Common use of Warranties of Grantor Clause in Contracts

Warranties of Grantor. Grantor, for itself and its successors and assigns, does hereby represent, warrant and covenant to and with Grantee, its successors and assigns, that: (a) Grantor has good and marketable fee simple title to the Property, subject only to those matters expressly set forth as exceptions to or subordinate matters in the title insurance policy insuring the lien of this Security Deed which Grantee has agreed to accept, excepting therefrom all preprinted and/or standard exceptions (the "Permitted Exceptions"), and has full power and lawful authority to grant, bargain, sell, convey, assign, transfer and mortgage its interest in the Property in the manner and form hereby done or intended. Grantor will preserve its interest in and title to the Property and will forever warrant and defend the same to Grantee against any and all claims whatsoever and will forever warrant and defend the validity and priority of the lien and security interest created herein against the claims of all persons and parties whomsoever, subject to the Permitted Exceptions. The foregoing warranty of title shall survive the foreclosure of this Security Deed and shall inure to the benefit of and be enforceable by Grantee in the event Grantee acquires title to the Property pursuant to any foreclosure; (b) No bankruptcy or insolvency proceedings are pending or contemplated by Grantor or, to the best knowledge of Grantor, against Grantor or by or against any endorser or cosigner of the Note, or any guarantor or indemnitor under any guaranty or indemnity agreement executed in connection with the Note of the loan evidenced thereby and secured hereby; (c) To the best of Grantor's knowledge, all reports, certificates, affidavits, statements and other data furnished by or on behalf of Grantor to Grantee in connection with the loan evidenced by the Note are true and correct in all material respects and do not omit to state any fact or circumstance necessary to make the statements contained therein not misleading; (d) The execution, delivery and performance of this Security Deed, the Note and all of the other Loan Documents have been duly authorized by all necessary action to be, and are, binding and enforceable against Grantor in accordance with the respective terms thereof and do not contravene, result in a breach of or constitute (upon the giving of notice or the passage of time or both) a default under the partnership agreement, articles of incorporation or other organizational documents of Grantor or any contract or agreement of any nature to which Grantor is a party or by which Grantor or any of its property may be bound and do not violate or contravene any law, order, decree, rule or regulation to which Grantor is subject; (e) The Real Estate and the Improvements, and the intended use thereof by Grantor comply in all material respects with all applicable restrictive covenants, zoning ordinances, subdivision and building codes, flood disaster laws, applicable health and environmental laws and regulations and all other ordinances, orders or requirements issued by any state, federal or municipal authorities having or claiming jurisdiction over the Property. The Real Estate and Improvements constitute one or more separate tax parcels for purposes of ad valorem taxation. The Real Estate and Improvements do not require any rights over, or restrictions against, other property in order to comply with any of the aforesaid governmental ordinances, orders or requirements other than Permitted Exceptions. (f) All utility services necessary and sufficient for the full use, occupancy, operation and disposition of the Real Estate and the Improvements for their intended purposes are available to the Property, including water, storm sewer, sanitary sewer, gas, electric, cable and telephone facilities, through public rights-of-way or perpetual private easements; (g) All streets, roads, highways, bridges and waterways necessary for access to and full use, occupancy, operation and disposition of the Real Estate and the Improvements have been completed, have been dedicated to and accepted by the appropriate municipal authority and are open and available to the Real Estate and the Improvements without further condition or cost to Grantor or served by a perpetual private easement reflected in the Permitted Exceptions; (h) All curb cuts, driveways and traffic signals shown on the survey delivered to Grantee prior to the execution and delivery of this Security Deed are existing and have been fully approved by the appropriate governmental authority; (i) To the best of Grantor's knowledge, there are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or threatened against or affecting Grantor, (and, if Grantor is a partnership, any of its general partners) or the Property which, if adversely determined, would materially impair either the Property or Grantor's ability to perform the covenants or obligations required to be performed under the Loan Documents; (j) The Property is free from delinquent water charges, sewer rents, taxes and assessments; (k) As of the date of this Security Deed, the Property is free from unrepaired damage caused by fire, flood, accident or other casualty; (l) As of the date of this Security Deed, no part of the Real Estate or the Improvements has been taken in condemnation, eminent domain or like proceeding nor is any such proceeding pending or to Grantor's knowledge and belief, threatened or contemplated; (m) Grantor possesses all franchises, patents, copyrights, trademarks, trade names, licenses and permits adequate for the conduct of its business substantially as now conducted; (n) To the best of Grantor's knowledge, the Improvements are structurally sound, in good repair and free of defects in materials and workmanship and have been constructed and installed in substantial compliance with the plans and specifications relating thereto, ordinary wear and tear excepted. All major building systems located within the Improvements, including, without limitation, the heating and air conditioning systems and the electrical and plumbing systems, are in good working order and condition, ordinary wear and tear excepted; (o) Grantor has delivered to Grantee true, correct and complete copies of all Contracts and all amendments thereto or modifications thereof; (p) Each Contract constitutes the legal, valid and binding obligation of Grantor and, to the best of Grantor's knowledge and belief, is enforceable against any other party thereto. To the best of Grantor's knowledge, no default exists, or with the passing of time or the giving of notice or both would exist, under any Contract which would, in the aggregate, have a material adverse effect on Grantor or the Property; (q) No Contract provides any party with the right to obtain a lien or encumbrance upon the Property superior to the lien of this Security Deed other than Permitted Exceptions; (r) Grantor and the Property are free from any delinquent obligations for sales and payroll taxes; (s) There are no security agreements or financing statements affecting any of the Property other than (i) as disclosed in writing by Grantor to Grantee prior to the date hereof and (ii) the security agreements and financing statements created in favor of Grantee; and (t) The Property forms no part of any property owned, used or claimed by Grantor as a residence or business homestead and is not exempt from forced sale under the laws of the State of Georgia. Grantor hereby disclaims and renounces each and every claim to all or any portion of the Property as a homestead. (u) The Permitted Exceptions do not and will not materially and adversely affect (1) the ability of Grantor to pay in full the principal and interest on the Note in a timely manner or (2) the use of the Property for the use currently being made thereof, the operation of the Property as currently being operated or the value of the Property. (v) Grantor shall take all action necessary to assure that Grantor's computer based systems are able to operate and effectively process data, including dates on and after January 1, 2000 and at the request of Grantee, Grantor shall provide Grantee with assurance acceptable to Grantee of Grantor's Year 2000 compatibility.

Warranties of Grantor. Grantor, for itself and its successors and assigns, does hereby represent, warrant and covenant to and with GranteeBeneficiary, its successors and assigns, that: (a) Grantor has good good, marketable and marketable indefeasible fee simple title to the Real Property, subject only to those matters expressly set forth as exceptions to or subordinate matters in the title insurance policy insuring the lien of this Security Deed which Grantee has agreed to acceptof Trust delivered as of the date hereof (the "Title Insurance Policy"), excepting therefrom all preprinted and/or standard exceptions (such items being the "Permitted ExceptionsEncumbrances"), and has full power and lawful authority to grant, bargain, sell, convey, assign, transfer transfer, encumber and mortgage its interest in the Trust Property in the manner and form hereby done or intended. Grantor will preserve its interest in and title to the Real Property and will forever warrant and defend the same to Grantee Beneficiary against any and all claims whatsoever and will forever warrant and defend the validity and priority of the lien and security interest created herein against the claims of all persons and parties whomsoever, subject to the Permitted ExceptionsEncumbrances. The foregoing warranty of title shall survive the foreclosure of this Security Deed of Trust and shall inure to the benefit of and be enforceable by Grantee Beneficiary in the event Grantee Beneficiary acquires title to or ownership of the Trust Property pursuant to any foreclosure; (b) No bankruptcy or insolvency proceedings are pending or contemplated by Grantor or, to the best knowledge of Grantor, against Grantor or by or against any endorser or cosigner of the NoteNote or of any portion of the Debt, or any guarantor or indemnitor under any guaranty the Indemnity Agreement and the Environmental Indemnity Agreement or indemnity agreement executed in connection with the Note of the loan evidenced thereby and secured herebyhereby (the "Indemnitor"); (c) To the best of Grantor's knowledge, all reports, All written certificates, affidavits, written affidavits and written statements and other data furnished made by or on behalf of Grantor to Grantee Beneficiary in connection with the loan evidenced by the Note are true and correct in all material respects and do not omit to state any fact or circumstance necessary to make the statements contained therein not materially misleading; (d) The execution, delivery and performance of this Security DeedDeed of Trust, the Note and all of the other Loan Documents have been duly authorized by all necessary action to be, and are, binding and enforceable against Grantor in accordance with the respective terms thereof and do not in any material respect contravene, result in a breach of or constitute a default (nor upon the giving of notice or the passage of time or bothboth will same constitute a default) a default under the partnership agreement, articles of incorporation incorporation, operating agreement or other organizational documents of Grantor or any material contract or agreement of any nature to which Grantor is a party or by which Grantor or any of its property may be bound and do not violate or contravene in any material respect any law, order, decree, rule or regulation to which Grantor is subject; (e) The Real Estate Grantor is not required to obtain any consent, approval or authorization from or to file any declaration or statement with, any governmental authority or agency in connection with or as a condition to the execution, delivery or performance of this Deed of Trust, the Note or the other Loan Documents which has not been so obtained or filed; (f) Grantor has obtained or made all necessary (i) consents, approvals and authorizations and registrations and filings of or with all governmental authorities or agencies and (ii) consents, approvals, waivers and notifications of partners, stockholders, members, creditors, lessors and other non-governmental persons and/or entities, in each case, which are required to be obtained or made by Grantor in connection with the Improvementsexecution and delivery of, and the performance by Grantor of its obligations under, the Loan Documents; (g) Grantor is not an "investment company", or a company "controlled" by an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended; (h) No part of the proceeds of the indebtedness secured hereby will be used for the purpose of purchasing or acquiring any "margin stock" within the meaning of Regulation T, U or X of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulation T, U or X or any other Regulations of such Board of Governors, or for any purpose prohibited by legal requirements or by the terms and conditions of the Loan Documents; (i) Grantor and, if Grantor is a partnership, any general partner of Grantor, has filed all federal, state and local tax returns required to be filed as of the date hereof and has paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by Grantor and its general partner, if any as of the date hereof. Grantor and its general partners, if any, believe that their respective tax returns properly reflect the income and taxes of Grantor and said general partners, if any, for the periods covered thereby, subject only to reasonable adjustments required by the Internal Revenue Service or other applicable tax authority upon audit; (j) Grantor is not an "employee benefit plan", as defined in section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), which is subject to Title I of ERISA and the assets of Grantor do not constitute "plan assets" of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101; (k) The Premises and the Improvements and the current intended use thereof by Grantor comply in all material respects with all applicable restrictive covenants, zoning ordinances, subdivision and building codes, flood disaster laws, applicable health and environmental laws and regulations and all other ordinances, orders or requirements issued by any state, federal or municipal authorities having or claiming jurisdiction over the Trust Property. The Real Estate Premises and Improvements constitute one or more separate tax parcels for purposes of ad valorem taxation. The Real Estate To the best of Borrower's knowledge, information and Improvements belief, the Premises and Imxxxxxxxxts do not require any rights over, or restrictions against, other property in order to comply with any of the aforesaid governmental ordinances, orders or requirements other than Permitted Exceptions.requirements; (fl) All utility services necessary and sufficient for the full use, occupancy, occupancy and operation and disposition of the Real Estate Premises and the Improvements for their current intended purposes are available to the Real Property, including water, storm sewer, sanitary sewer, gas, electric, cable and telephone facilities, through public rights-of-way or perpetual private easements; (gm) All streets, roads, highways, highways and bridges and waterways necessary for access to and full for the current use, occupancy, occupancy and operation and disposition of the Real Estate Premises and the Improvements have been completed, to the best of Grantor's knowledge, information and belief, have been dedicated to and accepted by the appropriate municipal authority and are open and available to the Real Estate Premises and the Improvements without further condition or cost to Grantor or served by a perpetual private easement reflected in the Permitted ExceptionsGrantor; (hn) All curb cuts, driveways and traffic signals (if any) shown on the survey delivered to Grantee Beneficiary prior to the execution and delivery of this Security Deed of Trust (the "Survey") are existing and, to the best of Grantor's knowledge, information and belief, have been fully approved by the appropriate governmental authority; (io) To the best of Grantor's knowledge, there There are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or threatened against or affecting Grantor, Grantor (andor, if Grantor is a partnershippartnership or a limited liability company, any of its general partnerspartners or members) or the Trust Property which, if adversely determined, would materially impair either have a material adverse effect on (a) the Property Trust Property, (b) the business, prospects, profits, operations or condition (financial or otherwise) of Grantor's , (c) the enforceability, validity, perfection or priority of the lien of any Loan Document, or (d) the ability of Grantor to perform the covenants or any obligations required to be performed under the any Loan DocumentsDocument (collectively, a "Material Adverse Effect"); (jp) The Trust Property is free from delinquent water charges, sewer rents, taxes and assessments; (kq) As of the date of this Security DeedDeed of Trust, the Trust Property is free from unrepaired material damage caused by fire, flood, accident or other casualty; (lr) As of the date of this Security DeedDeed of Trust, no part of the Real Estate Premises or the Improvements has been taken in condemnation, eminent domain or like proceeding nor is any such proceeding pending or or, to Grantor's knowledge and belief, threatened or contemplatedthreatened; (ms) Grantor possesses all material franchises, patents, copyrights, trademarks, trade names, licenses and permits adequate necessary for the conduct of its business substantially as now conducted; (nt) To Except as may otherwise be disclosed in the best Engineering Report of Grantor's knowledgethe Real Property entitled Property Condition Assessment, dated July 14, 2000, and prepared by Jones, Hill, McFarland & Ellis, (i) the Improvements are structurally sound, in good repair and free of defects in materials and workmanship and have been constructed and installed in substantial compliance with the plans and specifications relating thereto, ordinary wear and tear excepted. All major (xx) xxx mxxxx building systems located within the Improvements, including, without limitation, the heating and air conditioning systems and the electrical and plumbing systems, are in good working order and condition, ordinary wear and tear excepted; (ou) Grantor has delivered to Grantee Beneficiary true, correct and complete copies of all Contracts and all amendments thereto or modifications thereof; (pv) Each Contract constitutes the legal, valid and binding obligation of Grantor and, to the best of Grantor's knowledge and belief, is enforceable against any other party thereto. To the best of Grantor's knowledge, no No default exists, or with the passing of time or the giving of notice or both would exist, under any Contract which would, in the aggregate, have a material adverse effect on Grantor or the PropertyMaterial Adverse Effect; (q) No Contract provides any party with the right to obtain a lien or encumbrance upon the Property superior to the lien of this Security Deed other than Permitted Exceptions; (rw) Grantor and the Trust Property are free from any delinquent past due obligations for sales and payroll taxes; (sx) There are no security agreements or financing statements affecting all or any portion of the Trust Property of Grantor other than (i) as disclosed in writing by Grantor to Grantee Beneficiary prior to the date hereof and (ii) the security agreements and financing statements created in favor of Grantee; andLoan Documents; (ty) Grantor has delivered to Beneficiary a true, correct and complete copy of the Percentage Lease; (z) The Property forms no part Percentage Lease constitutes the legal, valid and binding obligation of any property ownedGrantor and, used to the best of Grantor's knowledge and belief, is enforceable against the tenant thereof. No default exists, or claimed with the passing of time or the giving of notice or both would exist, under the Percentage Lease which would, in the aggregate, have a Material Adverse Effect; (aa) The rents under the Percentage Lease have not been waived, released, or otherwise discharged or compromised; (bb) All work to be performed by Grantor as a residence or business homestead and is not exempt from forced sale under the laws Percentage Lease has been substantially performed, all contributions to be made by Grantor to the tenant thereunder have been made and all other conditions precedent to each such tenant's obligations thereunder have been satisfied; (cc) To the best of Grantor's knowledge and belief, the State tenant under the Percentage Lease is free from bankruptcy, reorganization or arrangement proceedings or a general assignment for the benefit of Georgia. Grantor hereby disclaims and renounces each and every claim creditors; (dd) There are no outstanding options or rights of first offer or refusal to purchase all or any portion of the Trust Property as a homestead.or Grantor's interest therein or ownership thereof; (uee) The Permitted Exceptions do Grantor is not a "foreign person" within the meaning of ss.1445(f)(3) of the Internal Revenue Code of 1986, as amended, and will not materially and adversely affect the related Treasury Department regulations, including temporary regulations; and (1ff) As of the ability date hereof, the sole shareholder of Grantor is Apple Suites, Inc., a Virginia corporation (the "REIT"). The REIT's interest in Grantor is owned by the REIT free 9 and clear of all mortgages, assignments, pledges and security interests and free and clear of all warrants, options and rights to pay purchase, except as otherwise consented to in full the principal and interest on the Note writing by Beneficiary, which such consent may be granted or withheld in a timely manner or (2) the use of the Property for the use currently being made thereof, the operation of the Property as currently being operated or the value of the PropertyBeneficiary's sole discretion. (v) Grantor shall take all action necessary to assure that Grantor's computer based systems are able to operate and effectively process data, including dates on and after January 1, 2000 and at the request of Grantee, Grantor shall provide Grantee with assurance acceptable to Grantee of Grantor's Year 2000 compatibility.

Warranties of Grantor. Grantor, for itself and its successors and assigns, does hereby represent, warrant and covenant to and with Grantee, its successors and assigns, that: (a) Grantor has good and marketable fee simple title to the Property, subject only to those matters expressly set forth as exceptions to or subordinate matters in the title insurance policy insuring the lien of this Security Deed which Grantee has agreed to accept, excepting therefrom all preprinted and/or standard exceptions (the "Permitted Exceptions"), and has full power and lawful authority to grant, bargain, sell, convey, assign, transfer and mortgage its interest in the Property in the manner and form hereby done or intended. Grantor will preserve its interest in and title to the Property and will forever warrant and defend the same to Grantee against any and all claims whatsoever and will forever warrant and defend the validity and priority of the lien and security interest created herein against the claims of all persons and parties whomsoever, subject to the Permitted Exceptions. The foregoing warranty of title shall survive the foreclosure of this Security Deed and shall inure to the benefit of and be enforceable by Grantee in the event Grantee acquires title to the Property pursuant to any foreclosure; (b) No bankruptcy or insolvency proceedings are pending or contemplated by Grantor or, to the best knowledge of Grantor, against Grantor or by or against any endorser or cosigner of the Note, or any guarantor or indemnitor under any guaranty or indemnity agreement executed in connection with the Note of the loan evidenced thereby and secured hereby; (c) To the best of GrantorXxxxxxx's knowledge, all reports, certificates, affidavits, statements and other data furnished by or on behalf of Grantor to Grantee in connection with the loan evidenced by the Note are true and correct in all material respects and do not omit to state any fact or circumstance necessary to make the statements contained therein not misleading; (d) The execution, delivery and performance of this Security Deed, the Note and all of the other Loan Documents have been duly authorized by all necessary action to be, and are, binding and enforceable against Grantor in accordance with the respective terms thereof and do not contravene, result in a breach of or constitute (upon the giving of notice or the passage of time or both) a default under the partnership agreement, articles of incorporation or other organizational documents of Grantor or any contract or agreement of any nature to which Grantor is a party or by which Grantor or any of its property may be bound and do not violate or contravene any law, order, decree, rule or regulation to which Grantor is subject; (e) The Real Estate and the Improvements, and the intended use thereof by Grantor comply in all material respects with all applicable restrictive covenants, zoning ordinances, subdivision and building codes, flood disaster laws, applicable health and environmental laws and regulations and all other ordinances, orders or requirements issued by any state, federal or municipal authorities having or claiming jurisdiction over the Property. The Real Estate and Improvements constitute one or more separate tax parcels for purposes of ad valorem taxation. The Real Estate and Improvements do not require any rights over, or restrictions against, other property in order to comply with any of the aforesaid governmental ordinances, orders or requirements other than Permitted Exceptions. (f) All utility services necessary and sufficient for the full use, occupancy, operation and disposition of the Real Estate and the Improvements for their intended purposes are available to the Property, including water, storm sewer, sanitary sewer, gas, electric, cable and telephone facilities, through public rights-of-way or perpetual private easements; (g) All streets, roads, highways, bridges and waterways necessary for access to and full use, occupancy, operation and disposition of the Real Estate and the Improvements have been completed, have been dedicated to and accepted by the appropriate municipal authority and are open and available to the Real Estate and the Improvements without further condition or cost to Grantor or served by a perpetual private easement reflected in the Permitted Exceptions; (h) All curb cuts, driveways and traffic signals shown on the survey delivered to Grantee prior to the execution and delivery of this Security Deed are existing and have been fully approved by the appropriate governmental authority; (i) To the best of Grantor's knowledge, there are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or threatened against or affecting Grantor, (and, if Grantor is a partnership, any of its general partners) or the Property which, if adversely determined, would materially impair either the Property or Grantor's ability to perform the covenants or obligations required to be performed under the Loan Documents; (j) The Property is free from delinquent water charges, sewer rents, taxes and assessments; (k) As of the date of this Security Deed, the Property is free from unrepaired damage caused by fire, flood, accident or other casualty; (l) As of the date of this Security Deed, no part of the Real Estate or the Improvements has been taken in condemnation, eminent domain or like proceeding nor is any such proceeding pending or to Grantor's knowledge and belief, threatened or contemplated; (m) Grantor possesses all franchises, patents, copyrights, trademarks, trade names, licenses and permits adequate for the conduct of its business substantially as now conducted; (n) To the best of GrantorXxxxxxx's knowledge, the Improvements are structurally sound, in good repair and free of defects in materials and workmanship and have been constructed and installed in substantial compliance with the plans and specifications relating thereto, ordinary wear and tear excepted. All major building systems located within the Improvements, including, without limitation, the heating and air conditioning systems and the electrical and plumbing systems, are in good working order and condition, ordinary wear and tear excepted; (o) Grantor has delivered to Grantee true, correct and complete copies of all Contracts and all amendments thereto or modifications thereof; (p) Each Contract constitutes the legal, valid and binding obligation of Grantor and, to the best of Grantor's knowledge and belief, is enforceable against any other party thereto. To the best of Grantor's knowledge, no default exists, or with the passing of time or the giving of notice or both would exist, under any Contract which would, in the aggregate, have a material adverse effect on Grantor or the Property; (q) No Contract provides any party with the right to obtain a lien or encumbrance upon the Property superior to the lien of this Security Deed other than Permitted Exceptions; (r) Grantor and the Property are free from any delinquent obligations for sales and payroll taxes; (s) There are no security agreements or financing statements affecting any of the Property other than (i) as disclosed in writing by Grantor to Grantee prior to the date hereof and (ii) the security agreements and financing statements created in favor of GranteeXxxxxxx; and (t) The Property forms no part of any property owned, used or claimed by Grantor as a residence or business homestead and is not exempt from forced sale under the laws of the State of Georgia. Grantor hereby disclaims and renounces each and every claim to all or any portion of the Property as a homestead. (u) The Permitted Exceptions do not and will not materially and adversely affect (1) the ability of Grantor to pay in full the principal and interest on the Note in a timely manner or (2) the use of the Property for the use currently being made thereof, the operation of the Property as currently being operated or the value of the Property. (v) Grantor shall take all action necessary to assure that GrantorXxxxxxx's computer based systems are able to operate and effectively process data, including dates on and after January 1, 2000 and at the request of Grantee, Grantor shall provide Grantee with assurance acceptable to Grantee of GrantorXxxxxxx's Year 2000 compatibility.

Warranties of Grantor. Grantor, for itself and its successors and assigns, does hereby represent, warrant and covenant to and with GranteeBeneficiary, its successors and assigns, that: (a) Grantor has good good, marketable and marketable indefeasible fee simple title to the Real Property, subject only to those matters expressly set forth as exceptions to or subordinate matters in the title insurance policy insuring the lien of this Security Deed which Grantee has agreed to acceptof Trust delivered as of the date hereof (the "Title Insurance Policy"), excepting therefrom all preprinted and/or standard exceptions (such items being the "Permitted ExceptionsEncumbrances"), and has full power and lawful authority to grant, bargain, sell, convey, assign, transfer transfer, encumber and mortgage its interest in the Trust Property in the manner and form hereby done or intended. Grantor will preserve its interest in and title to the Real Property and will forever warrant and defend the same to Grantee Beneficiary against any and all claims whatsoever and will forever warrant and defend the validity and priority of the lien and security interest created herein against the claims of all persons and parties whomsoever, subject to the Permitted ExceptionsEncumbrances. The foregoing warranty of title shall survive the foreclosure of this Security Deed of Trust and shall inure to the benefit of and be enforceable by Grantee Beneficiary in the event Grantee Beneficiary acquires title to or ownership of the Trust Property pursuant to any foreclosure; (b) No bankruptcy or insolvency proceedings are pending or contemplated by Grantor or, to the best knowledge of Grantor, against Grantor or by or against any endorser or cosigner of the NoteNote or of any portion of the Debt, or any guarantor or indemnitor under any guaranty or indemnity agreement the Indemnity and Guaranty Agreement and the Environmental Indemnity Agreement executed in connection with the Note of or the loan evidenced thereby and secured herebyhereby (the "Indemnitor"); (c) To the best of Grantor's knowledge, all reports, All written certificates, affidavits, written affidavits and written statements and other data furnished made by or on behalf of Grantor to Grantee Beneficiary in connection with the loan evidenced by the Note are true and correct in all material respects and do not omit to state any fact or circumstance necessary to make the statements contained therein not materially misleading; (d) The execution, delivery and performance of this Security DeedDeed of Trust, the Note and all of the other Loan Documents have been duly authorized by all necessary action to be, and are, binding and enforceable against Grantor in accordance with the respective terms thereof and do not in any material respect contravene, result in a breach of or constitute a default (nor upon the giving of notice or the passage of time or bothboth will same constitute a default) a default under the partnership agreement, articles of incorporation incorporation, operating agreement or other organizational documents of Grantor or any material contract or agreement of any nature to which Grantor is a party or by which Grantor or any of its property may be bound and do not violate or contravene in any material respect any law, order, decree, rule or regulation to which Grantor is subject; (e) The Real Estate Grantor is not required to obtain any consent, approval or authorization from or to file any declaration or statement with, any governmental authority or agency in connection with or as a condition to the execution, delivery or performance of this Deed of Trust, the Note or the other Loan Documents which has not been so obtained or filed; (f) Grantor has obtained or made all necessary (i) consents, approvals and authorizations and registrations and filings of or with all governmental authorities or agencies and (ii) consents, approvals, waivers and notifications of partners, stockholders, members, creditors, lessors and other non-governmental persons and/or entities, in each case, which are required to be obtained or made by Grantor in connection with the Improvementsexecution and delivery of, and the performance by Grantor of its obligations under, the Loan Documents; (g) Grantor is not an "investment company", or a company "controlled" by an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended; (h) No part of the proceeds of the indebtedness secured hereby will be used for the purpose of purchasing or acquiring any "margin stock" within the meaning of Regulation T, U or X of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulation T, U or X or any other Regulations of such Board of Governors, or for any purpose prohibited by legal requirements or by the terms and conditions of the Loan Documents; (i) Grantor and, if Grantor is a partnership, any general partner of Grantor, has filed all federal, state and local tax returns required to be filed as of the date hereof and has paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by Grantor and its general partner, if any as of the date hereof. Grantor and its general partners, if any, believe that their respective tax returns properly reflect the income and taxes of Grantor and said general partners, if any, for the periods covered thereby, subject only to reasonable adjustments required by the Internal Revenue Service or other applicable tax authority upon audit; (j) Grantor is not an "employee benefit plan", as defined in section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), which is subject to Title I of ERISA and the assets of Grantor do not constitute "plan assets" of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101; (k) The Premises and the Improvements and the current intended use thereof by Grantor comply in all material respects with all applicable restrictive covenants, zoning ordinances, subdivision and building codes, flood disaster laws, applicable health and environmental laws and regulations and all other ordinances, orders or requirements issued by any state, federal or municipal authorities having or claiming jurisdiction over the Trust Property. The Real Estate Premises and Improvements constitute one or more separate tax parcels for purposes of ad valorem taxation. The Real Estate To the best of Borrower's knowledge, information and Improvements belief, the Premises and Impxxxxxxxxs do not require any rights over, or restrictions against, other property in order to comply with any of the aforesaid governmental ordinances, orders or requirements other than Permitted Exceptions.requirements; (fl) All utility services necessary and sufficient for the full use, occupancy, occupancy and operation and disposition of the Real Estate Premises and the Improvements for their current intended purposes are available to the Real Property, including water, storm sewer, sanitary sewer, gas, electric, cable and telephone facilities, through public rights-of-way or perpetual private easements; (gm) All streets, roads, highways, highways and bridges and waterways necessary for access to and full for the current use, occupancy, occupancy and operation and disposition of the Real Estate Premises and the Improvements have been completed, to the best of Grantor's knowledge, information and belief, have been dedicated to and accepted by the appropriate municipal authority and are open and available to the Real Estate Premises and the Improvements without further condition or cost to Grantor or served by a perpetual private easement reflected in the Permitted ExceptionsGrantor; (hn) All curb cuts, driveways and traffic signals (if any) shown on the survey delivered to Grantee Beneficiary prior to the execution and delivery of this Security Deed of Trust (the "Survey") are existing and, to the best of Grantor's knowledge, information and belief, have been fully approved by the appropriate governmental authority; (io) To the best of Grantor's knowledge, there There are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or threatened against or affecting Grantor, Grantor (andor, if Grantor is a partnershippartnership or a limited liability company, any of its general partnerspartners or members) or the Trust Property which, if adversely determined, would materially impair either have a material adverse effect on (a) the Property Trust Property, (b) the business, prospects, profits, operations or condition (financial or otherwise) of Grantor's , (c) the enforceability, validity, perfection or priority of the lien of any Loan Document, or (d) the ability of Grantor to perform the covenants or any obligations required to be performed under the any Loan DocumentsDocument (collectively, a "Material Adverse Effect"); (jp) The Trust Property is free from delinquent water charges, sewer rents, taxes and assessments; (kq) As of the date of this Security DeedDeed of Trust, the Real Property is free from unrepaired material damage caused by fire, flood, accident or other casualty; (lr) As of the date of this Security DeedDeed of Trust, no part of the Real Estate Premises or the Improvements has been taken in condemnation, eminent domain or like proceeding nor is any such proceeding pending or or, to Grantor's knowledge and belief, threatened or contemplatedthreatened; (ms) Grantor possesses all material franchises, patents, copyrights, trademarks, trade names, licenses and permits adequate necessary for the conduct of its business substantially as now conducted; (nt) To the best of Grantor's knowledgeExcept as may otherwise be disclosed in that certain Property Condition Report dated March 7, 2001 (Draft), prepared by Dominion Environmental Group, (i) the Improvements are structurally sound, in good repair and free of defects in materials and workmanship and have been constructed and installed in substantial compliance with the plans and specifications relating thereto, ordinary wear and tear excepted. All (ii) all major building systems located within the Improvements, including, without limitation, the heating and air conditioning systems and the electrical and plumbing systems, are in good working order and condition, ordinary wear and tear excepted; (ou) Grantor has delivered to Grantee Beneficiary true, correct and complete copies of all Contracts and all amendments thereto or modifications thereof; (pv) Each Contract constitutes the legal, valid and binding obligation of Grantor and, to the best of Grantor's knowledge and belief, is enforceable against any other party thereto. To the best of Grantor's knowledge, no No default exists, or with the passing of time or the giving of notice or both would exist, under any Contract which would, in the aggregate, have a material adverse effect on Grantor or the PropertyMaterial Adverse Effect; (q) No Contract provides any party with the right to obtain a lien or encumbrance upon the Property superior to the lien of this Security Deed other than Permitted Exceptions; (rw) Grantor and the Trust Property are free from any delinquent past due obligations for sales and payroll taxes; (sx) There are no security agreements or financing statements affecting all or any portion of the Trust Property of Grantor other than (i) as disclosed in writing by Grantor to Grantee Beneficiary prior to the date hereof and (ii) the security agreements and financing statements created in favor of Grantee; andLoan Documents; (ty) Grantor has delivered to Beneficiary a true, correct and complete schedule (the "Rent Roll") of all Leases affecting the Trust Property as of the date hereof, which accurately and completely sets forth in all material respects for each such Lease, the following: the name of the Tenant, the lease expiration date, the base rent payable, the security deposit held thereunder and any other material provisions of such Lease; (z) No Tenant under any Lease has, as of the date hereof, paid rent more than thirty (30) days in advance, and the rents under such Leases have not been waived, released, or otherwise discharged or compromised; (aa) The Real Property forms no part of any property owned, used or claimed by Grantor as a its residence or business homestead and is not exempt from forced sale under and, to the laws of the State of Georgia. extent permitted by applicable law, Grantor hereby disclaims and renounces each and every claim to all that the Real Property is exempt from forced sale upon the occurrence and continuance of an Event of Default as a result of such Real Property being Grantor's residence or any portion homestead; (bb) Grantor is not a "foreign person" within the meaning of ss.1445(f)(3) of the Property Internal Revenue Code of 1986, as a homestead.amended, and the related Treasury Department regulations, including temporary regulations; and (ucc) The Permitted Exceptions do not and will not materially and adversely affect (1) the ability of Grantor to pay in full the principal and interest on the Note in a timely manner or (2) the use As of the Property for date hereof, Cornerstone Realty Income Trust, Inc., a Virginia corporation (the use currently being made thereof, "REIT") is the operation of the Property as currently being operated or the value of the Property. (v) Grantor shall take all action necessary to assure that Grantor's computer based systems are able to operate and effectively process data, including dates on and after January 1, 2000 and at the request of Grantee, Grantor shall provide Grantee with assurance acceptable to Grantee sole shareholder of Grantor. The REIT's Year 2000 compatibilityinterest in Grantor is owned by the REIT free and clear of all mortgages, assignments, pledges and security interests and free and clear of all warrants, options and rights to purchase.

Warranties of Grantor. Grantor, for itself and its successors and --------------------- assigns, does hereby represent, warrant and covenant to and with GranteeBeneficiary, its successors and assigns, that: (a) Grantor has good and marketable indefeasible fee simple title to the Property, subject only to those matters expressly set forth as exceptions to or subordinate matters in the title insurance policy insuring the lien of on Exhibit B --------- attached hereto and by this Security Deed which Grantee has agreed to accept, excepting therefrom all preprinted and/or standard exceptions reference incorporated herein (the "Permitted --------- Exceptions"), and has full power and lawful authority to grant, bargain, sell, ---------- convey, assign, transfer and mortgage encumber its interest in the Property in the manner and form hereby done or intended. Grantor will preserve its interest in and title to the Property and will forever warrant and defend the same to Grantee Beneficiary against any and all claims whatsoever and will forever warrant and defend the validity and priority of the lien and security interest created herein against the claims of all persons and parties whomsoever, subject to the Permitted Exceptions. The foregoing warranty of title shall survive the foreclosure of this Security Deed of Trust and shall inure to the benefit of and be enforceable by Grantee Beneficiary in the event Grantee Beneficiary acquires title to the Property pursuant to any foreclosure; (b) No bankruptcy or insolvency proceedings are pending or contemplated by Grantor or, to the best knowledge of Grantor, against Grantor or by or against any endorser endorser, cosigner or cosigner guarantor of the Note, or any guarantor or indemnitor under any guaranty or indemnity agreement executed in connection with the Note of the loan evidenced thereby and secured hereby; (c) To the best of Grantor's knowledge, all All reports, certificates, affidavits, statements and other data furnished by or on behalf of Grantor to Grantee Beneficiary in connection with the loan evidenced by the Note are true and correct in all material respects and do not omit to state any fact or circumstance necessary to make the statements contained therein not misleading; (d) The execution, delivery and performance of this Security DeedDeed of Trust, the Note and all of the other Loan Documents have been duly authorized by all necessary action to be, and are, binding and enforceable against Grantor in accordance with the respective terms thereof and do not contravene, result in a breach of or constitute (upon the giving of notice or the passage of time or both) a default under the partnership agreement, articles of incorporation or other organizational documents of Grantor or any contract or agreement of any nature to which Grantor is a party or by which Grantor or any of its property may be bound and do not violate or contravene any law, order, decree, rule or regulation to which Grantor is subject; (e) The Real Estate Grantor is not required to obtain any consent, approval or authorization from or to file any declaration or statement with, any governmental authority or agency in connection with or as a condition to the execution, delivery or performance of this Deed of Trust, the Note or the other Loan Documents which has not been so obtained or filed; (f) Grantor has obtained or made all necessary (i) consents, approvals and authorizations and registrations and filings of or with all governmental authorities and (ii) consents, approvals, waivers and notifications of partners, stockholders, creditors, lessors and other non-governmental persons and/or entities, in each case, which are required to be obtained or made by Grantor in connection with the execution and delivery of, and the Improvementsperformance by Grantor of its obligations under, the Loan Documents; (g) Grantor and, if Grantor is a partnership, the general partner of Grantor, have filed all federal, state and local tax returns required to be filed and has paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by Grantor and its general partner, if any. Grantor and its general partner, if any, believe that their respective tax returns properly reflect the income and taxes of Grantor and said general partner, if any, for the periods covered thereby, subject only to reasonable adjustments required by the Internal Revenue Service or other applicable tax authority upon audit; (h) Grantor is not an "employee benefit plan," as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), which is subject to Title I of ERISA and the assets of Grantor do not ----- constitute "plan assets" of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101; (i) The Land and the Improvements and the intended use thereof by Grantor comply in all material respects with all applicable restrictive covenants, zoning ordinances, subdivision and building codes, flood disaster laws, applicable health and environmental laws and regulations and all other ordinances, orders or requirements issued by any state, federal or municipal authorities having or claiming jurisdiction over the Property. The Real Estate Land and Improvements constitute one or more a separate tax parcels parcel for purposes of ad valorem taxation. The Real Estate Land and Improvements do not require any rights over, or restrictions against, other property in order to comply with any of the aforesaid governmental ordinances, orders or requirements other than Permitted Exceptions.requirements; (fj) All utility services necessary and sufficient for the full use, occupancy, operation and disposition of the Real Estate Land and the Improvements for their intended purposes are available to the Property, including water, storm sewer, sanitary sewer, gas, electric, cable and telephone facilities, through public rights-of-way or perpetual private easementseasements approved by Beneficiary; (gk) All streets, roads, highways, bridges and waterways necessary for access to and full use, occupancy, operation and disposition of the Real Estate Land and the Improvements have been completed, have been dedicated to and accepted by the appropriate municipal authority and are open and available to the Real Estate Land and the Improvements without further condition or cost to Grantor or served by a perpetual private easement reflected in the Permitted ExceptionsGrantor; (hl) All curb cuts, driveways and traffic signals shown on the survey delivered to Grantee Beneficiary prior to the execution and delivery of this Security Deed of Trust are existing and have been fully approved by the appropriate governmental authority; (im) To the best of Grantor's knowledge, there There are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or threatened against or affecting Grantor, (and, if Grantor is a partnership, any of its general partnerspartners or if Grantor is a limited liability company, any member of Grantor) or the Property which, if adversely determined, would materially impair either the Property or Grantor's ability to perform the covenants or obligations required to be performed under the Loan Documents; (jn) The Property is free from delinquent water charges, sewer rents, taxes and assessments; (ko) As of the date of this Security DeedDeed of Trust, the Property is free from unrepaired damage caused by fire, flood, accident or other casualty; (lp) As of the date of this Security DeedDeed of Trust, no part of the Real Estate Land or the Improvements has been taken in condemnation, eminent domain or like proceeding nor is any such proceeding pending or to Grantor's knowledge and belief, threatened or contemplated; (mq) Grantor possesses all franchises, patents, copyrights, trademarks, trade names, licenses and permits adequate for the conduct of its business substantially as now conducted; (nr) To the best of Grantor's knowledge, the The Improvements are structurally sound, in good repair and free of defects in materials and workmanship and have been constructed and installed in substantial compliance with the plans and specifications relating thereto, ordinary wear and tear excepted. All major building systems located within the Improvements, including, without limitation, the heating and air conditioning systems and the electrical and plumbing systems, are in good working order and condition, ordinary wear and tear excepted; (os) Grantor has delivered to Grantee Beneficiary true, correct and complete copies of all Contracts and all amendments thereto or modifications thereof; (p) Each Contract constitutes the legal, valid and binding obligation of Grantor and, to the best of Grantor's knowledge and belief, is enforceable against any other party thereto. To the best of Grantor's knowledge, no default exists, or with the passing of time or the giving of notice or both would exist, under any Contract which would, in the aggregate, have a material adverse effect on Grantor or the Property; (q) No Contract provides any party with the right to obtain a lien or encumbrance upon the Property superior to the lien of this Security Deed other than Permitted Exceptions; (rt) Grantor and the Property are free from any delinquent past due obligations for sales and payroll taxes; (su) There are no security agreements or financing statements affecting any of the Property other than (i) as disclosed in writing by Grantor to Grantee Beneficiary prior to the date hereof and (ii) the security agreements and financing statements created in favor of Grantee; andBeneficiary; (tv) Grantor has delivered a true, correct and complete schedule (the "Rent Roll") of all leases affecting the Property (individually a "Lease" and ---------- ----- collectively the "Leases") as of the date hereof, which accurately and ------ completely sets forth in all material respects for each such Lease, the following: the name of the tenant, the lease expiration date, extension and renewal provisions, the base rent payable, and the security deposit held thereunder; (w) Each Lease constitutes the legal, valid and binding obligation of Grantor and, to the best of Grantor's knowledge and belief, is enforceable against the tenant thereof. No default exists, or with the passing of time or the giving of notice would exist, under any Lease which would, in the aggregate, have a material adverse effect on Grantor or the Property; (x) No tenant under any Lease has, of the date hereof, paid rent more than thirty (30) days in advance, and the rents under such Leases have not been waived, released, or otherwise discharged or compromised; (y) All work to be performed by Grantor under the Leases has been substantially performed, all contributions to be made by Grantor to the tenants thereunder have been made and all other conditions precedent to each such tenant's obligations thereunder have been satisfied; (z) Each tenant under a Lease has entered into occupancy of the demised premises; (aa) To the best of Grantor's knowledge and belief, each tenant is free from bankruptcy, reorganization or arrangement proceedings or a general assignment for the benefit of creditors; (bb) No Lease or Contract or easement, right-of-way, permit or declaration (collectively, all such instruments are referred to hereinafter as "Property Agreements") provides any party with the right to obtain a lien or -------------------- encumbrance upon the Property superior to the lien of this Deed of Trust; (cc) Grantor has not received or given any written communication which alleges that a default exists or, with the giving of notice or the lapse of time, or both, would exist under the provisions of any Property Agreement; (dd) Except as previously disclosed to Beneficiary in writing, there are no brokerage fees or commissions payable by Grantor with respect to the leasing of space at the Property and there are no management fees payable by Grantor with respect to the management of the Property; (ee) Grantor is in compliance with all Lease requirements and legal requirements relating to security deposits; (ff) There are no outstanding options or rights of first refusal to purchase all or any portion of the Property or Grantor's ownership thereof. No condition exists whereby Grantor or any future owner of the Property may be required to purchase any other parcel of land which is subject to any Property Agreement or which gives any person or entity a right to purchase, or right of first refusal with respect to, the Property; (gg) The Property is free and clear of any mechanics' liens or liens in the nature thereof, and no rights are outstanding that under law would give rise to any such liens, any of which liens are or may be prior to, or equal with, the lien of this Deed of Trust, except those which are insured against by the title insurance policy insuring the lien of this Deed of Trust; (hh) To the extent required by Beneficiary, Grantor has delivered to Beneficiary true, correct and complete copies of all Property Agreements; (ii) No default exists or which, with the passing of time, or the giving of notice, or both would exist under any Property Agreement which would, in the aggregate, have a material adverse effect on the ability of Grantor to perform any obligations under any Loan Documents (collectively, a "Material -------- Adverse Effect"); -------------- (jj) To the best knowledge of Grantor, no offset or any right of offset exists respecting continued contributions to be made by any party to any Property Agreement except as expressly set forth therein. Except as previously disclosed to Beneficiary in writing, no material exclusions or restrictions on the utilization, leasing or improvement of the Property (including non-compete agreements) exists in any Property Agreement; (kk) All work, if any, to be performed by Grantor under each of the Property Agreements has been substantially performed, all contributions to be made by Grantor to any party to such Property Agreements have been made, and all other conditions to such party's obligations thereunder have been satisfied; (ll) The Property is taxed separately without regard to any other real estate and constitutes a legally subdivided lot under all applicable legal requirements (or, if not subdivided, no subdivision or platting of the Property is required under applicable legal requirements), and for all purposes may be mortgaged, conveyed or otherwise dealt with as an independent parcel; (mm) The representations and warranties contained in this Deed of Trust, or the review and inquiry made on behalf of the Grantor therefor, have all been made by persons having the requisite expertise and knowledge to provide such representations and warranties. No statement or fact made by or on behalf of Grantor in this Deed of Trust or in any certificate, document or schedule furnished to Beneficiary pursuant hereto, contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained therein or herein not misleading (which may be to Grantor's best knowledge where so provided herein). There is no fact presently known to Grantor which has not been disclosed to Beneficiary which would have a Material Adverse Effect; (nn) The Property forms no part of any property owned, used or claimed by Grantor as a residence or business homestead and is not exempt from forced sale under the laws of the State of GeorgiaTexas. Grantor hereby disclaims and renounces each and every claim to all or any portion of the Property as a homestead.; and (u) The Permitted Exceptions do not and will not materially and adversely affect (1) the ability of Grantor to pay in full the principal and interest on the Note in a timely manner or (2) the use of the Property for the use currently being made thereof, the operation of the Property as currently being operated or the value of the Property. (voo) Grantor shall take has delivered to Beneficiary true, correct and complete copies of all action necessary to assure that Grantor's computer based systems are able to operate and effectively process data, including dates on and after January 1, 2000 and at Leases described in the request of Grantee, Grantor shall provide Grantee with assurance acceptable to Grantee of Grantor's Year 2000 compatibilityRent Roll.

Warranties of Grantor. Grantor, for itself and its successors and assigns, does hereby represent, warrant and covenant to and with GranteeBeneficiary, its successors and assigns, thatthat as of the date hereof: (a) Grantor has good and marketable fee simple title to the Property, subject only to those matters expressly set forth as exceptions to or subordinate matters in the title insurance policy insuring the lien of on Exhibit B attached hereto and by this Security Deed which Grantee has agreed to accept, excepting therefrom all preprinted and/or standard exceptions reference incorporated herein (the "Permitted Exceptions"), and has full power and lawful authority to grant, bargain, sell, convey, assign, transfer and mortgage encumber its interest in the Property in the manner and form hereby done or intended. Grantor will preserve its interest in and title to the Property and will forever warrant and defend the same to Grantee Trustee and Beneficiary against any and all claims whatsoever and will forever warrant and defend the validity and priority of the lien and security interest created herein against the claims of all persons and parties whomsoever, subject to the Permitted ExceptionsExceptions and such matters as may be approved in writing by Beneficiary pursuant to this Deed of Trust. The foregoing warranty of title shall survive the foreclosure foreclosure, exercise of any power of sale or other enforcement of this Security Deed of Trust (whether by power of sale or otherwise) and shall inure to the benefit of and be enforceable by Grantee Beneficiary in the event Grantee Beneficiary acquires title to the Property pursuant to any foreclosure, exercise of any power of sale or otherwise; (b) No bankruptcy or insolvency proceedings are pending or contemplated by Grantor or, to the best knowledge of Grantor, against Grantor or by or against any endorser endorser, cosigner or cosigner guarantor of the Note, or any guarantor or indemnitor under any guaranty or indemnity agreement executed in connection with the Note of the loan evidenced thereby and secured hereby; (c) To the best of Grantor's best knowledge, all reports, certificates, affidavits, statements and other data furnished by or on behalf of Grantor to Grantee Beneficiary in connection with the loan evidenced by the Note Loan are true and correct in all material respects and do not omit to state any fact or circumstance necessary to make the statements contained therein not misleading; (d) The execution, delivery and performance of this Security DeedDeed of Trust, the Note and all of the other Loan Documents have been duly authorized by all necessary action to bebe taken, and are, binding and enforceable against Grantor in accordance with the respective terms thereof and do not contravene, result in a breach of or constitute (upon the giving of notice or the passage of time or both) a default under the partnership agreement, certificate or articles of incorporation or other organizational documents of Grantor or any contract or agreement of any nature to which Grantor is a party or by which Grantor or any of its property may be bound and to the best of Grantor's knowledge do not violate or contravene any law, order, decree, rule or regulation to which Grantor is subject; (e) The Real Estate To Grantor's best knowledge, Grantor is not required to obtain any consent, approval or authorization from or to file any declaration or statement with, any governmental authority or the agency in connection with or as a condition to the execution, delivery or performance of this Deed of Trust, the Note or the other Loan Documents which has not been so obtained or filed; (f) To Grantor's best knowledge, Grantor has obtained or made all necessary (i) consents, approvals and authorizations and registrations and filings of or with all governmental authorities or agencies and (ii) consents, approvals, waivers and notifications of partners, stockholders, members, creditors, lessors and other non-governmental persons and/or entities, in each case, which are required to be obtained or made by Grantor in connection with the execution and delivery of, and the Improvementsperformance by Grantor of its obligations under, the Loan Documents; (g) Grantor is not an "investment company," or a company "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended; (h) No part of the proceeds of the indebtedness secured hereby will be used by Grantor for the purpose of purchasing or acquiring any "margin stock" within the meaning of Regulations T, U or X of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulations T, U or X or any other Regulations of such Board of Governors, or for any purpose prohibited by legal requirements or by the terms and conditions of the Loan Documents; (i) Grantor and, if Grantor is a partnership, any general partner of Grantor, has filed all federal, state and local tax returns required to be filed and has paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments, including sales and payroll taxes, payable by Grantor and its general partners, if any. Grantor and its general partners, if any, believe that their respective tax returns properly reflect the income and taxes of Grantor and said general partners, if any, for the periods covered thereby, subject only to reasonable adjustments required by the Internal Revenue Service or other applicable tax authority upon audit; (j) Grantor is not an "employee benefit plan," as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), which is subject to Title I of ERISA and the assets of Grantor do not constitute "plan assets" of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101; (k) To Grantor's best knowledge, the Land and the Improvements and the intended use thereof by Grantor comply in all material respects with all applicable restrictive covenants, zoning ordinances, subdivision and building codes, flood disaster laws, applicable health and environmental laws and regulations and all other ordinances, orders or requirements issued by any state, federal or municipal authorities having or claiming jurisdiction over the Property. The Real Estate To Grantor's best knowledge, the Land and Improvements constitute one or more a separate tax parcels parcel for purposes of ad valorem taxation. The Real Estate To Grantor's best knowledge, the Land and Improvements do not require any rights over, or restrictions against, other property in order to comply with any of the aforesaid governmental ordinances, orders or requirements other than Permitted Exceptions.except for such rights and restrictions which are described in the Title Insurance Policy (as hereinafter defined); (fl) All utility services necessary and sufficient for the full use, occupancy, operation and disposition of the Real Estate Land and the Improvements for their intended purposes are available to the Property, including water, storm sewer, sanitary sewer, gas, electric, cable and telephone facilities, through public rights-of-way or perpetual private easementseasements reflected in the title insurance policy insuring the lien of this Deed of Trust and approved by Beneficiary (the "Title Insurance Policy"); (gm) All streets, roads, highways, bridges and waterways necessary for access to and full use, occupancy, operation and disposition of the Real Estate Land and the Improvements have been completed, have been dedicated to and accepted by the appropriate municipal authority and are open and available to the Real Estate Land and the Improvements without further condition or cost to Grantor or served by a perpetual private easement reflected in the Permitted ExceptionsGrantor; (hn) All curb cuts, driveways and traffic signals shown on the survey delivered to Grantee Beneficiary prior to the execution and delivery of this Security Deed of Trust are existing and to Grantor's best knowledge have been fully approved by the appropriate governmental authority; (io) To the best of Grantor's best knowledge, there are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or threatened against or affecting Grantor (and any member of Grantor, (and, if Grantor is a partnership, any of its general partners) or the Property which, if adversely determined, would materially impair either have a material adverse effect on (a) the Property Property, (b) the business, prospects, profits, operations or condition (financial or otherwise) of Grantor's , (c) the enforceability, validity, perfection or priority of the lien of any Loan Document, or (d) the ability of Grantor to perform the covenants or any obligations required to be performed under the any Loan DocumentsDocument (collectively, a "Material Adverse Effect"); (jp) The As of the date of this Deed of Trust (i) the Property is free from delinquent water charges, sewer rents, taxes and assessments; (k) As of the date of this Security Deed, the Property is free and from unrepaired damage caused by fire, flood, accident or other casualty; , and (lii) As of the date of this Security Deed, no part of the Real Estate Land or the Improvements has been taken in condemnation, eminent domain or like proceeding nor is any such proceeding pending or to Grantor's knowledge and belief, threatened or contemplated; (mq) Grantor possesses all franchises, patents, copyrights, trademarks, trade names, licenses (including, without limitation, liquor licenses), and permits (collectively, the "Permits") adequate for the conduct of its business substantially as now conductedconducted or, with respect to liquor licenses, has the right to use the same in the operation of the Property pursuant to legal, valid and enforceable agreements, all fees due and payable in connection with the Permits have been paid and the Property and the conduct of Grantor's business thereof materially complies with the Permits; (nr) To Except as set forth in the best Title Insurance Policy insuring the lien of this Deed of Trust and to Grantor's best knowledge no improvements on adjoining properties encroach upon the Property. To Grantor's best knowledge, the Improvements are structurally sound, in good repair and free of defects in materials and workmanship and have been constructed and installed in substantial compliance with the plans and specifications relating thereto, ordinary wear and tear excepted. All major building systems located within the Improvements, including, without limitation, the heating and air conditioning systems and the electrical and plumbing systems, are in good working order and condition, ordinary wear all of the guest rooms in the Improvements are in good condition and tear exceptedavailable for regular occupancy and the lobby, restaurant and lounge facilities, meeting rooms, "back-of-the-house" areas, parking facilities and other public areas are in good condition and available for regular use. The Improvements and Grantor's operations of its business materially comply with the requirements of the Franchise Agreement (as hereinafter defined); (os) Except as disclosed in writing by Grantor has delivered to Grantee trueBeneficiary prior to the date hereof, correct there are no security agreements or financing statements affecting any of the Property other than the security agreements and complete copies financing statements created in favor of all Contracts and all amendments thereto or modifications thereofBeneficiary; (pt) Each Contract constitutes the legal, valid and binding obligation of Grantor and, to the best of Except as previously disclosed in Grantor's knowledge Certification Regarding Project Documents and beliefFinancial Information dated of even date herewith and delivered to Beneficiary or otherwise in writing by Grantor to Beneficiary, and other than certain incentive compensation systems designed to promote increased customer use of the Property, there is enforceable against any no collective bargaining agreement and other party thereto. To the best of Grantor's knowledge, no default exists, or with the passing of time or the giving of notice or both would exist, under any Contract labor agreement to which would, in the aggregate, have a material adverse effect on Grantor or the Property, or any portion thereof, is a party or by which either is or may be bound. To Grantor's best knowledge, Grantor is not in violation of, in any material respect, any applicable laws, rules and regulations relating to the employment of labor, including those relating to wages, hours, collective bargaining and the payment and withholding of taxes and other sums as required by appropriate governmental authorities; (qu) No The Property is free and clear of any mechanics' or materialmen's liens or liens in the nature thereof, and no rights are outstanding that under law would give rise to any such liens, any of which liens are or may be prior to, or equal with, the lien of this Deed of Trust, except those which are insured against by the Title Insurance Policy; (v) Except as disclosed in the Title Insurance Policy, no Lease or Contract or easement, right of way, permit or declaration (collectively, "Property Agreements") provides any party with the right to obtain a lien or encumbrance upon the Property superior to the lien of this Security Deed other than Permitted Exceptionsof Trust; (rw) Grantor has delivered to Beneficiary true, correct and complete copies of all Property Agreements and no default exists or would exist, with the passing of time, or the giving of notice, or both, under any Property are free from any delinquent obligations for sales and payroll taxesAgreement which would, in the aggregate, have a Material Adverse Effect; (sx) There are To the best knowledge of Grantor, no security agreements offset or financing statements affecting any right of offset exists respecting continued contributions to be made by any party to any Property Agreement except as expressly set forth herein. Except as previously disclosed to Beneficiary in writing, no material exclusions or restrictions on the utilization, leasing or improvement of the Property other than (iincluding non-compete agreements) as disclosed exists in writing any Property Agreement; (y) All work, if any, to be performed by Grantor under each of the Property Agreements has been substantially performed, all contributions to be made by Grantor to Grantee prior any party to the date hereof such Property Agreements have been made, and (ii) the security agreements and financing statements created in favor of Grantee; andall other conditions to such party's obligations thereunder have been satisfied; (tz) The Land is taxed separately without regard to any other real estate and constitutes a legally subdivided lot under all applicable legal requirements (or, if not subdivided, no subdivision or platting of the Property is required under applicable legal requirements), and for all purposes may be mortgaged, conveyed, pledged, hypothecated, assigned or otherwise dealt with as an independent parcel; (aa) The Land forms no part of any property owned, used or claimed by Grantor as a residence or business homestead and is not exempt from forced sale under the laws of the State of Georgiain which the Property is located. Grantor hereby disclaims and renounces each and every claim to all or any portion of the Property as a homestead. (u) The Permitted Exceptions do not homestead and will not materially the Loan evidenced by the Loan Documents is made and adversely affect (1) the ability of Grantor to pay in full the principal and interest on the Note in a timely manner transacted solely for business, investment, commercial or (2) the use other similar purposes. No part of the Property is or will be used for agricultural or farming purposes; (bb) There are no outstanding options or rights of first offer or refusal to purchase all or any portion of the use currently being Property or Grantor's interest therein or ownership thereof made thereofby Grantor and to Grantor's best knowledge made by any other party; (cc) There are no actions, suits, proceedings or orders of record or of which Grantor has notice, and, to the best of Grantor's knowledge, there are no inquiries or investigations, pending or threatened, in any such case against, involving or affecting the Property, at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, alleging the violation of any federal, state or local law, statute, ordinance, rule or regulation relating to Environmental Laws. Furthermore, Grantor has not received any written claim, notice or opinion that the ownership or operation of the Property as currently being operated violates any federal, state or local law, statute, ordinance, rule, regulation, decree, order, and/or permit relating to Environmental Laws, and, to the value of the Property. (v) Grantor shall take all action necessary to assure that Grantor's computer based systems are able to operate and effectively process data, including dates on and after January 1, 2000 and at the request of Grantee, Grantor shall provide Grantee with assurance acceptable to Grantee best of Grantor's Year 2000 compatibilityknowledge, no valid basis for any proceeding, action or claim of such nature exists; (dd) The representations and warranties contained in this Deed of Trust, or the review and inquiry made on behalf of the Grantor therefor, have all been made by persons having the requisite expertise and knowledge to provide such representations and warranties. No statement or fact made by or on behalf of Grantor in this Deed of Trust or in any certificate, document or schedule furnished to Beneficiary pursuant hereto, contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained therein or herein not misleading (which may be to Grantor's best knowledge where so provided herein). There is no fact presently known to Grantor which has not been disclosed to Beneficiary which would have a Material Adverse Effect; and (ee) Any lease, license or occupancy agreement now in effect permits the application of insurance and condemnation proceeds as provided herein.

Warranties of Grantor. Grantor, for itself and its successors and assigns, does hereby represent, warrant and covenant to and with GranteeBeneficiary, its successors and assigns, thatthat as of the date hereof: (a) Grantor has good and marketable fee simple title to the Property, subject only to those matters expressly set forth as exceptions to or subordinate matters in the title insurance policy insuring the lien of on Exhibit B attached hereto and by this Security Deed which Grantee has agreed to accept, excepting therefrom all preprinted and/or standard exceptions reference incorporated herein (the "Permitted Exceptions"), and has full power and lawful authority to grant, bargain, sell, convey, assign, transfer and mortgage encumber its interest in the Property in the manner and form hereby done or intended. None of the Permitted Exceptions materially interfere with the security intended to be provided by this Deed of Trust, the current primary use of the Property or the current ability of the Property to generate income sufficient to service the Loan. Grantor will preserve its interest in and title to the Property and will forever warrant and defend the same to Grantee Trustee and Beneficiary against any and all claims whatsoever and will forever warrant and defend the validity and priority of the lien and security interest created herein against the claims of all persons and parties whomsoever, subject to the Permitted ExceptionsExceptions and such matters as may be approved in writing by Beneficiary pursuant to this Deed of Trust. The foregoing warranty of title shall survive the foreclosure foreclosure, exercise of any power of sale or other enforcement of this Security Deed of Trust (whether by power of sale or otherwise) and shall inure to the benefit of and be enforceable by Grantee Beneficiary in the event Grantee Beneficiary acquires title to the Property pursuant to any foreclosure, exercise of any power of sale or otherwise; (b) No bankruptcy or insolvency proceedings are pending or contemplated by Grantor or, to the best knowledge of Grantor, against Grantor or by or against any endorser endorser, cosigner or cosigner guarantor of the Note, or any guarantor or indemnitor under any guaranty or indemnity agreement executed in connection with the Note of the loan evidenced thereby and secured hereby; (c) To the best of Grantor's best knowledge, all reports, certificates, affidavits, statements and other data furnished by or on behalf of Grantor to Grantee Beneficiary in connection with the loan evidenced by the Note Loan are true and correct in all material respects and do not omit to state any fact or circumstance necessary to make the statements contained therein not misleading; (d) The execution, delivery and performance of this Security DeedDeed of Trust, the Note and all of the other Loan Documents have been duly authorized by all necessary action to bebe taken, and are, binding and enforceable against Grantor in accordance with the respective terms thereof and do not contravene, result in a breach of or constitute (upon the giving of notice or the passage of time or both) a default under the partnership agreement, certificate or articles of incorporation or other organizational documents of Grantor or any contract or agreement of any nature to which Grantor is a party or by which Grantor or any of its property may be bound and and, to the best of Grantor's knowledge, do not violate or contravene any law, order, decree, rule or regulation to which Grantor is subject; (e) The Real Estate To Grantor's best knowledge, Grantor is not required to obtain any consent, approval or authorization from or to file any declaration or statement with, any governmental authority or the agency in connection with or as a condition to the execution, delivery or performance of this Deed of Trust, the Note or the other Loan Documents which has not been so obtained or filed; (f) To Grantor's best knowledge, Grantor has obtained or made all necessary (i) consents, approvals and authorizations and registrations and filings of or with all governmental authorities or agencies and (ii) consents, approvals, waivers and notifications of partners, stockholders, members, creditors, lessors and other non-governmental persons and/or entities, in each case, which are required to be obtained or made by Grantor in connection with the execution and delivery of, and the Improvementsperformance by Grantor of its obligations under, the Loan Documents; (g) Grantor is not an "investment company," or a company "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended; (h) No part of the proceeds of the indebtedness secured hereby will be used by Grantor for the purpose of purchasing or acquiring any "margin stock" within the meaning of Regulations T, U or X of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulations T, U or X or any other Regulations of such Board of Governors, or for any purpose prohibited by legal requirements or by the terms and conditions of the Loan Documents; (i) Grantor and, if Grantor is a partnership, any general partner of Grantor, has filed all federal, state and local tax returns required to be filed and has paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments, including sales and payroll taxes, payable by Grantor and its general partners, if any. Grantor and its general partners, if any, believe that their respective tax returns properly reflect the income and taxes of Grantor and said general partners, if any, for the periods covered thereby, subject only to reasonable adjustments required by the Internal Revenue Service or other applicable tax authority upon audit; (j) Grantor is not an "employee benefit plan," as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), which is subject to Title I of ERISA and the assets of Grantor do not constitute "plan assets" of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101; (k) To Grantor's best knowledge, the Land and the Improvements and the intended use thereof by Grantor comply in all material respects with all applicable restrictive covenants, zoning ordinances, subdivision and building codes, flood disaster laws, applicable health and environmental laws and regulations and all other ordinances, orders or requirements issued by any state, federal or municipal authorities having or claiming jurisdiction over the Property. The Real Estate To Grantor's best knowledge, the Land and Improvements constitute one or more a separate tax parcels parcel for purposes of ad valorem taxation. The Real Estate To Grantor's best knowledge, the Land and Improvements do not require any rights over, or restrictions against, other property in order to comply with any of the aforesaid governmental ordinances, orders or requirements other than Permitted Exceptions.except for such rights and restrictions which are described in the Title Insurance Policy (as hereinafter defined); (fl) All utility services necessary and sufficient for the full use, occupancy, operation and disposition of the Real Estate Land and the Improvements for their intended purposes are available to the Property, including water, storm sewer, sanitary sewer, gas, electric, cable and telephone facilities, through public rights-of-way or perpetual private easementseasements reflected in the title insurance policy insuring the lien of this Deed of Trust and approved by Beneficiary (the "Title Insurance Policy"); (gm) All streets, roads, highways, bridges and waterways necessary for access to and full use, occupancy, operation and disposition of the Real Estate Land and the Improvements have been completed, have been dedicated to and accepted by the appropriate municipal authority and are open and available to the Real Estate Land and the Improvements without further condition or cost to Grantor or served by a perpetual private easement reflected in the Permitted ExceptionsGrantor; (hn) All curb cuts, driveways and traffic signals shown on the survey delivered to Grantee Beneficiary prior to the execution and delivery of this Security Deed of Trust are existing and and, to the best knowledge of Grantor, have been fully approved by the appropriate governmental authority; (io) To the best of Grantor's best knowledge, there are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or threatened against or affecting Grantor, (and, if Grantor is a partnership, and any member of its general partnersGrantor) or the Property which, if adversely determined, would materially impair either have a material adverse effect on (a) the Property Property, (b) the business, prospects, profits, operations or condition (financial or otherwise) of Grantor's , (c) the enforceability, validity, perfection or priority of the lien of any Loan Document, or (d) the ability of Grantor to perform the covenants or any obligations required to be performed under the any Loan DocumentsDocument (collectively, a "Material Adverse Effect"); (jp) The As of the date of this Deed of Trust (i) the Property is free from delinquent water charges, sewer rents, taxes and assessments; (k) As of the date of this Security Deed, the Property is free and from unrepaired damage caused by fire, flood, accident or other casualty; , and (lii) As of the date of this Security Deed, no part of the Real Estate Land or the Improvements has been taken in condemnation, eminent domain or like proceeding nor is any such proceeding pending or to Grantor's knowledge and belief, threatened or contemplated; (mq) Grantor possesses all franchises, patents, copyrights, trademarks, trade names, licenses (including, without limitation, liquor licenses), and permits (collectively, the "Permits") adequate for the conduct of its business substantially as now conductedconducted or, with respect to liquor licenses, has the right to use the same in the operation of the Property pursuant to legal, valid and enforceable agreements, all fees due and payable in connection with the Permits have been paid and the Property and the conduct of Grantor's business thereof materially complies with the Permits; (nr) To Except as set forth in the best Title Insurance Policy insuring the lien of this Deed of Trust and, to Grantor's best knowledge, no improvements on adjoining properties encroach upon the Property. To Grantor's best knowledge, the Improvements are structurally sound, in good repair and free of defects in materials and workmanship and have been constructed and installed in substantial compliance with the plans and specifications relating thereto, ordinary wear and tear excepted. All major building systems located within the Improvements, including, without limitation, the heating and air conditioning systems and the electrical and plumbing systems, are in good working order and condition, ordinary wear all of the guest rooms in the Improvements are in good condition and tear exceptedavailable for regular occupancy and the lobby, restaurant and lounge facilities, meeting rooms, "back-of-the-house" areas, parking facilities and other public areas are in good condition and available for regular use. The Improvements and Grantor's operations of its business materially comply with the requirements of the Franchise Agreement (as hereinafter defined); (os) Except as disclosed in writing by Grantor has delivered to Grantee trueBeneficiary prior to the date hereof, correct there are no security agreements or financing statements affecting any of the Property other than the security agreements and complete copies financing statements created in favor of all Contracts and all amendments thereto or modifications thereofBeneficiary; (pt) Each Contract constitutes the legal, valid and binding obligation of Grantor and, to the best of Except as previously disclosed in Grantor's knowledge Certification Regarding Project Documents and beliefFinancial Information dated of even date herewith and delivered to Beneficiary or otherwise in writing by Grantor to Beneficiary, and other than certain incentive compensation systems designed to promote increased customer use of the Property, there is enforceable against any no collective bargaining agreement and other party thereto. To the best of Grantor's knowledge, no default exists, or with the passing of time or the giving of notice or both would exist, under any Contract labor agreement to which would, in the aggregate, have a material adverse effect on Grantor or the Property, or any portion thereof, is a party or by which either is or may be bound. To Grantor's best knowledge, Grantor is not in violation of, in any material respect, any applicable laws, rules and regulations relating to the employment of labor, including those relating to wages, hours, collective bargaining and the payment and withholding of taxes and other sums as required by appropriate governmental authorities; (qu) No The Property is free and clear of any mechanics' or materialmen's liens or liens in the nature thereof, and no rights are outstanding that under law would give rise to any such liens, any of which liens are or may be prior to, or equal with, the lien of this Deed of Trust, except those which are insured against by the Title Insurance Policy; (v) Except as disclosed in the Title Insurance Policy, no Lease or Contract or easement, right of way, permit or declaration (collectively, "Property Agreements") provides any party with the right to obtain a lien or encumbrance upon the Property superior to the lien of this Security Deed other than Permitted Exceptionsof Trust; (rw) Grantor has delivered to Beneficiary true, correct and complete copies of all Property Agreements and no default exists or would exist, with the passing of time, or the giving of notice, or both, under any Property are free from any delinquent obligations for sales and payroll taxesAgreement which would, in the aggregate, have a Material Adverse Effect; (sx) There are To the best knowledge of Grantor, no security agreements offset or financing statements affecting any right of offset exists respecting continued contributions to be made by any party to any Property Agreement except as expressly set forth herein. Except as previously disclosed to Beneficiary in writing, no material exclusions or restrictions on the utilization, leasing or improvement of the Property other than (iincluding non-compete agreements) as disclosed exists in writing any Property Agreement; (y) All work, if any, to be performed by Grantor under each of the Property Agreements has been substantially performed, all contributions to be made by Grantor to Grantee prior any party to the date hereof such Property Agreements have been made, and (ii) the security agreements and financing statements created in favor of Grantee; andall other conditions to such party's obligations thereunder have been satisfied; (tz) The Land is taxed separately without regard to any other real estate and constitutes a legally subdivided lot under all applicable legal requirements (or, if not subdivided, no subdivision or platting of the Property is required under applicable legal requirements), and for all purposes may be mortgaged, conveyed, pledged, hypothecated, assigned or otherwise dealt with as an independent parcel; (aa) The Land forms no part of any property owned, used or claimed by Grantor as a residence or business homestead and is not exempt from forced sale under the laws of the State of Georgiain which the Property is located. Grantor hereby disclaims and renounces each and every claim to all or any portion of the Property as a homestead.homestead and the Loan evidenced by the Loan Documents is made and transacted solely for business, investment, commercial or other similar purposes; (ubb) The Permitted Exceptions do not and will not materially and adversely affect (1) the ability There are no outstanding options or rights of Grantor first offer or refusal to pay in full the principal and interest on the Note in a timely manner purchase all or (2) the use any portion of the Property for or Grantor's interest therein or ownership thereof made by Grantor and, to Grantor's best knowledge, made by any other party; (cc) There are no actions, suits, proceedings or orders of record or of which Grantor has notice, and, to the use currently being made thereofbest of Grantor's knowledge, there are no inquiries or investigations, pending or threatened, in any such case against, involving or affecting the Property, at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, alleging the violation of any federal, state or local law, statute, ordinance, rule or regulation relating to Environmental Laws. Furthermore, Grantor has not received any written claim, notice or opinion that the ownership or operation of the Property as currently being operated violates any federal, state or local law, statute, ordinance, rule, regulation, decree, order, and/or permit relating to Environmental Laws, and, to the value of the Property. (v) Grantor shall take all action necessary to assure that Grantor's computer based systems are able to operate and effectively process data, including dates on and after January 1, 2000 and at the request of Grantee, Grantor shall provide Grantee with assurance acceptable to Grantee best of Grantor's Year 2000 compatibilityknowledge, no valid basis for any proceeding, action or claim of such nature exists; (dd) The representations and warranties contained in this Deed of Trust, or the review and inquiry made on behalf of the Grantor therefor, have all been made by persons having the requisite expertise and knowledge to provide such representations and warranties. No statement or fact made by or on behalf of Grantor in this Deed of Trust or in any certificate, document or schedule furnished to Beneficiary pursuant hereto, contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained therein or herein not misleading (which may be to Grantor's best knowledge where so provided herein). There is no fact presently known to Grantor which has not been disclosed to Beneficiary which would have a Material Adverse Effect; and (ee) Any lease, license or occupancy agreement now in effect permits the application of insurance and condemnation proceeds as provided herein.

Warranties of Grantor. Grantor, for itself and its successors and --------------------- assigns, does hereby represent, warrant and covenant to and with GranteeBeneficiary, its successors and assigns, that: (a) Grantor has good good, marketable and marketable indefeasible fee simple title to the Real Property, subject only to those matters expressly set forth as exceptions to or subordinate matters in the title insurance policy insuring the lien of this Security Deed which Grantee has agreed to acceptof Trust delivered as of the date hereof (the "Title Insurance --------------- Policy"), excepting therefrom all preprinted and/or standard exceptions (such ------ items being the "Permitted ExceptionsEncumbrances"), and has full power and lawful ---------------------- authority to grant, bargain, sell, convey, assign, transfer transfer, encumber and mortgage its interest in the Trust Property in the manner and form hereby done or intended. Grantor will preserve its interest in and title to the Real Property and will forever warrant and defend the same to Grantee Beneficiary against any and all claims whatsoever and will forever warrant and defend the validity and priority of the lien and security interest created herein against the claims of all persons and parties whomsoever, subject to the Permitted ExceptionsEncumbrances. The foregoing warranty of title shall survive the foreclosure of this Security Deed of Trust and shall inure to the benefit of and be enforceable by Grantee Beneficiary in the event Grantee Beneficiary acquires title to or ownership of the Trust Property pursuant to any foreclosure; (b) No bankruptcy or insolvency proceedings are pending or contemplated by Grantor or, to the best knowledge of Grantor, against Grantor or by or against any endorser or cosigner of the NoteNote or of any portion of the Debt, or any guarantor or indemnitor under any guaranty or indemnity agreement the Indemnity and Guaranty Agreement and the Environmental Indemnity Agreement executed in connection with the Note of or the loan evidenced thereby and secured herebyhereby (the "Indemnitor"); (c) To the best of Grantor's knowledge, all reports, All written certificates, affidavits, written affidavits and written statements and other data furnished made by or on behalf of Grantor to Grantee Beneficiary in connection with the loan evidenced by the Note are true and correct in all material respects and do not omit to state any fact or circumstance necessary to make the statements contained therein not materially misleading; (d) The execution, delivery and performance of this Security DeedDeed of Trust, the Note and all of the other Loan Documents have been duly authorized by all necessary action to be, and are, binding and enforceable against Grantor in accordance with the respective terms thereof and do not in any material respect contravene, result in a breach of or constitute a default (nor upon the giving of notice or the passage of time or bothboth will same constitute a default) a default under the partnership agreement, articles of incorporation incorporation, operating agreement or other organizational documents of Grantor or any material contract or agreement of any nature to which Grantor is a party or by which Grantor or any of its property may be bound and do not violate or contravene in any material respect any law, order, decree, rule or regulation to which Grantor is subject; (e) The Real Estate Grantor is not required to obtain any consent, approval or authorization from or to file any declaration or statement with, any governmental authority or agency in connection with or as a condition to the execution, delivery or performance of this Deed of Trust, the Note or the other Loan Documents which has not been so obtained or filed; (f) Grantor has obtained or made all necessary (i) consents, approvals and authorizations and registrations and filings of or with all governmental authorities or agencies and (ii) consents, approvals, waivers and notifications of partners, stockholders, members, creditors, lessors and other non-governmental persons and/or entities, in each case, which are required to be obtained or made by Grantor in connection with the Improvementsexecution and delivery of, and the performance by Grantor of its obligations under, the Loan Documents; (g) Grantor is not an "investment company", or a company "controlled" by an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended; (h) No part of the proceeds of the indebtedness secured hereby will be used for the purpose of purchasing or acquiring any "margin stock" within the meaning of Regulation T, U or X of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulation T, U or X or any other Regulations of such Board of Governors, or for any purpose prohibited by legal requirements or by the terms and conditions of the Loan Documents; (i) Grantor and, if Grantor is a partnership, any general partner of Grantor, has filed all federal, state and local tax returns required to be filed as of the date hereof and has paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by Grantor and its general partner, if any as of the date hereof. Grantor and its general partners, if any, believe that their respective tax returns properly reflect the income and taxes of Grantor and said general partners, if any, for the periods covered thereby, subject only to reasonable adjustments required by the Internal Revenue Service or other applicable tax authority upon audit; (j) Grantor is not an "employee benefit plan", as defined in section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), which is subject to Title I of ERISA and the assets of Grantor do not ----- constitute "plan assets" of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101; (k) The Premises and the Improvements and the current intended use thereof by Grantor comply in all material respects with all applicable restrictive covenants, zoning ordinances, subdivision and building codes, flood disaster laws, applicable health and environmental laws and regulations and all other ordinances, orders or requirements issued by any state, federal or municipal authorities having or claiming jurisdiction over the Trust Property. The Real Estate Premises and Improvements constitute one or more separate tax parcels for purposes of ad valorem taxation. The Real Estate To the best of Xxxxxxxx's knowledge, information and belief, the Premises and Improvements do not require any rights over, or restrictions against, other property in order to comply with any of the aforesaid governmental ordinances, orders or requirements other than Permitted Exceptions.requirements; (fl) All utility services necessary and sufficient for the full use, occupancy, occupancy and operation and disposition of the Real Estate Premises and the Improvements for their current intended purposes are available to the Real Property, including water, storm sewer, sanitary sewer, gas, electric, cable and telephone facilities, through public rights-of-way or perpetual private easements; (gm) All streets, roads, highways, highways and bridges and waterways necessary for access to and full for the current use, occupancy, occupancy and operation and disposition of the Real Estate Premises and the Improvements have been completed, to the best of Grantor's knowledge, information and belief, have been dedicated to and accepted by the appropriate municipal authority and are open and available to the Real Estate Premises and the Improvements without further condition or cost to Grantor or served by a perpetual private easement reflected in the Permitted ExceptionsGrantor; (hn) All curb cuts, driveways and traffic signals (if any) shown on the survey delivered to Grantee Beneficiary prior to the execution and delivery of this Security Deed of Trust (the "Survey") are existing and, to the best of Grantor's ------ knowledge, information and belief, have been fully approved by the appropriate governmental authority; (io) To the best of Grantor's knowledge, there There are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or threatened against or affecting Grantor, Grantor (andor, if Grantor is a partnershippartnership or a limited liability company, any of its general partnerspartners or members) or the Trust Property which, if adversely determined, would materially impair either have a material adverse effect on (a) the Property Trust Property, (b) the business, prospects, profits, operations or condition (financial or otherwise) of Grantor's , (c) the enforceability, validity, perfection or priority of the lien of any Loan Document, or (d) the ability of Grantor to perform the covenants or any obligations required to be performed under the any Loan Documents;Document (collectively, a "Material Adverse Effect"); ----------------------- (jp) The Trust Property is free from delinquent water charges, sewer rents, taxes and assessments; (kq) As of the date of this Security DeedDeed of Trust, the Real Property is free from unrepaired material damage caused by fire, flood, accident or other casualty; (lr) As of the date of this Security DeedDeed of Trust, no part of the Real Estate Premises or the Improvements has been taken in condemnation, eminent domain or like proceeding nor is any such proceeding pending or or, to Grantor's knowledge and belief, threatened or contemplatedthreatened; (ms) Grantor possesses all material franchises, patents, copyrights, trademarks, trade names, licenses and permits adequate necessary for the conduct of its business substantially as now conducted; (nt) To the best of Grantor's knowledgeExcept as may otherwise be disclosed in that certain Property Condition Report dated June 5, 2001, prepared by Dominion Environmental Group, (i) the Improvements are structurally sound, in good repair and free of defects in materials and workmanship and have been constructed and installed in substantial compliance with the plans and specifications relating thereto, ordinary wear and tear excepted. All (ii) all major building systems located within the Improvements, including, without limitation, the heating and air conditioning systems and the electrical and plumbing systems, are in good working order and condition, ordinary wear and tear excepted; (ou) Grantor has delivered to Grantee Beneficiary true, correct and complete copies of all Contracts and all amendments thereto or modifications thereof; (pv) Each Contract constitutes the legal, valid and binding obligation of Grantor and, to the best of Grantor's knowledge and belief, is enforceable against any other party thereto. To the best of Grantor's knowledge, no No default exists, or with the passing of time or the giving of notice or both would exist, under any Contract which would, in the aggregate, have a material adverse effect on Grantor or the PropertyMaterial Adverse Effect; (q) No Contract provides any party with the right to obtain a lien or encumbrance upon the Property superior to the lien of this Security Deed other than Permitted Exceptions; (rw) Grantor and the Trust Property are free from any delinquent past due obligations for sales and payroll taxes; (sx) There are no security agreements or financing statements affecting all or any portion of the Trust Property of Grantor other than (i) as disclosed in writing by Grantor to Grantee Beneficiary prior to the date hereof and (ii) the security agreements and financing statements created in favor of Grantee; andLoan Documents; (ty) Grantor has delivered to Beneficiary a true, correct and complete schedule (the "Rent Roll") of all Leases affecting the Trust Property --------- as of the date hereof, which accurately and completely sets forth in all material respects for each such Lease, the following: the name of the Tenant, the lease expiration date, the base rent payable, the security deposit held thereunder and any other material provisions of such Lease; (z) No Tenant under any Lease has, as of the date hereof, paid rent more than thirty (30) days in advance, and the rents under such Leases have not been waived, released, or otherwise discharged or compromised; (aa) The Real Property forms no part of any property owned, used or claimed by Grantor as a its residence or business homestead and is not exempt from forced sale under and, to the laws of the State of Georgia. extent permitted by applicable law, Grantor hereby disclaims and renounces each and every claim to all that the Real Property is exempt from forced sale upon the occurrence and continuance of an Event of Default as a result of such Real Property being Grantor's residence or any portion homestead; (bb) Grantor is not a "foreign person" within the meaning of ss.1445(f)(3) of the Property Internal Revenue Code of 1986, as a homestead.amended, and the related Treasury Department regulations, including temporary regulations; and (ucc) The Permitted Exceptions do not and will not materially and adversely affect (1) the ability of Grantor to pay in full the principal and interest on the Note in a timely manner or (2) the use As of the Property for date hereof, Cornerstone Realty Income Trust, Inc., a Virginia corporation (the use currently being made thereof, "REIT") is the operation of the Property as currently being operated or the value of the Property. (v) Grantor shall take all action necessary to assure that Grantor's computer based systems are able to operate and effectively process data, including dates on and after January 1, 2000 and at the request of Grantee, Grantor shall provide Grantee with assurance acceptable to Grantee sole shareholder of Grantor. The REIT's Year 2000 compatibilityinterest ---- in Grantor is owned by the REIT free and clear of all mortgages, assignments, pledges and security interests and free and clear of all warrants, options and rights to purchase.

Warranties of Grantor. Grantor, for itself and its successors and assigns, does hereby represent, warrant and covenant to and with GranteeBeneficiary, its successors and assigns, that: (a) Grantor has good good, marketable and marketable indefeasible fee simple title to the Real Property, subject only to those matters expressly set forth as exceptions to or subordinate matters in the title insurance policy insuring the lien of this Security Deed which Grantee has agreed to acceptof Trust delivered as of the date hereof (the "Title Insurance Policy"), excepting therefrom all preprinted and/or standard exceptions (such items being the "Permitted ExceptionsEncumbrances"), and has full power and lawful authority to grant, bargain, sell, convey, assign, transfer transfer, encumber and mortgage its interest in the Trust Property in the manner and form hereby done or intended. Grantor will preserve its interest in and title to the Real Property and will forever warrant and defend the same to Grantee Beneficiary against any and all claims whatsoever and will forever warrant and defend the validity and priority of the lien and security interest created herein against the claims of all persons and parties whomsoever, subject to the Permitted ExceptionsEncumbrances. The foregoing warranty of title shall survive the foreclosure of this Security Deed of Trust and shall inure to the benefit of and be enforceable by Grantee Beneficiary in the event Grantee Beneficiary acquires title to or ownership of the Trust Property pursuant to any foreclosure; (b) No bankruptcy or insolvency proceedings are pending or contemplated by Grantor or, to the best knowledge of Grantor, against Grantor or by or against any endorser or cosigner of the NoteNote or of any portion of the Debt, or any guarantor or indemnitor under any guaranty or indemnity agreement the Indemnity and Guaranty Agreement and the Environmental Indemnity Agreement executed in connection with the Note of or the loan evidenced thereby and secured herebyhereby (the "Indemnitor"); (c) To the best of Grantor's knowledge, all reports, All written certificates, affidavits, written affidavits and written statements and other data furnished made by or on behalf of Grantor to Grantee Beneficiary in connection with the loan evidenced by the Note are true and correct in all material respects and do not omit to state any fact or circumstance necessary to make the statements contained therein not materially misleading; (d) The execution, delivery and performance of this Security DeedDeed of Trust, the Note and all of the other Loan Documents have been duly authorized by all necessary action to be, and are, binding and enforceable against Grantor in accordance with the respective terms thereof and do not in any material respect contravene, result in a breach of or constitute a default (nor upon the giving of notice or the passage of time or bothboth will same constitute a default) a default under the partnership agreement, articles of incorporation incorporation, operating agreement or other organizational documents of Grantor or any material contract or agreement of any nature to which Grantor is a party or by which Grantor or any of its property may be bound and do not violate or contravene in any material respect any law, order, decree, rule or regulation to which Grantor is subject; (e) The Real Estate Grantor is not required to obtain any consent, approval or authorization from or to file any declaration or statement with, any governmental authority or agency in connection with or as a condition to the execution, delivery or performance of this Deed of Trust, the Note or the other Loan Documents which has not been so obtained or filed; (f) Grantor has obtained or made all necessary (i) consents, approvals and authorizations and registrations and filings of or with all governmental authorities or agencies and (ii) consents, approvals, waivers and notifications of partners, stockholders, members, creditors, lessors and other non-governmental persons and/or entities, in each case, which are required to be obtained or made by Grantor in connection with the Improvementsexecution and delivery of, and the performance by Grantor of its obligations under, the Loan Documents; (g) Grantor is not an "investment company", or a company "controlled" by an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended; (h) No part of the proceeds of the indebtedness secured hereby will be used for the purpose of purchasing or acquiring any "margin stock" within the meaning of Regulation T, U or X of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulation T, U or X or any other Regulations of such Board of Governors, or for any purpose prohibited by legal requirements or by the terms and conditions of the Loan Documents; (i) Grantor and, if Grantor is a partnership, any general partner of Grantor, has filed all federal, state and local tax returns required to be filed as of the date hereof and has paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by Grantor and its general partner, if any as of the date hereof. Grantor and its general partners, if any, believe that their respective tax returns properly reflect the income and taxes of Grantor and said general partners, if any, for the periods covered thereby, subject only to reasonable adjustments required by the Internal Revenue Service or other applicable tax authority upon audit; (j) Grantor is not an "employee benefit plan", as defined in section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), which is subject to Title I of ERISA and the assets of Grantor do not constitute "plan assets" of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101; (k) The Premises and the Improvements and the current intended use thereof by Grantor comply in all material respects with all applicable restrictive covenants, zoning ordinances, subdivision and building codes, flood disaster laws, applicable health and environmental laws and regulations and all other ordinances, orders or requirements issued by any state, federal or municipal authorities having or claiming jurisdiction over the Trust Property. The Real Estate Premises and Improvements constitute one or more separate tax parcels for purposes of ad valorem taxation. The Real Estate To the best of Xxxxxxxx's knowledge, information and belief, the Premises and Improvements do not require any rights over, or restrictions against, other property in order to comply with any of the aforesaid governmental ordinances, orders or requirements other than Permitted Exceptions.requirements; (fl) All utility services necessary and sufficient for the full use, occupancy, occupancy and operation and disposition of the Real Estate Premises and the Improvements for their current intended purposes are available to the Real Property, including water, storm sewer, sanitary sewer, gas, electric, cable and telephone facilities, through public rights-of-way or perpetual private easements; (gm) All streets, roads, highways, highways and bridges and waterways necessary for access to and full for the current use, occupancy, occupancy and operation and disposition of the Real Estate Premises and the Improvements have been completed, to the best of Grantor's knowledge, information and belief, have been dedicated to and accepted by the appropriate municipal authority and are open and available to the Real Estate Premises and the Improvements without further condition or cost to Grantor or served by a perpetual private easement reflected in the Permitted ExceptionsGrantor; (hn) All curb cuts, driveways and traffic signals (if any) shown on the survey delivered to Grantee Beneficiary prior to the execution and delivery of this Security Deed of Trust (the "Survey") are existing and, to the best of Grantor's knowledge, information and belief, have been fully approved by the appropriate governmental authority; (io) To the best of Grantor's knowledge, there There are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or threatened against or affecting Grantor, Grantor (andor, if Grantor is a partnershippartnership or a limited liability company, any of its general partnerspartners or members) or the Trust Property which, if adversely determined, would materially impair either have a material adverse effect on (a) the Property Trust Property, (b) the business, prospects, profits, operations or condition (financial or otherwise) of Grantor's , (c) the enforceability, validity, perfection or priority of the lien of any Loan Document, or (d) the ability of Grantor to perform the covenants or any obligations required to be performed under the any Loan DocumentsDocument (collectively, a "Material Adverse Effect"); (jp) The Trust Property is free from delinquent water charges, sewer rents, taxes and assessments; (kq) As of the date of this Security DeedDeed of Trust, the Real Property is free from unrepaired material damage caused by fire, flood, accident or other casualty; (lr) As of the date of this Security DeedDeed of Trust, no part of the Real Estate Premises or the Improvements has been taken in condemnation, eminent domain or like proceeding nor is any such proceeding pending or or, to Grantor's knowledge and belief, threatened or contemplatedthreatened; (ms) Grantor possesses all material franchises, patents, copyrights, trademarks, trade names, licenses and permits adequate necessary for the conduct of its business substantially as now conducted; (nt) To Except as may otherwise be disclosed in the best of Grantor's knowledgeEngineering Report (as hereinafter defined), (i) the Improvements are structurally sound, in good repair and free of defects in materials and workmanship and have been constructed and installed in substantial compliance with the plans and specifications relating thereto, ordinary wear and tear excepted. All (ii) all major building systems located within the Improvements, including, without limitation, the heating and air conditioning systems and the electrical and plumbing systems, are in good working order and condition, ordinary wear and tear excepted; (ou) Grantor has delivered to Grantee Beneficiary true, correct and complete copies of all Contracts and all amendments thereto or modifications thereof; (pv) Each Contract constitutes the legal, valid and binding obligation of Grantor and, to the best of Grantor's knowledge and belief, is enforceable against any other party thereto. To the best of Grantor's knowledge, no No default exists, or with the passing of time or the giving of notice or both would exist, under any Contract which would, in the aggregate, have a material adverse effect on Grantor or the PropertyMaterial Adverse Effect; (q) No Contract provides any party with the right to obtain a lien or encumbrance upon the Property superior to the lien of this Security Deed other than Permitted Exceptions; (rw) Grantor and the Trust Property are free from any delinquent past due obligations for sales and payroll taxes; (sx) There are no security agreements or financing statements affecting all or any portion of the Trust Property of Grantor other than (i) as disclosed in writing by Grantor to Grantee Beneficiary prior to the date hereof and (ii) the security agreements and financing statements created in favor of Grantee; andLoan Documents; (ty) Grantor has delivered to Beneficiary a true, correct and complete schedule (the "Rent Roll") of all Leases affecting the Trust Property as of the date hereof, which accurately and completely sets forth in all material respects for each such Lease, the following: the name of the Tenant, the lease expiration date, the base rent payable, the security deposit held thereunder and any other material provisions of such Lease; (z) No Tenant under any Lease has, as of the date hereof, paid rent more than thirty (30) days in advance, and the rents under such Leases have not been waived, released, or otherwise discharged or compromised; (aa) The Real Property forms no part of any property owned, used or claimed by Grantor as a its residence or business homestead and is not exempt from forced sale under and, to the laws of the State of Georgia. extent permitted by applicable law, Grantor hereby disclaims and renounces each and every claim to all that the Real Property is exempt from forced sale upon the occurrence and continuance of an Event of Default as a result of such Real Property being Grantor's residence or any portion homestead; (bb) Grantor is not a "foreign person" within the meaning of Section 1445(f)(3) of the Property Internal Revenue Code of 1986, as a homestead.amended, and the related Treasury Department regulations, including temporary regulations; and (ucc) The Permitted Exceptions do not and will not materially and adversely affect (1) the ability of Grantor to pay in full the principal and interest on the Note in a timely manner or (2) the use As of the Property for date hereof, Cornerstone Realty Income Trust, Inc., a Virginia corporation (the use currently being made thereof, "REIT") is the operation of the Property as currently being operated or the value of the Property. (v) Grantor shall take all action necessary to assure that Grantor's computer based systems are able to operate and effectively process data, including dates on and after January 1, 2000 and at the request of Grantee, Grantor shall provide Grantee with assurance acceptable to Grantee sole shareholder of Grantor. The REIT's Year 2000 compatibilityinterest in Grantor is owned by the REIT free and clear of all mortgages, assignments, pledges and security interests and free and clear of all warrants, options and rights to purchase.