DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT COLLATERAL INCLUDES FIXTURES

Exhibit 10.2

DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT

AND FINANCING STATEMENT

COLLATERAL INCLUDES FIXTURES

NORTH CAROLINA, BEAUFORT COUNTY

THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT made and entered into as of September 19, 2005, by and among FOUNTAIN POWERBOATS, INC. , a North Carolina corporation, whose address is 1653 Whichard’s Beach Road, Washington, North Carolina 27889, and whose organizational identification number is 0055124 (hereinafter called “ Grantor ”), BRYAN F. KENNEDY, III , a resident of North Carolina, whose address is 6805 Morrison Boulevard, Suite 100, Charlotte, North Carolina 28211 (hereinafter called “ Trustee ”), and REGIONS BANK , an Alabama chartered bank, whose address is 6805 Morrison Boulevard, Suite 100, Charlotte, North Carolina 28211 (hereinafter called “ Beneficiary ”);

RECITALS:

A. Grantor and Beneficiary have entered into a Loan Agreement dated as of even date herewith (as amended, modified, restated, supplemented, extended, or renewed from time to time, the “ Loan Agreement ”) pursuant to which Beneficiary has made available to Grantor a term loan in the principal amount of $16,500,000 (the “ Loan ”) as evidenced by a Note dated as of even date herewith, from Grantor and payable to Beneficiary (as the same may be amended, modified, replaced, restated, supplemented, extended, or renewed from time to time, the “ Note ”). Unless extended or renewed, the Note is due and payable in full on or before the Maturity Date. Except as otherwise provided herein, capitalized terms used herein without definition shall have the meanings given to them in the Loan Agreement.

B. As partial consideration for Beneficiary entering into the Loan Agreement, Grantor has agreed to secure by execution and delivery of this Deed of Trust and the collateral hereafter described, the payment and performance of the obligations of Grantor under the following documents or instruments (hereinafter collectively referred to as the “ Obligations ”): (i) payment of all payment obligations evidenced by the Loan Agreement in accordance with the terms thereof, including repayment of the indebtedness evidenced by the Note, with interest thereon; (ii) the fulfillment and performance of the other covenants and agreements set forth in the Loan Agreement, the Note, this Deed of Trust, and in any of the other instruments or documents evidencing or securing the indebtedness described in the Loan Agreement; (iii) the payment of all charges provided herein and all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Deed of Trust; and (iv) payment and performance of any and all obligations of the Grantor under any Hedge Agreement required or permitted under the Loan Agreement and to which the Grantor and the Beneficiary are parties (the Loan Agreement, the Note, this Deed of Trust, the Hedge Agreements and all documents and instruments evidencing or securing any such indebtedness, as hereafter amended, modified, restated, supplemented, extended, or renewed from time to time, are known herein collectively as and are referred to herein as the “ Loan Documents ”).

NOW, THEREFORE, in consideration of these premises and the sum of One and No/100 Dollars ($1.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor has given, granted, bargained, sold and conveyed, and by these presents does give, grant, bargain, sell, alien, remise, release, convey, assign, transfer, mortgage, hypothecate, pledge, deliver, set over, warrant and confirm unto Trustee, its successors and assigns forever all right, title and interest of Grantor in and to the following property (the “ Premises ”):

(a) The real property described in EXHIBIT A ATTACHED HERETO AND INCORPORATED HEREIN BY REFERENCE (the “ Land ”); and

(b) All buildings and other improvements now or hereafter located in, on or about the Land, and all of Grantor’s building materials intended for incorporation but not incorporated into the improvements to the Land, and all furnishings, furniture, fixtures, machinery, equipment, tools, and all other personal property or chattels used in connection with the operation of such improvements, specifically including, without limitation, appliances, gas and electric fixtures and systems, radiators, heaters, engines and machinery, boilers, ranges, elevators and motors, plumbing and heating fixtures and systems, carpeting and other floor coverings, water heaters, air conditioning apparatus and systems, window screens, awnings, and storm sashes, whenever acquired by Grantor and now or hereafter located in, upon or under the Land, together with all additions and accessions thereto and replacements and proceeds thereof (the “ Improvements ”); and

(c) All right, title and interest of Grantor in and to the minerals, shrubs, timber and other emblements now or hereafter located on the Land, or under or above the same; and

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(d) All leases, rents, issues, profits, royalties, income and other benefits derived from the Land and the Improvements (the “ Rents ”), subject to the right, power and authority hereinafter given to Grantor to collect and apply such Rents, and the proceeds from any insurance or condemnation award relating to the Land and the Improvements; and

(e) All easements, rights-of-way and rights used in connection with the Land and the Improvements or as a means of access thereto, and all tenements, hereditaments and appurtenances thereof and thereto; and

(f) All proceeds, products, replacements, additions, substitutions, renewals and accessions of or to any of the foregoing; and

(g) All the rights, interest and privileges which Grantor as lessor has or may have in the leases now existing or hereafter made and affecting the Land or the Improvements or any part thereof, as said leases may have been or may from time to time be hereafter modified, extended and renewed, together with any and all guarantees of any leases affecting all or any part of the Land or the Improvements and all security deposits received in respect of such leases (the “ Security Deposits ”).

TO HAVE AND TO HOLD the Premises unto Trustee in fee simple forever, upon the trusts and for the uses and purposes hereinafter set out;

And Grantor covenants with Trustee that Grantor is seized of the Premises in fee and has the right to convey the same in fee simple; that the same are free and clear of all encumbrances except as set forth in the loan policy of title insurance covering the Land issued to Beneficiary as of the date of the recording of this Deed of Trust; that Grantor has done no act to encumber the Premises and, that Grantor will warrant and defend the title to the same against the lawful claims of all persons whomsoever, and that Grantor will execute such further assurances of title to the Premises as may be required.

THIS CONVEYANCE IS MADE UPON THIS SPECIAL TRUST, that if Grantor shall pay the Obligations in accordance with the terms of the Loan Documents and shall comply with all the covenants, terms and conditions of this Deed of Trust, this conveyance shall be released and cancelled of record. Grantor hereby further covenants and agrees with Trustee and Beneficiary as follows:

1. Loan Agreement . The terms and provisions of the Loan Agreement are incorporated herein by reference. An Event of Default under the Loan Agreement shall for all purposes constitute a default hereunder. In the event of any default under this Deed of Trust, Beneficiary may, at its option, defer application by it to Trustee to sell the Premises and may take action under and invoke such other rights and remedies as may be provided in the Loan Agreement, in this Deed of Trust or in any other document or instrument evidencing or securing the Obligations. If there is any conflict between the Loan Agreement and this Deed of Trust, then the Loan Agreement shall control.

2. Payment and Performance of Obligations; Impositions . Grantor will pay and perform, as and when due, the Obligations and, in all events prior to delinquency, all real and

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personal property taxes and assessments, general and special, and all other taxes and assessments of any kind or nature whatsoever, including without limitation non-governmental levies or assessments (hereinafter referred to as “ Impositions ”), such as owner association dues or charges or fees and maintenance charges which are assessed or imposed upon the Premises. Grantor shall upon demand furnish to Beneficiary satisfactory evidence of payment of the Impositions and shall authorize the appropriate governmental official to deliver to Beneficiary at any time a written statement of the taxes and assessments against the Premises. If at any time after the date hereof, there shall be assessed or imposed (the following hereafter referenced to as the “ Additional Impositions ”) (a) a tax or assessment on the Premises in lieu of or in addition to the Impositions payable by Grantor or (b) a license fee, tax or assessment imposed on Beneficiary and measured by or based in whole or in part upon the amount of the outstanding Obligations secured hereby, Grantor shall pay and discharge all such taxes, assessments or fees before they become delinquent. If Grantor fails to pay such amounts prior to delinquency and Grantor has not previously provided notice to Beneficiary of Grantor’s good faith protest of any such Impositions or Additional Impositions and evidence that Grantor has taken appropriate measures to avoid the accrual of penalties for failure to pay any such Impositions or Additional Impositions, Beneficiary may, at its option, pay any such Impositions or Additional Impositions of which payment, amount and validity thereof the official receipt shall be conclusive evidence, and any amounts so expended shall immediately become debts due by Grantor, shall bear interest at the rate specified in the Loan Agreement, and such payment shall be secured by this Deed of Trust.

3. Insurance . (a) The Grantor will keep the buildings and other improvements now or hereafter on the Land insured against loss and damage by fire or other casualty in accordance with the Loan Agreement. In the event of a transfer of the Premises, including a transfer by foreclosure, exercise of the power of sale, or deed in lieu of foreclosure, Grantor’s interest in the insurance policies referred to above and any return premiums in connection therewith shall automatically be transferred to the successor in title to Grantor’s interest in the Premises.

(b) In the event of loss, Grantor will give immediate notice by mail to Beneficiary who, as mortgagee or additional insured, as appropriate to the policy, may make proof of loss if not made promptly by Grantor, and each insurance company concerned shall hereby be authorized and directed to make payment for such loss directly to Beneficiary instead of to Grantor and Beneficiary jointly. If the Premises, or any part thereof, shall be damaged by fire or other hazard against which insurance is held, proceeds of insurance shall, to the extent of the Obligations then remaining unpaid, be paid to Beneficiary, and, at its option, may be applied either in such a manner so as to reduce the Obligations or to the restoration or repair of the Improvements.

(c) If any portion of the Improvements is located in a special flood hazard area according to the Federal Emergency Management Agency (“ FEMA ”), then Grantor must maintain a flood insurance policy in the amount of the Obligations plus the outstanding principal balance of any senior liens on the Premises or the replacement value of the Improvements located in a special flood hazard area, whichever is less. If at any time during the term of the Credit Documents, the Improvements are classified by FEMA as being located in a special flood hazard area, flood insurance will be mandatory. Should this occur, federal law requires Beneficiary to notify Grantor of the reclassification. If, within 45 days of receipt of notification

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from Beneficiary that any portion of the Improvements has been reclassified by the FEMA as being located in a special flood hazard area, Grantor has not provided sufficient evidence of flood insurance, Beneficiary is mandated under federal law to purchase flood insurance on behalf of Grantor, and any amounts so expended shall immediately become debts of Grantor, shall bear interest at the Default Rate specified in the Loan Agreement, and payment thereof shall be secured by this Deed of Trust.

4. Maintenance of Premises; Compliance with Laws . Grantor will keep the Premises in good order, repair and condition, reasonable wear and tear excepted, and shall not commit or permit any waste with respect to any of the Premises. Grantor also will comply with all applicable laws, statutes, ordinances, codes, judicial and administrative decisions (including without limitation and as applicable, all such laws, statutes, judicial and administrative decisions relating to the physical accessibility requirements of Title III of the Americans with Disabilities Act of 1990 (as amended) and the implementing regulations promulgated thereunder by the Department of Justice and the Americans with Disabilities Act Accessibility Guidelines (ADAAG) associated therewith and the applicable ANSI Standards under the Fair Housing Act (as amended) and all applicable regulations) of all applicable state, federal or local governmental entities. Grantor will not make material changes to the Premises, change the use of the Premises, or consent to a change in zoning of the Premises without Beneficiary’s prior written consent. Grantor shall immediately provide notice to Beneficiary of any proposed zoning changes affecting the Premises.

5. Liens; Conveyance of Premises . (a) Except for Permitted Liens, Grantor will not sell, convey, or transfer the Premises, or any part thereof or interest therein, legal or equitable, without the prior written consent of Beneficiary.

(b) The Grantor agrees to ensure that no liens other than Permitted Liens are filed against the Premises by reason of any services or materials supplied thereto, whether such services or materials are supplied to Grantor or to some person, firm or corporation in possession of all or a part of the Premises through or under Grantor; provided that the Grantor shall not be in breach of this covenant if any such liens are cancelled or appropriately bonded within thirty (30) days of the filing thereof.

6. Hazardous Material . Grantor represents and warrants to Beneficiary that the representations and warranties set forth in Section 4.13 of the Loan Agreement are true, accurate and complete with respect to Grantor and the Premises, as applicable. Grantor shall comply with the provisions of Section 5.4 of the Loan Agreement, and Grantor shall indemnify Beneficiary pursuant to Section 9.2 of the Loan Agreement. Beneficiary shall have, and Grantor hereby grants to Beneficiary, the right to enter upon the Premises, with reasonable advance notice to Grantor, to verify compliance by Grantor with the terms of this Section 6 and to conduct such environmental assessments and audits as Beneficiary shall reasonably deem advisable; provided , however , GRANTOR ACKNOWLEDGES THAT IT SHALL HAVE THE SOLE RESPONSIBILITY FOR ALL HAZARDOUS WASTE HANDLING PRACTICES AND ENVIRONMENTAL PRACTICES, AND GRANTOR HAS FULL DECISION MAKING POWER WITH RESPECT THERETO.

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7. Leases . (a) Grantor will faithfully perform the covenants of the lessor contained in any present or future lease by it of any part or all of the Premises, and in pursuance thereof, will neither do anything nor neglect to do anything, nor permit anything to be done which would cause the modification or termination of any of such leases, or of the obligation of any lessee, his or its successors and assigns, or the Rents provided for therein or the interest of the lessor or of Beneficiary therein or thereunder resulting in a Material Adverse Effect. Grantor will not assign such leases or the Rents therefrom or any part of such leases or Rents to anyone other than Beneficiary without the prior written consent of Beneficiary (which shall not be unreasonably withheld), nor collect such Rents (other than a security deposit) for more than one month in advance, nor do any other act whereby the lien of this Deed of Trust may be impaired in value or quality. Grantor will not execute a mortgage, deed of trust or other instrument or permit a lien which may be or become superior to any existing lease of any part of the Premises, except as expressly permitted in this Deed of Trust, the Loan Agreement or the Security Agreement. All material leases affecting the Premises entered into after the date hereof shall be on forms, with tenants and on terms submitted to Beneficiary for its prior written approval (not to be unreasonably withheld conditioned or delayed), and shall be made subordinate or superior to the lien of this Deed of Trust at the option of Beneficiary. Grantor agrees not to execute any lease, modification of lease, termination of lease or extension of lease of all or part of the Premises without first obtaining Beneficiary’s prior review and written approval (which shall not be unreasonably withheld, conditioned or delayed) of the form, content and lessee of said lease and the form and content of said modification of lease, termination of lease or extension of lease. Grantor will advise Beneficiary of the execution of any lease of all or part of the Premises and will assign such lease to Beneficiary in form and substance acceptable to Beneficiary as additional security for the Obligations. In addition, Grantor agrees to provide Beneficiary with a rent roll and copies of any and all present and future leases of the Premises or any portion thereof and any modification or extension of leases as same may be requested by Beneficiary from time to time, together with all supplementary information relating to the status of such leases.

Grantor does hereby assign and set over to Beneficiary all leases affecting the Premises and all Rents of the Premises, whether under leases or tenancies now existing or hereafter created, and whether such Rents are to become due, are due or have been collected, and all general intangibles in connection therewith, including without limitation such Rents as are due and unpaid from time to time, collected Rents and proceeds of Rents, accounts into which all or any of such Rents are deposited from time to time, and all accounts and general intangibles of Grantor related in any manner to the Premises or the operation thereof, as additional security for the Obligations, as well as all funds received for the purpose of keeping said Premises in proper repair, and Beneficiary is given a prior and continuing lien thereon. Grantor hereby appoints Beneficiary its attorney to collect such Rents with or without suit, and to apply the same, less expenses of collection, to the Obligations and to repairs in such manner as Beneficiary may elect; provided , that until the occurrence of an Event of Default and after the cure thereof, Grantor may continue to collect and enjoy such Rents as they fall due without accountability to Beneficiary, except as Grantor is herein required to account. This assignment and power of attorney shall apply to all leases, security deposits, rentals and other amounts received from tenants in the future, whether by present or by future owners of the Premises; shall be in addition to other remedies herein provided for in Event of Default; and may be put into effect independently or concurrently with any of such remedies, but no liability shall attach to Beneficiary on account of failure or inability to collect any such Rents. If at any time there is any conflict between any

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provision of this Deed of Trust and any provision of the aforesaid leases, then such provision of this Deed of Trust shall govern and apply. Notwithstanding the foregoing, nothing herein shall be deemed to grant a greater interest in or provide greater rights to Beneficiary with respect to any general intangibles, accounts or other personalty than are granted or provided to Beneficiary under the Security Agreement or the Loan Agreement.

8. Right to Cure; Protection of Security . If Grantor shall fail in any of the covenants and provisions contained in this Deed of Trust, Beneficiary may (but shall not be obligated to) take any action Beneficiary deems necessary or desirable to prevent or cure any such default or failure. Beneficiary shall have the right to enter upon the Premises to such extent and as often as Beneficiary, in its reasonable discretion, deems necessary or desirable in order to prevent or cure any such default or failure by Grantor. In addition, if any legal proceeding (such as bankruptcy, condemnation, forfeiture or other legal or regulatory proceeding) that may affect Beneficiary’s rights or interests in the Premises (or any part thereof) is commenced, Beneficiary may act to protect or preserve such rights or interests (including, without limitation, the employment of an attorney or other professional(s)). Beneficiary may expend such sums of money as Beneficiary, in its sole discretion, deems necessary for any such purpose, and Grantor hereby agrees to pay to Beneficiary, immediately upon demand, all sums so expended by Beneficiary, together with interest thereon from the date of each such payment at the Default Rate. All sums so expended by Beneficiary, and the interest thereon, shall be added to and secured by the lien of this Deed of Trust.

9. Condemnation . Upon condemnation of the Premises or any part thereof, this Deed of Trust shall become a lien, charge and encumbrance upon the proceeds or award realized as a result of any such proceeding or of any settlement or payment made in lieu of any such proceeding (the “ Condemnation Proceeds ”). Grantor hereby grants to Beneficiary a security interest in any Condemnation Proceeds and hereby agrees to execute such further assignments of the Condemnation Proceeds as Beneficiary may require. Grantor further covenants and agrees that Beneficiary may (and is hereby authorized and empowered but not required to) collect and receive any Condemnation Proceeds and, if received by Grantor, Grantor shall pay over and deliver immediately to Beneficiary all Condemnation Proceeds to be held by Beneficiary and applied as follows:

(a) In the event the entire Premises shall be taken by condemnation or in settlement of any threat of condemnation, then any Condemnation Proceeds shall be paid to Beneficiary and applied in payment in whole or in part of the Obligations, whether or not then due and payable, and any excess shall be delivered to the parties legally entitled thereto.

(b) In the event of a partial taking of the Premises, the portion of the Condemnation Proceeds necessary to prevent impairment of the security of this Deed of Trust, as determined in Beneficiary’s reasonable discretion, shall be set aside, withheld or paid over to Beneficiary and applied to the Obligations, whether or not then due and payable, and the excess of such award or proceeds shall be delivered to Grantor or other parties legally entitled thereto. Upon any partial taking of the Premises, this Deed of Trust shall continue in full force as security for the unpaid portion of the Obligations secured hereby. Upon any partial taking of the Premises, Grantor covenants with Beneficiary to restore the Premises as nearly as possible to the condition thereof immediately prior to such taking and to apply Grantor’s portion of any Condemnation Proceeds

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together with any other necessary funds to complete and pay for the costs of restoration. Any amounts applied to principal of the Obligations shall be applied to principal last maturing thereon. The application or release by Beneficiary of any Condemnation Proceeds under this Section shall not cure or waive any default or notice of default under this Deed of Trust or invalidate any act done pursuant to such notice.

(c) Notwithstanding any contrary provision of this Deed of Trust, (i) up