Exhibit 10.1
THIS DOCUMENT HAS
BEEN PREPARED BY AND
SHOULD BE RETURNED TO:
LeeAnn W. Aldridge
Hunter, Maclean, Exley & Dunn,
P.C.
Post Office Box 9848
Savannah, Georgia 31412-0048
THIS DOCUMENT WAS DRAWN OUT OF
STATE
DEED OF TRUST, ASSIGNMENT OF
RENTS AND LEASES,
SECURITY AGREEMENT AND FIXTURE
FILING
(COLLATERAL INCLUDES
FIXTURES)
THIS DEED OF TRUST, ASSIGNMENT OF
RENTS AND LEASES, SECURITY AGREEMENT AND FIXTURE FILING (this
“Deed of Trust”) is made as of January 30,
2006 among JAMESON INNS FINANCING 02, LP, a Georgia limited
partnership, whose address is 41 Perimeter Center East, Suite 400,
Atlanta, Georgia 30346 (“Borrower”), LEEANN W. ALDRIDGE
(or any successor or substitute appointed and designated as herein
provided from time to time acting hereunder, being referred to
herein as “Trustee”), whose address is Hunter, Maclean,
Exley & Dunn, PC, 200 East Saint Julian Street, Savannah,
Georgia 31401, and for the benefit of GE CAPITAL FRANCHISE FINANCE
CORPORATION, a Delaware corporation (“Lender”), whose
address is 17207 N. Perimeter Drive, Scottsdale, Arizona
85255.
PRELIMINARY
STATEMENT:
The capitalized terms used in this
Deed of Trust, if not elsewhere defined herein, are defined as
indicated in Article I. Borrower holds the fee simple interest
in the Premises, subject to the Permitted Exceptions. Borrower is
executing this Deed of Trust for the purpose of granting the
interest of Borrower in and to the Trust Estate (as defined in the
Granting Clauses below) as security for the payment of the
Obligations. The Trust Estate shall be and remain subject to the
lien of this Deed of Trust and shall constitute security for the
Obligations so long as the Obligations shall remain
outstanding.
GRANTING CLAUSES:
Borrower, in consideration of the
premises and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, by these presents
does hereby create a security interest in, mortgage, grant,
bargain, sell, assign, pledge, give, transfer, set over and convey
unto Trustee and to its successors and assigns IN TRUST WITH POWER
OF SALE AND RIGHT OF ENTRY, for the benefit and security of Lender
and its successors and assigns, all of Borrower’s estate,
right, title and interest in, to and under any and all of the
following property (the “Trust Estate”), whether now
owned or hereafter acquired, subject only to the Permitted
Exceptions:
Rents and Derivative
Interests
The Premises, all rents, room rents,
accounts, accounts receivable, receipts, issues, profits,
royalties, income and other benefits derived from the property
comprising the Premises and the Personal Property (as defined
below) or any portion thereof , including, without limitation, any
of the foregoing
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which may arise from any food and beverage
service facilities (but not including tips and gratuities received
by employees, the receipts of licensees, concessionaires, and any
other third parties, or rebates and refunds) and from the use,
licensing, leasing or letting of hotel rooms and suites, ballrooms,
banquet halls, conference facilities, parking facilities, retail
facilities, sports or health facilities, and any other sums
received or receivable under any lease, sublease, license or rental
agreement or in connection with the operation of any business or
enterprise (including, but not limited to, a hotel business)
conducted on the Premises, in whatever form (including, but not
limited to, cash, checks and debit and credit card slips and
payments), and all rights to receive the same(collectively, the
“Rents”); all leases or subleases covering the Premises
and the Personal Property or any portion thereof now or hereafter
existing or entered into including but not limited to the Master
Lease between Grantor and Kitchin Hospitality, LLC dated
January 27, 2006 (the “Master Lease”)
(collectively, “Leases” and individually, a
“Lease”), including, without limitation, all cash or
security deposits, advance rentals and deposits or payments of
similar nature and all guaranties relating to the Leases; all
options to purchase or lease the Premises and the Personal Property
or any portion thereof or interest therein, and any greater estate
in the Premises and the Personal Property or any portion thereof;
all interests, estate or other claims, both in law and in equity,
with respect to the Premises and the Personal Property or any
portion thereof; all easements, rights-of-way and rights used in
connection therewith or as a means of access thereto, and all
tenements, hereditaments and appurtenances thereof and thereto, and
all water rights and shares of stock evidencing the same; all land
lying within the right-of-way of any street, open or proposed,
adjoining the Premises and any and all sidewalks, alleys and strips
and gores of land adjacent to or used in connection with the
Premises;
Personal Property
All tangible personal property now
or at any time hereafter located on or at the Premises or used in
connection therewith, including, without limitation, all machinery,
appliances, furniture, equipment and inventory (the “Personal
Property”);
Intangibles
All existing and future accounts,
contract rights, including, without limitation, with respect to
equipment leases, general intangibles, files, books of account,
agreements, franchise, license and/or area development agreements,
distributor agreements, management agreements, operating
agreements, Indemnity Agreements, permits, licenses and
certificates necessary or desirable in connection with the
acquisition, ownership, leasing, construction, operation, servicing
or management of the property comprising the Premises and the
Personal Property or any portion thereof, whether now existing or
entered into or obtained after the date hereof, all existing and
future names under or by which the property comprising the Premises
and the Personal Property or any portion thereof may at any time be
operated or known, all rights to carry on business under any such
names or any variant thereof, and all existing and future telephone
numbers and listings, advertising and marketing materials,
trademarks and good will in any way relating to the property
comprising the Premises and the Personal Property or any portion
thereof; and
Claims and Awards
All the claims or demands with
respect to the Premises and the Personal Property or any portion
thereof, including, without limitation, claims or demands with
respect to the proceeds of insurance in effect with respect
thereto, claims under any indemnity agreement, including, without
limitation, any indemnity agreement executed for the benefit of the
Premises and the Personal Property or any portion thereof with
respect to Hazardous Materials or USTs, and any and all awards made
for the taking by eminent domain, or by any proceeding or purchase
in lieu thereof, of the whole or any part of the Premises and the
Personal Property, including, without limitation, any awards
resulting from a change of grade of streets and awards for
severance damages.
The Trust Estate shall include all
products and proceeds of the foregoing property.
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TO HAVE AND TO HOLD the Trust Estate
hereby granted or mortgaged or intended to be granted or mortgaged,
unto Trustee, and its successors in trust and assigns, upon the
terms, provisions and conditions set forth herein.
THIS DEED OF TRUST SHALL SECURE THE
FOLLOWING INDEBTEDNESS AND OBLIGATIONS (the
“Obligations”):
(i) Payment of indebtedness
evidenced by the Note together with all extensions, renewals,
amendments and modifications thereof;
(ii) Payment of all other
indebtedness and other sums, with interest thereon, which may be
owed under, and performance of all other obligations and covenants
contained in, any Loan Document (other than the Environmental
Indemnity Agreement), together with any other instrument given to
evidence or further secure the payment and performance of any
obligation secured hereby or thereby; and
(iii) Payment of all indebtedness
and other sums, with interest thereon, which may be owed under, and
performance of all other obligations and covenants contained in any
Other Agreement, together with any other instrument given to
evidence or further secure the payment and performance of any
obligation secured thereby.
It is the intention of the parties
hereto that the Trust Estate shall secure all of the Obligations
presently or hereafter owed, and that the priority of the security
interest created by this Deed of Trust for all such Obligations
shall be controlled by the time of proper recording of this Deed of
Trust. In addition, this Deed of Trust shall also secure unpaid
balances of advances made with respect to the Trust Estate for the
payment of taxes, assessments, insurance premiums, costs or any
other advances incurred for the protection of the Trust Estate,
together with interest thereon until paid at the Default Rate, all
as contemplated in this Deed of Trust, all of which shall
constitute a part of the Obligations. This paragraph shall serve as
notice to all persons who may seek or obtain a lien on the Trust
Estate subsequent to the date of recording of this Deed of Trust,
that until this Deed of Trust is released, any debt owed Lender by
Borrower, including advances made subsequent to the recording of
this Deed of Trust, shall be secured with the priority afforded
this Deed of Trust as recorded. It is the intention of the parties
hereto that this Deed of Trust is made and executed to comply with
the provisions of N.C. Gen. Stat. § 45-67 et seq.
and shall secure any and all present and future obligations which
Borrower may now or hereafter incur pursuant to the Note and Other
Notes, including increases in the principal balance thereof as the
result of “Negative Amortization.” The amount of
present obligations of Borrower to Lender secured hereby is the sum
of $1,235,000.00 as of the date hereof. The maximum principal
amount including present and future obligations, which may be
secured hereby at any one time is $2,470,000.00. The period within
which such future obligations may be incurred is the period from
the date hereof and extending for 15 years from the date
hereof. Pursuant to N.C. Gen. Stat. § 45-68(2), Borrower
and Lender agree that at the time any such future obligation due to
Negative Amortization is incurred it shall not be necessary for
such obligation to be evidenced by any written instrument or
notation signed by Borrower or Lender stipulating that such
obligation is secured by this Deed of Trust.
Notwithstanding the foregoing or any
other provisions of this Deed of Trust to the contrary:
(x) in the event that the Loan
becomes the subject of a Securitization, Participation or Transfer,
this Deed of Trust shall only secure indebtedness and obligations
relating to the Loan and any other loans between any of the
Borrower Parties on the one hand and any of the Lender Entities on
the other hand which are part of the same Loan Pool as the Loan;
and
(y) in the event that any loans
between any of the Borrower Parties on the one hand and any of the
Lender Entities on the other hand (other than the Loan) become the
subject of a Securitization, Participation or Transfer, this Deed
of Trust shall not secure any indebtedness and obligations relating
to such loans unless the Loan is part of the same Loan Pool as such
loans.
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GE No. 8004-3736
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IT IS HEREBY COVENANTED, DECLARED
AND AGREED that the Note and the other Loan Documents are to be
executed, delivered and secured and that the Trust Estate is to be
held and disposed of by Trustee, upon and subject to the provisions
of this Deed of Trust.
ARTICLE I
DEFINED TERMS
Section 1.01.
Incorporation of Definitions . Initially capitalized
terms not otherwise defined in this Deed of Trust shall have the
meanings set forth in that certain Loan Agreement dated as of the
date of this Deed of Trust between Borrower and Lender, as the same
may be amended from time to time (the “Loan
Agreement”).
Section 1.02. Additional
Definitions . Unless the context otherwise specifies or
requires, the following terms shall have the meanings specified
(such definitions to be applicable equally to singular and plural
nouns and verbs of any tense):
“ Environmental Indemnity
Agreement ” means that certain Environmental Indemnity
Agreement dated as of the date of this Deed of Trust executed by
Borrower for the benefit of Lender and such other parties as are
identified in such agreement with respect to the Premises, as the
same may be amended from time to time.
“ Event of Default
” has the meaning set forth in Section 6.01.
“ Improvements ”
means all buildings, fixtures and other improvements now or
hereafter located on the Land (whether or not affixed to the
Land).
“ Indemnified Parties
” means Lender, Environmental Insurer and Trustee and any
person or entity who is or will have been involved in the
origination of the Loan, any person or entity who is or will have
been involved in the servicing of the Loan, any person or entity in
whose name the encumbrance created by this Deed of Trust is or will
have been recorded, persons and entities who may hold or acquire or
will have held a full or partial interest in the Loan (including,
but not limited to, investors or prospective investors in any
Securitization, Participation or Transfer, as well as custodians,
trustees and other fiduciaries who hold or have held a full or
partial interest in the Loan for the benefit of third parties), as
well as the respective directors, officers, shareholders, partners,
members, employees, lenders, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries,
participants, successors and assigns of any and all of the
foregoing (including but not limited to any other person or entity
who holds or acquires or will have held a participation or other
full or partial interest in the Loan or the Trust Estate, whether
during the term of the Loan or as a part of or following a
foreclosure of the Loan and including, but not limited to, any
successors by merger, consolidation or acquisition of all or a
substantial portion of Lender’s assets and
business).
“ Land ” means
the parcel or parcels of real estate legally described in
Exhibit A attached hereto, and all rights, privileges
and appurtenances therewith.
“ Lease ” and
“ Leases ” has the meaning set forth in the
Granting Clause.
“ Loan ” means
the loan made by Lender to Borrower, which is evidenced by the Note
and secured by this Deed of Trust.
“ Loan Agreement
” has the meaning set forth in Section 1.01.
“ Net Award ” has
the meaning set forth in Section 4.01(b)(v).
“ Net Insurance
Proceeds ” has the meaning set forth in
Section 4.01(a)(iii).
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“ Note ” means
the promissory note dated as of even date herewith in the amount of
$1,235,000.00 executed by Borrower and payable to Lender which is
secured by this Deed of Trust and any amendments, extensions or
modifications thereof, including, without limitation, any amendment
and restatement of the Note as a result of a prepayment
contemplated by Section 9 of the Loan Agreement.
“ Obligations ”
has the meaning set forth in the Granting Clause.
“ Other Agreements
” means, collectively, all agreements and instruments
between, among or by (1) any of the Borrower Parties, and, or
for the benefit of, (2) any of the Lender Entities, including,
without limitation, promissory notes and guaranties; provided,
however, the term “Other Agreements” shall not include
the agreements and instruments defined in the Loan Agreement as the
Loan Documents.
“ Outstanding
Obligations ” has the meaning set forth in
Section 4.01(b)(iv)(x)(aa).
“ Partial Taking
” has the meaning set forth in
Section 4.01(b)(ii).
“ Personal Property
” has the meaning set forth in the Granting
Clause.
“ Premises ”
means the Land and the Improvements.
“ Rents ” has the
meaning set forth in the Granting Clause.
“ Restoration ”
means the restoration, replacement or rebuilding of the Premises,
or any part thereof, as nearly as possible to its value, condition
and character immediately prior to any damage, destruction or
Taking.
“ State ” means
the State in which the Premises is located.
“ Taking ” has
the meaning set forth in Section 4.01(b)(i).
“ Total Taking ”
has the meaning set forth in Section 4.01(b)(ii).
“ Trust Estate ”
has the meaning set forth in the Granting Clause.
“ UCC ” has the
meaning set forth in Section 6.02(iii).
ARTICLE II
INCORPORATION OF REPRESENTATIONS,
WARRANTIES AND COVENANTS OF BORROWER
The representations, warranties and
covenants of Borrower set forth in the Loan Agreement are
incorporated by reference into this Deed of Trust as if stated in
full in this Deed of Trust. All representations and warranties as
incorporated herein shall be deemed to have been made as of the
date of this Deed of Trust and all representations, warranties and
covenants incorporated herein shall survive the execution and
delivery of this Deed of Trust.
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ARTICLE III
COVENANTS OF
BORROWER
In addition to any covenants of
Borrower set forth in the Loan Agreement or any other Loan
Document, Borrower hereby covenants to Lender and agrees as follows
until the Obligations are satisfied in full:
Section 3.01.
Recording. Borrower shall, upon the execution and
delivery hereof and thereafter from time to time, take such actions
as Lender may request to cause this Deed of Trust, each supplement
and amendment to such instrument and financing statements with
respect thereto and each instrument of further assurance
(collectively, the “Recordable Documents”) to be filed,
registered and recorded as may be required by law to publish notice
and maintain the first lien or security interest, as applicable,
hereof upon the Trust Estate and to publish notice of and protect
the validity of the Recordable Documents. Borrower shall, from time
to time, perform or cause to be performed any other act and shall
execute or cause to be executed any and all further instruments
(including financing statements, continuation statements and
similar statements with respect to any of said documents) requested
by Trustee for carrying out the intention of, or facilitating the
performance of, this Deed of Trust. Lender shall be and is hereby
irrevocably appointed the agent and attorney-in-fact of Borrower to
comply therewith (including the execution, delivery and filing of
such financing statements and other instruments), which appointment
is coupled with an interest; provided, however, Lender shall not
exercise such power of attorney unless Borrower has first failed to
comply with this Section, and provided, further, that this sentence
shall not prevent any default in the observance of this Section
from constituting an Event of Default. To the extent permitted by
law, Borrower shall pay or cause to be paid recording taxes and
fees incident thereto and all expenses, taxes and other
governmental charges incident to or in connection with the
preparation, execution, delivery or acknowledgment of the
Recordable Documents, any instruments of further assurance and the
Note.
Section 3.02. Use;
Maintenance and Repair; Leases . (a) The Trust Estate
shall be used solely for the operation of a Permitted Concept in
accordance with the Master Lease and for no other purpose. Except
as set forth below, and except during periods when the Premises is
untenantable by reason of fire or other casualty or condemnation
(provided, however, during all such periods while the Premises is
untenantable, Borrower shall strictly comply with the terms and
conditions of Section 4.01 of this Deed of Trust), Borrower
shall at all times while this Deed of Trust is in effect occupy the
Trust Estate and diligently operate its business on the Trust
Estate. Borrower may cease diligent operation of business at the
Trust Estate for a period not to exceed 90 days and may do so
only once within any five-year period while this Deed of Trust is
in effect. If Borrower does discontinue operation as permitted by
this Section, Borrower shall (i) give written notice to Lender
within 10 days after Borrower elects to cease operation,
(ii) provide adequate protection and maintenance of the Trust
Estate during any period of vacancy and (iii) pay all costs
necessary to restore the Trust Estate to its condition on the day
operation of the business ceased at such time as the Trust Estate
is reopened for Borrower’s business operations or other
substituted use. Notwithstanding anything herein to the contrary,
Borrower shall pay monthly the principal and interest due under the
Note during any period in which Borrower discontinues operation.
Borrower will be deemed to have (i) occupied the Trust Estate
by leasing the Trust Estate under the Master Lease and
(ii) operated its business at the Trust Estate by the business
being operated by the lessee under the Master Lease.
Borrower shall not, and shall not
permit any tenant to, by itself or through any lease or other type
of transfer, convert the Premises to an alternative use while this
Deed of Trust is in effect without Lender’s consent, which
consent shall not be unreasonably withheld. Lender may consider any
or all of the following in determining whether to grant its
consent, without being deemed to be unreasonable: (i) whether
the converted use will be consistent with the highest and best use
of the Trust Estate, and (ii) whether the converted use will
increase Lender’s risks or decrease the value of the Trust
Estate.
(b) Borrower shall or shall cause
lessee under the Master Lease to (i) maintain the Trust Estate
in good condition and repair, subject to reasonable and ordinary
wear and tear, free from actual or constructive waste,
(ii) operate, remodel, update and modernize the Trust Estate
in accordance with those standards adopted from time to time by
Jameson Inns, Inc. on a system-wide basis for Permitted Concepts,
with such remodeling and modernizing being undertaken in accordance
with Jameson Inns, Inc.’s system-wide timing schedules for
such activities, and (iii) pay all operating costs of the
Premises in the ordinary course of business. Borrower shall not do
or allow any tenant or other user of the Premises to do any act
that (1) materially increase the dangers to human health or
the environment, (2) poses an unreasonable risk of harm to any
person or entity (whether on or off the Premises), (3) impairs
or is
Contract No. 29585
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reasonably likely to impair in any material
respect the value of the Premises, (4) is contrary to any
requirement of any insurer, or (5) violates in any material
respect any covenant, condition, agreement or easement applicable
to the Premises.
(c) Borrower shall not without
Lender’s prior consent (i) enter into any Leases;
(ii) modify or amend the terms of any Lease; (iii) grant
any consents under any Lease, including, without limitation, any
consent to an assignment of any Lease, a mortgaging of the
leasehold estate created by any Lease or a subletting by the tenant
under any Lease; (iv) terminate, cancel, surrender, or accept
the surrender of, any Lease or waive or release any person from the
observance or performance of any obligation to be performed under
the terms of any Lease or liability on account of any warranty
given thereunder; or (v) assign, transfer, mortgage, pledge or
hypothecate any Lease or any interest therein to any party other
than Lender. Any lease, modification, amendment, grant,
termination, cancellation, surrender, waiver or release in
violation of the foregoing provision shall be null and void and of
no force and effect. Unless Lender otherwise consents or elects,
Borrower’s title to the Trust Estate and the leasehold
interest in the Trust Estate created by any Lease shall not merge,
but shall always be kept separate and distinct, notwithstanding the
union of such estates in Borrower, Lender or any other person by
purchase, operation of law, foreclosure of this Deed of Trust, sale
of the Trust Estate pursuant to this Deed of Trust or
otherwise.
(d) Borrower shall (i) fulfill,
perform and observe in all respects each and every condition and
covenant of Borrower contained in any Lease; (ii) give prompt
notice to Lender of any claim or event of default under any Lease
given to or by Borrower, together with a complete copy or statement
of any information submitted or referenced in support of such claim
or event of default; (iii) at the sole cost and expense of
Borrower, enforce the performance and observance of each and every
covenant and condition of any Lease to be performed or observed by
any other party thereto, unless such enforcement is waived in
writing by Lender; (iv) appear in and defend any action
challenging the validity, enforceability or priority of the lien
created hereby or the validity or enforceability of any Lease; and
(v) hold that portion of the Rents which is sufficient to
discharge all current sums due under the Note for use in the
payment of such sums.
Section 3.03. Alterations
and Improvements. Borrower shall not alter the exterior,
structural, plumbing or electrical elements of the Trust Estate in
any manner without the consent of Lender, which consent shall not
be unreasonably withheld or conditioned; provided, however,
Borrower may undertake nonstructural alterations to the Trust
Estate costing less than $100,000 without Lender’s consent.
For purposes of this Deed of Trust, alterations to the exterior,
structural, plumbing or electrical elements of the Trust Estate
shall mean:
(i) alterations which affect the
foundation or “footprint” of the
Improvements;
(ii) alterations which involve the
structural elements of the Improvements, such as a load-bearing
wall, structural beams, columns, supports or roof; or
(iii) alterations which materially
affect any of the building systems, including, without limitation,
the electrical systems, plumbing, HVAC and fire and safety
systems.
If Lender’s consent is
required hereunder and Lender consents to the making of any such
alterations, the same shall be made by Borrower at Borrower’s
sole expense by a licensed contractor and according to plans and
specifications approved by Lender and subject to such other
conditions as Lender shall require. Any work at any time commenced
on the Trust Estate shall be prosecuted diligently to completion,
shall be of good workmanship and materials and shall comply fully
with all the terms of this Deed of Trust. Upon completion of any
alterations for which Lender’s consent is required hereunder
or any Restoration, Borrower shall promptly provide Lender with
(i) evidence of full payment to all laborers and materialmen
contributing to the alterations, (ii) an architect’s
certificate certifying the alterations to have been completed in
conformity with the plans and specifications, (iii) a
certificate of occupancy (if the alterations
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are of such a nature as would require the
issuance of a certificate of occupancy), and (iv) any other
documents or information reasonably requested by Lender.
Section 3.04.
After-Acquired Property. All right, title and
interest of Borrower in and to all improvements, alterations,
substitutions, restorations and replacements of, and all additions
and appurtenances to, the Trust Estate, hereafter acquired by or
released to Borrower, immediately upon such acquisition or release
and without any further granting by Borrower, shall become part of
the Trust Estate and shall be subject to the lien hereof fully,
completely and with the same effect as though now owned by Borrower
and specifically described in the Granting Clauses hereof. Borrower
shall execute and deliver to Trustee and/or Lender any further
assurances, mortgages, grants, conveyances or assignments thereof
as the Trustee may reasonably require to subject the same to the
lien hereof.
Section 3.05. Taxes,
Assessments, Charges and Other Impositions.
(a) Borrower shall do or cause to be done everything necessary
to preserve the lien hereof without expense to Trustee and Lender,
including, without limitation, paying and discharging or causing to
be paid and discharged, whether or not payable directly by Borrower
or subject to withholding at the source, (i) all taxes,
assessments, levies, fees, water and sewer rents and charges and
all other governmental charges, general, special, ordinary or
extraordinary, and all charges for utility or communications
services, which may at any time be assessed, levied or imposed upon
Borrower, the Trust Estate, this Deed of Trust, the Obligations or
the Rents or which may arise in respect of the occupancy, use,
possession or operation thereof, (ii) all income, excess
profits, sales, gross receipts and other taxes, duties or imposts,
whether similar or not in nature, assessed, levied or imposed by
any Governmental Authority on Borrower, the Trust Estate or the
Rents, and (iii) all lawful claims and demands of mechanics,
laborers, materialmen and others which, if unpaid, might create a
lien on the Trust Estate, or on the Rents, unless Borrower shall
contest the amount or validity thereof in accordance with
subsection (b).
(b) Borrower may, at its own
expense, contest or cause to be contested, by appropriate legal
proceedings conducted in good faith and with due diligence, the
amount or validity or application, in whole or in part, of any item
specified in subsection (a) or lien therefor, provided that
(i) Borrower shall provide written notice to Lender of any
contest involving more than $10,000.00, (ii) such proceeding
shall suspend the collection thereof from the Trust Estate or any
interest therein, (iii) neither the Trust Estate nor any
interest therein would be in any danger of being sold, forfeited or
lost by reason of such proceedings, (iv) no Event of Default
has occurred and is continuing, and (v) Borrower shall have
deposited with Lender adequate reserves for the payment of the
taxes, together with all interest and penalties thereon, unless
paid in full under protest, or Borrower shall have furnished
the security as may be required in the proceeding or as may be
required by Lender to insure payment of any contested
taxes.
Section 3.06.
Insurance. (a) Borrower shall maintain with
respect to the Trust Estate, at its sole expense, the following
types and amounts of insurance (which may be included under a
blanket insurance policy if all the other terms hereof are
satisfied), in addition to such other insurance as Lender may
reasonably require from time to time:
(i) Insurance against loss, damage
or destruction by fire and other casualty, including theft,
vandalism and malicious mischief, flood (if the Premises is in a
location designated by the Federal Emergency Management
Administration as a Special Flood Hazard Area), earthquake (if the
Premises is in an area subject to destructive earthquakes within
recorded history), boiler explosion (if there is any boiler upon
the Premises), plate glass breakage, sprinkler damage (if the
Premises have a sprinkler system), all matters covered by a
standard extended coverage endorsement, special coverage
endorsement commonly known as an “all risk” endorsement
and such other risks as Lender may reasonably require, insuring the
Trust Estate for not less than 100% of their full insurable
replacement cost.
(ii) Commercial general liability
and property damage insurance, including a products liability
clause, covering Lender and Borrower against bodily injury
liability, property damage liability and automobile bodily injury
and property damage liability, including without
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limitation any liability arising out
of the ownership, maintenance, repair, condition or operation of
the Trust Estate or adjoining ways, streets or sidewalks and, if
applicable, insurance covering Lender, against liability arising
from the sale of liquor, beer or wine on the Premises. Such
insurance policy or policies shall contain a broad form contractual
liability endorsement under which the insurer agrees to insure
Borrower’s obligations under Section 8.09 hereof to the
extent insurable, and a “severability of interest”
clause or endorsement which precludes the insurer from denying the
claim of either Borrower or Lender because of the negligence or
other acts of the other, shall be in amounts of not less than
$2,000,000.00 per injury and occurrence with respect to any insured
liability, whether for personal injury or property damage, or such
higher limits as Lender may reasonably require from time to time,
and shall be of form and substance reasonably satisfactory to
Lender.
(iii) Business income insurance
equal to 100% of the principal and interest payable under the Note
for a period of not less than six months.
(iv) State Worker’s
compensation insurance in the statutorily mandated limits,
employer’s liability insurance with limits not less than
$500,000 or such greater amount as Lender may from time to time
require and such other insurance as may be necessary to comply with
applicable laws.
(b) All insurance policies
shall:
(i) Provide for a waiver of
subrogation by the insurer as to claims against Lender, its
employees and agents and provide that such insurance cannot be
unreasonably cancelled, invalidated or suspended on account of the
conduct of Borrower, its officers, directors, employees or
agents;
(ii) Provide that any “no
other insurance” clause in the insurance policy shall exclude
any policies of insurance maintained by Lender and that the
insurance policy shall not be brought into contribution with
insurance maintained by Lender;
(iii) Contain a standard without
contribution mortgage clause endorsement in favor of Lender and its
successors and assigns as their interests may appear and any other
lender designated by Lender;
(iv) Provide that the policy of
insurance shall not be terminated, cancelled or substantially
modified without at least thirty (30) days’ prior
written notice to Lender and to any lender covered by any standard
mortgage clause endorsement;
(v) Provide that the insurer shall
not have the option to restore the Premises if Lender elects to
terminate this Deed of Trust in accordance with the terms
hereof;
(vi) Be issued by insurance
companies licensed to do business in the state in which the
Premises is located and which are rated A:VIII or better by
Best’s Key Rating Guide or otherwise approved by Lender;
and
(vii) Provide that the insurer shall
not deny a claim because of the negligence of Borrower, anyone
acting for Borrower or any tenant or other occupant of the Trust
Estate.
It is expressly understood and
agreed that the foregoing minimum limits of insurance coverage
shall not limit the liability of Borrower for its acts or omissions
as provided in this Deed of Trust. All liability insurance policies
(with the exception of worker’s compensation insurance to the
extent not available under statutory law) shall designate Lender
and its successors and assigns as additional insureds as their
interests may appear and shall be payable as set forth in Article
IV hereof. All such policies shall be written as primary policies,
with deductibles not to exceed $10,000. Any other policies,
including any
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Dunn, North Carolina
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policy now or hereafter carried by Lender, shall
serve as excess coverage. Borrower shall procure policies for all
insurance for periods of not less than one year and shall provide
to Lender certificates of insurance or, upon Lender’s
request, duplicate originals of insurance policies evidencing that
insurance satisfying the requirements of this Deed of Trust is in
effect at all times.
Section 3.07. Impound
Account. Upon the occurrence of an Event of Default under
this Deed of Trust or any other Loan Document, Lender may require
Borrower to pay to Lender sums which will provide an impound
account (which shall not be deemed a trust fund) for paying up to
the next one year of taxes, assessments and/or insurance premiums.
Upon such requirement, Lender will estimate the amounts needed for
such purposes and will notify Borrower to pay the same to Lender in
equal monthly installments, as nearly as practicable, in addition
to all other sums due under this Deed of Trust. Should additional
funds be required at any time, Borrower shall pay the same to
Lender on demand. Borrower shall advise Lender of all taxes and
insurance bills which are due and shall cooperate fully with Lender
in assuring that the same are paid. Lender may deposit all
impounded funds in accounts insured by any federal or state agency
and may commingle such funds with other funds and accounts of
Lender. Interest or other gains from such funds, if any, shall be
the sole property of Lender. If an Event of Default shall occur
subsequent to Lender requiring the establishment of an impound
account pursuant to this Section, Lender may apply all impounded
funds against any sums due from Borrower to Lender. Lender shall
give to Borrower an annual accounting showing all credits and
debits to and from such impounded funds received from
Borrower.
Section 3.08. Advances by
Trustee and Lender. Trustee and Lender may make advances to
perform any of the covenants contained in this Deed of Trust on
Borrower’s behalf and all sums so advanced (and all sums
advanced pursuant to any other provision hereof) by Trustee or
Lender shall be secured hereby. Borrower shall repay on demand all
sums so advanced with interest thereon at the Default Rate, such
interest to be computed from and including the date of the making
of such advance to and including the date of such repayment, and at
Lender’s election, Lender may add the amount of such advance
to the principal balance of the Loan.
Section 3.09. Negative
Covenants. Without limiting the terms and conditions of
Section 5 of the Loan Agreement, Borrower agrees that Borrower
shall not, without the prior written consent of Lender (each, a
“Prohibited Transaction”), sell, convey, mortgage,
grant, bargain, encumber, pledge, assign, or otherwise transfer the
Trust Estate or any part thereof or permit the Trust Estate or any
part thereof to be sold, conveyed, mortgaged, granted, bargained,
encumbered, pledged, assigned, or otherwise transferred, other than
sales from inventory in the ordinary course of business and the
replacement of obsolete Personal Property. A sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer within the meaning of this Section shall be deemed to
include, but not limited to, (a) an installment sales
agreement wherein Borrower agrees to sell the Trust Estate or any
part thereof for a price to be paid in installments; and
(b) an agreement by Borrower leasing all or any part of the
Trust Estate or a sale, assignment or other transfer of, or the
grant of a security interest in, Borrower’s right, title and
interest in and to any Lease or any Rents.
Lender’s consent to a
Prohibited Transaction shall be subject to the satisfaction of such
conditions as Lender shall determine in its sole discretion,
including, without limitation, (i) Borrower having executed
and delivered such modifications to the terms of this Deed of Trust
and the other Loan Documents as Lender shall request, (ii) the
Prohibited Transaction having been approved by each of the rating
agencies which have issued ratings in connection with any
Securitization of the Loan as well as any other rating agency
selected by Lender, and (iii) the proposed transferee having
assumed the Note, this Deed of Trust and the other Loan Documents
(as modified pursuant to clause (i) above). In addition, any
such consent shall be conditioned upon the payment by Borrower to
Lender of (x) a fee equal to one percent (1%) of the then
outstanding principal balance of the Note and (y) all
out-of-pocket costs and expenses incurred by Lender in connection
with such consent, including, without limitation, reasonable
attorneys’ fees. Lender shall not be required to demonstrate
any actual impairment of its security or any increased risk of
default hereunder in order to declare the Obligations immediately
due and payable upon Borrower’s sale, conveyance, mortgage,
grant, bargain, encumbrance, pledge, assignment, or transfer
of
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the Trust Estate without Lender’s consent,
as required hereunder. The provisions of this Section shall apply
to every sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, or transfer of the Trust Estate regardless of
whether voluntary or not, or whether or not Lender has consented to
any previous sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment, or transfer of the Trust
Estate.
ARTICLE IV
POSSESSION, USE AND RELEASE OF
THE TRUST ESTATE
Section 4.01. Casualty or
Condemnation. Borrower, immediately upon obtaining
knowledge of any casualty to any portion of the Trust Estate or of
any proceeding or negotiation for the taking of all or any portion
of the Trust Estate in condemnation or other eminent domain
proceedings, shall notify Lender of such casualty, proceeding or
negotiation. Any award, compensation or other payment resulting
from such casualty or condemnation or eminent domain proceeding, as
applicable, shall be applied as set forth below (the
“Proceeds”). Trustee and Lender may participate in any
condemnation or eminent domain proceeding, and Borrower will
deliver or cause to be delivered to Trustee and Lender all
instruments reasonably requested by Trustee and Lender to permit
such participation.
(a) Casualty . (i) In
the event of any material damage to or destruction of the Trust
Estate or any part thereof, Borrower will promptly give written
notice to Lender, generally describing the nature and extent of
such damage or destruction. No damage to or destruction of the
Trust Estate shall relieve Borrower of its obligation to pay any
monetary sum due under the Loan Documents at the time and in the
manner provided in the Loan Documents.
(ii) In the event of any damage to
or destruction of the Trust Estate or any part thereof, Borrower,
whether or not the Proceeds, if any, on account of such damage or
destruction shall be sufficient for the purpose, at its expense,
shall promptly cause the Restoration to be commenced and
completed.
(iii) Proceeds received by Lender
and Borrower on account of any occurrence of damage to or
destruction of the Trust Estate or any part thereof, less the
costs, fees and expenses incurred by Lender and Borrower in the
collection thereof, including, without limitation, adjuster’s
fees and expenses and attorneys’ fees and expenses (the
“Net Insurance Proceeds”), shall be paid to
(1) Borrower, if the amount of such Net Insurance Proceeds is
less than $100,000 and applied by Borrower toward the cost of the
Restoration, and (2) Lender, if the amount of such Net
Insurance Proceeds is $100,000 or greater. Net Insurance Proceeds
paid to Lender shall be held and disbursed by Lender, or as Lender
may from time to time direct, as the Restoration progresses, to pay
or reimburse Borrower for the cost of the Restoration, upon written
request of Borrower accompanied by evidence, reasonably
satisfactory to Lender, that (aa) the Restoration is in full
compliance with all Applicable Regulations and all private
restrictions and requirements, (bb) the amount requested has
been paid or is then due and payable and is properly a part of such
cost, (cc) there are no mechanics’ or similar liens for
labor or materials theretofore supplied in connection with the
Restoration, (dd) if the estimated cost of the Restoration
exceeds the Net Insurance Proceeds (exclusive of Proceeds received
from Borrower’s business income insurance), Borrower has
deposited into an escrow satisfactory to Lender such excess amount,
which sum will be disbursed pursuant to escrow instructions
satisfactory to Lender, (ee) the balance of such Net Insurance
Proceeds, together with the funds deposited into escrow, if any,
pursuant to the preceding subsection (dd), after making the
payment requested will be sufficient to pay the balance of the cost
of the Restoration, and (ff) the Master Lease is in full force and
effect. Upon receipt by Lender of evidence reasonably satisfactory
to it that the Restoration has been completed and the cost thereof
paid in full, and that there are no mechanics’ or similar
liens for labor or materials supplied in connection therewith, the
balance, if any, of such Net Insurance Proceeds shall be paid to
Borrower. If at the time of the damage or destruction to the Trust
Estate or at any time thereafter an Event of Default shall have
occurred and be continuing under the Loan Documents, all Net
Insurance Proceeds shall be paid to Lender, and Lender may retain
and apply the Net Insurance Proceeds toward the Obligations whether
or not then due and
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payable, in such order, priority and proportions
as Lender in its discretion shall deem proper, or to cure such
Event of Default, or, in Lender’s discretion, Lender may pay
such Net Insurance Proceeds in whole or in part to Borrower to be
applied toward the cost of the Restoration. If Lender shall receive
and retain Net Insurance Proceeds, the lien of this Deed of Trust
shall be reduced only by the amount received and retained by Lender
and actually applied by Lender in reduction of the
Obligations.
(b) Condemnation .
(i) In case of a taking of all or any part of the Trust Estate
or the commencement of any proceedings or negotiations which might
result in a taking, for any public or quasi-public purpose by any
lawful power or authority by exercise of the right of condemnation
or eminent domain or by agreement between Lender, Borrower and
those authorized to exercise such right (“Taking”),
Borrower will promptly give written notice thereof to Lender,
generally describing the nature and extent of such Taking. Lender
shall file and prosecute on behalf of Lender and Borrower any and
all claims for Proceeds, and all Proceeds on account of a Taking
shall be paid to Lender.
(ii) In case of a Taking of the
whole of the Trust Estate, other than for temporary use
(“Total Taking”), or in case of a Taking of less than
all of the Trust Estate (“Partial Taking”), the Loan
Documents shall remain in full force and effect. In the case of a
Partial Taking, Borrower, whether or not the Proceeds, if any, on
account of such Partial Taking shall be sufficient for the purpose
(but provided they are made available by Lender for such purpose),
at its own cost and expense, will promptly commence and complete
the Restoration. In case of a Partial Taking, other than a
temporary use, of such a substantial part of the Trust Estate as
shall result in the Trust Estate remaining after such Partial
Taking being unsuitable for use, such Taking shall be deemed a
Total Taking.
(iii) In case of a temporary use of
the whole or any part of the Trust Estate by a Taking, the Loan
Documents shall remain in full force and effect without any
reduction of any monetary sum payable under the Loan Documents. In
any proceeding for such Taking, Lender shall have the right to
intervene and participate; provided that, if such intervention
shall not be permitted, Borrower shall consult with Lender, its
attorneys and experts, and make all reasonable efforts to cooperate
with Lender in the prosecution or defense of such proceeding. At
the termination of any such use or occupation of the Trust Estate,
Borrower will, at its own cost and expense, promptly commence and
complete the Restoration.
(iv) Proceeds on account of a
Taking, less the costs, fees and expenses incurred by Lender and
Borrower in connection with the collection thereof, including,
without limitation, attorneys’ fees and expenses, shall be
applied in the following order:
(x) Proceeds received on account of
a Total Taking shall be allocated as follows:
(aa) There shall be paid to the
Lender an amount up to the sum of the outstanding principal,
including all sums advanced by Lender hereunder, and interest under
the Note, all as of the date on which such payment is made, such
amount shall be applied first against all sums advanced by Lender
under this Deed of Trust, second against the accrued but unpaid
interest on the Note, and third to the remaining unpaid principal
amount of the Note. If the Proceeds received on account of a Total
Taking are not sufficient to satisfy the outstanding principal
balance of the Note, all accrued but unpaid interest on the Note,
all other sums due under the Note, all sums advanced by Lender
under this Deed of Trust and all other sums due and payable under
this Deed of Trust and the other Loan Documents corresponding to
the Premises (collectively, the “Outstanding
Obligations”), Borrower shall pay to Lender simultaneously
with the payment of such Proceeds to Lender the difference between
the amount of such Proceeds and the amount of the Outstanding
Obligations.
(bb) Any remaining balance shall be
paid to Borrower.
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(y) Proceeds received on account of
a Partial Taking shall be held and allocated as follows:
(i) first, toward the cost of the
Restoration, such application of net awards and other payments to
be made substantially in the manner provided in
Section 4.01(a)(iii) of this Deed of Trust;
and
(ii) then, all or any portion of the
balance of such proceeds shall, in Lender’s sole discretion,
either be paid to:
(1) Lender, as the holder of this
Deed of Trust, and applied toward the Outstanding Obligations in
such order, priority and proportion, and at such time on or prior
to the Maturity Date (as defined in the Note), as Lender shall
determine; or
(2) Borrower; provided, however, in
Lender’s sole discretion, such proceeds shall be pledged to
Lender to secure the Outstanding Obligations pursuant to a security
agreement reasonably satisfactory to Lender, or, with
Lender’s consent, Borrower shall provide Lender with
alternative security satisfactory to Lender in its sole
discretion.
Lender may deposit any funds held by
it in accounts insured by any federal or state agency and may
commingle such funds with other funds and accounts of Lender.
Interest or gains from such funds, if any, shall be the sole
property of Lender.
(z) Proceeds received on account of
a Taking for temporary use shall be held by Lender and applied to
the payment of the monthly installments of combined interest and
principal becoming due under the Note, until such Taking for
temporary use is terminated and the Restoration, if any, has been
completed; provided, however, that, if any portion of any such
award or payment is made by reason of any damage to or destruction
of the Trust Estate, such portion shall be held and applied as
provided in Section 4.01(a)(iii) hereof. The balance, if
any, of such awards and payments shall be paid to
Borrower.
(v) Notwithstanding the foregoing,
if at the time of any Taking or at any time thereafter an Event of
Default shall have occurred and be continuing under the Loan
Documents, Lender is hereby authorized and empowered, in the name
and on behalf of Borrower and otherwise, to file and prosecute
Borrower’s claim, if any, for an award on account of any
Taking and to collect such award and apply the same, after
deducting all costs, fees and expenses incident to the collection
thereof (the “Net Award”), toward the Obligations
whether or not then due and payable, in such order, priority and
proportions as Lender in its discretion shall deem proper, or to
cure such Event of Default, or, in Lender’s discretion,
Lender may pay the Net Award in whole or in part to Borrower to be
applied toward the cost of the Restoration. If Lender shall receive
and retain the Net Award, the lien of this Deed of Trust shall be
reduced only by the amount received and retained by Lender and
actually applied by Lender in reduction of the
Obligations.
Section 4.02. Conveyance
in Anticipation of Condemnation, Granting of Easements,
Etc. If no Event of Default shall have occurred and be
continuing, Borrower may, from time to time with respect to its
interest in the Trust Estate, and with Lender’s prior written
consent, which consent shall not be unreasonably withheld,
(i) sell, assign, convey or otherwise transfer any interest
therein to any person legally empowered to take such interest under
the power of eminent domain, (ii) grant easements and other
rights in the nature of easements, (iii) release existing
easements or other rights in the nature of easements which are for
the benefit of the Trust Estate, (iv) dedicate or transfer
unimproved portions of the Trust Estate for road, highway or other
public purposes, (v) execute petitions to have the Trust
Estate annexed to any municipal corporation or utility district,
and (vi) execute and deliver to any person any instrument
appropriate to confirm or effect such grants, releases, dedications
and transfers.
Section 4.03.
Lender’s Power. At any time, or from time to
time, without liability therefor, Lender, without affecting the
personal liability of any person for payment of the Obligations or
the effect of
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this Deed of Trust upon the remainder of said
Trust Estate, may from time to time without notice (i) release
any part of said Trust Estate, (ii) consent in writing to the
making of any map or plat thereof, (iii) join in granting any
easement thereon, (iv) join in any extension agreement or any
agreement subordinating the lien or charge hereof, (v) release
any person so liable, (vi) extend the maturity or alter any of
the terms of any Obligations, (vii) grant other indulgences,
(viii) take or release any other or additional security for
any Obligations, (ix) make compositions or other arrangements
with debtors in relation thereto, or (x) advance additional
funds to protect the security hereof or to pay or discharge the
Obligations in the event Borrower fails to do so, and all amounts
so advanced shall be secured hereby and shall be due and payable
upon demand by Lender.
ARTICLE V
SECURITY INTEREST
Section 5.01. Security
Agreement . With respect to the Personal Property or any
portion of the Trust Estate which constitutes fixtures or other
property governed by the UCC, this Deed of Trust shall constitute a
security agreement between Borrower, as the debtor, and Lender, as
the secured party, and Borrower hereby grants to Lender a security
interest in such portion of the Trust Estate. Cumulative of all
other rights of Lender hereunder, Lender shall have all of the
rights conferred upon secured parties by the UCC. Borrower
authorizes Lender to file financing statements with respect to the
security interest of Lender, continuation statements with respect
thereto, and any amendments to such financing statements which may
be necessitated by reason of any of the changes described in
Section 4.C of the Loan Agreement. Furthermore, at any time,
and from time to time, Borrower will execute and deliver to Lender
all financing statements that may from time to time be required by
Lender to establish and maintain the validity and priority of the
security interest of Lender, or any modification thereof. Lender
may exercise any or all of the remedies of a secured party
available to it under the UCC with respect to such property. If,
upon the occurrence and during the continuance of an Event of
Default, Lender proceeds to dispose of such property in accordance
with the provisions of the UCC, 10 days’ notice by
Lender to Borrower shall be deemed to be reasonable notice under
any provision of the UCC requiring such notice; provided, however,
that Lender may at its option dispose of such property in
accordance with Lender’s rights and remedies with respect to
the real property pursuant to the provisions of this Deed of Trust,
in lieu of proceeding under the UCC. Borrower represents that its
exact legal name and state of formation or organization are as set
forth in the first paragraph of this Deed of Trust. Borrower agrees
that, notwithstanding any provision in the UCC to the contrary,
Borrower shall not file a termination statement of any financing
statement filed by Lender in connection with any security interest
granted under this Deed of Trust if Lender reasonably objects to
the filing of such termination statement.
Section 5.02. Effective
as a Financing Statement and Fixture Filing. This Deed of
Trust shall be effective as a financing statement filed as a
fixture filing with respect to all fixtures included within the
Trust Estate and is to be filed for record in the real estate
records of each county where any part of the Trust Estate
(including said fixtures) is situated. This Deed of Trust shall
also be effective as a financing statement covering any other
portion of the Trust Estate and may be filed in any other
appropriate filing or recording office. The mailing address of
Borrower is the address of Borrower set forth in the introductory
paragraph of this Deed of Trust, and the address of the Lender from
which information concerning the security interests hereunder may
be obtained is the address of Lender as set forth in the
introductory paragraph of this Deed of Trust. A carbon,
photographic or other reproduction of this Deed of Trust or of any
financing statement relating to this Deed of Trust shall be
sufficient as a financing statement for any of the purposes
referred to in this Section.
ARTICLE VI
EVENTS OF DEFAULT AND
REMEDIES
Section 6.01. Events of
Default. Each of the following shall be an event of default
under this Deed of Trust (each an “Event of
Default”):
(i) Subject to the provisions of
Section 3.05(b) of this Deed of Trust, if Borrower fails to
pay, prior to delinquency, any taxes, assessments or other charges
the failure of which to pay will result in the imposition of a lien
against the Trust Estate pursuant to Applicable
Regulations.
Contract No. 29585
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(ii) If Borrower shall fail to
maintain insurance in accordance with the requirements of
Section 3.06 of this Deed of Trust.
(iii) If Borrower fails to observe
or perform any of the covenants, conditions, or obligations of this
Deed of Trust, provided, however, if any such failure does not
involve the payment of any principal, interest or other monetary
sum due under the Note, is not willful or intentional, does not
place any rights or interest in collateral of Lender in immediate
jeopardy, and is within the reasonable power of Borrower to
promptly cure after receipt of notice thereof, all as determined by
Lender in its reasonable discretion, then such failure shall not
constitute an Event of Default hereunder, unless otherwise
expressly provided herein, unless and until Lender shall have given
Borrower notice thereof and a period of 30 days shall have
elapsed, during which period Borrower may correct or cure such
failure, upon failure of which an Event of Default shall be deemed
to have occurred hereunder without further notice or demand of any
kind being required. If such failure cannot reasonably be cured
within such 30-day period, as determined by Lender in its
reasonable discretion, and Borrower is diligently pursuing a cure
of such failure, then Borrower shall have a reasonable period to
cure such failure beyond such 30-day period, which shall in no
event exceed 90 days after receiving notice of the failure
from Lender. If Borrower shall fail to correct or cure such failure
within such 90-day period, an Event of Default shall be deemed to
have occurred hereunder without further notice or demand of any
kind being required.
(iv) If there is an “Event of
Default” under the Loan Agreement.
Section 6.02.
Remedies. Upon the occurrence and during the
continuance of an Event of Default and subject to the limitations
set forth in Section 6.01, Lender may declare all or any part
of the Obligations to be due and payable, and the same shall
thereupon become due and payable without any presentment, demand,
protest or notice (including notice of intent to accelerate and
notice of acceleration) of any kind except as otherwise expressly
provided herein or as may be required by applicable law.
Furthermore, upon the occurrence and during the continuance of an
Event of Default, Lender may:
(i) Either in person or by agent,
with or without bringing any action or proceeding, or by a receiver
appointed by a court, and without regard to the adequacy of its
security, enter upon and take possession of the Trust Estate or any
part thereof and do any acts which it deems necessary or desirable
to preserve the value, marketability or rentability of the Trust
Estate, or part thereof or interest therein, increase the income
therefrom or protect the security hereof and, with or without
taking possession of the Trust Estate, take any action described
herein, sue for or otherwise collect the Rents, including those
past due and unpaid, and apply the same, less costs and expenses of
operation and collection including reasonable attorneys’
fees, upon any Obligations, all in such order as Lender may
determine. The entering upon and taking possession of the Trust
Estate, the taking of any action described herein, the collection
of such Rents, and the application thereof as aforesaid, shall not
cure or waive any Event of Default or notice of default or
invalidate any act done in response to such Event of Default or
pursuant to such notice of default and, notwithstanding the
continuance in possession of the Trust Estate or the collection,
receipt and application of Rents, Lender shall be entitled to
exercise every right provided for in any of the Loan Documents or
by law upon any Event of Default, including the right to exercise
the power of sale herein conferred;
(ii) Commence an action for judicial
foreclosure of this Deed of Trust or direct Trustee to file and
Trustee shall file a notice of hearing to foreclose this Deed of
Trust pursuant to the power of sale herein conferred in a single
parcel or in several parcels, appoint a receiver, or specifically
enforce any of the covenants hereof;
Contract No. 29585
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(iii) Exercise any or all of the
remedies available to a secured party under the Uniform Commercial
Code as adopted in the State (“UCC”), including,
without limitation:
(1) Either personally or by means of
a court appointed receiver, commissioner or other officer, take
possession of all or any of the Personal Property and exclude
therefrom Borrower and all others claiming under Borrower, and
thereafter hold, store, use, operate, manage, maintain and control,
make repairs, replacements, alterations, additions and improvements
to and exercise all rights and powers of Borrower in respect of the
Personal Property or any part thereof. In the event Lender demands
or attempts to take possession of the Personal Property in the
exercise of any rights under any of the Loan Documents, Borrower
promises and agrees to promptly turn over and deliver complete
possession thereof to Lender;
(2) Without notice to or demand upon
Borrower, make such payments and do such acts as Lender may deem
necessary to protect its security interest in the Personal
Property, including, without limitation, paying, purchasing,
contesting or compromising any encumbrance, charge or lien which is
prior to or superior to the security interest granted hereunder
and, in exercising any such powers or authority, to pay all
expenses incurred in connection therewith;
(3) Require Borrower to assemble the
Personal Property or any portion thereof, at the Premises, and
promptly to deliver such Personal Property to Lender, or an agent
or representative designated by it. Lender, and its agents and
representatives, shall have the right to enter upon any or all of
Borrower’s premises and property to exercise Lender’s
rights hereunder;
(4) Sell, lease or otherwise dispose
of the Personal Property at public sale, with or without having the
Personal Property at the place of sale, and upon such terms and in
such manner as Lender may determine. Lender may be a purchaser at
any such sale;
(5) Unless the Personal Property is
perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, Lender shall give
Borrower at least 10 days’ prior written notice of the time
and place of any public sale of the Personal Property or other
intended disposition thereof. Such notice may be delivered to
Borrower at the address set forth at the beginning of this Deed of
Trust and shall be deemed to be given as provided herein;
and
(6) Any sale made pursuant to the
provisions of this subsection shall be deemed to have been a public
sale conducted in a commercially reasonable manner if held
contemporaneously with the sale of all or a portion of the other
Trust Estate under power of sale as provided herein upon giving the
same notice with respect to the sale of the Personal Property
hereunder as is required for such sale of the other Trust Estate
under power of sale, and such sale shall be deemed to be pursuant
to a security agreement covering both real and personal property
under the UCC.
(iv) Exercise all of
Borrower’s rights and remedies under the Indemnity
Agreements, including, without limitation, making demands and
claims and receiving payments under the Indemnity Agreements.
Borrower hereby grants Lender a power of attorney (which grant
shall be deemed irrevocable and coupled with an interest) to
exercise such rights and remedies;
(v) Apply any sums then deposited in
the impound account described in Section 3.07 toward payment
of the taxes, assessment and insurance premiums for the Trust
Estate and/or as a credit on the Obligations in such priority and
proportion as Lender may determine in its sole
discretion;
Contract No. 29585
GE No. 8004-3736
Dunn, North Carolina
16
(vi) If held by Lender, surrender
the insurance policies maintained pursuant to Section 3.06,
collect the unearned insurance premiums and apply such sums as a
credit on the Obligations in such priority and proportion as Lender
in its sole discretion shall deem proper, and in connection
therewith, Borrower hereby appoints Lender as agent and
attorney-in-fact (which is coupled with an interest and is
therefore irrevocable) for Lender to collect such insurance
premiums; and
(vii) Direct Trustee to sell
Borrower’s interest in the Trust Estate pursuant to the power
of sale herein conferred. If Lender elects to sell Borrower’s
interest in the Trust Estate by exercise of such power of sale,
Lender shall notify Trustee in the manner then required by
law.
(aa) Upon the occurrence of an Event
of Default, Trustee, at the request of Lender, after having first
given such notice of hearing as to commencement of foreclosure
proceedings and obtained such findings or leave of court as may
then be required by law and giving such notice and advertising the
time and place of such sale in such manner as may then be provided
by law, shall sell or offer for sale the Trust Estate in such
portions, order and parcels as Trustee may determine with or
without having first taken possession of same, to the highest
bidder for cash at one or more public auctions in accordance with
the terms and provisions of the law of the State governing the
exercise of powers of sale in deeds of trust. Such sale shall be
made at the area within the courthouse of the county in which the
Trust Estate (or any portion thereof to be sold) is situated
(whether the parts or parcels thereof, if any, in different
counties are contiguous or not, and without the necessity of having
any personal property hereby secured present at such sale) which is
designated by the applicable court of such county as the area in
which public sales are to take place, or, if no such area is
designated, at the area at the courthouse designated in the notice
of sale as the area in which the sale will take place, on such day
and at such times as permitted under applicable law of the State,
after advertising the time, place and terms of sale and that
portion of the Trust Estate in accordance with such law, and after
having served notice of the proposed sale in accordance with such
law to each party entitled to receive notice under such law. Upon
completion of any such public sale in accordance with the
provisions of the applicable North Carolina General Statutes,
and after having taken all such actions as required therein,
Trustee may execute and deliver to the purchaser a conveyance of
the Trust Estate or any part of the Trust Estate. If the Note and
other secured indebtedness is now or hereafter further secured by
any chattel deed of trusts, pledges, contracts or guaranty,
assignments of lease, or other security instruments, Lender at its
option may exhaust the remedies granted under any of said security
instruments either concurrently or independently, and in such order
as Lender may determine.
(bb) Upon any foreclosure sale or
sales of all or any portion of the Trust Estate under the power
herein granted, Trustee may require the successful bidder to
deposit immediately with Trustee cash or certified check or
cashier’s check in an amount up to ten percent (10%) of
the bid provided notice of such deposit requirement is published as
required by law. The bid may be rejected if the deposit is not
immediately made. Such deposit shall be refunded in case of a
resale because of an upset bid or if Trustee is unable to convey
the portion of the Trust Estate so sold to the bidder because the
power of sale has been terminated in accordance with applicable
law. If the purchaser fails to comply with its bid, the deposit
may, at the option of Trustee, be retained and applied to the
expenses of the sale and any resales and to any damages and
expenses incurred by reason of such default (including the amount
that such bid exceeds the final sales price), or may be deposited
with the Clerk of Superior Court. In all other cases, the deposit
shall be applied to the purchase price. Lender may bid for and
purchase the Trust Estate at any foreclosure sale or sales of all
or any portion of the Trust Estate under the power herein granted
and shall be entitled to apply all or any part of the Obligations
as a credit to the purchase price.
(cc) In the event of a foreclosure
or a sale of all or any portion of the Trust Estate under the power
herein granted, the proceeds of said sale shall be applied as may
be permitted by the laws of the State. The Trustee shall be
entitled to a reasonable commission for a completed or uncompleted
foreclosure.
Contract No. 29585
GE No. 8004-3736
Dunn, North Carolina
17
Section 6.03. Appointment
of Receiver. If an Event of Default shall have occurred and
be continuing, Lender, as a matter of right and without notice to
Borrower or anyone claiming under Borrower, and without regard to
the then value of the Trust Estate or the interest of Borrower
therein, or the insolvency of Borrower or the then-owner of the
Trust Estate, may seek the appointment of a receiver for the Trust
Estate upon ex parte application to any court of the
competent jurisdiction. Borrower waives any right to any hearing or
notice of hearing prior to the appointment of a receiver. Such
receiver shall be empowered (a) to take possession of the
Trust Estate and any businesses conducted by Borrower thereon and
any business assets used in connection therewith, (b) to
exclude Borrower and Borrower’s agents, servants and
employees from the Trust Estate, or, at the option of the receiver,
in lieu of such exclusion, to collect a fair market rental from any
such persons occupying any part of the Trust Estate, (c) to
collect the Rents, (d) to complete any construction that may
be in progress, (e) to continue the development, marketing and
sale of the Trust Estate, (f) to do such maintenance and make
such repairs and alterations as the receiver deems necessary,
(g) to use all stores of materials, supplies and maintenance
equipment on the Trust Estate and replace such items at the expense
of the receivership estate, (h) to pay all taxes and
assessments against the Trust Estate, all premiums for insurance
thereon, all utility and other operating expenses, and all sums due
under any prior or subsequent encumbrance, (i) to request that
Lender advance such funds as may reasonably be necessary to the
effective exercise of the receiver’s powers, on such terms as
may be agreed upon by the receiver and Lender, but not in excess of
the Default Rate, and (j) generally to do anything that
Borrower could legally do if Borrower were in possession of the
Trust Estate. All expenses incurred by the receiver or his agents,
including obligations to repay funds borrowed by the receiver,
shall constitute a part of the Obligations. Any revenues collected
by the receiver shall be applied first to the expenses of the
receivership, including reasonable attorneys’ fees incurred
by the receiver and by Lender, together with interest thereon at
the highest rate of interest applicable in the Note from the date
incurred until repaid, and the balance shall be applied toward the
Obligations or in such other manner as the court may
direct.
Section 6.04. Remedies
Not Exclusive. Lender shall be entitled to enforce payment
and performance of any Obligations and to exercise all rights and
powers under this Deed of Trust or under any Loan Documents or
other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Obligations may now or hereafter
be otherwise secured, whether by mortgage, deed of trust, pledge,
lien, assignment or otherwise. Neither the acceptance of this Deed
of Trust nor its enforcement, whether by court action or pursuant
to the power of sale or other powers herein contained, shall
prejudice or in any manner affect Lender’s right to realize
upon or enforce any other security now or hereafter held by Lender,
it being agreed that Lender shall be entitled to enforce this Deed
of Trust and any other security now or hereafter held by Lender in
such order and manner as it may in its absolute discretion
determine. No remedy herein conferred upon or reserved to Lender is
intended to be exclusive of any other remedy given hereunder or now
or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Loan Documents to Lender, or to
which Lender may be otherwise entitled, may be exercised,
concurrently or independently, from time to time and as often as
may be deemed expedient by Lender. Lender may pursue inconsistent
remedies.
The acceptance by Lender of any sum
after the same is due shall not constitute a waiver of the right
either to require prompt payment, when due, of all other sums
hereby secured or to declare a subsequent Event of Default as
herein provided. The acceptance by Lender of any sum in an amount
less than the sum then due shall be deemed an acceptance on account
only and upon condition that it shall not constitute a waiver of
the obligation of Borrower to pay the entire sum then due, and
failure of Borrower to pay such entire sum then due shall be an
Event of Default, notwithstanding such acceptance of such amount on
account, as aforesaid. Lender or Trustee shall be, at all times
thereafter and until the entire sum then due as contemplated by the
Loan Documents shall have been paid, and notwithstanding the
acceptance by Lender thereafter of further sums on account, or
otherwise, entitled to exercise all rights in this instrument
conferred upon them or either of them, and the right to proceed
with a sale under any notice of default, or an election to sell, or
the right to exercise any other rights or remedies
hereunder,
Contract No. 29585
GE No. 8004-3736
Dunn, North Carolina
18
shall in no way be impaired, whether any of such
amounts are received prior or subsequent to such proceeding,
election or exercise. Consent by Lender to any action or inaction
of Borrower which is subject to consent or approval of Lender
hereunder shall not be deemed a waiver of the right to require such
consent or approval to future or successive actions or
inactions.
Section 6.05. Possession
of Trust Estate. In the event of a trustee’s sale or
foreclosure sale hereunder and after the time of such sale,
Borrower occupies the portion of the Trust Estate so sold, or any
part thereof, Borrower shall immediately become the tenant of the
purchaser at such sale, which tenancy shall be a tenancy from day
to day, terminable at the will of either tenant or landlord, at a
reasonable rental per day based upon the value of the portion of
the Trust Estate so occupied, such rental to be due and payable
daily to the purchaser. An action of unlawful detainer shall lie if
the tenant holds over after a demand in writing for possession of
such Trust Estate; and this Deed of Trust and a trustee’s or
sheriff’s deed shall constitute a lease and agreement under
which the tenant’s possession arose and continued. Nothing
contained in this Deed of Trust shall be construed to constitute
Lender or Trustee as a “mortgagee in possession” in the
absence of its taking actual possession of the Trust Estate
pursuant to the powers granted herein.
Section 6.06. Waiver of
Rights. Borrower waives the benefit of all laws now
existing or that hereafter may be enacted (i) providing for
any appraisement before sale of any portion of the Trust Estate, or
(ii) in any way extending the time for the enforcement of the
collection of the Obligations or creating or extending a period of
redemption from any sale made in collecting the Obligations.
Borrower agrees that Borrower will not at any time insist upon,
plea, claim or take the benefit or advantage of any law now or
hereafter in force providing for any appraisement, valuation, stay,
extension, redemption or homestead exemption, and Borrower, for
Borrower, Borrower’s representatives, successors and assigns,
and for any and all persons ever claiming any interest in the Trust
Estate, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution, homestead exemption,
notice of election to mature or declare due the whole of the
Obligations and marshaling in the event of foreclosure of the liens
hereby created. If any law referred to in this Section and now in
force, of which Borrower, Borrower’s heirs, devisees,
representatives, successors and assigns or other person might take
advantage despite this Section, shall hereafter be repealed or
cease to be in force, such law shall not thereafter be deemed to
preclude the application of this Section. Borrower expressly waives
and relinquishes any and all rights, remedies and defenses that
Borrower may have or be able to assert by reason of the laws of the
State pertaining to the rights, remedies and defenses of
sureties.
Section 6.07. Relief From
Stay. In the event that Borrower commences a case under the
Code or is the subject of an involuntary case that results in an
order for relief under the Code, subject to court approval, Lender
shall thereupon be entitled and Borrower irrevocably consents to
relief from any stay imposed by Section 362 of the Code on or
against the exercise of the rights and remedies otherwise available
to Lender as provided in the Loan Documents and Borrower hereby
irrevocably waives its rights to object to such relief. In the
event Borrower shall commence a case under the Code or is the
subject of an involuntary case that results in an order for relief
under the Code, Borrower hereby agrees that no injunctive relief
against Lender shall be sought under Section 105 or other
provisions of the Code by Borrower or other person or entity
claiming through Borrower, nor shall any extension be sought of the
stay provided by Section 362 of the Code.
Section 6.08. Cash
Collateral. Borrower hereby acknowledges and agrees that in
the event that Borrower commences a case under the Code or is the
subject of an involuntary case that results in an order for relief
under the Code: (i) that all of the Rents are, and shall for
purposes be deemed to be, “proceeds, product, offspring,
rents, or profits” of the Premises covered by the lien of
this Deed of Trust, as such quoted terms are used in
Section 552(b) of the Code; (ii) that in no event shall
Borrower assert, claim or contend that any portion of the Rents
are, or should be deemed to be, “accounts” or
“accounts receivable” within the meaning of the Code
and/or applicable state law; (iii) that the Rents are and
shall be deemed to be in any such bankruptcy proceeding “cash
collateral” of Lender as that term is defined in
Section 363 of the Code; and (iv) that Lender has valid,
effective, perfected, enforceable and “choate” rights
in and to the Rents without any further action required on the part
of Lender to enforce or perfect its rights in and to such cash
collateral, including, without limitation, providing notice to
Borrower under Section 546(b) of the Code.
Contract No. 29585
GE No. 8004-3736
Dunn, North Carolina
19
Section 6.09. Assignment
of Rents and Leases. (a) Borrower hereby assigns,
transfers, conveys and sets over to Lender all of Borrower’s
estate, right, title and interest in, to and under the Leases,
whether existing on the date hereof or hereafter entered into,
together with any changes, extensions, revisions or modifications
thereof and all rights, powers, privileges, options and other
benefits of Borrower as the lessor under the Leases regarding the
current tenants and any future tenants, and all the Rents from the
Leases, including those now due, past due or to become due.
Borrower irrevocably appoints Lender its true and lawful
attorney-in-fact, at the option of Lender, at any time and from
time to time upon the occurrence and during the continuance of an
Event of Default, to take possession and control of the Premises,
pursuant to Borrower’s rights under the Leases, to exercise
any of Borrower’s rights under the Leases, and to demand,
receive and enforce payment, to give receipts, releases and
satisfaction and to sue, in the name of Borrower or Lender, for all
of the Rents. The power of attorney granted hereby shall be
irrevocable and coupled with an interest and shall terminate only
upon the payment of all sums due Lender for all losses, costs,
damages, fees and expenses whatsoever associated with the exercise
of this power of attorney, and Borrower hereby releases Lender from
all liability (other than as a result of the gross negligence or
willful misconduct of Lender) whatsoever for the exercise of the
foregoing power of attorney and all actions taken pursuant thereto.
The consideration received by Borrower to execute and deliver this
assignment and the liens and security interests created herein is
legally sufficient and will provide a direct economic benefit to
Borrower. It is intended by Borrower and Lender that the assignment
set forth herein constitutes an absolute assignment and not merely
an assignment for additional security. Notwithstanding the
foregoing, this assignment shall not be construed to bind Lender to
the performance of any of the covenants, conditions or provisions
of Borrower contained in the Leases or otherwise to impose any
obligation upon Lender, and, so long as no Event of Default shall
have occurred and be continuing, Borrower shall have a license,
revocable upon an Event of Default, to possess and control the
Premises and collect and receive all Rents. Upon an Event of
Default, such license shall be automatically revoked.
(b) Upon the occurrence and during
the continuance of an Event of Default, Lender may, at any time
without notice (except if required by applicable law), either in
person, by agent or by a court-appointed receiver, regardless of
the adequacy of Lender’s security, and at its sole election
(without any obligation to do so), enter upon and take possession
and control of the Premises, or any part thereof, to perform all
acts necessary and appropriate to operate and maintain the
Premises, including, but not limited to, execute, cancel or modify
the Leases, make repairs to the Premises, execute or terminate
contracts providing for the management or maintenance of the
Premises, all on such terms as are deemed best to protect the
security of this assignment, and in Lender’s or
Borrower’s name, sue for or otherwise collect such Rents as
specified in this Deed of Trust as the same become due and payable,
including, but not limited to, Rents then due and unpaid. Lender
may so sue for or otherwise collect such Rents with or without
taking possession of the Premises. Borrower agrees that upon the
occurrence and during the continuance of an Event of Default, each
tenant of the Premises shall make its rent payable to and pay such
rent to Lender (or Lender’s agents) on Lender’s written
demand therefor, delivered to such tenant personally, by mail, or
by delivering such demand to each rental unit, without any
liability on the part of said tenant to inquire further as to the
existence of an Event of Default by Borrower.
(c) Rents collected subsequent to
any Event of Default shall be applied at the direction of, and in
such order as determined by, Lender to the costs, if any, of taking
possession and control of and managing the Premises and collecting
such amounts, including, but not limited to, reasonable
attorney’s fees, receiver’s fees, premiums on
receiver’s bonds, costs of repairs to the Premises, premiums
on insurance policies, taxes, assessments and other charges on the
Premises, and the costs of discharging any obligation or liability
of Borrower with respect to the Leases and to the sums secured by
this Deed of Trust. Lender or the receiver shall have access to the
books and records used in the operation and maintenance of the
Premises and shall be liable to account only for those Rents
actually received.
Contract No. 29585
GE No. 8004-3736
Dunn, North Carolina
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(d) Lender shall not be liable to
Borrower, anyone claiming under or through Borrower or anyone
having an interest in the Premises by reason of anything done or
left undone by Lender hereunder, except to the extent of
Lender’s gross negligence or willful misconduct.
(e) Any entering upon and taking
possession and control of the Premises by Lender or the receiver
and any application of Rents as provided herein shall not cure or
waive any Event of Default hereunder or invalidate any other right
or remedy of Lender under applicable law or provided
therein.
ARTICLE VII
THE TRUSTEE
Section 7.01. Certain
Rights Concerning Trustee. With the approval of Lender,
Trustee shall have the right to take any and all of the following
actions: (i) to select, employ and consult with counsel (who
may be, but need not be, counsel for Lender) upon any matters
arising hereunder, including the preparation, execution and
interpretation of the Loan Documents, and shall be fully protected
in relying as to legal matters on the advice of counsel,
(ii) to execute any of the trusts and powers hereof and to
perform any duty hereunder either directly or through his or her
agents or attorneys, (iii) to select and employ, in and about
the execution of his or her duties hereunder, suitable accountants,
engineers and other experts, agents and attorneys-in-fact, either
corporate or individual, not regularly in the employ of Trustee
(and Trustee shall not be answerable for any act, default,
negligence or misconduct of any such accountant, engineer or other
expert, agent or attorney-in-fact, if selected with reasonable
care, or for any error of judgment or act done by Trustee in good
faith, or be otherwise responsible or accountable under any
circumstances whatsoever, expect for Trustee’s gross
negligence or bad faith), and (iv) any and all other lawful
action that Lender may instruct Trustee to take to protect or
enforce Lender’s rights hereunder. Trustee shall not be
personally liable in case of entry by Trustee, or anyone entering
by virtue of the powers herein granted to Trustee, upon the Trust
Estate for debts contracted for or liability or damages incurred in
the management or operation of the Trust Estate. Trustee shall have
the right to rely on any instrument, document or signature
authorizing or supporting any action taken or proposed to be taken
by Trustee hereunder, believed by Trustee in good faith to be
genuine. Trustee shall be entitled to reimbursement for expenses
incurred by Trustee in the performance of Trustee’s duties
hereunder and to reasonable compensation for such of
Trustee’s services hereunder as shall be rendered. Borrower
will, from time to time, pay the compensation due to Trustee
hereunder and reimburse Trustee for, and save and hold Trustee
harmless against, any and all liability and expenses which may be
incurred by Trustee in the performance of Trustee’s
duties.
Section 7.02. Retention
of Money. All moneys received by Trustee shall, until used
or applied as herein provided, be held in trust for the purposes
for which they were received, and shall be segregated from any
other moneys of Trustee.
Section 7.03. Successor
Trustees. Trustee may resign by the giving of notice of
such resignation in writing to Lender. If Trustee shall die, resign
or become disqualified from acting in the execution of this trust,
or if, for any reason, Lender, in Lender’s sole discretion
and with or without cause, shall prefer to appoint a substitute
trustee or multiple substitute trustees, or successive substitute
trustees or successive multiple substitute trustees, to act instead
of the aforenamed Trustee, Lender shall have full power to appoint
a substitute trustee (or, if preferred, multiple substitute
trustees) in succession who shall succeed (and if multiple
substitute trustees are appointed, each of such multiple substitute
trustees shall succeed) to all the estates, rights, powers and
duties of the aforenamed Trustee. Such appointment may be executed
by any authorized agent of Lender, and if such Lender be a
corporation and such appointment be executed on its behalf by any
officer of such corporation, such appointment shall be conclusively
presumed to be executed with authority and shall be valid and
sufficient without proof of any action by the board of directors or
any superior office of the corporation. Such appointment shall be
recorded in accordance with the laws of the State. Borrower hereby
ratify and confirm any and all acts which the aforenamed Trustee,
or his or her successor or successors in this trust, shall do
lawfully by virtue hereof. If multiple substitute trustees are
appointed, each of such multiple substitute trustees
shall
Contract No. 29585
GE No. 8004-3736
Dunn, North Carolina
21
be empowered and authorized to act alone without
the necessity of the joinder of the other multiple substitute
trustees, whenever any action or undertaking of such substitute
trustees is requested or required under or pursuant to this Deed of
Trust or applicable law. Any prior election to act jointly or
severally shall not prevent either or both of such multiple
substitute Trustees from subsequently executing, jointly or
severally, any or all of the provisions hereof.
Section 7.04. Perfection
of Appointment. Should any deed, conveyance or instrument
of any nature be required from Borrower by any Trustee or
substitute Trustee to more fully and certainly vest in and confirm
to Trustee or substitute Trustee such estates, rights, powers and
duties, then, upon request by Trustee or substitute trustee, any
and all such deeds, conveyances and instruments shall be made,
executed, acknowledged and delivered and shall be caused to be
recorded and/or filed by Borrower.
Section 7.05. Succession
Instruments. Any substitute trustee appointed pursuant to
any of the provisions hereof shall, without any further act, deed
or conveyance, become vested with all the estates, properties,
rights, powers and trusts of its, his or her predecessor in the
rights hereunder with like effect as if originally named as Trustee
herein; but nevertheless, upon the written request of Lender or of
the substitute trustee, the Trustee ceasing to act shall execute
and deliver any instrument transferring to such substitute trustee,
upon the trusts herein expressed, all the estates, properties,
rights, powers and trusts of the Trustee so ceasing to act, and
shall duly assign, transfer and deliver any of the property and
moneys held by such Trustee to the substitute trustee so appointed
in such Trustee’s place.
Section 7.06. No
Representation by Trustee or Lender. By accepting or
approving anything required to be observed, performed or fulfilled
or to be given to Trustee or Lender pursuant to the Loan Documents,
including, without limitation, any officer’s certificate,
balance sheet, statement of profit and loss or other financial
statement, survey, appraisal or insurance policy, neither Trustee
nor Lender shall be deemed to have warranted, consented to or
affirmed the sufficiency, legality, effectiveness or legal effect
of the same, or of any term, provision or condition thereof, and
such acceptance or approval thereof shall not be or constitute any
warranty or affirmation with respect thereto by Trustee or
Lender
ARTICLE VIII
MISCELLANEOUS
Section 8.01.
Satisfaction. If and when the Obligations shall have
become due and payable (whether by lapse of time or by acceleration
or by the exercise of the privilege of prepayment), and Borrower
shall pay or cause to be paid (provided such payment is permitted
or required by the Note) the full amount thereof and shall also pay
or cause to be paid all other sums payable by the Borrower Parties
to the Lender Entities with respect to the Obligations, then this
Deed of Trust shall be void (otherwise it shall remain in full
force and effect in law and equity forever) and Lender agrees to
execute an instrument evidencing the satisfaction of all
obligations under this Deed of Trust and releasing this Deed of
Trust which shall be prepared and recorded at Borrower’s sole
expense.
Section 8.02. Limitation
of Rights of Others. Nothing in this Deed of Trust is
intended or shall be construed to give to any person, other than
Borrower, Trustee and the holder of the Note, any legal or
equitable right, remedy or claim under or in respect of this Deed
of Trust or any covenant, condition or provision herein
contained.
Section 8.03.
Severability. In case any one or more of the
provisions contained herein or in the Note shall be held to be
invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision
hereof, and this Deed of Trust shall be construed as if such
provision had never been contained herein or therein.
Section 8.04. Notices;
Amendments; Waiver. All notices, demands, designations,
certificates, requests, offers, consents, approvals, appointments
and other instruments given pursuant to this Deed of Trust
(collectively called “Notices”) shall be in writing and
given by (i) hand delivery, (ii) facsimile,
Contract No. 29585
GE No. 8004-3736
Dunn, North Carolina
22
(iii) express overnight delivery service or
(iv) certified or registered mail, return receipt requested
and shall be deemed to have been delivered upon (a) receipt,
if hand delivered, (b) transmission, if delivered by
facsimile, (c) the next Business Day, if delivered by express
overnight delivery service, or (d) the third Business Day
following the day of deposit of such notice with the
United States Postal Service, if sent by certified or
registered mail, return receipt requested. Notices shall be
provided to the parties and addresses (or facsimile numbers, as
applicable) specified below:
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If to Borrower:
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JAMESON INNS
FINANCING 02, LP
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41 Perimeter
Center East, Suite 400
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Atlanta,
Georgia 30346
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Attn: Craig R.
Kitchin
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Telephone:
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770-481-0305
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Telecopy:
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770-901-9020
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If to
Lender:
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GE Capital
Franchise Finance Corporation
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17207 N.
Perimeter Drive
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Scottsdale,
Arizona 85255
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Attention:
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Collateral
Management
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Telephone:
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480-585-4500
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Telecopy:
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480-585-2225
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If to
Trustee:
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LeeAnn W.
Aldridge
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Hunter Maclean
Exley & Dunn, P.C.
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200 East Saint
Julian Street
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Savannah,
Georgia 31401
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Telephone:
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(912)
236-0261
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Telecopy:
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(912)
236-4936
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or to such other address or such
other person as either party may from time to time hereafter
specify to the other party in a notice delivered in the manner
provided above. Whenever in this Deed of Trust the giving of Notice
is required, the giving thereof may be waived in writing at any
time by the person or persons entitled to receive such Notice.
Except as in this Deed of Trust otherwise expressly provided,
(i) this Deed of Trust may not be modified except by an
instrument in writing executed by Borrower and Lender and
(ii) no requirement hereof may be waived at any time except by
a writing signed by the party against whom such waiver is sought to
be enforced, nor shall any waiver be deemed a waiver of any
subsequent breach or default.
Section 8.05. Successors
and Assigns. All of the provisions herein contained shall
be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto, to the same extent as
if each such successor and assign were in each case named as a
party to this Deed of Trust. Wherever used, the singular shall
include the plural, the plural shall include the singular and the
use of any gender shall include all genders.
Section 8.06.
Headings. The headings appearing in this Deed of
Trust have been inserted for convenient reference only and shall
not modify, define, limit or expand the express provisions of this
Deed of Trust.
Section 8.07. Time of the
Essence. Time is of the essence in the performance of each
and every obligation under this Deed of Trust.
Contract No. 29585
GE No. 8004-3736
Dunn, North Carolina
23
Section 8.08. Forum
Selection; Jurisdiction; Venue; Choice of Law. Borrower
acknowledges that this Deed of Trust was substantially negotiated
in the State of Arizona, this Deed of Trust was delivered in the
State of Arizona, all payments under the Loan Documents will be
delivered in the State of Arizona and there are substantial
contacts between the parties and the transactions contemplated
herein and the State of Arizona. For purposes of any action or
proceeding arising out of this Deed of Trust, the parties hereto
expressly submit to the jurisdiction of all federal and state
courts located in the State of Arizona. Borrower consents that it
may be served with any process or paper by registered mail or by
personal service within or without the State of Arizona in
accordance with applicable law. Furthermore, Borrower waives and
agrees not to assert in any such action, suit or proceeding that it
is not personally subject to the jurisdiction of such courts, that
the action, suit or proceeding is brought in an inconvenient forum
or that venue of the action, suit or proceeding is improper. The
creation of this Deed of Trust and the rights and remedies of
Lender with respect to the Trust Estate, as provided herein and by
the laws of the State, shall be governed by and construed in
accordance with the internal laws of the State without regard to
its principles of conflicts of law. With respect to other
provisions of this Deed of Trust, this Deed of Trust shall be
governed by the internal laws of the State of Arizona, without
regard to its principles of conflicts of law. Nothing in this
Section shall limit or restrict the right of Lender to commence any
proceeding in the federal or state courts located in the State to
the extent Lender deems such proceeding necessary or advisable to
exercise remedies available under the Deed of Trust or the other
Loan Documents.
Section 8.09.
Indemnification. Borrower shall indemnify and hold
harmless each of the Indemnified Parties for, from and against any
and all claims, suits, liabilities (including, without limitation,
strict liabilities), actions, proceedings, obligations, debts,
damages, losses, costs, expenses, diminutions in value, fines,
penalties, charges, fees, expenses, judgments, awards, amounts paid
in settlement and damages of whatever kind or nature (including,
without limitation, attorneys’ fees, court costs and other
costs of defense) (collectively, “Losses”) (excluding
Losses suffered by an Indemnified Party arising out of such
Indemnified Party’s gross negligence or willful misconduct;
provided, however, that the term “gross negligence”
shall not include gross negligence imputed as a matter of law to
any of the Indemnified Parties solely by reason of Borrower’s
interest in the Trust Estate or Borrower’s failure to act in
respect of matters which are or were the obligation of Borrower
under the Loan Documents) caused by, incurred or resulting from
Borrower’s operations of, or relating in any manner to, the
Trust Estate, whether relating to its original design or
construction, latent defects, alteration, maintenance, use by
Borrower or any person thereon, supervision or otherwise, or from
any breach of, default under or failure to perform any term or
provision of this Deed of Trust by Borrower, its officers,
employees, agents or other persons. It is expressly understood and
agreed that Borrower’s obligations under this Section shall
survive the expiration or earlier termination of this Deed of Trust
for any reason.
Section 8.10. Waiver of
Jury Trial and Punitive, Consequential, Special and Indirect
Damages. LENDER, BY ACCEPTING THIS DEED OF TRUST, AND BORROWER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT
EITHER MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY AND ALL
ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM
BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR ITS
SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS DEED OF TRUST, THE RELATIONSHIP OF LENDER AND
BORROWER, BORROWER’S USE OR OCCUPANCY OF THE TRUST ESTATE,
AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR
STATUTORY REMEDY. THIS WAIVER BY THE PARTIES HERETO OF ANY RIGHT
EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN
ESSENTIAL ASPECT OF THEIR BARGAIN. FURTHERMORE, BORROWER AND LENDER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT
EITHER MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND
INDIRECT DAMAGES FROM THE OTHER AND ANY OF THE OTHER’S
AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR
SUCCESSORS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER PARTY
AGAINST THE OTHER OR ANY OF THE OTHER’S AFFILIATES, OFFICERS,
DIRECTORS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO
ANY MATTER ARISING
Contract No. 29585
GE No. 8004-3736
Dunn, North Carolina
24
OUT OF OR IN CONNECTION WITH THIS DEED OF TRUST
OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO. THE WAIVER
BY BORROWER AND LENDER OF ANY RIGHT THEY MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED BY
THE PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR
BARGAIN.
Contract No. 29585
GE No. 8004-3736
Dunn, North Carolina
25
IN WITNESS WHEREOF, Borrower has
executed and delivered this Deed of Trust as of the day and year
first above written.
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BORROWER:
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JAMESON INNS FINANCING 02, LP,
a Georgia limited
partnership
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By its General Partner,
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Jameson Inns, Inc.,
a Georgia corporation
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By
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Steven A. Curlee,
Vice President-Legal
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U.S. Federal Tax Identification
Number:
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20-3105788
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Organization Identification Number:
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0547970
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Contract No. 29585
GE No. 8004-3736
Dunn, North Carolina
26
STATE OF GEORGIA
COUNTY OF DEKALB
I,
, a Notary
Public of
County, State of
, certify that Steven A. Curlee (“Signatory”)
personally came before me this day and acknowledged that he is Vice
President-Legal of Jameson Inns, Inc., a Georgia corporation,
General Partner of Jameson Inns Financing 02, LP, a Georgia limited
partnership and that he, in such capacity and being authorized to
do so, executed the foregoing on behalf of the corporation as
General Partner of Jameson Inns Financing 02, LP, a Georgia limited
partnership.
I certify that the Signatory
personally appeared before me this day, and
(check one of the
following)
(I have personal knowledge of the
identity of the Signatory); or
(I have seen satisfactory evidence
of the Signatory’s identity, by a current state or
federal
identification with the Signatory’s photograph in the form
of:
( check one of the
following)
a driver’s license
or
in the form of
); or
(a credible witness has sworn to the
identity of the Signatory).
The Signatory acknowledged to me
that he/she voluntarily signed the foregoing document for the
purpose stated therein and in the capacity indicated.
Witness my hand and official stamp
or seal this day of
, 2006.
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Notary Public
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Print: Name:
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[ Note: Notary Public must sign exactly as on notary
seal]
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E
[NOTARY SEAL] (MUST BE FULLY
LEGIBLE)
Contract No. 29585
GE No. 8004-3736
Dunn, North Carolina
27
EXHIBIT A
(901 Jackson Road, Dunn,
Harnett County, North Carolina)
