THIRD PARTY
DEED OF TRUST, ASSIGNMENT AND
SECURITY AGREEMENT
THIS THIRD PARTY DEED OF TRUST, ASSIGNMENT AND
SECURITY AGREEMENT (“Deed of Trust”), dated as of
, 2008, among LEE OIL COMPANY, INC., a Virginia corporation
(“Grantor”),
(“Trustee”), and CHOICE FINANCIAL GROUP, a North
Dakota state bank (“Beneficiary”), recites and
provides:
WHEREAS, Grantor is the owner of fee simple
title to certain real estate (including all improvements thereon
and all easements and other real property rights belonging thereto)
located in the Commonwealth of Virginia (the
“Premises”), and more particularly described on Exhibit
A attached hereto.
WHEREAS, Heartland, Inc., a Maryland
corporation (“Borrower”) is the maker of a certain
Promissory Note of even date herewith (the “Note”),
payable to the order of Beneficiary, evidencing a loan (the
“Loan”) in the principal amount of $3,250,000.00, with
interest and payable as stated therein. The Note is made pursuant
to a Loan Agreement of even date herewith (the “Loan
Agreement”), between Borrower and Beneficiary and is secured
by, among other things, this Deed of Trust and a security agreement
of even date herewith (the “Security Agreement”),
between Grantor and Beneficiary, and financing statements naming
Grantor, as debtor and Beneficiary, as secured party (the
“Financing Statements”). The Note is also secured by a
Guaranty of even date herewith (the “Guaranty”). The
Loan Agreement, the Note, this Deed of Trust, the Guaranty, the
Security Agreement, the Financing Statements and all other
documents and instruments evidencing and securing the indebtedness
evidenced by the Note are sometimes hereinafter referred to
collectively as the “Loan Documents.”
WHEREAS, the Loan is also secured by a lien on
certain real property owned by Grantor and located in the
Commonwealth of Virginia.
THIRD PARTY
DEED OF TRUST, ASSIGNMENT AND
SECURITY AGREEMENT:
For and in consideration of Beneficiary making
the Loan to Borrower, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, this
Deed of Trust provides as follows:
1.
GRANTING OF LIEN. Grantor hereby grants and conveys the
Premises to the Trustee, with general warranty of title but subject
to all easements, conditions and restrictions of record insofar as
they may lawfully affect the Premises as listed in Exhibit B
attached hereto (the “Permitted
Encumbrances”).
TOGETHER WITH (i) all improvements now or
hereafter erected on the Premises (the “Improvements”);
(ii) all carpeting, drapes, curtains, furnishings, appliances,
furniture, floor covering, maintenance equipment, cleaning
equipment, construction materials, fences, dynamos, partitions,
lighting, heating, ventilating, air-conditioning, air and water
cooling equipment, sprinkling and plumbing fixtures, water and
power systems, engines and machinery, boilers, water heaters,
stoves, ranges, ovens, dishwashers, all kitchen equipment,
utensils, dishes, mirrors and mantels, furnaces, oil burners,
elevators and motors, refrigerators, refrigeration plants or units,
communications systems, transformers, electrical equipment, doors,
storm and screen doors and windows, awnings and shades, parking lot
lighting, trees, bushes and shrubs, and other equipment or fixtures
owned by Grantor for location upon and use in the operation of the
Improvements on the Premises of every description now owned or
hereafter acquired; (iii) all additions, accessions, increases,
parts, fittings, accessories, replacements, substitutions,
betterments, repairs and proceeds of or to any or all of the
foregoing; (iv) all rights, privileges, hereditaments, easements,
appurtenances, rents, insurance and condemnation proceeds, issues,
profits, royalties and mineral, oil and gas rights now and
hereafter in any way belonging or pertaining to the Premises or any
Improvement thereon; (v) all of Grantor’s right, title and
interest in and to any lease contract covering equipment or
furnishings, or both, found in or about or appurtenant to, or used
in connection with the use, operation or maintenance of, the Land
or any building, structure or Improvement located thereon; and (vi)
specifically excluding any trade fixtures owned by tenants, if any,
of Grantor.
IN TRUST to secure the payment of the Note,
together with any and all renewals, replacements, extensions,
substitutions, modifications and consolidations thereof, and the
payment of all sums under and, the performance of the covenants
contained in, the Loan Documents and any modifications of the Loan
Documents.
(a) Leases. To further secure payment of
the Note and the performance by Borrower and Grantor of its other
obligations under the Loan Documents and hereunder, Grantor hereby
assigns, transfers and sets over to Beneficiary all leases and
other contracts (the “Leases”) of or relating to the
Premises, whether now existing or hereafter entered into and all
rents, income, revenue, issues and profits (the “Rents and
Profits”) now or hereafter arising from the Premises;
provided however, that until the occurrence of an “Event of
Default” (as hereinafter defined) and the election of
Beneficiary to collect the Rents and Profits after such Event of
Default, Grantor shall have a license (revocable by Beneficiary
upon the occurrence of an Event of Default) to collect and dispose
of the Rents and Profits without restriction, and provided further
that this assignment shall not impose on Trustee or Beneficiary any
of Grantor’s obligations under such Leases and
contracts.
(b) Contracts. To further
secure payment of the Note and the performance by Borrower and
Grantor of its other obligations under the Loan Documents and
hereunder, Grantor further assigns all insurance policies,
contracts, permits, licenses or plans now or hereafter pertaining
to, affecting or concerning the Premises including, without
limitation, all rights accruing to Grantor from any and all
contracts with all contractors, architects, engineers, managers,
subcontractors or others relating to the design, development,
construction, use, enjoyment, occupancy or operation of the
improvements on or upon the Premises, including performance and
materialmen’s bonds and any other related items.
Notwithstanding the provisions of
Paragraph 2(b), Grantor assigns no policies, contracts, permits,
licenses or plans that, as a matter of law, are not transferable or
assignable.
3.
SECURITY AGREEMENT. This Deed of Trust shall serve as a
security agreement in accordance with the applicable provisions of
the Uniform Commercial Code as adopted by the Commonwealth of
Virginia (the “UCC”). As to all personalty granted
under this Deed of Trust, Beneficiary shall have all of the rights
and remedies of a secured party under the UCC. The recordation of
this Deed of Trust shall also constitute a fixture filing in
accordance with the applicable provisions of the UCC.
4.
REPRESENTATIONS, WARRANTIES AND COVENANTS. Grantor makes the
following representations, warranties and covenants (and
acknowledges that Beneficiary has relied upon those
representations, warranties and covenants in making the
Loan):
(d)
Secondary Financing Prohibited. Grantor shall not pledge,
mortgage or encumber the Premises, or any part thereof or any
interest therein, without the prior written consent of the
Beneficiary.
(e)
Transfer of Premises or Interest in Grantor Prohibited.
Grantor shall not sell, convey, transfer, assign or permit any
sale, conveyance, transfer or assignment of the Premises or any
part thereof or interest therein, by operation of law or otherwise,
without the prior written consent of Beneficiary.
(f)
Leases. Grantor represents and warrants that Grantor shall
duly and punctually perform all of the terms, conditions and
covenants contained in the Leases to be kept, observed and
performed by Grantor; that Grantor shall not sell, assign,
transfer, mortgage or pledge any of the Rents and Profits, except
as set forth in this Deed of Trust; and that no Rents or Profits
becoming due subsequent to the date hereof have been collected, nor
has payment of any of the same been anticipated, waived, released,
discounted or otherwise discharged or compromised. Grantor agrees
to act in good faith to enforce or secure the performance of each
and every obligation, covenant, condition and agreement to be
performed by the tenants under the Leases. Grantor shall not,
except with the prior written consent of Beneficiary, cancel,
terminate or accept any surrender of the Leases; accept any
prepayments for more than 30 days of installments of rent under any
of the Leases; modify any of the terms, covenants and conditions of
any of the Leases so as to reduce the terms thereof or the rental
payments thereunder; enter into any new Leases of the Premises or
any part thereof or change any renewal privileges contained in any
of the Leases; agree in writing or otherwise to extinguish or limit
any rights which it has under applicable law as a landlord against
any tenant under any of the Leases. Notwithstanding the provisions
of this paragraph 4(f), Grantor may enter into new Leases in the
ordinary course of business for such portions of the Premises which
are leased as of the date hereof provided such Leases are on terms
and conditions that are customary and usual in leases of similar
premises in the general vicinity of the affected portion of the
Premises, and may, in accordance with sound business practices and
for the purpose of increasing Grantor’s revenues, terminate
(provided such termination is permitted under the terms of the
applicable lease) or modify any of the Leases.
(g)
Good Condition. Grantor shall maintain the Premises and all
other property (real or personal) subject to this Deed of Trust in
good condition and repair and shall keep the appearance of the
Premises attractive. Grantor shall not materially alter or demolish
any building or other improvements on the Premises or any part
thereof without the prior written consent of Beneficiary, in its
sole discretion, and shall not commit or suffer any waste to the
Premises or any part thereof and shall comply with all statutes,
ordinances and requirements of any governmental authority relating
to the Premises or any part thereof, or the Grantor’s
operations thereon. Beneficiary may, at any time, cause an
inspection to be made of the Premises or any part thereof by its
representatives, and such representatives shall be permitted
reasonable access to the Premises and every part thereof. If any
such inspection shows the reasonable need of restoration, repairs
or maintenance and the Beneficiary makes demand therefor, the
Grantor shall proceed within 10 days after such demand has been
made to effect such restoration, repairs and maintenance and shall
expeditiously complete the same in a good and workmanlike manner to
the satisfaction of the Beneficiary, free and clear of all
mechanics’ and materialmen’ s liens.
(h)
Insurance. Grantor shall maintain all risk insurance, public
liability and indemnity insurance, hazard insurance, business
interruption insurance and insurance against such other hazards as
Beneficiary may require, in its sole discretion, naming Beneficiary
as an additional insured, in amounts, with insurers and under forms
of policies (including standard noncontributing mortgagee clause
unless otherwise required) satisfactory to the Beneficiary, in its
sole discretion; shall deliver all such policies and, at least 30
days prior to their expiration dates, all renewals thereof to
Beneficiary; and shall pay all premiums thereon. All such policies
shall provide for 30 days’ written notice to Beneficiary
prior to cancellation. Upon request by Beneficiary, if not paid by
Borrower, Grantor shall pay to Beneficiary, in addition to all
other amounts payable hereunder and under the Note, on the first
day of each month, an amount equal to one-twelfth of the annual
premiums for such insurance to be held by Beneficiary in a
non-interest bearing account for the payment of such premiums.
Grantor shall not permit any condition to exist on the Premises
which would wholly or partially invalidate the insurance thereon.
Beneficiary may on behalf of Grantor adjust and compromise any
claims under such insurance and collect and receive proceeds
thereof and is hereby irrevocably appointed attorney-in-fact for
Grantor for such purposes. All Grantor’s rights, title and
interest in and to all such policies are hereby assigned to
Beneficiary, including unearned premiums on such policies. All
proceeds from all insurance policies are absolutely assigned to
Beneficiary and shall be made payable and delivered to Beneficiary
for payment of any amounts owed by Borrower or Grantor to
Beneficiary under any of the Loan Documents. Beneficiary shall not
be obligated to see to the proper application of any amount paid
over to Grantor and shall not be held responsible for any failure
to collect any insurance proceeds due under the terms of any
policy, regardless of the cause of such failure.
(i)
Liens. Grantor shall keep the Premises free from liens which
may have priority over the lien of this Deed of Trust, except liens
for taxes not yet due and payable. Grantor shall pay all taxes and
assessments levied against or which constitute liens on the
Premises when they are due, but Grantor may appropriately and in
good faith contest the levy of any such
