon any matters arising hereunder, including the preparation, execution and interpretation of the Loan Documents, and shall be fully protected in relying as to legal matters on the advice of counsel, (ii) to execute any of the trusts and powers hereof and to perform any duty hereunder either directly or through his or her agents or attorneys, (iii) to select and employ, in and about the execution of his or her duties hereunder, suitable accountants, engineers and other experts, agents and attorneys-in-fact, either corporate or individual, not regularly in the employ of Trustee (and Trustee shall not be answerable for any act, default, negligence, or misconduct of any such accountant, engineer or other expert, agent or attorney-in-fact, if selected with reasonable care, or for any error of judgment or act done by Mortgage 16 Mayodan BK:01294 PG:2001 Trustee in good faith, or be otherwise responsible or accountable under any circumstances whatsoever, except for Trustee's gross negligence or bad faith), and (iv) any and all other lawful action that Beneficiary may instruct Trustee to take to protect or enforce Beneficiary's rights hereunder. Trustee shall not be personally liable in case of entry by Trustee, or anyone entering by virtue of the powers herein granted to Trustee, upon the Premises for debts contracted for or liability or damages incurred in the management or operation of the Premises. Trustee shall have the right to rely on any instrument, document, or signature authorizing or supporting any action taken or proposed to be taken by Trustee hereunder, believed by Trustee in good faith to be genuine. Trustee shall be entitled to reimbursement for expenses incurred by Trustee in the performance ofTrustee's duties hereunder and to reasonable compensation for such ofTrustee's services hereunder as shall be rendered. Grantor will, from time to time, pay the compensation due to Trustee hereunder and reimburse Trustee for, and save and hold Trustee harmless against, any and all liability and expenses which may be incurred by Trustee in the performance of Trustee's duties. 7.2. Retention of Money. All moneys received by Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, and shall be segregated from any other moneys of Trustee. 7.3. Successor Trustees. Trustee may resign by the giving of notice of such resignation in writing to Beneficiary. If Trustee shall die, resign or become disqualified from acting in the execution of this trust, or if, for any reason, Beneficiary, in Beneficiary's sole discretion and with or without cause, shall prefer to appoint a substitute trustee or multiple substitute trustees, or successive substitute trustees or successive multiple substitute trustees, to act instead of the aforenamed Trustee, Beneficiary shall have full power to appoint a substitute trustee (or, if preferred, multiple substitute trustees) in succession who shall succeed (and if multiple substitute trustees are appointed, each of such multiple substitute trustees shall succeed) to all the estates, rights, powers and duties of the aforenamed Trustee. Such appointment may be executed by any authorized agent of Beneficiary, and if such Beneficiary be a corporation and such appointment be executed on its behalf by any officer of such corporation, such appointment shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the board of directors or any superior officer ofthe corporation. Grantor hereby ratifies and confirms any and all acts which the aforenamed Trustee, or his or her successor or successors in this trust, shall do lawfully by virtue hereof. If multiple substitute trustees are appointed, each of such multiple substitute trustees shall be empowered and authorized to act alone without the necessity of the joinder of the other multiple substitute trustees, whenever any action or undertaking of such substitute trustees is requested or required under or pursuant to this Deed of Trust or applicable law. Any prior election to act jointly or severally shall not prevent either or both of such multiple substitute Trustees from subsequently executing, jointly or severally, any or all of the provisions hereof. Perfection of Appointment. Should any deed, conveyance, or instrument of any 7.4. nature be required from Grantor by any Trustee or substitute Trustee to more fully and certainly vest in and confirm to Trustee or substitute Trustee such estates, rights, powers, and duties, then, upon request by Trustee or substitute trustee, any and all such deeds, conveyances and instruments shall be made, executed, acknowledged, and delivered and shall be caused to be recorded and/or filed by Grantor. Mortgage 17 Mayodan BK:01294 PG:2002 7.5. Succession Instruments. Any substitute trustee appointed pursuant to any of the provisions hereof shall, without any further act, deed or conveyance, become vested with all the estates, properties, rights, powers, and trusts of its, his or her predecessor in the rights hereunder with like effect as if originally named as Trustee herein; but nevertheless, upon the written request of Beneficiary or ofthe substitute trustee, the Trustee ceasing to act shall execute and deliver any instrument transferring to such substitute trustee, upon the trusts herein expressed, all the estates, properties, rights, powers, and trusts of the Trustee so ceasing to act, and shall duly assign, transfer and deliver any of the property and moneys held by such Trustee to the substitute trustee so appointed in such Trustee's place. 7.6. No Representation by Trustee or Beneficiary. By accepting or approving anything required to be observed, performed, or fulfilled or to be given to Trustee or Beneficiary pursuant to the Loan Documents, neither Trustee nor Beneficiary shall be deemed to have warranted, consented to, or affirmed the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision, or condition thereof, and such acceptance or approval thereof shall not be or constitute any warranty or affirmation with respect thereto by Trustee or Beneficiary. 8. Miscellaneous Provisions. 8.1. Additional Provisions. The Loan Documents fully state all of the terms and conditions of the parties' agreement regarding the matters mentioned in or incidental to this Deed of Trust. The Loan Documents also grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Grantor which apply to this Deed of Trust and to the Property. 8.2. No Waiver or Cure. (a) Each waiver by Beneficiary must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary to take action on account of any default of Grantor. Consent by Beneficiary to any act or omission by Grantor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary's consent to be obtained in any future or other instance. (b) If any of the events described below occurs, that event alone shall not: cure or waive any breach, Event of Default or notice of default under this Deed of Trust or invalidate any act performed pursuant to any such default or notice; or nullify the effect of any notice of default or sale (unless all Secured Obligations then due have been paid and performed and all other defaults under the Loan Documents have been cured); or impair the security of this Deed of Trust; or prejudice Beneficiary or any receiver in the exercise of any right or remedy afforded any of them under this Deed of Trust; or be construed as an affirmation by Beneficiary of any tenancy, lease or option, or a subordination ofthe lien of this Deed ofTrust. (i) Trustee or Beneficiary, its agent or a receiver takes possession of all or any part of the Property in the manner provided in Subsection 6.3(c). Mortgage 18 Mayodan BK:01294 PG:2003 (ii) Beneficiary collects and applies Rents as permitted under Sections 2.3 and 6.6 above, either with or without taking possession of all or any part of the Property. (iii) Beneficiary or Trustee receives and applies to any Secured Obligation any proceeds of any Property, including any proceeds of insurance policies, condemnation awards, or other claims, property or rights assigned to Beneficiary under Section 5.5 above. (iv) Beneficiary makes a site visit, observes the Property and/or conducts tests as permitted under Section 5.12 above. (v) Beneficiary or Trustee receives any sums under this Deed of Trust or any proceeds of any collateral held for any of the Secured Obligations, and applies them to one or more Secured Obligations. (vi) Beneficiary, Trustee or any receiver invokes any right or remedy provided under this Deed of Trust. 8.3. Powers ofBeneficiary. (a) If Beneficiary performs any act which it is empowered or authorized to perform under this Deed of Trust, including any act permitted by Section 5.7 or Subsection 6.3(d) of this Deed of Trust, that act alone shall not release or change the personal liability of any person for the payment and performance of the Secured Obligations then outstanding, or the lien of this Deed of Trust on all or the remainder of the Property for full payment and performance of all outstanding Secured Obligations. The liability of the original Grantor shall not be released or changed if Beneficiary grants any successor in interest to Grantor any extension of time for payment, or modification of the terms of payment, of any Secured Obligation. Beneficiary shall not be required to comply with any demand by the original Grantor that Beneficiary refuse to grant such an extension or modification to, or commence proceedings against, any such successor in interest. (b) Beneficiary may take any of the actions permitted under Subsections 6.3(b) and/or 6.3(c) regardless of the adequacy of the security for the Secured Obligations, or whether any or all of the Secured Obligations have been declared to be immediately due and payable, or whether notice of default and election to sell has been given under this Deed of Trust. (c) From time to time, Beneficiary may apply to any court of competent jurisdiction for aid and direction in executing and enforcing the rights and remedies created under this Deed of Trust. Beneficiary may from time to time obtain orders or decrees directing, confirming or approving acts in executing and enforcing these rights and remedies. 8.4. Merger. No merger shall occur as a result of Beneficiary's acquiring any other estate in or any other lien on the Property unless Beneficiary consents to a merger in writing. Mortgage 19 A1ayodan BK:01294 PG·.2004 8.5. Joint and Several Liability. If Grantor consists of more than one person, each shall be jointly and severally liable for the faithful performance of all of Grantor's obligations under this Deed of Trust. 8.6. Applicable Law. The creation, perfection and enforcement of the lien and security interest of this Deed ofTrust shall be governed by the law of the State in which the Property is located, except to the extent that the Uniform Commercial Code provides for the application of the laws of another state. Subject to the foregoing, in all other respects, this Deed ofTrust shall be governed by the substantive laws ofthe State of Ohio. 8.7. Successors in Interest. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties. However, this Section 8. 7 does not waive the provisions of Section 6.1 above. 8.8. Interpretation. (a) Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender. The captions of the sections of this Deed ofTrust are for convenience only and do not define or limit any terms or provisions. The word "include(s)" means "include(s), without limitation," and the word "including" means "including, but not limited to." (b) The word "obligations" is used in its broadest and most comprehensive sense, and includes all primary, secondary, direct, indirect, fixed and contingent obligations. It further includes all principal, interest, prepayment charges, late charges, loan fees and any other fees and charges accruing or assessed at any time, as well as all obligations to perform acts or satisfy conditions. (c) No listing of specific instances, items or matters in any way limits the scope or generality of any language of this Deed of Trust. The Exhibits to this Deed of Trust are hereby incorporated in this Deed ofTrust. (d) The term "Uniform Commercial Code" means the Uniform Commercial Code as amended from time to time, and any successor statute, enacted and in effect at any time in the relevant jurisdiction. Without living any definition set forth herein or in any other Loan Document, any term used herein, whether or not defined, that is defined in the Uniform Commercial Code shall be deemed to have or include the meaning ascribed to such term in the Uniform Commercial Code. 8.9. In-House Counsel Fees. Whenever Grantor is obligated to pay or reimburse Beneficiary for any attorneys' fees, those fees shall include the allocated costs for services of in-house counsel. 8.10. Waiver of Statutory Rights. To the extent permitted by law, Grantor hereby agrees that it shall not and will not apply for or avail itself of any appraisement, valuation, stay, extension or exemption laws, or any so-called "Moratorium Laws," now existing or hereafter enacted, in order to prevent or hinder the enforcement or foreclosure of this Deed ofTrust, but hereby waives the benefit of such laws. Grantor for itself and all who may claim through or Mortgage 20 Mayodan BK: 01294 PG:2005 under it waives any and all right to have the property and estates comprising the Property marshalled upon any foreclosure of the lien hereof and agrees that any court having jurisdiction to foreclose such lien may order the Property sold as an entirety. Grantor hereby waives any and all rights of redemption from sale under any judgment of foreclosure of this Deed of Trust on behalf of Grantor and on behalf of each and every person acquiring any interest in or title to the Property of any nature whatsoever, subsequent to the date of this Deed of Trust. The foregoing waiver of right of redemption is made pursuant to the provisions of applicable law. 8.11. Severability. If any provision of this Deed of Trust should be held unenforceable or void, that provision shall be deemed severable from the remaining provisions and shall in no way affect the validity of this Deed of Trust except that if such provision relates to the payment of any monetary sum, then Beneficiary may, at its option, declare all Secured Obligations immediately due and payable. 8.12. Notices. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three Business Days after mailing (c) if by Federal Express or other reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) ifby telecopier on the day of transmission so long as copy is sent on the same day by overnight courier as set forth below: Grantor: Tyler Shopping Center Pulaski Shopping Center LLC Shawnee Shopping Center LLC Ft. Dodge Shopping Center LLC Keokuk Shopping Center LLC West Burlington Shopping Center LLC Marshalltown Shopping Center LLC Oskaloosa Shopping Center LLC 5851 Ridge Bend Road Memphis, Tennessee 3 8120 Telephone: (901) 685-2300 Facsimile: (901) 685-2354 With a copy to: The Spectra Group, Inc. 5851 Ridge Bend Road Memphis, Tennessee 38120 Telephone: (901) 685-2300 Facsimile: (901) 685-2354 Trustee: Telephone Facsimile Mortgage 21 Mayodan BK:01294 PG:2006 With a copy to: Telephone Facsimile Beneficiary: KeyBank National Association 580 Walnut Street 2nd Floor Cincinnati, Ohio 45202 Attention: Kurt Reiber Telephone (513) 762-8215 Facsimile (513) 762-8450 With a copy to: Thompson Hine LLP 312 Walnut Street Suite 1400 Cincinnati, Ohio 45202 Attention: Stephen M. King Telephone (513) 352-6746 Facsimile (513) 241-4771 or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice. Any notice or demand delivered to the person or entity named above to accept notices and demands for Grantor shall constitute notice or demand duly delivered to Grantor, even if delivery is refused. 8.13. Future Advances. This Deed ofTrust shall secure any additional loans as well as any and all present or future advances and readvances under the Loan Documents made by Lender to or for the benefit of Borrower or the Property, to the fullest extent permitted by applicable law, including, without limitation: (a) principal, interest, late charges, fees and other amounts due under the Loan or this Deed of Trust; (b) all advances by Lender to Borrower or any other person to pay costs of erection, construction, alteration, repair, restoration, maintenance and completion of any improvements on the Property; (c) all advances made or costs incurred by Lender for the payment of real estate taxes, assessments or other governmental charges, maintenance charges, insurance premiums, appraisal charges, environmental inspection, audit, testing or compliance costs, and costs incurred by Lender for the enforcement and protection of the Property or the lien ofthis Deed ofTrust; (d) all legal fees, costs and other expenses incurred by Lender by reason of any default or otherwise in connection with the Loan; and (e) as otherwise permitted pursuant to Article 7 of Chapter 45 of the North Carolina General Statutes. The amount of the present Loan secured hereby is Four Million Eight Hundred Seventy-Five Thousand and 00/100 Dollars ($4,875,000.00) and the maximum principal amount, including present and future loans, which may be secured hereby at any one time shall not exceed Four Million Eight Hundred Seventy-Five Thousand and 00/100 Dollars ($4,875,000.00). The time period within which such future Loan may be incurred and such future advances may be made shall not extend for more than fifteen (15) years from the date of this Deed of Trust. Borrower and Lender agree that such future advances or loans shall be secured by this Deed of Mortgage 22 Mayodan BK:01294 PG:2007 Trust regardless of whether such future advances or loans are evidenced by a written instrument stipulating that such obligation is secured hereby. 8.14. Beneficiary's Lien for Service Charge and Expenses. At all times, regardless of whether any Loan proceeds have been disbursed, this Deed of Trust secures (in addition to any Loan proceeds disbursed from time to time) the payment of any and all loan commissions, service charges, liquidated damages, expenses and advances due to or incurred by Beneficiary not to exceed the maximum amount secured hereby. For purposes hereof, all obligations of Grantor to Beneficiary under all Interest Rate Agreements and any indebtedness or obligation contained therein or evidenced thereby shall be considered an obligation of Grantor secured hereby. 8.15. WAIVER OF TRIAL BY JURY. GRANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANYWAY IN CONNECTION WITH THIS DEED OF TRUST, THE NOTE, OR ANY OF THE OTHER LOAN DOCUMENTS, THE LOAN OR ANY OTHER STATEMENTS OR ACTIONS OF GRANTOR OR BENEFICIARY. GRANTOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS DEED OF TRUST AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH LEGAL COUNSEL. GRANTOR FURTHER ACKNOWLEDGES THAT (i) IT HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (ii) THIS WAIVER IS A MATERIAL INDUCEMENT FOR BENEFICIARY TO MAKE THE LOAN, ENTER INTO THIS DEED OF TRUST AND EACH OF THE OTHER LOAN DOCUMENTS, AND (iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH OTHER LOAN DOCUMENTS AS IF FULLY INCORPORATED THEREIN. 8.16. Inconsistencies. In the event of any inconsistency between this Deed of Trust and the Loan Agreement, the terms hereof shall be controlling as necessary to create, preserve and/or maintain a valid security interest upon the Property, otherwise the provisions of the Loan Agreement shall be controlling. 8.17. Further Assurances. From time to time, as requested by Beneficiary, Grantor shall take such other action and execute and deliver to Beneficiary all other instruments, supplements, further assurances and security or other agreements as may be required or requested by Beneficiary in order to perfect and continue Beneficiary's lien and interest in the Property. Grantor hereby irrevocably appoints Beneficiary as its agent and attorney-in-fact to sign all such instruments, supplements, further assurances and security and other agreements. 8.18. Mortgage Tax-Deferred Exchange Provisions. Intentionally omitted. 23 Mayodan BK:01294 PG:2008 IN WITNESS WHEREOF, Grantor has executed this Deed ofTrust as of the date first above written. TYLER SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: By: Its: Organizational ID/Number: 3 " 7 9(,. P ~ PULASKI SHOPPING CENTER LLC, a Delaware limited liability company JHF Property Holdings LLC, By: a Delaware limited liability company, Its: Manage By: Its: . a Manager Organizational ID/Number: 0/o ! b 70 7 SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liab~ompany, Its: a r /. By: ,_,....,__...... l t 1 Its: Organizational ID/Number: Mortgage 24 (3 7 C) G s--;/;( Mayodan BK:01294 PG:2009 FT DODGE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: By: Its: ianar . ~Lu;; f. Flrffi:r, III Manager Organizational ID/Number: _3=----"=-'-=--- KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: By: Its: n~er~ ~ 0--llr 1~~,ni Manager Organizational ID/Number: 3 Sl 4 9 s-§ 7 WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, : . Jit?lifj Its: Manager Organizational ID/Number: Mortgage 25 3b 7 9081 Mayodan BK:01294 PG:2010 MARSHALLTOWN SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, : : f~a£ 1fH~e~,III Its: Manager Organizational ID/Number: 3 7 ~ 3 C)blf OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: By: Its: Mortgage 26 M~er~ -r:g:; VJ..../ Je~~IIManager "3 ~ 1 7 b ~,;z Mayodan BK: 01294 PG: 2011 STATE OF ~ , COUNTY OF_~,k~~..o::~..tt~~lqo</;.___,) SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily signed the for~oing documen~ for the purpose stated therein and in the capacity indicated: r::::f;# H. ~eft-.~ " Date: August "·J;<"~!.'"·" ___2!/2oqfi A Nota Public c;:.. Pri ted Name:(!/n/ r rt:k~se r My Comission Expires: ) ~ :;?.0.. D7 STATE OF ~CbUNTY OF_-r~........,.=----+---._)) SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily ~e~ the fo~ument for the purpose stated therein and in the capacity indicated: ~If t/.. F Date: August~' 2006. STATEOF ~ ~=:...:::;:..~.=......!F--->)SS: ,COUNTYOF _ _ _ I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily signed the for~cument for the purpose stated therein and in the capacity indicated: ,-j£11- 1/. h- £ Date: August ~.J(, 2006. Mortgage 27 Mayodan BK:01294 PG:2012 STATEOF ~ ,COUNTYOF~,C )SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily signed the for:oing document for the purpose '"-:Je-ff 1/. ztl~~ stated therein and in the capacity indicated: Date: August STATE OF 4, 2006. ~ ,COUNTYOF ~L ) SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily signeg the fore~ng document fort e purpose stated therein and in the capacity indicated: ___~.._,f!!,~L-_L.L:_.__!.f-'_!!!_Ar:::::J.~~::::__-..!d.'...J.<-----Date: August STATEOF JL'f , 2006. ~ ,COUNTYOF ~ )SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily ~.!Ele<HP.e fore~ipg document for the purpose stated therein and in the capacity indicated: ~2~ f) .~~ 1[[: ~&~ ::Name• k h~l'~·r Date: August~ 2006. ' otary Public My Comission Expires: Mortgage 28 I -- ~6 7 Mayodan BK: 01294 PG:2013 STATE OF~ , COUNTY OF ~ ) SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily signed the foregoi~ docume!!!JQrlhe purpose r~f.lt, stated therein and in the capacity indicated: 1eU li . .Date: August ~2006. STATEOF ~ ,COUNTYOF ~ ) SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily si d fore oing docume~e purpose stated therein and in the capacity indicated: 1/. e . Date: August~' 2006. N ary Public ~ r:': rinted Name:/~~~ S e ~ My Comission Expires: /-X> ..::? 7 Mortgage 29 Mayodan BK:01294 PG:2014 EXHIBIT "A" All of that certain lot or parcel of land situated in Mayo Township, Rockingham County, · North Carolina, and more particularly described as follows: All of Lot 1 as shown on the plat of the IDK, LLC Subdivision recorded in Plat Book _6_f)__, Page Rockingham County Registry (the "Plat"). -1-J-. TOGETHER WITH, non-exclusive easements for ingress, egress, regress and utility purposes over portions of Lots 2, 3, 4 and 5 as shown on the Plat for the benefit of said Lot 1 as follows: 1. A 30-foot access and utility easement designated as "1" on the Plat; 2. A 25-foot access and utility easement designated as "2" on the Plat; 3. A 30-foot access and utility easement designated as "3" on the Plat. FILED ROCKINGHAM COUNTY REBECCA B. CIPRIANI REGISTER OF DEEDS BK:01294 PG:2015 This document prepared by after recording return to: Tracy L. Hawkins, Esq. Thompson Hine LLP 312 Walnut Street 14th Floor Cincinnati, Ohio 45202 RECORD OF POOR QUAUTY DUE TO CONDITION OF ORIGINAL DOCUMENT Aug 29, 2006 09:16:26 am RECORDING $48.00 PROBATE $2.00 EXCISE TAX NONSTAND $25.00 BOOK 01294 PAGES 2015-2027 INSTRUMENT# 12163 ALS ASSIGNMENT OF LEASES AND RENTS THIS ASSIGNMENT OF LEASES AND RENTS (this "Assignment") made as of the _;;t5_ day of August, 2006, is by TYLER SHOPPING CENTER LLC, a Delaware limited liability company, PULASKI SHOPPING CENTER LLC, a Delaware limited liability company, SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company, FT. DODGE SHOPPING CENTER LLC, a Delaware limited liability company, KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company, WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company, MARSHALL TOWN SHOPPING CENTER LLC, a Delaware limited liability company, OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company, having an office at 915 Wilshire Boulevard, Suite 2100, Los Angeles, California 90017 (collectively, the "Assignor"), in favor ofKEYBANK NATIONAL ASSOCIATION, a national banking association, having an office at 580 Walnut Street, 2"d Floor, Cincinnati, Ohio 45202 its successors and assigns ("Assignee"). RECITALS A. On or about the date hereof, Assignor and Assignee entered into that certain Construction Loan Agreement ("Loan Agreement") whereby Assignee agreed to make a secured construction loan (the "Loan") available to Assignor in the maximum aggregate amount at any time outstanding not to exceed the sum of Four Million Eight Hundred Seventy-Five Thousand and 00/100 Dollars ($4,875,000.00), to finance the "Project" (as such term is defined in the Loan Agreement). The Project is legally described in Exhibit A attached hereto and made a part hereof. Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Loan Agreement. B. In connection with the Loan, Assignor has executed and delivered a promissory note (the "Note") in favor of Assignee of even date herewith in the amount of the Loan, payment of which is secured by (i) a Mortgage made by Assignor in favor of Assignee on the Project, and (ii) the other Loan Documents. C. Assignor is desirous of further securing to Assignee the performance of the terms, covenants and agreements hereof and of theN ote, the Mortgage and the Loan Documents. Mayodan Rental Assignment EXHIBIT 14 BK:01294 PG:2016 AGREEMENTS NOW, THEREFORE, in consideration of the making of the Loan evidenced by the Note by Assignee to Assignor and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby irrevocably, absolutely and unconditionally transfer, sell, assign, pledge and convey to Assignee, its successors and assigns, all of the right, title and interest of Assignor in and to: (a) any and all leases, licenses, rental agreements and occupancy agreements of whatever form now or hereafter affecting all or any part of the Project and any and all guarantees, extensions, renewals, replacements and modifications thereof (collectively, the "Leases"); and (b) all issues, profits, security or other deposits, revenues, royalties, accounts, rights, benefits and income of every nature of and from the Project, including, without limitation, minimum rents, additional rents, termination payments, bankruptcy claims, forfeited security deposits, damages following default and all proceeds payable under any policy of insurance covering loss of rents resulting from untenantability due to destruction or damage to the Project, together with the immediate and continuing right to collect and receive the same, whether now due or hereafter becoming due, and together with all rights and claims of any kind that Assignor may have against any Tenant, lessee or licensee under the Leases or against any other occupant ofthe Project (collectively, the "Rents"). TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns. IT IS AGREED that, notwithstanding that this instrument is a present, absolute and executed assignment of the Rents and of the Leases and a present, absolute and executed grant of the powers herein granted to Assignee, Assignor is hereby permitted, at the sufferance of Assignee and at its discretion, and is hereby granted a license by Assignee, to retain possession of the Leases and to collect and retain the Rents unless and until there shall be an "Event of Default" (as defined herein) under the terms of this Assignment or any of the other Loan Documents. Upon an Event of Default, the aforementioned license granted to Assignor shall automatically terminate without notice to Assignor, and Assignee may thereafter, without taking possession of the Project, take possession of the Leases and collect the Rents. Further, from and after such termination, Assignor shall be the agent of Assignee in collection of the Rents, and any Rents so collected by Assignor shall be held in trust by Assignor for the sole and exclusive benefit of Assignee and Assignor shall, within one (1) business day after receipt of any Rents, pay the same to Assignee to be applied by Assignee as hereinafter set forth. Furthermore, from and after such Event of Default and termination of the aforementioned license, Assignee shall have the right and authority, without any notice whatsoever to Assignor and without regard to the adequacy of the security therefor, to: (a) make application to a court of competent jurisdiction for appointment of a receiver for all or any part of the Project, as particularly set forth in the Mortgage; (b) manage and operate the Project, with full power to employ agents to manage the same; (c) demand, collect, receive and sue for the Rents, including those past due and unpaid; and (d) do all acts relating to such management of the Project, including, but not limited to, negotiation of new Leases, making adjustments of existing Leases, contracting and paying for repairs and replacements to the Improvements and to the fixtures, equipment and personal Rental Assignment 2 Mayodan BK:01294 PG:2017 property located in the Improvements or used in any way in the operation, use and occupancy of the Project as in the sole subjective judgment and discretion of Assignee may be necessary to maintain the same in a tenantable condition, purchasing and paying for such additional furniture and equipment as in the sole subjective judgment of Assignee may be necessary to maintain a proper rental income from the Project, employing necessary managers and other employees, purchasing fuel, providing utilities and paying for all other expenses incurred in the operation of the Project, maintaining adequate insurance coverage over hazards customarily insured against and paying the premiums therefor. Assignee shall apply the Rents received by Assignor from the Project, after deducting the costs of collection thereof, including, without limitation, attorneys' fees and a management fee for any management agent so employed, against amounts expended for repairs, upkeep, maintenance, service, fuel, utilities, taxes, assessments, insurance premiums and such other expenses as Assignee incurs in connection with the operation of the Project and against interest, principal, required escrow deposits and other sums which have or which may become due, from time to time, under the terms of the Loan Documents, in such order or priority as to any of the items so mentioned as Assignee, in its sole subjective discretion, may determine. The exercise by Assignee of the rights granted Assignee in this paragraph, and the collection of, the Rents and the application thereof as herein provided, shall not be considered a waiver by Assignee of any Event of Default under the Loan Documents or prevent foreclosure of any liens on the Project nor shall such exercise make Assignee liable under any of the Leases, Assignee hereby expressly reserving all of its rights and privileges under the Mortgage and the other Loan Documents as fully as though this Assignment had not been entered into. Without limiting the rights granted hereinabove, in the event Assignor shall fail to make any payment or to perform any act required under the terms hereof and such failure shall not be cured within any applicable grace or cure period, then Assignee may, but shall not be obligated to, without prior notice to or demand on Assignor, and without releasing Assignor from any obligation hereof, make or perform the same in such manner and to such extent as Assignee may deem necessary to protect the security hereof, including specifically, without limitation, appearing in and defending any action or proceeding purporting to affect the security hereof or the rights or powers of Assignee, performing or discharging any obligation, covenant or agreement of Assignor under any of the Leases, and, in exercising any of such powers, paying all necessary costs and expenses, employing counsel and incurring and paying attorneys' fees. Any sum advanced or paid by Assignee for any such purpose, including, without limitation, attorneys' fees, together with interest thereon at the Default Rate from the date paid or advanced by Assignee until repaid by Assignor, shall immediately be due and payable to Assignee by Assignor on demand and shall be secured by the Mortgage and by all of the other Loan Documents securing all or any part of the indebtedness evidenced by the Note. IT IS FURTHER AGREED that this Assignment is made upon the following terms, covenants and conditions: 1. This Assignment shall not operate to place responsibility for the control, care, management or repair of the Project upon Assignee, nor for the performance of any of the terms and conditions of any of the Leases, nor shall it operate to make Assignee responsible or liable for any waste committed on the Project by any tenant or any other party or for any dangerous or defective condition of the Project or for any negligence in the management, upkeep, repair or control of the Project. Assignee shall not be liable for any loss sustained by Assignor resulting Rental Assignment 3 Mayodan BK:01294 PG:2018 from Assignee's failure to let the Project or from any other act or omission of Assignee in managing the Project. Assignor shall and does hereby indemnify and hold Assignee harmless from and against any and all liability, loss, claim, demand or damage which may or might be incurred by reason of this Assignment, including, without limitation, claims or demands for security deposits from tenants deposited with Assignor, and from and against any and all claims and demands whatsoever which may be asserted against Assignee by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants or agreements contained in any of the Leases. Should Assignee incur any liability by reason of this Assignment or in defense of any claim or demand for loss or damage as provided above, the amount thereof, including, without limitation, costs, expenses and attorneys' fees, together with interest thereof at the Default Rate from the date paid or incurred by Assignee until repaid by Assignor, shall be immediately due and payable to Assignee by Assignor upon demand and shall be secured by the Mortgage and by all of the other Loan Documents securing all or any part of the indebtedness evidenced by the Note. 2. possession. This Assignment shall not be construed as making Assignee a mortgagee m 3. Assignee is obligated to account to Assignor only for such Rents as are actually collected or received by Assignee. 4. Assignor hereby further presently and absolutely assigns to Assignee subject to the terms and provisions of this Assignment: (a) any award or other payment which Assignor may hereafter become entitled to receive with respect to any of the Leases as a result of or pursuant to any bankruptcy, insolvency or reorganization or similar proceedings involving any tenant under such Leases; and (b) any and all payments made by or on behalf of any tenant of any part of the Project in lieu of Rent. Assignor hereby irrevocably appoints Assignee as its attorney-in-fact to appear in any such proceeding and to collect any such award or payment, which power of attorney is coupled with an interest by virtue of this Assignment and is irrevocable so long as any sums are outstanding under the loan evidenced by the Note. All awards or payments so collected shall be applied to the indebtedness secured hereby in such order as Assignee shall elect. 5. Assignor represents, warrants and covenants to and for the benefit of Assignee: (a) that Assignor now is (or with respect to any Leases not yet in existence, will be immediately upon the execution thereof) the absolute owner of the landlord's interest in the Leases, with full right and title to assign the same and the Rents due or to become due thereunder; (b) that, other than this Assignment and any assignment to Assignee pursuant to the Mortgage there are no outstanding assignments of the Leases or Rents; (c) that no Rents have been anticipated, discounted, released, waived, compromised or otherwise discharged except for prepayment of rent of not more than one (1) month prior to the accrual thereof; (d) that there are no material default now existing under any of the Leases by the landlord or any tenant, and there exists no state of facts which, with the giving of notice or lapse of time or both, would constitute a default under any of the Leases by the landlord or any tenant, except as disclosed in writing to Assignee; (e) that Assignor has and shall duly and punctually observe and perform all covenants, conditions and agreements in the Leases on the part of the landlord to be observed and performed thereunder and (f) the Leases are in full force and effect and are the valid and binding obligations Rental Assignment 4 Mayodan BK: 01294 PG: 2019 of Assignor, and, to the knowledge of Assignor, are the valid and binding obligations of each tenant thereto. 6. Assignor covenants and agrees that Assignor shall, at its sole cost and expense, appear in and defend any action or proceeding arising under, growing out of, or in any manner connected with the Leases or the obligations, duties or liabilities of the landlord or any tenant thereunder, and shall pay on demand all costs and expenses, including, without limitation, attorneys' fees, which Assignee may incur in connection with Assignee's appearance, voluntary or otherwise, in any such action or proceeding, together with interest thereon at the Default Rate from the date incurred by Assignee until repaid by Assignor. 7. At any time, Assignee may, at its option, notifY any tenant, purchaser or other parties of the existence of this Assignment. Assignor does hereby specifically authorize, instruct and direct each and every present and future tenant, lessee, licensee of the whole or any part of the Project to pay all unpaid and future Rents, to Assignee upon receipt of demand from Assignee to so pay the same and Assignor hereby agrees that each such present and future tenant, lessee, licensee, may rely upon such written demand from Assignee to so pay said Rents without any inquiry into whether there exists an Event of Default hereunder or under the other Loan Documents or whether Assignee is otherwise entitled to said Rents. Assignor hereby waives any right, claim or demand which Assignor may now or hereafter have against any present or future tenant, lessee or licensee by reason of such payment of Rents to Assignee, and any such payment shall discharge such tenant's, lessee's or licensee's obligation to make such payment to Assignor. 8. Assignee may take or release any security for the indebtedness evidenced by the Note, may release any party primarily or secondarily liable for the indebtedness evidenced by the Note, may grant extensions, renewals or indulgences with respect to the indebtedness evidenced by the Note and may apply any other security therefor held by it to the satisfaction of any indebtedness evidenced by the Note without prejudice to any of its rights hereunder. 9. The acceptance of this Assignment and the collection of the Rents in the event Assignor's license is terminated, as referred to above, shall be without prejudice to Assignee. The rights of Assignee hereunder are cumulative and concurrent, may be pursued separately, successively or together and may be exercised as often as occasion therefor shall arise, it being agreed by Assignor that the exercise of any one or more of the rights provided for herein shall not be construed as a waiver of any of the other rights or remedies of Assignee, at law or in equity or otherwise, so long as any obligation under the Loan Documents remains unsatisfied. I 0. All rights of Assignee hereunder shall inure to the benefit of its successors and assigns, and all obligations of Assignor shall bind its successors and assigns and any subsequent owner of the Project. All rights of Assignee in, to and under this Assignment shall pass to and may be exercised by any assignee of such rights of Assignee. Assignor hereby agrees that if Assignee gives notice to Assignor of an assignment of said rights, upon such notice the liability of Assignor to the assignee of the Assignee shall be immediate and absolute. Assignor will not set up any claim against Assignee or any intervening assignee as a defense, counterclaim or setoff to any action brought by Assignee or any intervening assignee for any amounts due hereunder or for possession of or the exercise of rights with respect to the Leases or Rents. Rental Assignment 5 Mayodan BK:01294 PG:2020 11. It shall be an "Event of Default" hereunder (a) if any representation or warranty made herein by Assignor is determined by Assignee to have been false or misleading in any material respect at the time made, or (b) upon any failure by Assignor in the performance or observance of any other covenant or condition hereof and the continuance of such failure for thirty (30) days after written notice thereof from Assignee to Assignor; provided, however, that if such failure is susceptible of cure but cannot reasonably be accomplished within said thirty (30) day period, then Assignor shall have an additional sixty (60) day period to cure such failure and no Event of Default shall be deemed to exist hereunder so long as Assignor commences such cure within the initial thirty (30) day period and diligently and in good faith pursues such cure to completion within such resulting ninety (90) day period from the date of Assignee's notice. Any such default not so cured shall be an "Event of Default" under each of the other Loan Documents, entitling Assignee to exercise any or all rights and remedies available to Assignee under the terms hereof or of any or all of the other Loan Documents, and any Event of Default under the other Loan Documents, or any default under any other Loan Document which is not cured within any applicable grace or cure period, shall be deemed an Event of Default hereunder subject to no grace or cure period, entitling Assignee to exercise any or all rights provided for herein. 12. Failure by Assignee to exercise any right which it may have hereunder shall not be deemed a waiver thereof unless so agreed in writing by Assignee, and the waiver by Assignee of any default hereunder shall not constitute a continuing waiver or a waiver of any other default or of the same default on any future occasion. No collection by Assignee of any Rents pursuant to this Assignment shall constitute or result in a waiver of any default then existing hereunder or under any of the other Loan Documents. If any provision under this Assignment or the application thereof to any entity, 13. person or circumstance shall be invalid, illegal or unenforceable to any extent, the remainder of this Assignment and the application of the provisions hereof to other entities, persons or circumstances shall not be affected thereby and shall be enforced to the fullest extent permitted by law. 14. This Assignment may not be amended, modified or otherwise changed except by a written instrument duly executed by Assignor and Assignee. 15. This Assignment shall be in full force and effect continuously from the date hereof to and until the payment, discharge, and performance of any and all indebtedness and obligations evidenced by the Note or secured or guaranteed by any of the Loan Documents, and the release of the Mortgage shall, for all purposes, automatically terminate this Assignment and render this Assignment null and void and of no effect whatsoever. Any partial release of the Mortgage shall, for all purposes, automatically terminate this Assignment only with respect to those portions of the real property covered by such partial release. 16. In case of a conflict between any provision of this Assignment and any provision of the other Loan Documents, the provision selected by Assignee in its sole subjective discretion shall prevail and be controlling. Rental Assignment 6 Mayodan BK:01294 PG:2021 17. All notices, demands, requests or other communications to be sent by one party to the other hereunder or required by law shall be given and become effective as provided in the Loan Agreement. 18. This Assignment shall be governed by and construed in accordance with the laws of the State in which the Project is located. 19. This Assignment may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Assignment may be detached from any counterpart of this Assignment without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Assignment identical in form hereto but having attached to it one or more additional signature pages. 20. In addition to, but not in lieu of, any other rights hereunder, Assignee shall have the right to institute suit and obtain a protective or mandatory injunction against Assignor to prevent a breach or default, or to reinforce the observance, of the agreements, covenants, terms and conditions contained herein, as well as the right to damages occasioned by any breach or default by Assignor. 21. Assignor hereby covenants and agrees that Assignee shall be entitled to all of the rights, remedies and benefits available by statute, at law, in equity or as a matter of practice for the enforcement and perfection of the intents and purposes hereof. Assignee shall, as a matter of absolute right, be entitled, upon application to a court of applicable jurisdiction, and without notice to Assignor, to the appointment of a receiver to obtain and secure the rights of Assignee hereunder and the benefits intended to be provided to Assignee hereunder. [REMAINDER OF PAGE INTENTIONALLY BLANK] Rental Assignment 7 Mayodan BK: 01294 PG: 2022 IN WITNESS WHEREOF, Assignor has executed this Assignment under seal as of the day and year first above written. TYLER SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, M~er Its: WJ!b.ff By. Its: Manager PULASKI SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: By: M~gf! ~.IFf' Its: J .F Manager er, III SHAWNEE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, M\!ZtJ Its: dxdb% By: Its: Manager FT DODGE SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, uy ::, Its: Rental Assignment ~~elaware Jeflhm company, Manager 8 Mayodan BK:01294 PG:2023 KEOKUK SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: ag rjJ ~ ~ar; By: J H. armer, III Manager Its: WEST BURLINGTON SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: ~ffr-Jlr r:In e By: r/J Jf:F Its: Manager MARSHALLTOWN SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, !Jl!tb ~:: Its: Manager OSKALOOSA SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, iifiity ~:: Its: Rental Assignment cornp~y, Manager 9 Mayodan BK:01294 PG:2024 STATEOF ~J ,COUNTYOF_=~~' ~~~--~)SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily si nepJhe ,fpregoing docum~Jhe purpose _ ~~--'-h...u:..~~~--e___ stated therein and in the capacity indicated: ~""'--=":::_.;__._f- _:_lf'-....!:. ______ Date: August ;2_ C(, 2006. STATE OF ~ N~ , COUNTY OF__..,..)/£"""""""'"0""'""'~~~~--') SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily sig!!ed t e for going docum~the purpose stated therein and in the capacity indicated: -~J-J:.~r..._n~-::u:,~~~dll------Date: ;\ugust --dJf---' 2006. My Comission Expires: STATE OF~ ,COUNTYOF ~ ) SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily signed ~~ foregoi_!!g document J9r the purpose \Je_-f+- tf. ·f-~ lfl stated therein and in the capacity indicated: - Date: August Rental Assignment Z.r--' 2006. 10 Mayodan BK:01294 PG:2025 STATEOF ~ ,COUNTYOF .~ ) SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily si~~heJor~g docuillent for the purpose stated therein and in the capacity indicated: fl.~ L/1 g Date: August .E_, 2006. STATEOF~ ..-~:::J/4=~=~f------) SS: , COUNTY OF ---. .. I certify that the following person(s) personally appeared before me this day, each ackno·w··!edging to me that he or she voluntarily signed ./ifor~i~..fur_the purpose statyd therein and in the capacity indicated: :Je_ • II£ · Date: August ..J!f_, 2006. STATEOF~ , COUNTY OF -~~""-_;;;;_.o:::::...:r:~---') SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily signed t e ocument foJ;:Jh~ose stated therein and in the capacity indicated: L Date: August 4, 2006. No y Public A r ·ntedName://TALttf ~-~.ser My Comission Expires: I- _:__ -() 7 Rental Assignment 11 Mayodan BK:01294 PG:2026 STATEOF ~ , COUNTY OF &f~.c. ) SS: I certify that the following person(s) personally appeared before me this day, each docume, the purpose acknowledging to me that he or she voluntarily signed t stated therein and in the capacity indicated: I!J Date: August~, 2006. STATE OF _.....;~~..r;...~o::;~=::;.;:;;_=..___,, COUNTY OF_....:;~~~~·~c __,) SS: _ I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily signed the foregoi~ document for the purpose stated therein and in the capacity indicated: J~ J-1.., J-~~ Date: August -4, 2006. My Comission Expires: Rental Assignment 12 f - ;;L tf ~ O(; Mayodan EXHIBIT "A" All of that certain lot or parcel of land situated in Mayo Township, Rockingham County, · North Carolina, and more particularly described as follows: All of Lot 1 as shown on the plat of the IDK, LLC Subdivision recorded in Plat Book~ Page Rockingham County Registry (the "Plat"). -J-1-. TOGETHER WITH, non-exclusive easements for ingress, egress, regress and utility purposes over portions of Lots 2, 3, 4 and 5 as shown on the Plat for the benefit of said Lot I as follows: 1. A 30-foot access and utility easement designated as "1" on the Plat; 2. A 25-foot access and utility easement designated as "2" on the Plat; 3. A 30-foot access and utility easement designated as "3" on the Plat. PROJECT AGREEMENT THIS PROJECT AGREEMENT is made as of October J_\_, 2006 by and among THE SPECTRA GROUP, INC., a Delaware corporation and JEFF H. FARMER, JR., jointly and severally ("Developer"), KEYBANK NATIONAL ASSOCIATION, a national banking association ("Lender"), and DURANT SHOPPING CENTER LLC, a Delaware limited liability company, NEWTON SHOPPING CENTER LLC, a Delaware limited liability company, and ZACHARY SHOPPING CENTER LLC, a Delaware limited liability company (collectively, the "Borrower"). RECITALS A. Lender and Developer entered into a certain Master Construction Loan Agreement, dated as of December 8, 2005, as amended (the "Master Loan Agreement"), pursuant to which Lender agreed to make credit available, not exceeding the principal amount specified in Section 4.1 thereof, to certain entities designated by the Developer (such credit facility being referred to in the Master Loan Agreement and this Agreement as the "Loan"). B. Borrower has acquired 1.86 acres of real estate located in Pueblo County, Colorado, which real estate is more particularly described in Exhibit A attached hereto and incorporated herein by reference (for the purposes of the Master Loan Agreement and this Project Agreement (the "Project Site")). C. Borrower intends to construct a 29,700 square foot retail shopping center known as Pueblo West Shopping Center upon the Project Site (the "Improvements") (for the purposes of the Master Loan Agreement and this Project Agreement, the Project Site, all easements benefiting the Project Site and all Improvements located or to be located thereon, being sometimes hereinafter collectively referred to as the "Project"). D. Borrower desires to arrange the financing which will enable it to acquire the Project Site and to construct the Improvements. E. Borrower has been designated by the Developer as "Borrower" under the terms of the Master Loan Agreement. F. Lender is willing to make Two Million Two Hundred Fifty Thousand and 00/100 Dollars ($2,250,000.00) of the Loan available to Borrower (for the purposes of the Master Loan Agreement and this Project Agreement, the amount of the Loan being made available to Borrower hereunder being referred to as the "Project Loan"), which shall be evidenced by a Promissory Note (the "Note) in the amount of $2,250,000.00, subject to the terms, provisions and conditions set forth herein. NOW, THEREFORE, in consideration of the premises and of the several covenants and conditions herein contained, Developer, Borrower and Lender agree as follows: 1. Definitions. All capitalized terms used herein, but not defined herein, shall have the meanings ascribed thereto in the Master Loan Agreement. Project Agreement EXHIBIT 15 Pueblo West, CO 2. Budget; Required Leases. The Borrower and the Lender agree that the Budget for the Project is attached hereto as Exhibit B and made a part hereof, which sets forth the Borrower's equity ($574,970.00), an interest reserve ($60,000.00) and Borrower's developer's fee ($1 00,000.00). For purposes of the Master Loan Agreement, the Required Leases are set forth on Exhibit C attached hereto and made a part hereof. 3. Project Loan. The Developer hereby designates the Borrower as a "Borrower" under the Master Loan Agreement. Lender agrees to make credit available to Borrower in the principal amount of the Project Loan pursuant to the terms of the Master Loan Agreement, which Master Loan Agreement by reference thereto is hereby deemed to be fully incorporated herein. The Borrower agrees to be subject to and comply with all terms, conditions and provisions of the Master Loan Agreement governing or applicable to a Project Loan. 4. Completion Date. The Completion Date for the Project shall be no later than twelve (12) months after the date of this Project Agreement. 5. Conditions to Advances. Lender's obligation to advance any amounts under the Project Loan shall be subject to satisfaction of all conditions for advances under the Master Loan Agreement. 6. Project Loan. Notwithstanding anything contained in such documents to the contrary, the term "Loan" used in the following documents executed in connection with the Project, the Project Loan and this Project Agreement shall be deemed to mean and solely refer to the Project Loan defined in Recital F of this Project Agreement: The A Note, the B Note, the Mortgage, Assignment of Rents, Security Agreement and Fixture Filing, the Assignment of Leases and Rents, the Performance and Completion Guaranty, the Guaranty by Jeff H. Farmer, Jr., the Guaranty by The Spectra Group, Inc., the Conditional Assignment of Architect's Contract, the Assignment of Management and Leasing Agreement, the Environmental and Hazardous Substances Indemnity Agreement and the Conditional Assignment of Contractor Contract and Subcontract. 7. Loan Agreement. Notwithstanding anything contained in such documents to the contrary, the term "Loan Agreement", "Construction Loan Agreement" and the phrase "Construction Loan Agreement of even date herewith" and "Loan Agreement of even date herewith" used in the following documents executed in connection with the Project, the Project Loan and this Project Agreement shall be deemed to mean and solely refer to this Project Agreement and the Master Loan Agreement: The Note, the Mortgage, Assignment of Rents, Security Agreement and Fixture Filing, the Assignment of Leases and Rents, the Performance and Completion Guaranty, the Guaranty by Jeff H. Farmer, Jr., the Guaranty by The Spectra Group, Inc., the Conditional Assignment of Architect's Contract, the Assignment of Management and Leasing Agreement, the Environmental and Hazardous Substances Indemnity Agreement and the Conditional Assignment of Contractor Contract and Subcontract. 8. Loan Documents. Notwithstanding anything contained in such documents to the contrary, the tem1 "Loan Documents" used in the following documents executed in connection with the Project, the Project Loan and this Project Agreement shall be deemed to mean and solely refer to "Project Documents" as such term is defined in the Master Loan Agreement: The Project Agreement 2 Pueblo West, CO Note, the Mortgage, Assignment of Rents, Security Agreement and Fixture Filing, the Assignment of Leases and Rents, the Performance and Completion Guaranty, the Guaranty by Jeff H. Farmer, Jr., the Guaranty by The Spectra Group, Inc., the Conditional Assignment of Architect's Contract, the Assignment of Management and Leasing Agreement, the Environmental and Hazardous Substances Indemnity Agreement and the Conditional Assignment of Contractor Contract and Subcontract. 9. Applicable Rate and Term. This Paragraph 9 has been included solely for the purpose of administrative convenience and is not intended to in any way amend or modify the terms of the Master Loan Agreement. In the event of a conflict between the provisions of this Paragraph 9 and the provisions of the Master Loan Agreement, the Master Loan Agreement shall control. (i) The Project Loan will bear interest at the Applicable Rate, unless the Default Rate is applicable. The Adjusted Prime Rate shall be the "Applicable Rate", except that the Adjusted LIBOR Rate shall be the "Applicable Rate" with respect to portions of the Project Loan as to which a LIBOR Rate Option is then in effect. (ii) The "Adjusted Prime Rate" means: A rate per annum equal to the sum of (a) the Prime Rate Margin and (b) the greater of (i) the Prime Rate or (ii) zero percent (0%) in excess of the Federal Funds Effective Rate. Any change in the Adjusted Prime Rate shall be effective immediately from and after such change in the Adjusted Prime Rate. (iii) The "Adjusted LIBOR Rate" means: For any LIBOR Rate Interest Period, an interest rate per annum equal to the sum of (A) the rate obtained by dividing (x) the LIBOR Rate for such LIBOR Rate Interest Period by (y) a percentage equal to one hundred percent (100%) minus the Reserve Percentage for such LIBOR Rate Interest Period and (B) the LIBOR Rate Margin. (iv) The "LIBOR Rate" means: For any LIBOR Rate Interest Period, the average rate (rounded upwards to the nearest Ill 6th) as shown in Dow Jones Markets (formerly Telerate) (Page 3750) at which deposits in U.S. dollars are offered by first class banks in the London Interbank Market at approximately 11:00 a.m. (London time) on the day that is two (2) LIBOR Business Days prior to the first day of such LIBOR Rate Interest Period with a maturity approximately equal to such LIBOR Rate Interest Period and in an amount approximately equal to the amount to which such LIBOR Rate Interest Period relates, adjusted for reserves and taxes if required by future regulations. If Dow Jones Markets no longer reports such rate or Lender determines in good faith that the rate so reported no longer accurately reflects the rate available to Lender in the London Interbank Market, Lender may select a replacement index. (v) The "LIBOR Rate Interest Period" means: With respect to each amount bearing interest at a LIBOR based rate, a period of one, two or three months, to the extent deposits with such maturities are available to Lender, commencing on a LIBOR Business Day, as selected by Borrower provided, however, that (i) any LIBOR Rate Interest Period which would otherwise end on a day which is not a LIBOR Business Day shall continue to and end on the next succeeding LIBOR Business Day, unless the result would be that such LIBOR Rate Interest Period would be extended to the next succeeding calendar month, in which case such LIBOR Project Agreement 3 f'ueh!o West, CO Rate Interest Period shall end on the next preceding LIBOR Business Day and (ii) any LIBOR Rate Interest Period which begins on a day for which there is no numerically corresponding date in the calendar month in which such LIBOR Rate Interest Period would otherwise end shall instead end on the last LIBOR Business Day of such calendar month. (vi) The "LIBOR Rate Margin" means: (a) For Project Loans (except as hereinafter described in (b) of this definition) 1.75 percent (175 basis points) per annum, provided that if an Interest Rate Agreement in form and substance acceptable to Lender in its sole discretion is in effect with respect to all Project Loans outstanding hereunder and no Event of Default has occurred and is continuing, then 1.65 percent (165 basis points) per annum; and (b) for those portions of Project Loans designated an Outlot Loan, 2.25 percent (225 basis points) per annum provided that if an Interest Rate Agreement in form and substance acceptable to Lender in its sole discretion is in effect with respect to all Project Loans outstanding hereunder and no Event of Default has occurred and is continuing, then 2.15 percent (215 basis points) per annum. (vii) The "Prime Rate" means: That interest rate established from time to time by Lender as Lender's Prime Rate, whether or not such rate is publicly announced; the Prime Rate may not be the lowest interest rate charged by Lender for commercial or other extensions of credit; (viii) The "Prime Rate Margin" means: 0% (0 basis points) per annum, except for an Outlot Loan, .50% (50 basis points) per annum. (ix) The Initial Term of this Loan is eighteen (18) months. 10. Repayment of Outlot Loans. Notwithstanding anything contained in the Master Loan Agreement, the Note or Notes, or any ofthe Loan Documents to the contrary, if this Project Loan includes an Outlot Loan, the following repayment limitations shall apply. All principal payments made by Borrower towards the Project Loan shall first be applied to reduce the principal under any promissory note evidencing any Outlot Loan. Only after the entire principal accruing under any promissory note evidencing an Outlot Loan has been repaid in full will any principal payments made by Borrower be applied towards promissory notes evidencing any other portion of the Project Loan. 11. Tax-Deferred Exchange Provisions. Intentionally omitted. 12. Holdback. Notwithstanding anything in the Loan Documents to the contrary, the Lender shall be permitted to holdback, and not obligated to disburse, any portion of the Loan to the extent the Debt Service Coverage Ratio set forth in Section 4.2(c) ofthe Loan Agreement is not met. In the event the Debt Service Coverage Ratio set forth in Section 4.2(c) of the Loan Agreement is not met, and the entire Project Loan is not in balance, on the date of substantial completion of the shell of the Improvements, Borrower shall deposit an amount with the Lender to be treated as equity for the Loan in order that such Debt Service Coverage Ratio is met and the Loan is in balance. Project Agreement 4 Pueblo West, CO BORROWER: DURANT SHOPPING CENTER LLC a Delaware limited liability company By: JHF Property Holdings LLC a Delaware limited liability company Its: Manager By: Its: JeffH. Farmer, III Manager NEWTON SHOPPING CENTER LLC a Delaware limited liability company By: JHF Property Holdings LLC a Delaware limited liability company Its: Manager By: Its: JeffH. Farmer, III Manager ZACHARY SHOPPING CENTER LLC a Delaware limited liability company By: JHF Property Holdings LLC a Delaware limited liability company Its: Manager By: Its: JeffH. Farmer, III Manager DEVELOPER: THE SPECTRA GROUP, INC., a Tennessee corporation By: JeffH. Fanner, III Its: President Address: 5851 Ridge Bend Road Memphis, Tennessee 38120 LENDER: KEYBANK NATIONAL ASSOCIATION EXHIBIT A LEGAL DESCRIPTION OF THE PROJECT SITE EXHIBIT B BUDGET EXHIBIT C REQUIRED LEASES Tenant Cato Shoe Department China Buffet VACANT Square Feet 4,060 4,550 3,500 5,040 TOTAL 29,700 Total Leased Vacant TOTAL PROJECT 24,660 5,040 29,700 EXECUTED as of the date first set forth above. BORROWER: DURANT SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: By: Its: Organizational ID/Number: _ _ _ _ __ NEWTON SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: M ge By: Its: Organizational ID/Number: _ _ _ _ __ ZACHARY SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Del ware limited liability company, " Its: By: Its: armer, III Manager Organizational ID/Number: LENDER: KEYBANK NATIONAL ASSOCIATION, a national banking association By: Kurt A. Reiber Its: Senior Vice President BORROWER: DURANT SHOPPING CENTER LLC a Delaware limited liability company By: JHF Property Holdings LLC a Delaware limited liability company Its: Manager By: Its: JeffH. Farmer, III Manager NEWTON SHOPPING CENTER LLC a Delaware limited liability company By: JHF Property Holdings LLC a Delaware limited liability company Its: Manager By: Its: JeffH. Farmer, III Manager ZACHARY SHOPPING CENTER LLC a Delaware limited liability company By: JHF Property Holdings LLC a Delaware limited liability company Its: Manager By: Its: Jeff H. Farmer, III Manager DEVELOPER: THE SPECTRA GROU a Tennessee COIJ)9 1/ By: '--JeffH. r,I Its: Presiden Address: 5851 R1dge Bend Road Memphis, Tennessee 38120 m l PROMISSORY NOTE As of October JL_, 2006 U.S. $2,250,000.00 FOR VALUE RECEIVED, DURANT SHOPPING CENTER LLC, a Delaware limited liability company, NEWTON SHOPPING CENTER LLC, a Delaware limited liability company, and ZACHARY SHOPPING CENTER LLC, a Delaware limited liability company, each having an address at 5851 Ridge Bend Road, Memphis, Tennessee 38120 (jointly and severally, the "Maker"), hereby promises to pay to the order of KEYBANK NATIONAL ASSOCIATION, a national banking association ("Payee"), having an address at 580 Walnut Street, 2nd Floor, Cincinnati, Ohio 45202, the principal sum of Two Million Two Hundred Fifty Thousand and 001100 Dollars ($2,250,000.00) or so much thereof as may be advanced from time to time, and interest from the date hereof on the balance of principal from time to time outstanding, in United States currency, at the rates and at the times hereinafter described. This promissory note (the "Note") is issued by Maker pursuant to that certain Construction Loan Agreement of even date herewith (the "Loan Agreement") entered into between Payee and Maker. This Note evidences the Loan (as defined in the Loan Agreement). Payment of this Note is governed by the Loan Agreement, the terms of which are incorporated herein by express reference as if fully set forth herein. Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Loan Agreement. Interest. The principal amount hereof outstanding from time to time shall 1. bear interest until paid in full at the Applicable Rate. 2. Monthly Payments. Interest only shall be payable in arrears on the first (1st) day of each calendar month after the date hereof commencing on the first day of the second calendar month after the date hereof up to and including the Maturity Date in the amount of all interest accrued during the immediately preceding calendar month. Notwithstanding the foregoing, in the event the Extension Option is exercised, during the Extension Term, on the first (1st) day of every calendar month Borrower shall make monthly principal and interest payments based on a term of twenty-five (25) years and the assumed interest rate used in determining the Debt Service Coverage Ratio in connection with the exercise of the Extension Option. All payments on account of the indebtedness evidenced by this Note shall be made to Payee not later than 11:00 a.m. Cincinnati, Ohio time on the day when due in lawful money of the United States and shall be first applied to late charges, costs of collection or enforcement and other similar amounts due, if any, under this Note and any of the other Loan Documents, then to interest due and payable hereunder and the remainder to principal due and payable hereunder. 3. Maturity Date. The indebtedness evidenced hereby shall mature on the Maturity Date. On the Maturity Date, the entire outstanding principal balance hereof, together with accrued and unpaid interest and all other sums evidenced by this Note, shall, if not sooner paid, become due and payable. EXHIBIT 16 Promissory Note Pueblo West, CO 4. General Provisions. (a) Regardless of whether an Adjusted LIBOR Rate would otherwise then be in effect, in the event (i) the principal balance hereof is not paid when due whether by acceleration or upon the Maturity Date or (ii) an Event of Default exists, then the principal balance hereof shall bear interest from and after the Default Rate. In addition, for any installment (exclusive of the payment due upon the Maturity Date) which is not paid within ten (l 0) days after the due date thereof a late charge equal to the greater of (a) ten percent (1 0%) of the amount of such installment or (b) $25 shall be due and payable to the holder of this Note on demand to cover the extra expense involved in handling delinquent payments. (b) Maker agrees that the obligation evidenced by this Note is an exempt transaction under the Truth-in-Lending Act, 15 U.S.C. § 1601, et seq. (c) The parties hereto intend and believe that each provision in this Note comports with all applicable local, state and federal laws and judicial decisions. However, if any provision or provisions, or if any portion of any provision or provisions, in this Note is found by a court of law to be in violation of any applicable local, state or federal ordinance, statute, law, administrative or judicial decision, or public policy, and if such court should declare such portion, provision or provisions of this Note to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such portion, provision or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder of this Note shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were not contained therein, and that the rights, obligations and interest of Maker and the holder or holders hereof under the remainder of this Note shall continue in full force and effect. All agreements herein are expressly limited so that in no contingency or event whatsoever, whether by reason of advancement of the proceeds hereof, acceleration of maturity of the unpaid principal balance hereof, or otherwise, shall the amount paid or agreed to be paid to the holders hereof for the use, forbearance or detention of the money to be advanced hereunder exceed the highest lawful rate permissible under applicable usury laws. If, from any circumstances whatsoever, the fulfillment of any provision hereof, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law which a court of competent jurisdiction may deem applicable hereto, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity and if from any circumstance the holder hereof shall ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance due hereunder and not to the payment of interest. (d) This Note and all provisions hereof shall be binding upon Maker and all persons claiming under or through Maker, and shall inure to the benefit of Payee, together with its successors and assigns, including each owner and holder from time to time of this Note. (e) Promissory Note Time is of the essence as to all dates set forth herein. 2 P11cblo West, CO (f) Maker agrees that its liability shall not be in any manner affected by any indulgence, extension of time, renewal, waiver, or modification granted or consented to by Payee; and Maker consents to any indulgences and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and to any substitution, exchange or release of the collateral, or any part thereof, with or without substitution, and agrees to the addition or release of any makers, endorsers, guarantors, or sureties, all whether primarily or secondarily liable, without notice to Maker and without affecting its liability hereunder. (g) Maker hereby waives and renounces for itself, its successors and assigns, all rights to the benefits of any statute of limitations and any moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension, redemption, appraisement, or exemption and homestead laws now provided, or which may hereafter be provided, by the laws of the United States and of any state thereof against the enforcement and collection of the obligations evidenced by this Note. If this Note is placed in the hands of attorneys for collection or is collected (h) through any legal proceedings, Maker promises and agrees to pay, in addition to the principal, interest and other sums due and payable hereon, all costs of co11ecting or attempting to collect this Note, including all reasonable attorneys' fees and disbursements. (i) All parties now or hereafter liable with respect to this Note, whether Maker, principal, surety, guarantor, endorsee or otherwise hereby severally waive presentment for payment, demand, notice of nonpayment or dishonor, protest and notice of protest. No failure to accelerate the indebtedness evidenced hereby, acceptance of a past due installment following the expiration of any cure period provided by this Note, any Loan Document or applicable law, or indulgences granted from time to time shall be construed (i) as a novation of this Note or as a reinstatement of the indebtedness evidenced hereby or as a waiver of such right of acceleration or of the right of Payee thereafter to insist upon strict compliance with the terms of this Note, or (ii) to prevent the exercise of such right of acceleration or any other right granted hereunder or by any Laws. Maker hereby expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing. (j) Maker hereby expressly acknowledges that the loan evidenced by this Note is a "business loan" within the meaning of Chapter 1343 of the Ohio Revised Code. (k) With respect to any agreement by Borrower in this Note or in any other Loan Document to pay Payee's attorneys' fees and disbursements incurred in connection with the Loan, Borrower agrees that each Loan Document is a "contract of indebtedness" and that the attorneys' fees and disbursements referenced are those which are a reasonable amount, all as contemplated hy Ohio Revised Code Section 1301.21, as such Section may hereafter be amended. Borrower further agrees that the indebtedness incurred in connection with the Loan is not incurred for purposes that are primarily Promissory Note 3 Pueh/o West, CO personal, family or household and confirms that the total amount owed on the contract of indebtedness exceeds One Hundred Thousand and Noll 00 Dollars ($100,000.00). THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. (I) (m) MAKER AND PAYEE EACH WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE AND THE OTHER LOAN DOCUMENTS OR RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS NOTE AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. 5. Tax-Deferred Exchange Provisions. Intentionally omitted. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Promissory Note 4 Pueblo West. CO Maker has delivered this Note as of the day and year first set forth above. MAKER: DURANT SHOPPING CENTER LLC a Delaware limited liability company By: JHF Property Holdings LLC a Delaware limited liability company Its: By: Its: ra~e; ~ fFarill{;r, III Manager NEWTON SHOPPING CENTER LLC a Delaware limited liability company By: JHF Property Holdings LLC a Delaware limited liability company Its: By: Its: i~r ~ i~mer:ni Manager ZACHARY SHOPPING CENTER LLC a Delaware limited liability company By: JHF Property Holdings LLC a Delaware limited liability company Its: MaT!g' . By~ Its: Promissorv Note Manager Pueblo West, CO Maximum Principal Indebtedness for Colorado Recording Tax Purposes is $2,250,000.00 11111111111111111 111111 Chris C. Munoz PuebloCtyClk&Rec TD ~~=?.~1~,. R 141.00 CONSTRUCTION DEED OF TRUST ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING MADE BY DURANT SHOPPING CENTER LLC, a Delaware limited liability company, and NEWTON SHOPPING CENTER LLC, a Delaware limited liability company, and ZACHARY SHOPPING CENTER LLC, a Delaware limited liability company, collectively, as Grantor to PUBLIC TRUSTEE OF PUEBLO COUNTY, COLORADO, as Trustee for the benefit of KEYBANK NATIONAL ASSOCIATION as Beneficiary Dated as of: October ll_, 2006 PREPARED BY AND UPON RECORDATION RETURN TO: Stephen M. King, Esq. Thompson Hine LLP 312 Walnut Street 14th Floor Cincinnati, Ohio 45202 EXHIBIT 17 D 0.00 CONSTRUCTION DEED OF TRUST ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING Project Common Known As "Pueblo West Shopping Center" THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Deed of Trust") is made as of October lL_, 2006, by DURANT SHOPPING CENTER LLC, a Delaware limited liability company, NEWTON SHOPPING CENTER LLC, a Delaware limited liability company, and ZACHARY SHOPPING CENTER LLC, a Delaware limited liability company (collectively, the "Grantor") whose address is 5851 Ridge Bend Road, Memphis, Tennessee 38120, in favor of Public Trustee of Pueblo County, 3o N. MAtt\! ~-~-.I f>...,e! Colorado, its successors and assigns ("Trustee") whose address is Color A~:>b S I 003 , for the benefit ofKEYBANK NATIONAL ASSOCIATiON, its successors and assigns ("Beneficiary") whose address is 580 Walnut Street, 2nd Floor, Cincinnati, Ohio 45202. a 1. Grant and Secured Obligations. 1.1. Grant. For the purpose of securing payment and performance of the Secured Obligations defined and described in Section 1.2 below, Grantor hereby irrevocably and unconditionally grants, bargains, sells, conveys, assigns, transfers, pledges and sets over to Trustee and Beneficiary, with power of sale and with right of entry and possession, all estate, right, title and interest which Grantor now has or may later acquire in and to the following property (all or any part of such property, or any interest in all or any part of it, as the context may require, the "Property"): The real property located in the City of Pueblo West, County of Pueblo, (a) State of Colorado, as described in Exhibit A, together with all existing and future easements and rights affording access to it (the "Premises"); together with (b) All buildings, structures and improvements now located or later to be constructed on the Premises (the "Improvements"); together with (c) All existing and future appurtenances, privileges, easements, franchises and tenements of the Premises, including all minerals, oil, gas, other hydrocarbons and associated substances, sulphur, nitrogen, carbon dioxide, helium and other commercially valuable substances which may be in, under or produced from any part of the Premises, all development rights and credits, air rights, water, water rights (whether riparian, appropriative or otherwise, and whether or not appurtenant) and water stock, and any Premises lying in the streets, roads or avenues, open or proposed, in front of or adjoining the Premises and Improvements; together with (d) All existing and future leases, subleases, subtenancies, licenses, occupancy agreements and concessions ("leases") relating to the use and enjoyment of all or any part of the Premises and Improvements, and any and all guaranties and other supporting l-o 1111111111111111 1111 Chris C. Munoz PuebloCtyClk&Rec TD II !:~:f.~1f21P R 141.00 D 0.00 obligations or other agreements relating to or made in connection with any of such leases; together with (e) All real property and improvements on it, and all appurtenances and other property and interests of any kind or character, whether described in Exhibit A or not, which may be reasonably necessary or desirable to promote the present and any reasonable future beneficial use and enjoyment of the Premises and Improvements; together with All goods, materials, supplies, chattels, furniture, fixtures, equipment and machinery now or later to be attached to, placed in or on, or used in connection with the use, enjoyment, occupancy or operation of all or any part of the Premises and Improvements, whether stored on the Premises or elsewhere, including all pumping plants, engines, pipes, ditches and flumes, and also all gas, electric, cooking, heating, cooling, air conditioning, lighting, refrigeration and plumbing fixtures and equipment, all of which shall be considered to the fullest extent of the law to be real property for purposes of this Deed of Trust and any manufacturer's warranties with respect thereto; together with (f) (g) All building materials, equipment, work in process or other personal property of any kind, whether stored on the Premises or elsewhere, which have been or later will be acquired for the purpose of being delivered to, incorporated into or installed in or about the Premises or Improvements; together with (h) All of Grantor's interest in and to all operating accounts, the Loan funds, whether disbursed or not, all reserves set forth in the Budget, and any other bank accounts of Grantor; together with All rights to the payment of money, accounts, accounts receivable, reserves, deferred payments, refunds, cost savings, payments and deposits, whether now or later to be received from third parties (including all earnest money sales deposits) or deposited by Grantor with third parties (including all utility deposits), contract rights, general intangibles, development and use rights, governmental permits and licenses, applications, architectural and engineering plans, specifications and drawings, as-built drawings, chattel paper, instruments, documents, notes, drafts and letters of credit (other than letters of credit in favor of Beneficiary), which arise from or relate to construction on the Premises or to any business now or later to be conducted on it, or to the Premises and Improvements generally and any builder's or manufacturer's warranties with respect thereto; together with (i) All insurance policies pertaining to the Premises and all proceeds, including all claims to and demands for them, of the voluntary or involuntary conversion of any of the Premises, Improvements or the other property described above into cash or liquidated claims, including proceeds of all present and future fire, hazard or casualty insurance policies and all condemnation awards or payments now or later to be made by any public body or decree by any court of competent jurisdiction for any taking or in connection with any condemnation or eminent domain proceeding, and all causes of (j) llllllllllllllll llllll !:~=?.~1rZlP Chris c. Munoz PuebloCtyClk&Rec TD R 141.00 D 0.00 action and their proceeds for any damage or injury to the Premises, Improvements or the other property described above or any part of them, or breach of warranty in connection with the construction of the Improvements, including causes of action arising in tort, contract, fraud or concealment of a material fact; together with (k) All of Grantor's rights in and to all Interest Rate Agreements; (1) All books and records pertaining to any and all of the property described above, including computer-readable memory and any computer hardware or software necessary to access and process such memory ("Books and Records"); together with (m) All proceeds of, additions and accretions to, substitutions and replacements for, and changes in any of the property described above. TO HAVE AND TO HOLD the Property and all parts, rights, members and appurtenances thereof, to the use and benefit of Trustee and the successors, successors-intitle and assigns of Trustee, forever; and Grantor covenants that Grantor is lawfully seized and possessed of the Premises as aforesaid and has good right to convey the same, that the same are unencumbered except for those matters expressly set forth in Exhibit B attached hereto and by this reference made a part hereof, and Grantor does warrant and will forever defend the title thereto against the claims of all persons whomsoever, except as to those matters set forth in said Exhibit B attached hereto. Capitalized terms used above and elsewhere in this Deed of Trust without definition have the meanings given them in the Loan Agreement referred to in Subsection 1.2(a)(iii) below. 1.2. Secured Obligations. But this conveyance is made IN TRUST for the following uses and trusts, and for no other purposes, to-wit: (a) Grantor makes the grant, conveyance, and mortgage set forth in Section 1.1 above, and grants the security interest set forth in Section 3 below for the purpose of securing the following obligations (the "Secured Obligations") in any order of priority that Beneficiary may choose: (i) Payment of all obligations at anytime owing under a promissory note (the "Note") evidencing the loan in the amount of Two Million Two Hundred Fifty Thousand and 00/100 ($2,250,000.00) (the "Loan"), bearing even date herewith, payable by Grantor as maker to the order of Beneficiary which matures on the Maturity Date, as defined in the Loan Agreement. (ii) Payment and pe1formance of all obligations of Grantor under this Deed of Trust; and (iii) Payment and performance of all obligations of Grantor under a Construction Loan Agreement bearing even date herewith between Grantor as "Borrower" and Beneficiary as "Lender" (the "Loan Agreement"); and 1111111111111111 111111 Chris C. Munoz PuebloCtyClk&Rec TD !:~=~~~r21P R 141.00 D 0.00 (iv) Payment and performance of any obligations of Grantor under any Loan Documents which are executed by Grantor; and (v) Payment and performance of all obligations of Grantor arising from any Interest Rate Agreements. Interest Rate Agreements shall mean an interest rate hedging program through the purchase by Grantor from Beneficiary of an interest rate swap, cap, or such other interest rate protection product with respect to the Note; and Payment and performance of all future advances and other (vi) obligations that Grantor or any successor in ownership of all or part of the Property may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when a writing evidences the parties' agreement that the advance or obligation be secured by this Deed of Trust; and (vii) Payment and performance of all modifications, amendments, extensions, and renewals, however evidenced, of any of the Secured Obligations; and (viii) Payment of any and all amounts advanced by Beneficiary with respect to the Property for the payment of taxes, assessments, insurance premiums or costs incurred for the protection of the Property, together with interest at the Default Rate. (b) All persons who may have or acquire an interest in all or any part of the Property will be considered to have notice of, and will be bound by, the terms of the Secured Obligations and each other agreement or instrument made or entered into in connection with each of the Secured Obligations. Such terms include any provisions in the Note or the Loan Agreement which permit borrowing, repayment and reborrowing, or which provide that the interest rate on one or more of the Secured Obligations may vary from time to time. 2. Assignment of Rents. 2.1. Assignment. Grantor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary all rents, royalties, issues, profits, revenue, income, accounts, proceeds and other benefits of the Property, whether now due, past due or to become due, including all prepaid rents and security deposits (some or all collectively, as the context may require, "Rents"). This is an absolute assignment, not an assignment for security only. 2.2. Grant of License. Beneficiary hereby confers upon Grantor a license ("License") to collect and retain the Rents as they become due and payable, so long as no Event of Default, as defined in Section 6.2 below, shall exist and be continuing. If an Event of Default has occurred and is continuing, Beneficiary shall have the right, which it may choose to exercise in its sole discretion, to terminate this License without notice to or demand upon Grantor, and without regard to the adequacy of Beneficiary's security under this Deed of Trust. 1111111111111111 111111 Chris C. Munoz PuebloCtyClk&Rec TD ?:;:r.~1t1P R 141.00 D 0.00 2.3. Collection and Application of Rents. Subject to the License granted to Grantor under Section 2.2 above, Beneficiary has the right, power and authority to collect any and all Rents. Grantor hereby appoints Beneficiary its attorney-in-fact to perform any and all of the following acts, if and at the times when Beneficiary in its sole discretion may so choose: (a) Demand, receive and enforce payment of any and all Rents; or (b) Give receipts, releases and satisfactions for any and all Rents; or (c) Sue either in the name of Grantor or in the name of Beneficiary for any and all Rents. Beneficiary and Grantor agree that the mere recordation of the assignment granted herein entitles Beneficiary immediately to collect and receive rents upon the occurrence of an Event of Default, as defined in Section 6.2, without first taking any acts of enforcement under applicable law, such as, but not limited to, providing notice to Grantor, filing foreclosure proceedings, or seeking and/or obtaining the appointment of a receiver. Further, Beneficiary's right to the Rents does not depend on whether or not Beneficiary takes possession of the Property as permitted under Subsection 6.3(c). In Beneficiary's sole discretion, Beneficiary may choose to collect Rents either with or without taking possession of the Property. Beneficiary shall apply all Rents collected by it in the manner provided under Section 6.6. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity. 2.4. Beneficiary Not Responsible. Under no circumstances shall Beneficiary have any duty to produce Rents from the Property. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Premises and Improvements, unless Beneficiary agrees in writing to the contrary, Beneficiary is not and shall not be deemed to be: (a) (b) lease; or A "Beneficiary in possession" for any purpose; or Responsible for performing any of the obligations of the lessor under any (c) Responsible for any waste committed by lessees or any other parties, any dangerous or defective condition of the Property, or any negligence in the management, upkeep, repair or control of the Property; or (d) Liable in any manner for the Property or the use, occupancy, enjoyment or operation of all or any part of it. 2.5. Leasing. Grantor shall not accept any deposit or prepayment of rents under the leases for any rental period exceeding one (1) month without Beneficiary's prior written consent. Grantor shall not lease the Property or any part of it except strictly in accordance with the Loan Agreement. 1111111111111111 111111 Chris 3. c. Munoz PuebloCtyClkll.Rec TD ?:;:r.~~r". R 141.00 D 0.00 Grant of Security Interest. 3.1. Security Agreement. The parties intend for this Deed of Trust to create a lien on the Property, and an absolute assignment of the Rents, all in favor of Beneficiary. The parties acknowledge that some of the Property and some or all of the Rents may be determined under applicable law to be personal property or fixtures. To the extent that any Property or Rents may be determined to be personal property, Grantor as debtor hereby grants Beneficiary and Trustee as secured parties a security interest in all of Grantor's right, title and interest in all such Property and Rents, whether now owned or existing or hereafter acquired, to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the Uniform Commercial Code of the State in which the Property is located, covering all such Property and Rents. 3.2. Financing Statements. Grantor shall execute, or in the alternative hereby authorizes Beneficiary to file, on behalf of Grantor and without its signature, one or more financing statements and such other documents as Beneficiary may from time to time require to perfect or continue the perfection of Beneficiary's security interest in any Property or Rents. As provided in Section 5.9 below, Grantor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. In case Grantor fails to execute any financing statements or other documents for the perfection or continuation of any security interest, Grantor hereby irrevocably appoints Beneficiary as its true and lawful attorney-in-fact which power of attorney is coupled with an interest to execute any such documents on its behalf. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall never be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it. 4. Fixture Filing. This Deed of Trust constitutes a financing statement filed as a fixture filing under Article 9 of the Uniform Commercial Code in the State in which the Property is located, as amended or recodified from time to time, covering any Property which now is or later may become fixtures attached to the Premises or Improvements. The description of the Property in this Deed of Trust includes goods which are or are to become fixtures on the Premises and/or Improvements of which Beneficiary is the record owner. For this purpose, the respective addresses of Grantor, as debtor, and Beneficiary and Trustee, as secured parties, are as set forth in the preambles of this Deed of Trust. 5. Rights and Duties of the Parties. 5 .1. Representations and Warranties. Grantor represents and warrants that: (a) Grantor lawfully, possesses and holds fee simple title to all of the Premises and Improvements and has not encumbered or assigned any of its business interests and rights under, in and to the Premises and Improvements; (b) Grantor has or will have good title to, and is and will be the sole owner of, all Property other than the Premises and Improvements; 1111111111111111 111111 Chris C. Munoz PuebloCtyClk&Rec TO ~~=?.~1?21. R 141.00 0 0.00 (c) Grantor has the full and unlimited power, right and authority to encumber the Property and assign the Rents; (d) This Deed of Trust creates a first and prior lien on the Property; (e) The Property includes all property and rights which may be reasonably necessary or desirable to promote the present and any reasonable future beneficial use and enjoyment of the Premises and Improvements; Grantor owns any Property which is personal property free and clear of any security agreements, reservations of title or conditional sales contracts, and there is no financing statement affecting such personal property on file in any public office; and (f) (g) Grantor is a limited partnership formed under the laws of the State of Virginia and will not change the state of its formation or transfer the Collateral, or any portion thereof (except as permitted by Section 6.l(b)), to an entity formed in another state. Grantor's exact legal name is as shown in this Deed of Trust and Grantor will not change its legal name. Grantor's organization number is L019214-8 and Grantor will not change its organization number. 5.2. Taxes, and Assessments. Grantor shall pay prior to delinquency all taxes, levies, charges and assessments, in accordance with Section 15.1(h) of the Loan Agreement. 5.3. Performance of Secured Obligations. Grantor shall promptly pay and perform each Secured Obligation in accordance with its terms. 5.4. Liens, Charges and Encumbrances. Grantor shall immediately discharge any lien on the Property which Beneficiary has not consented to in writing in accordance with the terms of Section 15.l(c) of the Loan Agreement. 5.5. Damages and Insurance and Condemnation Proceeds. In the event of any casualty or condemnation of the Property, the provisions of Article 16 of the Loan Agreement shall govern. 5.6. Maintenance and Preservation of Property. (a) Grantor shall insure the Property as required by the Loan Agreement and keep the Property in good condition and repair. (b) Grantor shall not remove or demolish the Property or any part of it, or alter, restore or add to the Property, or initiate or allow any change or variance in any zoning or other Premises use classification which affects the Property or any part of it, except as permitted or required by the Loan Agreement or with Beneficiary's express prior written consent in each instance (c) If all or part of the Property becomes damaged or destroyed, Grantor shall promptly and completely repair and/or restore the Property in a good and workmanlike manner in accordance with sound building practices, regardless of whether or not 1111111111111111 111111 Chris C. Munoz PuebloCtyClk&Rec TD R ~~=f~1t. 141.00 D 0.00 Beneficiary agrees to disburse Proceeds or other sums to pay costs of the work of repair or reconstruction under Article 16 of the Loan Agreement. (d) Grantor shall not commit or allow any act upon or use of the Property which would violate: (i) any applicable Laws or order of any Governmental Authority, whether now existing or later to be enacted and whether foreseen or unforeseen; or (ii) any public or private covenant, condition, restriction or equitable servitude affecting the Property. Grantor shall not bring or keep any article on the Property or cause or allow any condition to exist on it, if that could invalidate or would be prohibited by any insurance coverage required to be maintained by Grantor on the Property or any part of it under the Loan Agreement. (e) Grantor shall not commit or allow waste of the Property, including those acts or omissions characterized under the Loan Agreement as waste which arises out of Hazardous Material. Grantor shall perform all other acts which from the character or use of the Property may be reasonably necessary to maintain and preserve its value. (f) 5.7. Releases, Extensions, Modifications and Additional Security. From time to time, Beneficiary may perform any of the following acts without incurring any liability or giving notice to any person: (a) Release any person liable for payment of any Secured Obligation; (b) Extend the time for payment, or otherwise alter the terms of payment, of any Secured Obligation; (c) Accept additional real or personal property of any kind as security for any Secured Obligation, whether evidenced by deeds of trust, mortgages, security agreements or any other instruments of security; (d) Alter, substitute or release any property securing the Secured Obligations; (e) Consent to the making of any plat or map of the Property or any part of it; (f) Join in granting any easement or creating any restriction affecting the Property; or (g) Join in any subordination or other agreement affecting this Deed of Trust or the lien of it; or (h) Release the Property or any part of it. 5.8. Release. When all of the Secured Obligations have been paid in full and all fees and other sums relating to the Note and owed by Grantor under this Deed of Trust and the other Loan Documents have been received, Beneficiary and Trustee shall release this Deed of Trust, 1111111111111111 111111 Chris C. Munoz PuebloCtyClk&Rec TD t:;~?:~~r."' R 141.00 D 0.00 the lien created thereby, and all notes and instruments evidencing the Secured Obligations. Grantor shall pay any costs of preparation and recordation of such release. 5.9. Compensation, Exculpation, Indemnification. (a) Grantor agrees to pay fees in the maximum amounts legally permitted, or reasonable fees as may be charged by Beneficiary when the law provides no maximum limit, for any services that Beneficiary or Trustee may render in connection with this Deed of Trust, including providing a statement of the Secured Obligations or providing the release pursuant to Section 5.8 above. Grantor shall also pay or reimburse all of Beneficiary's and Trustee's costs and expenses which may be incurred in rendering any such services. Grantor further agrees to pay or reimburse Beneficiary for all costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including any rights or remedies afforded to Beneficiary and Trustee under Section 6.3, whether any lawsuit is filed or not, or in defending any action or proceeding arising under or relating to this Deed of Trust, including attorneys' fees and other legal costs, costs of any Foreclosure Sale (as defined in Subsection 6.3(i) below) and any cost of evidence of title. If Beneficiary and/or Trustee, as required by applicable law, chooses to dispose of Property through more than one Foreclosure Sale, Grantor shall pay all costs, expenses or other advances that may be incurred or made by Beneficiary and/or Trustee in each of such Foreclosure Sales. In any suit to foreclose the lien hereof or enforce any other remedy of Trustee or Beneficiary under this Deed of Trust or the Note, there shall be allowed and included as additional indebtedness in the decree for sale or other judgment or decree all expenditures and expenses which may be paid or incurred by or on behalf of Trustee and Beneficiary for reasonable attorneys' costs and fees (including the costs and fees of paralegals), survey charges, appraiser's fees, inspecting engineer's and/or architect's fees, fees for environmental studies and assessments and all additional expenses incurred by Trustee and Beneficiary with respect to environmental matters, outlays for documentary and expert evidence, stenographers' 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, Torrens certificates and similar data and assurances with respect to title as Trustee and Beneficiary may deem reasonably necessary either to prosecute such suit or to evidence to bidders at any sale which may be had pursuant to such decree the true condition of the title to, the value of or the environmental condition of the Property. All expenditures and expenses of the nature in this Subsection mentioned, and such expenses and fees as may be incurred in the protection of the Property and maintenance of the lien of this Deed of Trust, including the fees of any attorney (including the costs and fees of paralegals) employed by Trustee or Beneficiary in any litigation or proceeding affecting this Deed of Trust, the Note or the Property, including probate and bankruptcy proceedings, or in preparation for the commencement or defense of any proceeding or threatened suit or proceeding, shall be immediately due and payable by Grantor, with interest thereon at the Default Rate and shall be secured by this Deed of Trust. 1111111111 IIIIII 111111 Chris C. Munoz PuebloCtyClk&Rec TO !:~=~~~fa R 141.00 D 0.00 (b) Neither Beneficiary nor Trustee shall be directly or indirectly liable to Grantor or any other person as a consequence of any of the following: (i) Beneficiary's or Trustee's exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary and/or Trustee in this Deed of Trust; (ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of Grantor under any agreement related to the Property or under this Deed of Trust; or (iii) Any loss sustained by Grantor or any third party resulting from Beneficiary's failure to lease the Property, or from any other act or omission of Beneficiary in managing the Property, after an Event of Default, unless the loss is caused by the willful misconduct and bad faith of Beneficiary. Grantor hereby expressly waives and releases all liability of the types described above, and agrees that no such liability shall be asserted against or imposed upon Beneficiary or Trustee. (c) Grantor agrees to indemnify Beneficiary and Trustee against and hold them harmless from all losses, damages, liabilities, claims, causes of action, judgments, court costs, attorneys' fees and other legal expenses, cost of evidence of title, cost of evidence of value, and other costs and expenses which they may suffer or incur: (i) In performing any act required or permitted by this Deed of Trust or any of the other Loan Documents or by law; (ii) Because of any failure of Grantor to perform any of its obligations; or (iii) Because of any alleged obligation of or undertaking by Beneficiary and/or Trustee to perform or discharge any of the representations, warranties, conditions, covenants or other obligations in any document relating to the Property other than the Loan Documents. This agreement by Grantor to indemnify Beneficiary and Trustee shall survive the release and cancellation of any or all of the Secured Obligations and the full or partial release of this Deed of Trust. (d) Grantor shall pay all obligations to pay money arising under this Section 5.9 immediately upon demand by Beneficiary. Each such obligation shall be added to, and considered to be part of, the principal of the Note, and shall bear interest from the date the obligation arises at the Default Rate. 5.10. Defense and Notice of Claims and Actions. At Grantor's sole expense, Grantor shall protect, preserve and defend the Property and title to and right of possession of the Property, and the security of this Deed of Trust and the rights and powers of Beneficiary created 21P 1111111111111111 1111 II Chris C Munoz PuebloCtyClkS.Rec TD ~~=~~~F21P R 141.00 D 0.00 under it, against all adverse claims. Grantor shall give Beneficiary prompt notice in writing if any claim is asserted which does or could affect any such matters, or if any action or proceeding is commenced which alleges or relates to any such claim. 5.11. Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust or with the proceeds of any loan secured by this Deed of Trust. 5.12. Site Visits, Observation and Testing. Beneficiary and its agents and representatives shall have the right at any reasonable time to enter and visit the Property for the purpose of performing appraisals, observing the Property, taking and removing soil or groundwater samples, and conducting tests on any part of the Property. Beneficiary has no duty, however, to visit or observe the Property or to conduct tests, and no site visit, observation or testing by Beneficiary, its agents or representatives shall impose any liability on any of Beneficiary, its agents or representatives. In no event shall any site visit, observation or testing by Beneficiary, its agents or representatives be a representation that Hazardous Material are or are not present in, on or under the Property, or that there has been or shall be compliance with any law, regulation or ordinance pertaining to Hazardous Material or any other applicable governmental law. Neither Grantor nor any other party is entitled to rely on any site visit, observation or testing by any of Beneficiary, its agents or representatives. Neither Beneficiary, its agents or representatives owe any duty of care to protect Grantor or any other party against, or to inform Grantor or any other party of, any Hazardous Material or any other adverse condition affecting the Property. Beneficiary shall give Grantor reasonable notice before entering the Property. Beneficiary shall make reasonable efforts to avoid interfering with Grantor's use of the Property in exercising any rights provided in this Section 5.12. 5.13. Notice of Change. Grantor shall give Beneficiary prior written notice of any change in: (a) the location of its place of business or its chief executive office if it has more than one place of business; (b) the location of any of the Property, including the Books and Records; and (c) Grantor's name or business structure. Unless otherwise approved by Beneficiary in writing, all Property that consists of personal property (other than the Books and Records) will be located on the Premises and all Books and Records will be located at Grantor's place of business or chief executive office if Grantor has more than one place of business. 6. Accelerating Transfers, Default and Remedies. 6.1. Accelerating Transfers. (a) "Accelerating Transfer" means any Transfer not expressly permitted under Article 17 of the Loan Agreement. (b) Grantor acknowledges that Beneficiary is making one or more advances under the Loan Agreement in reliance on the expertise, skill and experience of Grantor; thus, the Secured Obligations include material elements similar in nature to a personal service contract. In consideration of Beneficiary's reliance, Grantor agrees that Grantor shall not make any Accelerating Transfer, unless the transfer is preceded by Beneficiary's 1111111111111111 111111 Chris c. Munoz PuebloCtyClk&Reo TD ~;=~~~~ R 141.00 D 0.00 express written consent to the particular transaction and transferee. Beneficiary may withhold such consent in its sole discretion. If any Accelerating Transfer occurs, Beneficiary in its sole discretion may declare all of the Secured Obligations to be immediately due and payable, and Beneficiary may invoke any rights and remedies provided by Section 6.3 of this Deed of Trust. 6.2. Events of Default. Grantor will be in default under this Deed of Trust upon the occurrence of any one or more of the following events (some or all collectively, "Events of Default;" any one singly, an "Event of Default"). (a) Failure of Grantor (i) (x) to pay any of the principal of the Loan when due, (y) to pay interest within ten (10) days after the date when due or (z) to observe or perform any of the other covenants or conditions by Grantor to be performed under the terms of this Deed of Trust or any of the other Loan Documents concerning the payment of money for a period of ten (10) days after written notice from Beneficiary that the same is due and payable; or (ii) for a period of thirty (30) days after written notice from Beneficiary, to observe or perform any non-monetary covenant or condition contained in this Deed of Trust or any of the other Loan Documents; provided that if any such failure concerning a non-monetary covenant or condition is susceptible to cure but cannot reasonably be cured within said thirty (30) day period, then Grantor shall have an additional sixty (60) day period to cure such failure and no Event of Default shall be deemed to exist hereunder so long as (x) Grantor commences such cure within the initial thirty (30) day period and diligently and in good faith pursues such cure to completion within such resulting ninety (90) day period from the date of Beneficiary's notice, and (y) the existence of such uncured default will not result in any tenant under a Lease having the right to terminate such Lease due to such uncured default; and provided further that if a different notice or grace period is specified under Article 19 of the Loan Agreement (or elsewhere in this Deed of Trust or the Loan Agreement) in which such particular breach will become an Event of Default, the specific provision shall control; or (b) An "Event of Default" occurs under the Loan Agreement or any other Loan Document. 6.3. Remedies. At any time after an Event of Default, Beneficiary shall be entitled to invoke any and all of the rights and remedies described below, in addition to all other rights and remedies available to Beneficiary at law or in equity. All of such rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. (a) Acceleration. Beneficiary may declare any or all of the Secured Obligations to be due and payable immediately. (b) Receiver. Beneficiary shall, as a matter of right, without notice and without giving bond to Grantor or anyone claiming by, under or through Grantor, and without regard for the solvency or insolvency of Grantor or the then value of the Property, to the extent permitted by applicable law, be entitled to have a receiver appointed for all or any part of the Property and the Rents, and the proceeds, issues and 21P 1111111111 IIIIII 1111 R 141.00 D 0.00 II ~;=~~~fa Chris C. Munoz PuebloCtyClk&Rec TO profits thereof, with the rights and powers referenced below and such other rights and powers as the court making such appointment shall confer, and Grantor hereby consents to the appointment of such receiver and shall not oppose any such appointment. Such receiver shall have all powers and duties prescribed by applicable law, all other powers which are necessary or usual in such cases for the protection, possession, control, management and operation of the Property, and such rights and powers as Beneficiary would have, upon entering and taking possession of the Property under subsection (c) below. (c) Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing all of Grantor's or the then owner's Books and Records; entering into, enforcing, modifying or canceling leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Beneficiary; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Grantor shall assemble all of the Property that has been removed from the Premises and make all of it available to Beneficiary at the site of the Premises. Grantor hereby irrevocably constitutes and appoints Beneficiary as Grantor's attorney-in-fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Grantor's name on any instruments. (d) Cure; Protection of Security. Beneficiary may cure any breach or default of Grantor, and if it chooses to do so in connection with any such cure, Beneficiary may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust, including, without limitation, completing construction of the improvements at the Property contemplated by the Loan Agreement. Such other things may include: appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Beneficiary under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary's sole judgment is or may be senior in priority to this Deed of Trust, such judgment of Beneficiary or to be conclusive as among the parties to this Deed of Trust; obtaining insurance and/or paying any premiums or charges for insurance required to be carried under the Loan Agreement; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary. Beneficiary may take any of the actions permitted under this Subsection 6.3(d) either with or without giving notice to any person. Any amounts expended by Beneficiary under this Subsection 6.3(d) shall be secured by this Deed of Trust. 21P 1111111111111111 1111 Chris C. Munoz PuebloCtyClkS.Rec TD II ?:;~~~~t, R 141.00 D 0.00 (e) Uniform Commercial Code Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the Uniform Commercial Code in the State in which the Property is located. (f) Foreclosure; Lawsuits. Beneficiary and/or Trustee, as required by applicable law, shall have the right, in one or several concurrent or consecutive proceedings, to foreclose the lien hereof upon the Property or any part thereof, for the Secured Obligations, or any part thereof, by any proceedings appropriate under applicable law. Beneficiary and/or Trustee, as required by applicable law, or its nominee may bid and become the purchaser of all or any part of the Property at any foreclosure or other sale hereunder, and the amount of Beneficiary's and/or Trustee's, as required by applicable law, successful bid shall be credited on the Secured Obligations. Without limiting the foregoing, Beneficiary and/or Trustee, as required by applicable law, may proceed by a suit or suits in law or equity, whether for specific performance of any covenant or agreement herein contained or in aid of the execution of any power herein granted, or for any foreclosure under the judgment or decree of any court of competent jurisdiction. In addition to the right provided in Subsection 6.3(a), upon, or at any time after the filing of a complaint to foreclose this Deed of Trust, Beneficiary and/or Trustee, as required by applicable law, shall be entitled to the appointment of a receiver of the property by the court in which such complaint is filed, and Grantor hereby consents to such appointment. (g) Other Remedies. Beneficiary may exercise all rights and remedies contained in any other instrument, document, agreement or other writing heretofore, concurrently or in the future executed by Grantor or any other person or entity in favor of Beneficiary in connection with the Secured Obligations or any part thereof, without prejudice to the right of Beneficiary thereafter to enforce any appropriate remedy against Grantor. Beneficiary shall have the right to pursue all remedies afforded to a Beneficiary under applicable law, and shall have the benefit of all of the provisions of such applicable law, including all amendments thereto which may become effective from time to time after the date hereof. Sale of Personal Property. Beneficiary and/or Trustee, as required by (h) applicable law, shall have the discretionary right to cause some or all of the Property, which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law. (i) For purposes of this power of sale, Beneficiary and/or Trustee, as required by applicable law, may elect to treat as personal property any Property which is intangible or which can be severed from the Premises or Improvements without causing structural damage. If it chooses to do so, Beneficiary and/or Trustee, as required by applicable law, may dispose of any personal property, in any manner permitted by Article 9 of the Uniform Commercial Code of the state in which the Property is located, including any public or private sale, or in any manner permitted by any other applicable law. II II II II II 111111 111111 !:~:~~~f.21P Chris C. Munoz PuebloCtyClk&Rec TD R 141.00 D 0.00 (ii) In connection with any sale or other disposition of such Property, Grantor agrees that the following procedures constitute a commercially reasonable sale: Beneficiary shall mail written notice of the sale to Grantor not later than thirty (30) days prior to such sale. Beneficiary will publish notice of the sale in a local daily newspaper of general circulation. Upon receipt of any written request, Beneficiary will make the Property available to any bona fide prospective purchaser for inspection during reasonable business hours. Without limiting any other provisions of this Deed of Trust, Beneficiary and/or Trustee, as required by applicable law, shall have the right to conduct any such sale on Grantor's Property, and Beneficiary and/or Trustee, as required by applicable law, shall have such right of possession of the Property as shall be necessary or convenient for such purpose or any other purpose under this Section 6.3. Beneficiary and/or Trustee, as required by applicable law, may sell the Property without giving any warranties relating to title, possession, quiet enjoyment, merchantability, fitness or the like as to the Property and may specifically disclaim any warranties, which shall not be considered to adversely affect the commercial reasonableness of any sale of the Property. Beneficiary and/or Trustee, as required by applicable law, has no obligation to clean up or otherwise prepare the Property for sale. Notwithstanding, Beneficiary shall be under no obligation to consummate a sale if, in its judgment, none of the offers received by it equals the fair value of the Property offered for sale. The foregoing procedures do not constitute the only procedures that may be commercially reasonable. (i) Single or Multiple Foreclosure Sales. If the Property consists of more than one lot, parcel or item of property, Beneficiary and/or Trustee, as required by applicable law, may: (i) Designate the order in which the lots, parcels and/or items shall be sold or disposed of or offered for sale or disposition; and (ii) Elect to dispose of the lots, parcels and/or items through a single consolidated sale or disposition to be held or made under or in connection with judicial proceedings, or by virtue of a judgment and decree of foreclosure and sale; or through two or more such sales or dispositions; or in any other manner Beneficiary may deem to be in its best interests (any such sale or disposition, a "Foreclosure Sale;" and any two or more, "Foreclosure Sales"). If Beneficiary chooses to have more than one Foreclosure Sale, Beneficiary at its option may cause the Foreclosure Sales to be held simultaneously or successively, on the same day, or on such different days and at such different times and in such order as Beneficiary may deem to be in its best interests. No Foreclosure Sale shall terminate or affect the liens of this Deed of Trust on any part of the Property which has not been sold, until all of the Secured Obligations have been paid in full. II II 111111111111 Chris C. Munoz PuebloCtyClk&Rec TD 111111 ?:~:~~~f.2!P R 141.00 D 0.00 6.4. Credit Bids. At any Foreclosure Sale, any person, including Grantor or Beneficiary, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law. Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the sales price of the property against the following obligations: (a) First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Grantor is obligated to pay or reimburse Beneficiary and Trustee under Section 5.9 of this Deed of Trust; and (b) Second, all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose. 6.5. Application of Foreclosure Sale Proceeds. Beneficiary shall apply the proceeds of any Foreclosure Sale in the following manner: (a) First, to pay the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Grantor is obligated to reimburse Beneficiary or Trustee under Section 5.9 of this Deed of Trust; (b) Second, to pay the portion of the Secured Obligations attributable to any sums expended or advanced by Beneficiary under the terms of this Deed of Trust which then remain unpaid; (c) Third, to pay all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose; and (d) Fourth, to remit the remainder, if any, to the person or persons entitled to it. 6.6. Application of Rents and Other Sums. Beneficiary shall apply any and all Rents collected by it, and any and all sums other than proceeds of a Foreclosure Sale which Beneficiary may receive or collect under Section 6.3 above, in the following manner: (a) First, to pay the portion of the Secured Obligations attributable to the costs and expenses of operation and collection that may be incurred by Beneficiary or any receiver; (b) Second, to pay all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose; and (c) Third, to remit the remainder, if any, to the person or persons entitled to it. Beneficiary shall have no liability for any funds which it does not actually receive. 1111111111111111 111111 Chris C. Munoz PuebloCtyClk&Rec TD 7. ~~~~~~~21P R 141.00 D 0.00 The Trustee. 7.1. Certain Rights. With the approval of Beneficiary, Trustee shall have the right to take any and all of the following actions: (i) to select, employ and consult with counsel (who may be, but need not be, counsel for Beneficiary) upon any matters arising hereunder, including the preparation, execution and interpretation of the Loan Documents, and shall be fully protected in relying as to legal matters on the advice of counsel, (ii) to execute any of the trusts and powers hereof and to perform any duty hereunder either directly or through his or her agents or attorneys, (iii) to select and employ, in and about the execution of his or her duties hereunder, suitable accountants, engineers and other experts, agents and attorneys-in-fact, either corporate or individual, not regularly in the employ of Trustee (and Trustee shall not be answerable for any act, default, negligence, or misconduct of any such accountant, engineer or other expert, agent or attorney-in-fact, if selected with reasonable care, or for any error of judgment or act done by Trustee in good faith, or be otherwise responsible or accountable under any circumstances whatsoever, except for Trustee's gross negligence or bad faith), and (iv) any and all other lawful action that Beneficiary may instruct Trustee to take to protect or enforce Beneficiary's rights hereunder. Trustee shall not be personally liable in case of entry by Trustee, or anyone entering by virtue of the powers herein granted to Trustee, upon the Premises for debts contracted for or liability or damages incurred in the management or operation of the Premises. Trustee shall have the right to rely on any instrument, document, or signature authorizing or supporting any action taken or proposed to be taken by Trustee hereunder, believed by Trustee in good faith to be genuine. Trustee shall be entitled to reimbursement for expenses incurred by Trustee in the performance of Trustee's duties hereunder and to reasonable compensation for such of Trustee's services hereunder as shall be rendered. Grantor will, from time to time, pay the compensation due to Trustee hereunder and reimburse Trustee for, and save and hold Trustee harmless against, any and all liability and expenses which may be incurred by Trustee in the performance of Trustee's duties. 7 .2. Retention of Money. All moneys received by Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, and shall be segregated from any other moneys of Trustee. 7.3. Successor Trustees. Trustee may resign by the giving of notice of such resignation in writing to Beneficiary. If Trustee shall die, resign or become disqualified from acting in the execution of this trust, or if, for any reason, Beneficiary, in Beneficiary's sole discretion and with or without cause, shall prefer to appoint a substitute trustee or multiple substitute trustees, or successive substitute trustees or successive multiple substitute trustees, to act instead of the aforenamed Trustee, Beneficiary shall have full power to appoint a substitute trustee (or, if preferred, multiple substitute trustees) in succession who shall succeed (and if multiple substitute trustees are appointed, each of such multiple substitute trustees shall succeed) to all the estates, rights, powers and duties of the aforenamed Trustee. Such appointment may be executed by any authorized agent of Beneficiary, and if such Beneficiary be a corporation and such appointment be executed on its behalf by any officer of such corporation, such appointment shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the board of directors or any superior officer of the corporation. Grantor hereby ratifies and confirms any and all acts which the aforenamed Trustee, or his or her successor or successors in this trust, shall do lawfully by virtue hereof. If multiple substitute 3714 1111111111 IIIIII 111111 Chris C. Munoz PuebloCtyClk&Rec TD ~~=~~~f. R 141.00 D 0.00 trustees are appointed, each of such multiple substitute trustees shall be empowered and authorized to act alone without the necessity of the joinder of the other multiple substitute trustees, whenever any action or undertaking of such substitute trustees is requested or required under or pursuant to this Deed of Trust or applicable law. Any prior election to act jointly or severally shall not prevent either or both of such multiple substitute Trustees from subsequently executing, jointly or severally, any or all of the provisions hereof. Perfection of Appointment. Should any deed, conveyance, or instrument of any 7 .4. nature be required from Grantor by any Trustee or substitute Trustee to more fully and certainly vest in and confirm to Trustee or substitute Trustee such estates, rights, powers, and duties, then, upon request by Trustee or substitute trustee, any and all such deeds, conveyances and instruments shall be made, executed, acknowledged, and delivered and shall be caused to be recorded and/or filed by Grantor. 7 .5. Succession Instruments. Any substitute trustee appointed pursuant to any of the provisions hereof shall, without any further act, deed or conveyance, become vested with all the estates, properties, rights, powers, and trusts of its, his or her predecessor in the rights hereunder with like effect as if originally named as Trustee herein; but nevertheless, upon the written request of Beneficiary or of the substitute trustee, the Trustee ceasing to act shall execute and deliver any instrument transferring to such substitute trustee, upon the trusts herein expressed, all the estates, properties, rights, powers, and trusts of the Trustee so ceasing to act, and shall duly assign, transfer and deliver any of the property and moneys held by such Trustee to the substitute trustee so appointed in such Trustee's place. 7.6. No Representation by Trustee or Beneficiary. By accepting or approving anything required to be observed, performed, or fulfilled or to be given to Trustee or Beneficiary pursuant to the Loan Documents, neither Trustee nor Beneficiary shall be deemed to have warranted, consented to, or affirmed the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision, or condition thereof, and such acceptance or approval thereof shall not be or constitute any warranty or affirmation with respect thereto by Trustee or Beneficiary. 8. Miscellaneous Provisions. 8.1. Additional Provisions. The Loan Documents fully state all of the terms and conditions of the parties' agreement regarding the matters mentioned in or incidental to this Deed of Trust. The Loan Documents also grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Grantor which apply to this Deed of Trust and to the Property. 8.2. No Waiver or Cure. (a) Each waiver by Beneficiary must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary to take action on account of any default of Grantor. Consent by Beneficiary to any act or omission by Grantor shall not be construed as a consent to any 21P 1111111111111111 111111 !:~=~~~f.21P R 141.00 D 0.00 Chris C. Munoz PuebloCtyClk&Rec TD other or subsequent act or omission or to waive the requirement for Beneficiary's consent to be obtained in any future or other instance. (b) If any of the events described below occurs, that event alone shall not: cure or waive any breach, Event of Default or notice of default under this Deed of Trust or invalidate any act performed pursuant to any such default or notice; or nullify the effect of any notice of default or sale (unless all Secured Obligations then due have been paid and performed and all other defaults under the Loan Documents have been cured); or impair the security of this Deed of Trust; or prejudice Beneficiary or any receiver in the exercise of any right or remedy afforded any of them under this Deed of Trust; or be construed as an affirmation by Beneficiary of any tenancy, lease or option, or a subordination of the lien of this Deed of Trust. (i) Trustee or Beneficiary, its agent or a receiver takes possession of all or any part of the Property in the manner provided in Subsection 6.3(c). (ii) Beneficiary collects and applies Rents as permitted under Sections 2.3 and 6.6 above, either with or without taking possession of all or any part of the Property. (iii) Beneficiary or Trustee receives and applies to any Secured Obligation any proceeds of any Property, including any proceeds of insurance policies, condemnation awards, or other claims, property or rights assigned to Beneficiary under Section 5.5 above. (iv) Beneficiary makes a site visit, observes the Property and/or conducts tests as permitted under Section 5.12 above. (v) Beneficiary or Trustee receives any sums under this Deed of Trust or any proceeds of any collateral held for any of the Secured Obligations, and applies them to one or more Secured Obligations. (vi) Beneficiary, Trustee or any receiver invokes any right or remedy provided under this Deed of Trust. 8.3. Powers of Beneficiary. (a) If Beneficiary performs any act which it is empowered or authorized to perform under this Deed of Trust, including any act permitted by Section 5.7 or Subsection 6.3(d) of this Deed of Trust, that act alone shall not release or change the personal liability of any person for the payment and performance of the Secured Obligations then outstanding, or the lien of this Deed of Trust on all or the remainder of the Property for full payment and performance of all outstanding Secured Obligations. The liability of the original Grantor shall not be released or changed if Beneficiary grants any successor in interest to Grantor any extension of time for payment, or modification of the terms of payment, of any Secured Obligation. Beneficiary shall not be required to comply with any demand by the original Grantor that Beneficiary refuse to grant such an II Ill 1111 I II 1111 II II II Chris C. Munoz PuebloCtyClkS.Rec TD 1698835 Page: 21 of 28 10/20/2006 03:21P R 141.00 D 0.00 extension or modification to, or commence proceedings against, any such successor in interest. (b) Beneficiary may take any of the actions permitted under Subsections 6.3(b) and/or 6.3(c) regardless of the adequacy of the security for the Secured Obligations, or whether any or all of the Secured Obligations have been declared to be immediately due and payable, or whether notice of default and election to sell has been given under this Deed of Trust. (c) From time to time, Beneficiary may apply to any court of competent jurisdiction for aid and direction in executing and enforcing the rights and remedies created under this Deed of Trust. Beneficiary may from time to time obtain orders or decrees directing, confirming or approving acts in executing and enforcing these rights and remedies. 8.4. Merger. No merger shall occur as a result of Beneficiary's acquiring any other estate in or any other lien on the Property unless Beneficiary consents to a merger in writing. 8.5. Joint and Several Liability. If Grantor consists of more than one person, each shall be jointly and severally liable for the faithful performance of all of Grantor's obligations under this Deed of Trust. 8.6. Applicable Law. The creation, perfection and enforcement of the lien and security interest of this Deed of Trust shall be governed by the law of the State in which the Property is located, except to the extent that the Uniform Commercial Code provides for the application of the laws of another state. Subject to the foregoing, in all other respects, this Deed of Trust shall be governed by the substantive laws of the State of Ohio. 8.7. Successors in Interest. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties. However, this Section 8.7 does not waive the provisions of Section 6.1 above. 8.8. Interpretation. (a) Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender. The captions of the sections of this Deed of Trust are for convenience only and do not define or limit any terms or provisions. The word "include(s)" means "include(s), without limitation," and the word "including" means "including, but not limited to." (b) The word "obligations" is used in its broadest and most comprehensive sense, and includes all primary, secondary, direct, indirect, fixed and contingent obligations. It further includes all principal, interest, prepayment charges, late charges, loan fees and any other fees and charges accruing or assessed at any time, as well as all obligations to perform acts or satisfy conditions. II II II II II 111111 1111 I ~~=~~~~,, Chris C. Munoz PuebloCtyClk&Rec TD R 141.00 D 0.00 (c) No listing of specific instances, items or matters in any way limits the scope or generality of any language of this Deed of Trust. The Exhibits to this Deed of Trust are hereby incorporated in this Deed of Trust. 8.9. In-House Counsel Fees. Whenever Grantor is obligated to pay or reimburse Beneficiary for any attorneys' fees, those fees shall include the allocated costs for services of in-house counsel. 8.10. Waiver of Statutory Rights. To the extent permitted by law, Grantor hereby agrees that it shall not and will not apply for or avail itself of any appraisement, valuation, stay, extension or exemption laws, or any so-called "Moratorium Laws," now existing or hereafter enacted, in order to prevent or hinder the enforcement or foreclosure of this Deed of Trust, but hereby waives the benefit of such laws. Grantor for itself and all who may claim through or under it waives any and all right to have the property and estates comprising the Property marshalled upon any foreclosure of the lien hereof and agrees that any court having jurisdiction to foreclose such lien may order the Property sold as an entirety. Grantor hereby waives any and all rights of redemption from sale under any judgment of foreclosure of this Deed of Trust on behalf of Grantor and on behalf of each and every person acquiring any interest in or title to the Property of any nature whatsoever, subsequent to the date of this Deed of Trust. The foregoing waiver of right of redemption is made pursuant to the provisions of applicable law. 8.11. Severability. If any provision of this Deed of Trust should be held unenforceable or void, that provision shall be deemed severable from the remaining provisions and shall in no way affect the validity of this Deed of Trust except that if such provision relates to the payment of any monetary sum, then Beneficiary may, at its option, declare all Secured Obligations immediately due and payable. 8.12. Notices. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three Business Days after mailing (c) if by Federal Express or other reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by telecopier on the day of transmission so long as copy is sent on the same day by overnight courier as set forth below: Grantor: Durant Shopping Center LLC Newton Shopping Center LLC Zachary Shopping Center LLC 5851 Ridge Bend Road Memphis, Tennessee 38120 Telephone (901) 685-2300 Facsimile (901) 685-2354 II II I II II I II II II Chris C. Munoz PuebloCtyClk&Rec TD Trustee: II II II !:~:~~~~ R 141.00 D 0.00 Public Trustee of Pueblo County, Colorado ~3o tv. VVtA-•N' 5...../ Telephone Facsimile 7 ( q - S" L( S' - 0 1!1 ( 1 , q - s '-t..:i"" - o e 2s- Beneficiary: KeyBank National Association 580 Walnut Street 2nd Floor Cincinnati, Ohio 45202 Attention: Kurt Reiber Telephone (513) 762-8215 Facsimile (513) 762-8450 With a copy to: Thompson Hine LLP 312 Walnut Street Suite 1400 Cincinnati, Ohio 45202 Attention: Stephen M. King Telephone (513) 352-6746 Facsimile (513) 241-4771 or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice. Any notice or demand delivered to the person or entity named above to accept notices and demands for Grantor shall constitute notice or demand duly delivered to Grantor, even if delivery is refused. 8.13. Future Advances. The total amount of indebtedness secured hereby may increase or decrease from time to time, but the total unpaid principal balance of indebtedness secured hereby (including disbursements that the Bank may, but shall not be obligated to, make under this Deed of Trust, the Loan Documents or any other document with respect thereto) at any one time outstanding may be substantially less but shall not exceed Two Million Two Hundred Fifty Thousand and 00/100 Dollars ($2,250,000.00), plus interest thereon, and any disbursements made for the enforcement of this Deed of Trust and any remedies hereunder, payment of taxes, special assessments, utilities or insurance on the Property and interest on such disbursements and all disbursements by Beneficiary pursuant to applicable law (all such indebtedness being hereinafter referred to as the maximum amount secured hereby). This Deed of Trust shall be valid and have priority to the extent of the maximum amount secured hereby over all subsequent liens and encumbrances, including statutory liens, excepting solely taxes and assessments levied on the Property given priority by law. 8.14. Beneficiary's Lien for Service Charge and Expenses. At all times, regardless of whether any Loan proceeds have been disbursed, this Deed of Trust secures (in addition to any 21. 1698835 Page: 24 of 28 10/20/2006 03:21P R 141.00 0 0.00 1111111111 111111 1111 II Chris C. Munoz PuebloCtyC!k&Rec TD Loan proceeds disbursed from time to time) the payment of any and all loan commissions, service charges, liquidated damages, expenses and advances due to or incurred by Beneficiary not to exceed the maximum amount secured hereby. For purposes hereof, all obligations of Grantor to Beneficiary under all Interest Rate Agreements and any indebtedness or obligation contained therein or evidenced thereby shall be considered an obligation of Grantor secured hereby. 8.15. WAIVER OF TRIAL BY JURY. GRANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY W AlVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS DEED OF TRUST, THE NOTES, OR ANY OF THE OTHER LOAN DOCUMENTS, THE LOAN OR ANY OTHER STATEMENTS OR ACTIONS OF GRANTOR OR BENEFICIARY. GRANTOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS DEED OF TRUST AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH LEGAL COUNSEL. GRANTOR FURTHER ACKNOWLEDGES THAT (i) IT HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (ii) THIS WAIVER IS A MATERIAL INDUCEMENT FOR BENEFICIARY TO MAKE THE LOAN, ENTER INTO THIS DEED OF TRUST AND EACH OF THE OTHER LOAN DOCUMENTS, AND (iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH OTHER LOAN DOCUMENTS AS IF FULLY INCORPORATED THEREIN. 8.16. Inconsistencies. In the event of any inconsistency between this Deed of Trust and the Loan Agreement, the terms hereof shall be controlling as necessary to create, preserve and/or maintain a valid security interest upon the Property, otherwise the provisions of the Loan Agreement shall be controlling. 8.17. Further Assurances. From time to time, as requested by Beneficiary, Grantor shall take such other action and execute and deliver to Beneficiary all other instruments, supplements, further assurances and security or other agreements as may be required or requested by Beneficiary in order to perfect and continue Beneficiary's lien and interest in the Property. Grantor hereby irrevocably appoints Beneficiary as its agent and attorney-in-fact to sign all such instruments, supplements, further assurances and security and other agreements. 8.18. Certain Matters Relating to Property Located in the State of Colorado. With respect to the Property which is located in the State of Colorado, notwithstanding anything contained hereinto the contrary: If requested by Beneficiary to foreclose the lien secured hereby, Trustee shall: (1) either personally or by agent give notice of the foreclosure sale as required by the Colorado Property Code as then amended; (2) sell and convey all or part of the property to the highest bidder for cash, after advertising the time, place and terms of said sale in accordance with the Colorado 1111111111111111 1111 Chris C. Munoz PuebloCtyClk&Rec TD II !:~~~~~~,. R 141.00 D 0.00 Property Code, with a general warranty binding Grantor, subject to prior liens and to other exceptions to conveyance and warranty; and (3) from the proceeds of the sale, pay, in this order; 1. expenses of foreclosure, including a commission to Trustee of 5% of the bid; n. to Beneficiary, the full amount of principal, interest, attorney's fees, and other charges due and unpaid; m. any amounts required by law to be paid before payment to Grantor; and IV. 8.19 to Grantor, any balance. Tax-Deferred Exchange Provisions. Intentionally omitted. IN WITNESS WHEREOF, Grantor has executed this Deed of Trust as of the date first above written. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 1111111111111111 111111 Chris C. Munoz PuebloCtyClk&Rec TD ~~=~~~~21P R 141 .00 D 0.00 IN WITNESS WHEREOF, Grantor has executed this Deed of Trust as of the date first above written. DURANT SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: By: Yl/!bf Its: Manager Organizational ID/Number: NEWTON SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: Man er By: Its: I H / ')..<.--'-t' . armer, III Manager Organizational ID/Number: ZACHARY SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its By Its: Mrt!! ~ Je~ Manager Organizational ID/Number: _ _ _ _ __ ;V/ortgage Pueblo West, CO 1111111111111111 111111 Chris C. Munoz PuebloCtyClk&Rec TD STATEOF ~ ,COUNTYOF ~ ~g=~~~f. R 141.00 D 0.00 )SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntaril~~.!_he f~?ing doc.for the purpose stated therein and in the capacity indicated: ~frt. ~ffiek ~ Notary Public Printed Name:lC-e._.t\-.~er My Comission Expires: ~ 0& f\ STATE OF My Commission Expires A1\ ( ' ~- April 29. 2008 ____,l,<:;;tJ'\-=~-=-----' COUNTY OF ~\J/.lb'cf fl ) SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily sig th for oing docume t for the purpose stated therein and in the capacity indicated: ---=f..'6;;4-."'~'--f-L-"---'-.I.LL.<l-LI_u_LI-----I~------ Notary Public Printed Name:·--m_s My Comission Expires: A. ~JEtQ ~ STATE OF A" My comrn~sston expires _:::;;.,;;~,.L-..:.__;;;;_---April-·!"t'irvNTY 0 F L{ ·d=CJ o<i:> 0 i~ cd1\tR.b1fr- ) SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily~ned th~ fo_regoing docJl!:t for the purpose stated therein and in the capacity indicated: f{\Xjy\.(J{ fP . . Date: ~r iI, 2006. Notary Public Printed Name: My Comission Expires: ne Mortgage A. \-btz1Uf)(= 4· JQ Of() Puehlo West, CO 21P 1111111111111111 111111 Chris C. Munoz PuebloCtyClk&Rec TD t:;:~~~~21P R 141.00 D 0.00 Exhibit A Parcel "A", Lot Line Vacation No. 2006 - 010 (formerly Lots 13 through 17, Block 2, Tract 240) according to the plat thereof filed for record October 3, 2006 Reception Number 1696395 in the Office of the Pueblo County Clerk & Recorder, County of Pueblo, State of Colorado. This document prepared by after recording return to: 1111111111111111 111111 Chris C. Munoz PuebloCtyClk&RecASN R ~;~?.~1L. R 51.00 D 0.00 Stephen M. King, Esq. Thompson Hine LLP 312 Walnut Street 14th Floor Cincinnati, Ohio 45202 ASSIGNMENT OF LEASES AND RENTS Project Commonly Known As "PUEBI~O WEST SHOPPING CENTER" THIS ASSIGNMENT OF LEASES AND RENTS (this "Assignment") made as of the day of October, 2006, is by DURANT SHOPPING CENTER LLC, a Delaware limited liability company, and NEWTON SHOPPING CENTER LLC, a Delaware limited liability company, and ZACHARY SHOPPING CENTER LLC, a Delaware limited liability company, each having an office at 5851 Ridge Bend Road, Memphis, Tennessee 38120 (collectively, the "Assignor"), in favor of KEYBANK NATIONAL ASSOCIATION, a national banking association, having an office at 580 Walnut Street, 2nd Floor, Cincinnati, Ohio 45202 its successors and assigns ("Assignee"). Jl RECITALS A. On or about the date hereof, Assignor and Assignee entered into that certain Project Loan Agreement ("Loan Agreement") whereby Assignee agreed to make a secured construction loan (the "Loan") available to Assignor in the maximum aggregate amount at any time outstanding not to exceed the sum of Two Million Two Hundred Fifty Thousand and 001100 Dollars ($2,250,000.00), to finance the development and construction of a 29,700 square foot shadow anchored strip Shopping Center with four (4) proposed retail spaces (the "Project"). The Project is legally described in Exhibit A attached hereto and made a part hereof. Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Loan Agreement. B. In connection with the Loan, Assignor has executed and delivered a promissory note (the "Note") in favor of Assignee of even date herewith in the amount of the Loan, payment of which is secured by (i) a Deed of Trust made by Assignor in favor of Assignee on the Project, and (ii) the other Loan Documents. C. Assignor is desirous of further securing to Assignee the performance of the terms, covenants and agreements hereof and of the Note, the Deed of Trust and the Loan Documents. AGREEMENTS NOW, THEREFORE, in consideration of the making of the Loan evidenced by the Note by Assignee to Assignor and for other good and valuable consideration, the receipt and Rental Assif!,nment EXHIBIT 18 Puehlo West. CO 1698836 Page: 2 of 10 10/20/2006 03:21P R 51.00 D 0.00 1111111111 111111 111111 Chris C. Munoz PuebloCtyClk&Rec ASN R sufficiency of which are hereby acknowledged, Assignor does hereby irrevocably, absolutely and unconditionally transfer, sell, assign, pledge and convey to Assignee, its successors and assigns, all of the right, title and interest of Assignor in and to: (a) any and all leases, licenses, rental agreements and occupancy agreements of whatever form now or hereafter affecting all or any part of the Project and any and all guarantees, extensions, renewals, replacements and modifications thereof (collectively, the "Leases"); and (b) all issues, profits, security or other deposits, revenues, royalties, accounts, rights, benefits and income of every nature of and from the Project, including, without limitation, minimum rents, additional rents, termination payments, bankruptcy claims, forfeited security deposits, damages following default and all proceeds payable under any policy of insurance covering loss of rents resulting from untenantability due to destruction or damage to the Project, together with the immediate and continuing right to collect and receive the same, whether now due or hereafter becoming due, and together with all rights and claims of any kind that Assignor may have against any Tenant, lessee or licensee under the Leases or against any other occupant of the Project (collectively, the "Rents"). TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns. IT IS AGREED that, notwithstanding that this instrument is a present, absolute and executed assignment of the Rents and of the Leases and a present, absolute and executed grant of the powers herein granted to Assignee, Assignor is hereby permitted, at the sufferance of Assignee and at its discretion, and is hereby granted a license by Assignee, to retain possession of the Leases and to collect and retain the Rents unless and until there shall be an "Event of Default" (as defined herein) under the terms of this Assignment or any of the other Loan Documents. Upon an Event of Default, the aforementioned license granted to Assignor shall automatically terminate without notice to Assignor, and Assignee may thereafter, without taking possession of the Project, take possession of the Leases and collect the Rents. Further, from and after such termination, Assignor shall be the agent of Assignee in collection of the Rents, and any Rents so collected by Assignor shall be held in trust by Assignor for the sole and exclusive benefit of Assignee and Assignor shall, within one (1) business day after receipt of any Rents, pay the same to Assignee to be applied by Assignee as hereinafter set forth. Furthermore, from and after such Event of Default and termination of the aforementioned license, Assignee shall have the right and authority, without any notice whatsoever to Assignor and without regard to the adequacy of the security therefor, to: (a) make application to a court of competent jurisdiction for appointment of a receiver for all or any part of the Project, as particularly set forth in the Deed of Trust; (b) manage and operate the Project, with full power to employ agents to manage the same; (c) demand, collect, receive and sue for the Rents, including those past due and unpaid; and (d) do all acts relating to such management of the Project, including, but not limited to, negotiation of new Leases, making adjustments of existing Leases, contracting and paying for repairs and replacements to the Improvements and to the fixtures, equipment and personal property located in the Improvements or used in any way in the operation, use and occupancy of the Project as in the sole subjective judgment and discretion of Assignee may be necessary to maintain the same in a tenantable condition, purchasing and paying for such additional furniture and equipment as in the sole subjective judgment of Assignee may be necessary to maintain a Rental Assignmellt 2 Pueblo West. CO IIIII III II 111111 1111 II Chris C. Munoz PuebloCt yCl k&Rec ASN R 1698836 Page: 3 of 10 10/20/2006 03:21P R 51 . 00 D 0. 00 proper rental income from the Project, employing necessary managers and other employees, purchasing fuel, providing utilities and paying for all other expenses incurred in the operation of the Project, maintaining adequate insurance coverage over hazards customarily insured against and paying the premiums therefor. Assignee shall apply the Rents received by Assignor from the Project, after deducting the costs of collection thereof, including, without limitation, attorneys' fees and a management fee for any management agent so employed, against amounts expended for repairs, upkeep, maintenance, service, fuel, utilities, taxes, assessments, insurance premiums and such other expenses as Assignee incurs in connection with the operation of the Project and against interest, principal, required escrow deposits and other sums which have or which may become due, from time to time, under the terms of the Loan Documents, in such order or priority as to any of the items so mentioned as Assignee, in its sole subjective discretion, may determine. The exercise by Assignee of the rights granted Assignee in this paragraph, and the collection of, the Rents and the application thereof as herein provided, shall not be considered a waiver by Assignee of any Event of Default under the Loan Documents or prevent foreclosure of any liens on the Project nor shall such exercise make Assignee liable under any of the Leases, Assignee hereby expressly reserving all of its rights and privileges under the Deed of Trust and the other Loan Documents as fully as though this Assignment had not been entered into. Without limiting the rights granted hereinabove, in the event Assignor shall fail to make any payment or to perform any act required under the terms hereof and such failure shall not be cured within any applicable grace or cure period, then Assignee may, but shall not be obligated to, without prior notice to or demand on Assignor, and without releasing Assignor from any obligation hereof, make or perform the same in such manner and to such extent as Assignee may deem necessary to protect the security hereof, including specifically, without limitation, appearing in and defending any action or proceeding purporting to affect the security hereof or the rights or powers of Assignee, performing or discharging any obligation, covenant or agreement of Assignor under any of the Leases, and, in exercising any of such powers, paying all necessary costs and expenses, employing counsel and incurring and paying attorneys' fees. Any sum advanced or paid by Assignee for any such purpose, including, without limitation, attorneys' fees, together with interest thereon at the Default Rate from the date paid or advanced by Assignee until repaid by Assignor, shall immediately be due and payable to Assignee by Assignor on demand and shall be secured by the Deed of Trust and by all of the other Loan Documents securing all or any part of the indebtedness evidenced by the Note. IT IS FURTHER AGREED that this Assignment is made upon the following terms, covenants and conditions: 1. This Assignment shall not operate to place responsibility for the control, care, management or repair of the Project upon Assignee, nor for the performance of any of the terms and conditions of any of the Leases, nor shall it operate to make Assignee responsible or liable for any waste committed on the Project by any Tenant or any other party or for any dangerous or defective condition of the Project or for any negligence in the management, upkeep, repair or control of the Project. Assignee shall not be liable for any loss sustained by Assignor resulting from Assignee's failure to let the Project or from any other act or omission of Assignee in managing the Project. Assignor shall and does hereby indemnify and hold Assignee harmless from and against any and all liability, loss, claim, demand or damage which may or might be incurred by reason of this Assignment, including, without limitation, claims or demands for Rental Assignment 3 Puehlo West, CO 1698836 Page: 4 of 10 10/20/2006 03:21P R 51.00 D 0.00 1111111111111111 111111 Chris C. Munoz PuebloCtyClkS.Rec ASN R security deposits from Tenants deposited with Assignor, and from and against any and all claims and demands whatsoever which may be asserted against Assignee by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants or agreements contained in any of the Leases. Should Assignee incur any liability by reason of this Assignment or in defense of any claim or demand for loss or damage as provided above, the amount thereof, including, without limitation, costs, expenses and attorneys' fees, together with interest thereof at the Default Rate from the date paid or incurred by Assignee until repaid by Assignor, shall be immediately due and payable to Assignee by Assignor upon demand and shall be secured by the Deed of Trust and by all of the other Loan Documents securing all or any part of the indebtedness evidenced by the Note. 2. possession. This Assignment shall not be construed as making Assignee a mortgagee in 3. Assignee is obligated to account to Assignor only for such Rents as are actually collected or received by Assignee. 4. Assignor hereby further presently and absolutely assigns to Assignee subject to the terms and provisions of this Assignment: (a) any award or other payment which Assignor may hereafter become entitled to receive with respect to any of the Leases as a result of or pursuant to any bankruptcy, insolvency or reorganization or similar proceedings involving any Tenant under such Leases; and (b) any and all payments made by or on behalf of any Tenant of any part of the Project in lieu of Rent. Assignor hereby irrevocably appoints Assignee as its attorney-in-fact to appear in any such proceeding and to collect any such award or payment, which power of attorney is coupled with an interest by virtue of this Assignment and is irrevocable so long as any sums are outstanding under the loan evidenced by the Note. All awards or payments so collected shall be applied to the indebtedness secured hereby in such order as Assignee shall elect. 5. Assignor represents, warrants and covenants to and for the benefit of Assignee: (a) that Assignor now is (or with respect to any Leases not yet in existence, will be immediately upon the execution thereof) the absolute owner of the landlord's interest in the Leases, with full right and title to assign the same and the Rents due or to become due thereunder; (b) that, other than this Assignment and any assignment to Assignee pursuant to the Deed of Trust there are no outstanding assignments of the Leases or Rents; (c) that no Rents have been anticipated, discounted, released, waived, compromised or otherwise discharged except for prepayment of rent of not more than one (I) month prior to the accrual thereof; (d) that there are no material defaults now existing under any of the Leases by the landlord or any Tenant, and there exists no state of facts which, with the giving of notice or lapse of time or both, would constitute a default under any of the Leases by the landlord or any Tenant, except as disclosed in writing to Assignee; (e) that Assignor has and shall duly and punctually observe and perform all covenants, conditions and agreements in the Leases on the part of the landlord to be observed and performed thereunder and (f) the Leases are in full force and effect and are the valid and binding obligations of Assignor, and, to the knowledge of Assignor, are the valid and binding obligations of each Tenant thereto. Rental Assiwunent 4 Pueblo West. CO 1698836 Page: 5 of 10 10/20/2006 03:21P R 51.00 0 0.00 II 11111111111111 111111 Chris C. Munoz PuebloCtyClkS.Rec ASN R 6. Assignor covenants and agrees that Assignor shall, at its sole cost and expense, appear in and defend any action or proceeding arising under, growing out of, or in any manner connected with the Leases or the obligations, duties or liabilities of the landlord or any Tenant thereunder, and shall pay on demand all costs and expenses, including, without limitation, attorneys' fees, which Assignee may incur in connection with Assignee's appearance, voluntary or otherwise, in any such action or proceeding, together with interest thereon at the Default Rate from the date incurred by Assignee until repaid by Assignor. 7. At any time, Assignee may, at its option, notify any Tenant or other parties of the existence of this Assignment. Assignor does hereby specifically authorize, instruct and direct each and every present and future tenant, lessee and licensee of the whole or any part of the Project to pay all unpaid and future Rents to Assignee upon receipt of demand from Assignee to so pay the same and Assignor hereby agrees that each such present and future Tenant, lessee and licensee may rely upon such written demand from Assignee to so pay said Rents without any inquiry into whether there exists an Event of Default hereunder or under the other Loan Documents or whether Assignee is otherwise entitled to said Rents. Assignor hereby waives any right, claim or demand which Assignor may now or hereafter have against any present or future tenant, lessee or licensee by reason of such payment of Rents to Assignee, and any such payment shall discharge such tenant's, lessee's or licensee's obligation to make such payment to Assignor. 8. Assignee may take or release any security for the indebtedness evidenced by the Note, may release any party primarily or secondarily liable for the indebtedness evidenced by the Note, may grant extensions, renewals or indulgences with respect to the indebtedness evidenced by the Note and may apply any other security therefor held by it to the satisfaction of any indebtedness evidenced by the Note without prejudice to any of its rights hereunder. 9. The acceptance of this Assignment and the collection of the Rents in the event Assignor's license is terminated, as referred to above, shall be without prejudice to Assignee. The rights of Assignee hereunder are cumulative and concurrent, may be pursued separately, successively or together and may be exercised as often as occasion therefor shall arise, it being agreed by Assignor that the exercise of any one or more of the rights provided for herein shall not be construed as a waiver of any of the other rights or remedies of Assignee, at law or in equity or otherwise, so long as any obligation under the Loan Documents remains unsatisfied. 10. All rights of Assignee hereunder shall inure to the benefit of its successors and assigns, and all obligations of Assignor shall bind its successors and assigns and any subsequent owner of the Project. All rights of Assignee in, to and under this Assignment shall pass to and may be exercised by any assignee of such rights of Assignee. Assignor hereby agrees that if Assignee gives notice to Assignor of an assignment of said rights, upon such notice the liability of Assignor to the assignee of the Assignee shall be immediate and absolute. Assignor will not set up any claim against Assignee or any intervening assignee as a defense, counterclaim or setoff to any action brought by Assignee or any intervening assignee for any amounts due hereunder or for possession of or the exercise of rights with respect to the Leases or the Rents. 11. It shall be an "Event of Default" hereunder (a) if any representation or warranty made herein by Assignor is determined by Assignee to have been false or misleading in any material respect at the time made, or (b) upon any failure by Assignor in the performance or Rental Assignment 5 Pueblo West, CO 1698836 Page: 6 of 10 10/20/2006 03:21P R 51.00 D 0.00 1111111111 111111 1111 II Chris C. Munoz PuebloCtyClk&Rec ASN R observance of any other covenant or condition hereof and the continuance of such failure for thirty (30) days after written notice thereof from Assignee to Assignor; provided, however, that if such failure is susceptible of cure but cannot reasonably be accomplished within said thirty (30) day period, then Assignor shall have an additional sixty (60) day period to cure such failure and no Event of Default shall be deemed to exist hereunder so long as Assignor commences such cure within the initial thirty (30) day period and diligently and in good faith pursues such cure to completion within such resulting ninety (90) day period from the date of Assignee's notice. Any such default not so cured shall be an "Event of Default" under each of the other Loan Documents, entitling Assignee to exercise any or all rights and remedies available to Assignee under the terms hereof or of any or all of the other Loan Documents, and any Event of Default under the other Loan Documents, or any default under any other Loan Document which is not cured within any applicable grace or cure period, shall be deemed an Event of Default hereunder subject to no grace or cure period, entitling Assignee to exercise any or all rights provided for herein. 12. Failure by Assignee to exercise any right which it may have hereunder shall not be deemed a waiver thereof unless so agreed in writing by Assignee, and the waiver by Assignee of any default hereunder shall not constitute a continuing waiver or a waiver of any other default or of the same default on any future occasion. No collection by Assignee of any Rents pursuant to this Assignment shall constitute or result in a waiver of any default then existing hereunder or under any of the other Loan Documents. 13. If any provision under this Assignment or the application thereof to any entity, person or circumstance shall be invalid, illegal or unenforceable to any extent, the remainder of this Assignment and the application of the provisions hereof to other entities, persons or circumstances shall not be affected thereby and shall be enforced to the fullest extent permitted by law. 14. This Assignment may not be amended, modified or otherwise changed except by a written instrument duly executed by Assignor and Assignee. 15. This Assignment shall be in full force and effect continuously from the date hereof to and until the payment, discharge, and performance of any and all indebtedness and obligations evidenced by the Note or secured or guaranteed by any of the Loan Documents, and the release of the Deed of Trust shall, for all purposes, automatically terminate this Assignment and render this Assignment null and void and of no effect whatsoever. 16. In case of a conflict between any provision of this Assignment and any provision of the other Loan Documents, the provision selected by Assignee in its sole subjective discretion shall prevail and be controlling. 17. All notices, demands, requests or other communications to be sent by one party to the other hereunder or required by law shall be given and become effective as provided in the Loan Agreement. 18. This Assignment shall be governed by and construed in accordance with the laws of the State in which the Project is located. Rental Assigmnent 6 f'uehlo West, CO 1111111111111111 111111 Chris C. Munoz PuebloCtyClk&RecASN R !:~~~~1t, R 51.00 D 0.00 19. This Assignment may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Assignment may be detached from any counterpart of this Assignment without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Assignment identical in form hereto but having attached to it one or more additional signature pages. 20. In addition to, but not in lieu of, any other rights hereunder, Assignee shall have the right to institute suit and obtain a protective or mandatory injunction against Assignor to prevent a breach or default, or to reinforce the observance, of the agreements, covenants, terms and conditions contained herein, as well as the right to damages occasioned by any breach or default by Assignor. 21. Assignor hereby covenants and agrees that Assignee shall be entitled to all of the rights, remedies and benefits available by statute, at law, in equity or as a matter of practice for the enforcement and perfection of the intents and purposes hereof. Assignee shall, as a matter of absolute right, be entitled, upon application to a court of applicable jurisdiction, and without notice to Assignor, to the appointment of a receiver to obtain and secure the rights of Assignee hereunder and the benefits intended to be provided to Assignee hereunder. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANKJ Rental Assignment 7 Pueh!o West, CO 1111111111111111 111111 Chris C. Munoz PuebloCt yCl k&Rec ASN R ~~=r.~1t,. R 51.00 0 0. 00 IN WITNESS WHEREOF, Assignor has executed this Assignment under seal as of the day and year first above written. DURANT SHOPPING CENTER LLC, a Delaware limited liability company JHF Property Holdings LLC, By: a Delaware limited liability company, Its: By: armer, III Manager Its: NEWTON SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware 'mited liability company, Its: By: armer, III Manager Its: ZACHARY SHOPPING CENTER LLC, a Delaware limited liability company By: JHF Property Holdings LLC, a Delaware limited liability company, Its: By: Its: Rental Assignment Manager 8 Pueblo West, ( '() STATEOF_ju ,COUNTYOF ~ )SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily signed the foregoing document for the purpose stated therein and in the capacity indicated: jQ. :.Bf2 -\-\ _:Jli1 CVY1:JC J1C Notary Public _ Printed Name: I re.-A. ~~-er My Comission Expires: «;} ==- f\ A• } .~ STATEOF "Yc:;::'::::a.""'*-p_,.}": ,COUNTYOF~/f )SS: I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily signed the foregoing doc,nt for the purpose .lJ!:: stated therein and in the capacity indicated: ~[ ~ tJ xa:mex-. Odc:ber Date: A,ugugt JL, 2006. otary Public rinted Name:'--lf£)-\. Bmi.t-ec y Comission Expires: 4· d-'1- 0 R STATE OF----::~"""""------ I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she voluntarily si ned t e fi reggjng document for the purpose stated therein and in the capacity indicated: --'-.1----'"--"ll--'---'--+---'-'-L.>....J-'-'--'-'-'~-1-Ll__----- Notary Public Printed Name: My Comission Expires: . 1tE A.Era uer ·OL MyCommissionExpires Aprll29,2008 Rental Assignment 9 4·3·~"1 1111111111111111 111111 Chris C Munoz PuebloCtyC!k&Rec ASN R ~~=r.~~t R 51.00 0 0.00 Pueh!o West, CO · 1P Exhibit A Parcel "A", Lot Line Vacation No. 2006 - 010 (formerly Lots 13 through 17, Block 2, Tract 240) according to the plat thereof filed for record October 3, 2006 Reception Number 1696395 in the Office of the Pueblo County Clerk & Recorder, County of Pueblo, State of Colorado. FIRST AMENDMENT TO MASTER CONSTRUCTION LOAN AGREEMENT THIS AMENDMENT TO MASTER STRUCTION LOAN AGREEMENT (the "Amendment") is made as of this 3D~ day _, 2006, by and between THE SPECTRA GROUP, INC., a Delaware corpor f n ("Spectra"), JEFF H. FARMER, JR. ("Farmer"), and KEYBANK NATIONAL ASSO IATION (the "Bank"), under the following circumstances: Pursuant to a Master Construction Loan Agreement datedD--Rt.H\iliQA <75, 2005, between Spectra, Farmer and the Bank (the "Loan Agreement"), the Bank made a $75,000,000.00 project loan facility (the "Loan") available to Farmer on the terms and conditions set forth in the Loan Agreement. B. Spectra, Farmer and the Bank hereby desire to amend the Loan Agreement to, among other things, extend the Project Loan Commitment Expiration Date, all under the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing premises, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Except as hereinafter specifically provided, all words in this Amendment beginning with capital letters which are not nonnally capitalized shall have the same meaning as set forth in the Loan Agreement. 2. Effective as of June 30, 2006, the Loan Agreement is hereby amended as follows: (a) The phrase "twelve (12)" contained in the defined term "Initial Project Maturity Date" in Section 2.1 of the Loan Agreement is hereby deleted and the phrase "eighteen (18)" is hereby inserted in its place. (b) The following changes are hereby made to the defined tenn "LIBOR Rate Margin" in Section 2.1 of the Loan Agreement: (i) The phrase "1.85% (one hundred and eighty-five basis points)" is hereby deleted and the phrase "1.75% (one hundred and seventy-five basis points)" is hereby inserted in its place. (ii) The phrase "I. 75% (one hundred and seventy-five basis points)" is hereby deleted and the phrase "1.65% (one hundred and sixty-five basis points)" is hereby inserted in its place. (iii) The phrase "2.35% (two hundred and thirty-five basis points)" is hereby deleted and the phrase "2.25% (two hundred and twenty-five basis points)" is hereby inserted in its place. EXHIBIT 19 (iv) The phrase "2.25% (two hundred and twenty-five basis points)" is hereby deleted and the phrase "2.15% (two hundred and fifteen basis points)" is hereby inserted in its place. The phrase "June 30, 2006" contained in the definition "Project Loan (c) Commitment Expiration Date" in Section 2.1 of the Loan Agreement is hereby deleted and the phrase "July 2, 2007" is hereby inserted in its place. The number "75%" contained in the definition "Required Leases" in (d) Section 2.1 of the Loan Agreement is hereby deleted and the number "60%" is inserted in its place. (e) The definition of "Total Annual Debt Service" contained in Section 2.1 of the Loan Agreement is hereby deleted and the following is inserted in its place: The aggregate of Debt Service Payments for a 12-month period on the stated principal amount of any particular Project Loan, assuming, (i) a per annum interest rate (herein, "Assumed Rate") equal to the yield on 10-year United States Treasury Notes as of the close of business on the date preceding the date of calculation, as announced on Bloomberg.com or another reliable source selected by Lender, plus the published Key Commercial Mortgage spread for "shadow anchored retail" plus 100 basis points, and (ii) monthly payments of principal and interest based on an amortization period of thirty (30) years. (f) The number "$4,800,000.00" contained in Section 4.2(b) of the Loan Agreement is hereby deleted and the number "$5,000,000.00" is hereby inserted in its place. Section 4.2(c) of the Loan Agreement is hereby deleted and the following (g) provision is hereby inserted in its place as new Section 4.2(c): The Project shall be 60% pre-leased with tenants acceptable to Lender and generate a "Debt Service Coverage Ratio" of not less than 1.00:1.00 based upon (i) the actual rental income provided under the leases meeting the pre-leasing requirement, (ii) an assumed interest rate of 7.18% per annum, and (iii) interest-only payments on the debt. Section 4.2( e) of the Loan Agreement is hereby deleted and the following (h) provision is hereby inserted in its place as new Section 4.2( e): Such Project shall generate a "Debt Service Coverage Ratio" of not less than 1.20: 1.00, based upon such Borrower's pro fonna operating statement for such Project (as approved by Lender in its sole discretion with such assumptions consistent with Lender's assumptions when underwrjting take out loans). The Appraisal for such Project must support Borrower's pro fonna rent and expense statement. (i) The phrase "eighty percent (80%)" contained in Section 4.2(g) of the Loan Agreement is hereby deleted and the phrase "eight-five percent (85%)" is hereby inserted in its place. (j) The phrase "25 basis points (.25%)" contained in Section 4.4(b )(iv) of the Loan Agreement is hereby deleted and the phrase "12.5 basis points (.125%)" is hereby inserted in its place. (k) Section 4.4(b)(vi) of the Loan Agreement 1s hereby deleted and the following is hereby inserted in its place as new Section 4.4(b )(vi): For the Extended Term, the Debt Service Coverage Ratio is not less than 1.20:1.00 based on the actual rental income provided under the Leases for the Project. (I) The phrase "eighty percent (80%)" contained in Section 4.5(b) of the Loan Agreement is hereby deleted and the phrase "eighty-five percent (85%)" is hereby inserted in its place. (m) Section 4.5(c) is hereby deleted and the following provision is hereby inserted in its place as new Section 4.5(c): The Project relating to the Project Loan for which such transfer is requested shall generate a Debt Service Coverage Ratio of not less than 1.00:1.00 based upon the actual rental income provided by the Leases for the Project. (n) Section 4.5( d) of the Loan Agreement is hereby deleted and the following is inserted in its place as new Section 4.5(d): Upon inclusion of the Project Loan for such Project in the Stabilized Tranche, the Debt Service Coverage Ratio for all Projects in the Stabilized Tranche in the aggregate shall be not less than 1.15:1.00 based upon (i) actual income provided by the Leases for all such aggregated Projects, and (ii) the higher of annualized actual expenses or pro forma expenses as shown on the Budget when the Project Loan was approved, shall be used in detennining Net Operating Income. (o) The phrase "eighty percent (80%)" contained in Section 4.5(e) of the Loan Agreement is hereby deleted and the phrase "sixty-five percent (65°/t>)" is hereby inserted in its place. (p) The phrase "eight-five percent (85%)" contained in Section 4.5(f) of the Loan Agreement is hereby deleted and the phrase "seventy-five percent (75%)" is hereby inserted in its place. (q) The number "$1,500,000.00" contained in Section 4.10 of the Loan Agreement is hereby deleted and the number "$2,250,000.00" is hereby inserted in its place, and the phrases "fifty percent (50%)" and "sixty percent (60%)" contained in Section 4.10 of the Loan Agreement are hereby deleted and the phrases "sixty percent (60%)" and "seventy percent (70%)" are hereby inserted in their places, respectively. (r) The phrase ".5% percent" contained in Section 7.3 of the Loan Agreement is hereby deleted and the phrase ".25%" is hereby inserted in its place. (s) In Section 8.1(a) of the Loan Agreement, the numbers "20%" and "40%" are hereby deleted and the numbers "15%" and "30%" are inserted in their place, respectively. (t) The ratio "1.25: 1" contained in Section 8.1 (v) of the Loan Agreement is hereby deleted and the ratio "1.20: 1" is inserted in its place. (u) In Section 8.1 (w) of the Loan Agreement, the numbers "$10,000,000.00" and "$1 ,500,000.00" are hereby deleted and the numbers "$20,000,000.00" and "$2,000,000" are hereby inserted in their place, respectively. (v) The word "closed" contained in (ii) of the last sentence of the third paragraph of Section 10.2 of the Loan Agreement is hereby deleted and the phrase "signed a noncontingent agreement for" is hereby inserted in its place. (w) Section 13.l(d) of the Loan Agreement following provision is inserted in its place as new Section 13.1 (d): IS hereby deleted and the Borrower shall have executed a certificate to Lender that all Tenants have accepted their premises and there are no defaults or events or facts which through the passage of time will become defaults with respect to Borrower or Tenants under the Leases. (x) The following phrase is added to the end of Section 13.1(e) ofthe Loan Agreement: ... unless the title company will issue a title policy brought to current date with the survey exception deleted without such survey being completed. (y) The dates "December 31, 2005", "January 31, 2006" and "April 30, 2006" contained in Section 15.1 (gg) of the Loan Agreement are hereby deleted and the dates "December 31, 2006", "January 31, 2007" and "April 30, 2007" are hereby inserted in their place, respectively. I (z) The phrase "28 properties listed on the engagement letter with the existing buyer which Developer is willing to accept" contained in (i) of the first sentence of Section 15.1 (gg) of the Loan Agreement is hereby deleted and the phrase "all Projects held within the Stabilized Tranche" is hereby inserted in its place. (aa) The phrase "the above-referenced 28 properties" contained in the fourth sentence of Section 15.1 (gg) of the Loan Agreement is here deleted and the phrase "all Projects held within the Stabilized Tranche" is hereby inserted in its place. (bb) Schedule I attached to the Loan Agreement is hereby deleted and the Schedule 1 attached to this Amendment is hereby inserted in its place. (cc) The name "John Bertleff' contained as the addressee in the LIBOR Notice Election on Exhibit C to the Loan Agreement is hereby deleted and the name "Melanie Omas" is hereby inserted in its place and in every place in Exhibit C where such name occurs. 3. Notwithstanding anything herein to the contrary, the Bank may elect to close and commence disbursements under a Project Loan which meets the sixty percent (60%) pre-leasing requirements under Section 4.2(c) of the Loan Agreement even if the Project Loan as a whole does not meet the 1.00:1.00 Debt Service Coverage Ratio set forth in Section 4.2( c). In such event, the Bank shall not be obligated to disburse any portion of such Project Loan to the extent the Debt Service Coverage Ratio in Section 4.2( c) would not be met, and shall be entitled to hold back such portion of such Project Loan. Upon substantial completion of the shell of the improvements for a Project Loan with respect to which there is a holdback described above, if the Debt Service Coverage Ratio in Section 4.2(c) is still not met as to such entire Project Loan, Borrower shall be obligated to deposit with the Bank sufficient additional equity in order that such Debt Service Coverage Ratio is met as to such entire Project Loan and bring the Project Loan into balance. Spectra, Farmer and the Bank acknowledge and agree that all existing, 4. outstanding Project Loans shall, effective as of July 1, 2006, bear interest at the Applicable Rate as set forth in the Loan Agreement, as amended hereby. 5. The Bank, Spectra and Fam1er all agree that the Project Loans relating to Alice Shopping Center, Bad Axe Shopping Center, Douglas Shopping Center, Mustang Shopping Center are hereby extended through and until July 2, 2007. 6. The Bank, Spectra and Farmer agree and acknowledge that the Bank is currently requiring three inspections of each Project with respect to any Project Loan, one at completion of foundation, one at shell completion and one at substantial completion. 7. In connection with a Project, a Borrower may be required to post one or more letters of credit as security for completion of utility facilities, streets or other public improvements. At a Borrower's request, the Bank may issue such letter of credit subject to the following: (i) Borrower's obligation to repay any amounts advanced under such letter of credit will be evidenced and secured by such documents, agreements, pledges, mortgages, guarantees or other documents requested in the sole discretion of the Bank. Upon issuance of a letter of credit, the Bank will hold back that (ii) portion of the Project Loan equal to the stated amount of the letter of credit and funds held back will be advanced only when (and if) the letter of credit is drawn upon, and may not be advanced for any other purpose as long as the letter of credit is outstanding. (iii) Such Borrower will pay a per annum letter of credit fee equal to 1.0% of the stated amount of the letter of credit plus the Bank's standard issuance and amendment cost. 8. All the terms and provisions of the Loan Agreement, except as hereby amended, are hereby ratified and confirmed. 9. Spectra and Farmer hereby represent, warrant, covenant and agree, on behalf of themselves and all of the Borrowers, the Loan Agreement, as modified hereby, remains otherwise unmodified and in full force and effect and that Spectra, Farmer and each Borrower has no cause of action at law or in equity against the Bank, including, without limitation, any offset, counterclaim or defense with respect to the Loan Agreement or any of the documents or instruments entered into in connection with the Loan Agreement or any Project. 10. Farmer, as Guarantor of each Project Loan, hereby consents to the modification of the Loan Agreement as set forth herein, reaffirms each and every Guaranty executed by Farmer, and represents, warrants, and covenants to the Bank that Farmer and Spectra has no cause of action at law or in equity against the Bank including, without limitation, any offset, counterclaim or defense with respect to any of the obligations under the Loan Agreement, Project Agreements, Notes or any other document executed and delivered in connection therewith. WITNESS the execution hereof as of the date first written above. IATION 5968664

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