EXHIBIT 10.20
OBLIGATIONS SECURED HEREBY PROVIDE FOR
A FLUCTUATING INTEREST RATE
AMENDED AND RESTATED
DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING (TENNESSEE)
BY AND FROM
THE PANTRY, INC., "GRANTOR"
TO
DAVID R. CANNON, "TRUSTEE"
FOR THE BENEFIT OF
FIRST UNION NATIONAL BANK,
IN ITS CAPACITY AS AGENT, "BENEFICIARY"
DATED AS OF OCTOBER 23, 1997
COLLATERAL IS OR INCLUDES FIXTURES
THE SECURED PARTY (BENEFICIARY) DESIRES THIS FIXTURE FILING
TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE
DESCRIBED HEREIN
PREPARED BY, RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
O'MELVENY & MYERS LLP
400 SOUTH HOPE STREET
LOS ANGELES, CALIFORNIA
ATTENTION: F. THOMAS MULLER, ESQ.
FILE 154,607-004
AMENDED AND RESTATED
DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING (TENNESSEE)
THIS AMENDED AND RESTATED DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF RENTS AND LEASES AND FIXTURE FILING (Tennessee) (this "DEED OF
TRUST") is dated as of October 23, 1997, by and from THE PANTRY, INC., a
Delaware corporation ("GRANTOR"), whose address is 1801 Douglas Drive, Sanford,
North Carolina 27330, to CARLA PEACHER-RYAN, the trustee hereunder ("TRUSTEE"),
having an address c/o Baker, Donelson, Bearman & Caldwell, First Tennessee
Building, 165 Madison Avenue, Suite 2000, Memphis, Tennessee 38103, for the
benefit of FIRST UNION NATIONAL BANK, as Agent ("AGENT") for the lenders party
to the Credit Agreement (defined below) (such lenders, together with their
respective successors and assigns, collectively, the "LENDERS"), having an
address at 301 South College Street, Charlotte, North Carolina 28288 (Agent,
together with its successors and assigns, "BENEFICIARY").
R E C I T A L S
A. Beneficiary is the assignee of the beneficial interest in those
certain deeds of trust described on Exhibit B hereto (the "ORIGINAL DEEDS OF
TRUST") and of the obligations secured thereby, which encumber the properties
described on Exhibit A hereto.
B. Beneficiary and Grantor now desire to amend and restate the Original
Deeds of Trust to contain all of the terms and conditions contained herein and
in the Credit Agreement.
NOW, THEREFORE, Beneficiary and Grantor hereby amend and restate the
Original Deeds of Trust in their entirety to provide as follows:
ARTICLE 1
DEFINITIONS
-----------
SECTION 1.1 DEFINITIONS. All capitalized terms used herein without
-----------
definition shall have the respective meanings ascribed to them in that certain
Credit Agreement dated as of even date herewith (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT") among Grantor, the
Lenders, Canadian Imperial Bank of Commerce, as Syndication Agent, and
Beneficiary. As used herein, the following terms shall have the following
meanings:
1.1.1 "INDEBTEDNESS": (1) All indebtedness of Grantor to Beneficiary
and the Lenders, including, without limitation, the sum of all (a) principal,
interest and other amounts evidenced or secured by the Loan Documents, and (b)
principal, interest and other amounts
which may hereafter be loaned by Beneficiary or any of the Lenders under or in
connection with the Credit Agreement or any of the other Loan Documents, whether
evidenced by a promissory note or other instrument which, by its terms, is
secured hereby, and (2) all other indebtedness, obligations and liabilities now
or hereafter existing of any kind of Grantor to Beneficiary or any of the
Lenders under documents which recite that they are intended to be secured by
this Deed of Trust.
1.1.2 "TRUST PROPERTY": All of Grantor's interest in (1) the fee
interest in the real property described in Exhibit A attached hereto and
incorporated herein by this reference, together with any greater estate therein
as hereafter may be acquired by Grantor (the "LAND"), (2) all improvements now
owned or hereafter acquired by Grantor, now or at any time situated, placed or
constructed upon the Land (the "IMPROVEMENTS"), (3) all materials, supplies,
equipment, apparatus and other items of personal property now owned or hereafter
acquired by Grantor and now or hereafter attached to, installed in or used in
connection with any of the Improvements or the Land, and water, gas, electrical,
storm and sanitary sewer facilities and all other utilities whether or not
situated in easements (the "FIXTURES"), (4) all right, title and interest of
Grantor in and to all goods, accounts, general intangibles, instruments,
documents, chattel paper and all other personal property of any kind or
character, including such items of personal property as defined in the UCC
(defined below), now owned or hereafter acquired by Grantor and now or hereafter
affixed to, placed upon, used in connection with, arising from or otherwise
related to the Land and Improvements (the "PERSONALTY"), (5) all reserves,
escrows or impounds required under the Credit Agreement and all deposit accounts
maintained by Grantor with respect to the Trust Property, (6) all leases,
licenses, concessions, occupancy agreements or other agreements (written or
oral, now or at any time in effect) which grant to any Person a possessory
interest in, or the right to use, all or any part of the Trust Property,
together with all related security and other deposits (the "LEASES"), (7) all of
the rents, revenues, income, proceeds, profits, security and other types of
deposits, and other benefits paid or payable by parties to the Leases for using,
leasing, licensing, possessing, operating from, residing in, selling or
otherwise enjoying the Trust Property (the "RENTS"), (8) all other agreements,
such as construction contracts, architects' agreements, engineers' contracts,
utility contracts, maintenance agreements, management agreements, service
contracts, permits, licenses, certificates and entitlements in any way relating
to the construction, use, occupancy, operation, maintenance, enjoyment or
ownership of the Trust Property (the "PROPERTY AGREEMENTS"), (9) all rights,
privileges, tenements, hereditaments, rights-of-way, easements, appendages and
appurtenances appertaining to the foregoing, (10) all accessions, replacements
and substitutions for any of the foregoing and all proceeds thereof, (11) all
insurance policies, unearned premiums therefor and proceeds from such policies
covering any of the above property now or hereafter acquired by Grantor, and
(12) all of Grantor's right, title and interest in and to any awards,
remunerations, reimbursements, settlements or compensation heretofore made or
hereafter to be made by any governmental authority pertaining to the Land,
Improvements, Fixtures or Personalty. As used in this Deed of Trust, the term
"TRUST PROPERTY" shall mean all or, where the context permits or requires, any
portion of the above or any interest therein.
2
1.1.3 "OBLIGATIONS": All of the agreements, covenants, conditions,
warranties, representations and other obligations of Grantor (including, without
limitation, the obligation to repay the Indebtedness) under the Credit Agreement
and the other Loan Documents.
1.1.4 "UCC": The Uniform Commercial Code of Tennessee or, if the
creation, perfection and enforcement of any security interest herein granted is
governed by the laws of a state other than Tennessee, then, as to the matter in
question, the Uniform Commercial Code in effect in that state.
ARTICLE 2
GRANT
-----
SECTION 2.1 GRANT.
-----
2.1.1 To secure the full and timely payment of the Indebtedness and
the full and timely performance of the Obligations, Grantor MORTGAGES, GRANTS,
BARGAINS, ASSIGNS, SELLS and CONVEYS, to Trustee, with power of sale, the Trust
Property, subject, however, to the Permitted Encumbrances, TO HAVE AND TO HOLD
the Trust Property to Trustee, for the benefit of Beneficiary upon the terms and
trusts herein, and Grantor does hereby bind itself, its successors and assigns
to WARRANT AND FOREVER DEFEND the title to the Trust Property unto Trustee
against the lawful claims of all persons whomsoever.
2.1.2 THIS CONVEYANCE IS MADE UPON THIS SPECIAL TRUST, that if
Grantor shall pay the Indebtedness and perform the Obligations in accordance
with the Credit Agreement, Notes, this Deed of Trust, and the other Loan
Documents, then this conveyance shall be null and void and may be canceled of
record at the request and at the cost of Grantor as provided in Section 7.7
-----------
hereof.
2.1.3 To the extent that any of the Trust Property is not real
property that Trustee is empowered to sell at a public sale pursuant to N.C.
Gen. Stat. (S) 45-21.1 et seq., or is not real property that could be sold at a
-- ----
public sale pursuant to a judicial proceeding to foreclose the lien of this Deed
of Trust, such property shall automatically be deemed to be personal property in
which a security interest is granted by Grantor unto Beneficiary as provided in
Section 6.1 of this Deed of Trust, effective as of the date of this Deed of
- -----------
Trust.
SECTION 2.2 FUTURE ADVANCES. This Deed of Trust is given to secure
---------------
all present and future Indebtedness of Grantor to Beneficiary. The period in
which future Indebtedness may be incurred and secured by this Deed of Trust is
the period between the date hereof and that date which is ten years from the
date hereof. The amount of present Indebtedness secured by this Deed of Trust
is Seventy-Five Million Dollars ($75,000,000), and the maximum principal amount,
including present and future Indebtedness that may be secured by this Deed of
Trust at any one time is One Hundred Fifty Million Dollars ($150,000,000). Any
additional amounts
3
advanced by Beneficiary or Trustee pursuant to previous provisions of this Deed
of Trust or other Loan Documents shall be deemed necessary expenditures for the
protection of the Trust Property. Grantor need not sign any instrument or
notation evidencing or stipulating that future advances are secured by this Deed
of Trust.
ARTICLE 3
WARRANTIES, REPRESENTATIONS AND COVENANTS
-----------------------------------------
Grantor warrants, represents and covenants to Beneficiary as follows:
SECTION 3.1 TITLE TO TRUST PROPERTY AND LIEN OF THIS INSTRUMENT.
---------------------------------------------------
Grantor owns the Trust Property free and clear of any liens, claims or
interests, except the Permitted Encumbrances. This Deed of Trust creates valid,
enforceable first priority liens and security interests against the Trust
Property, subject to the Permitted Encumbrances.
SECTION 3.2 FIRST LIEN STATUS. Grantor shall preserve and protect
-----------------
the first lien and security interest status of this Deed of Trust and the other
Loan Documents. If any lien or security interest other than the Permitted
Encumbrances is asserted against the Trust Property, Grantor shall promptly, and
at its expense, (a) give Beneficiary a detailed written notice of such lien or
security interest (including origin, amount and other terms), and (b) pay the
underlying claim in full or take such other action so as to cause it to be
released or contest the same in compliance with the requirements of the Credit
Agreement (including the requirement of providing a bond or other security
satisfactory to Beneficiary).
SECTION 3.3 PAYMENT AND PERFORMANCE. Grantor shall pay the
-----------------------
Indebtedness when due under the Loan Documents and shall perform the Obligations
in full when they are required to be performed.
SECTION 3.4 REPLACEMENT OF FIXTURES AND PERSONALTY. Grantor shall
--------------------------------------
not, without the prior written consent of Beneficiary (said consent not to be
unreasonably withheld or delayed), permit any of the Fixtures or Personalty to
be removed at any time from the Land or Improvements, unless the removed item is
removed temporarily for maintenance and repair or, if removed permanently, is
obsolete and is replaced by an article of equal or better suitability and value,
owned by Grantor subject to the liens and security interests of this Deed of
Trust and the other Loan Documents, and free and clear of any other lien or
security interest except such as may be permitted under the Credit Agreement or
first approved in writing by Beneficiary.
SECTION 3.5 INSPECTION. Grantor shall permit Beneficiary and the
----------
Lenders, and their respective agents, representatives and employees, upon
reasonable prior notice to Grantor, to inspect the Trust Property and all books
and records of Grantor located thereon, and to conduct such environmental and
engineering studies as provided in the Credit Agreement.
4
SECTION 3.6 OTHER COVENANTS. All of the covenants in the Credit
---------------
Agreement are incorporated herein by reference and, together with covenants in
this Article, shall be covenants running with the land.
-------
SECTION 3.7 CONDEMNATION AWARDS AND INSURANCE PROCEEDS.
------------------------------------------
3.7.1 Condemnation Awards. Grantor assigns all awards and
-------------------
compensation to which it is entitled for any condemnation or other taking, or
any purchase in lieu thereof, to Beneficiary and authorizes Beneficiary to
collect and receive such awards and compensation and to give proper receipts and
acquittances therefor, subject to the terms of the Credit Agreement.
3.7.2 Insurance Proceeds. Subject to the terms of the Credit
------------------
Agreement, Grantor assigns to Beneficiary all proceeds of any insurance policies
insuring against loss or damage to the Trust Property. Subject to the terms of
the Credit Agreement, Grantor authorizes Beneficiary to collect and receive such
proceeds and authorizes and directs the issuer of each of such insurance
policies to make payment for all such losses directly to Beneficiary, instead of
to Grantor and Beneficiary jointly.
ARTICLE 4
DEFAULT AND FORECLOSURE
-----------------------
SECTION 4.1 REMEDIES. If an Event of Default exists, Beneficiary
--------
may, at Beneficiary's election, exercise any or all of the following rights,
remedies and recourses:
4.1.1 Acceleration. Declare the Indebtedness to be immediately due
------------
and payable, without further notice, presentment, protest, notice of intent to
accelerate, notice of acceleration, demand or action of any nature whatsoever
(each of which hereby is expressly waived by Grantor), whereupon the same shall
become immediately due and payable.
4.1.2 Entry on Trust Property. Enter the Trust Property and take
-----------------------
exclusive possession thereof and of all books, records and accounts relating
thereto or located thereon. If Grantor remains in possession of the Trust
Property after an Event of Default and without Beneficiary's prior written
consent, Beneficiary may invoke any legal remedies to dispossess Grantor.
4.1.3 Operation of Trust Property. Hold, lease, develop, manage,
---------------------------
operate or otherwise use the Trust Property upon such terms and conditions as
Beneficiary may deem reasonable under the circumstances (making such repairs,
alternations, additions and improvements and taking other actions, from time to
time, as Beneficiary deems necessary or desirable), and apply all Rents and
other amounts collected by Beneficiary in connection therewith in accordance
with the provisions of Section 4.7.
-----------
5
4.1.4 Foreclosure and Sale. Institute proceedings for the complete
--------------------
foreclosure of this Deed of Trust, either by judicial action or by power of sale
in accordance with the provisions of applicable law, in which case the Trust
Property may be sold for cash or credit in one or more parcels. With respect to
any notices required or permitted under the UCC, Grantor agrees that five days'
prior written notice shall be deemed commercially reasonable. At any such sale
by virtue of any judicial proceedings, power of sale, or any other legal right,
remedy or recourse, the title to and right of possession of any such property
shall pass to the purchaser thereof, and to the fullest extent permitted by law,
Grantor shall be completely and irrevocably divested of all of its right, title,
interest, claim, equity, equity of redemption, and demand whatsoever, either at
law or in equity, in and to the property sold and such sale shall be a perpetual
bar both at law and in equity against Grantor, and against all other Persons
claiming or to claim the property sold or any part thereof, by, through or under
Grantor. Beneficiary or any of the Lenders may be a purchaser at such sale. If
Beneficiary is the highest bidder, Beneficiary may credit the portion of the
purchase price that would be distributed to Beneficiary against the Indebtedness
in lieu of paying cash. In the event this Deed of Trust is foreclosed by
judicial action, appraisement of the Trust Property is waived.
4.1.4.a Beneficiary instituting proceedings for foreclosure by power
of sale shall direct Trustee to exercise the power of sale granted hereunder,
and upon such direction, Trustee is hereby authorized and empowered to expose to
sale and to sell the Trust Property or any part thereof at public sale to the
highest bidder for cash, in compliance with all applicable requirements of
Tennessee law with respect to powers of sale in deeds of trust. Trustee shall
have the right to designate the place of sale in compliance with applicable law,
and the sale shall be held at the place designated by the notice of sale. The
successful bidder at any sale may be required by Trustee to immediately deposit
with Trustee cash or certified check or cashier's check in an amount up to five
percent of the bid, provided notice of such deposit requirement is published as
required by law. Trustee may reject the bid if the deposit is not immediately
made. Trustee shall refund such deposit in case of a resale because of an upset
bid or if Trustee is unable to convey the portion of the Trust Property 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, Trustee may
retain the deposit and apply the deposit 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
deposit the deposit with the Clerk of Superior Court. In all other cases,
Trustee shall apply the deposit to the purchase price.
4.1.4.b Beneficiary may direct Trustee to expose to sale and sell,
together with the real estate, any portion of the Trust Property which is
personal property. If personal property is sold hereunder, it need not be at
the place of sale. Trustee shall not be entitled to a commission for any
completed or uncompleted sale of real or personal property under this Section
4.1.4 upon an Event of Default, but shall be entitled to collect all reasonable
expenses and attorneys' fees and court costs in connection with exercising its
powers as Trustee.
6
4.1.5 Receiver. Make application to a court of competent
--------
jurisdiction for, and obtain from such court as a matter of strict right and
without notice to Grantor or regard to the adequacy of the Trust Property for
the repayment of the Indebtedness, the appointment of a receiver of the Trust
Property, and Grantor irrevocably consents to such appointment. Any such
receiver shall have all the usual powers and duties of receivers in similar
cases, including the full power to rent, maintain and otherwise operate the
Trust Property upon such terms as may be approved by the court, and shall apply
such Rents in accordance with the provisions of Section 4.7.
-----------
4.1.6 Other. Exercise all other rights, remedies and recourses
-----
granted under the Loan Documents or otherwise available at law or in equity.
SECTION 4.2 SEPARATE SALES. The Trust Property may be sold in one or
--------------
more parcels and in such manner and order as Beneficiary in its reasonable
discretion may elect; the right of sale arising out of any Event of Default
shall not be exhausted by any one or more sales.
SECTION 4.3 REMEDIES CUMULATIVE, CONCURRENT AND NONEXCLUSIVE.
------------------------------------------------
Beneficiary and the Lenders shall have all rights, remedies and recourses
granted in the Loan Documents and available at law or equity (including the
UCC), which rights (a) shall be cumulated and concurrent, (b) may be pursued
separately, successively or concurrently against Grantor or others obligated
under the Loan Documents, or against the Trust Property, or against any one or
more of them, at the sole discretion of Beneficiary or the Lenders, (c) may be
exercised as often as occasion therefor shall arise, and the exercise or failure
to exercise any of them shall not be construed as a waiver or release thereof or
of any other right, remedy or recourse, and (d) are intended to be, and shall
be, nonexclusive. No action by Beneficiary or the Lenders in the enforcement of
any rights, remedies or recourses under the Loan Documents or otherwise at law
or equity shall be deemed to cure any Event of Default.
SECTION 4.4 RELEASE OF AND RESORT TO COLLATERAL. Beneficiary may
-----------------------------------
release, regardless of consideration and without the necessity for any notice to
or consent by the holder of any subordinate lien on the Trust Property, any part
of the Trust Property without, as to the remainder, in any way impairing,
affecting, subordinating or releasing the lien or security interest created in
or evidenced by the Loan Documents or their status as a first and prior lien and
security interest in and to the Trust Property. For payment of the
Indebtedness, Beneficiary may resort to any other security in such order and
manner as Beneficiary may elect.
SECTION 4.5 WAIVER OF REDEMPTION, NOTICE AND MARSHALLING OF ASSETS.
-------------------------------------------------------
To the fullest extent permitted by law, Grantor hereby irrevocably and
unconditionally waives and releases (a) all benefit that might accrue to Grantor
by virtue of any present or future statute of limitations or law or judicial
decision exempting the Trust Property from attachment, levy or sale on execution
or providing for any stay of execution, exemption from civil process, redemption
or extension of time for payment, (b) all notices of any Event of Default or of
7
Beneficiary's election to exercise or the actual exercise of any right, remedy
or recourse provided for under the Loan Documents, and (c) any right to a
marshalling of assets or a sale in inverse order of alienation.
SECTION 4.6 DISCONTINUANCE OF PROCEEDINGS. If Beneficiary or the
-----------------------------
Lenders or Trustee shall have proceeded to invoke any right, remedy or recourse
permitted under the Loan Documents and shall thereafter elect to discontinue or
abandon it for any reason, Beneficiary or the Lenders or Trustee, as the case
may be, shall have the unqualified right to do so and, in such an event,
Grantor, Beneficiary, the Lenders or Trustee, as the case may be, shall be
restored to their former positions with respect to the Indebtedness, the
Obligations, the Loan Documents, the Trust Property and otherwise, and the
rights, remedies, recourses and powers of Beneficiary, the Lenders and Trustee
shall continue as if the right, remedy or recourse had never been invoked, but
no such discontinuance or abandonment shall waive any Event of Default which may
then exist or the right of Beneficiary or the Lenders or Trustee, as the case
may be, thereafter to exercise any right, remedy or recourse under the Loan
Documents for such Event of Default.
SECTION 4.7 ALLOCATION OF PROCEEDS. The proceeds of any sale of, and
----------------------
the Rents and other amounts generated by the holding, leasing, management,
operation or other use of the Trust Property, shall be applied by Beneficiary
(or the receiver, if one is appointed) in the following order unless otherwise
required by applicable law:
4.7.1 to the payment of the reasonable costs and expenses of taking
possession of the Trust Property and of holding, using, leasing, repairing,
improving and selling the same, including, without limitation (1) receiver's
fees and expenses, including the repayment of the amounts evidenced by any
receiver's certificates, (2) court costs, (3) attorneys' and accountants' fees
and expenses, and (4) costs of advertisement;
4.7.2 to the payment of the Indebtedness and performance of the
Obligations in such manner and order of preference as Beneficiary in its sole
discretion may determine; and
4.7.3 the balance, if any, to the payment of the Persons legally
entitled thereto.
SECTION 4.8 OCCUPANCY AFTER FORECLOSURE. Any sale of the Trust
---------------------------
Property or any part thereof in accordance with Section 4.1.4 will, after the
-------------
expiration of any upset period, divest all right, title and interest of Grantor
in and to the property sold. Subject to applicable law, any purchaser at a
foreclosure sale will receive immediate possession of the property purchased.
If Grantor retains possession of such property or any part thereof subsequent to
such sale, Grantor will be considered a tenant at sufferance of the purchaser,
and will, if Grantor remains in possession after demand to remove, be subject to
eviction and removal, with or without process of law.
8
SECTION 4.9 ADDITIONAL ADVANCES AND DISBURSEMENTS; COSTS OF
-----------------------------------------------
ENFORCEMENT.
- -----------
4.9.1 If any Event of Default exists, Beneficiary and each of the
Lenders shall have the right, but not the obligation, to cure such Event of
Default in the name and on behalf of Grantor. All sums advanced and expenses
incurred at any time by Beneficiary or any Lender under this Section, or
-------
otherwise under this Deed of Trust or any of the other Loan Documents or
applicable law, shall be deemed advances of principal evidenced by the Notes and
shall bear interest from the date that such sum is advanced or expense incurred,
to and including the date of reimbursement, computed at the rate or rates at
which interest is then computed on the Indebtedness, and all such sums, together
with interest thereon, shall be secured by this Deed of Trust.
4.9.2 Grantor shall pay all expenses (including reasonable attorneys'
fees and expenses) of or incidental to the perfection and enforcement of this
Deed of Trust and the other Loan Documents, or the enforcement, compromise or
settlement of the Indebtedness or any claim under this Deed of Trust and the
other Loan Documents, and for the curing thereof, or for defending or asserting
the rights and claims of Beneficiary in respect thereof, by litigation or
otherwise. Attorneys' fees and expenses payable by Grantor under this Section
-------
4.9 or otherwise under this Deed of Trust shall be limited to those reasonable
- ---
fees and expenses actually incurred at standard rates without reference to a
specific percentage of the outstanding balance of the Indebtedness.
SECTION 4.10 NO BENEFICIARY IN POSSESSION. Except as otherwise
----------------------------
provided by law, neither the enforcement of any of the remedies under this
Article, the assignment of the Rents and Leases under Article 5, the security
- ------- ---------
interests under Article 5, nor any other remedies afforded to Beneficiary under
---------
the Loan Documents, at law or in equity shall cause Beneficiary or any Lender to
be deemed or construed to be a beneficiary in possession of the Trust Property,
to obligate Beneficiary or any Lender to lease the Trust Property or attempt to
do so, or to take any action, incur any expense, or perform or discharge any
obligation, duty or liability whatsoever under any of the Leases or otherwise.
ARTICLE 5
ASSIGNMENT OF RENTS AND LEASES
------------------------------
SECTION 5.1 ASSIGNMENT. In furtherance of and in addition to the
----------
assignment made by Grantor in Section 2.1 of this Deed of Trust, Grantor hereby
-----------
absolutely and unconditionally assigns, sells, transfers and conveys to
Beneficiary all of its right, title and interest in and to all Leases, whether
now existing or hereafter entered into, and all of its right, title and interest
in and to all Rents. If permitted under applicable law, this assignment is an
absolute assignment and not merely an assignment for additional security. So
long as no Event of Default shall have occurred and be continuing, Grantor shall
have a revocable license from Beneficiary to exercise all rights extended to the
landlord under the Leases, including the right
9
to receive and collect all Rents and to hold the Rents in trust for use in the
payment and performance of the Obligations and to otherwise use the same. The
foregoing license is granted subject to the conditional limitation that no Event
of Default shall have occurred and be continuing. Upon the occurrence and
during the continuance of an Event of Default, whether or not legal proceedings
have commenced, and without regard to waste, adequacy of security for the
Obligations or solvency of Grantor, the license herein granted shall
automatically expire and terminate, without notice by Beneficiary (any such
notice being hereby expressly waived by Grantor).
SECTION 5.2 PERFECTION UPON RECORDATION. Grantor acknowledges that
---------------------------
Beneficiary has taken all actions necessary to obtain, and that upon recordation
of this Deed of Trust Beneficiary shall have, to the extent permitted under
applicable law, a valid and fully perfected first priority present assignment of
the Rents arising out of the Leases and all security for such Leases. Grantor
acknowledges and agrees that upon recordation of this Deed of Trust
Beneficiary's interest in the Rents shall be deemed to be fully perfected,
"choate" and enforced as to Grantor and all third parties, including, without
limitation, any subsequently appointed trustee in any case under Title 11 of the
United States Code (the "BANKRUPTCY CODE"), without the necessity of commencing
a foreclosure action with respect to this Deed of Trust, making formal demand
for the Rents, obtaining the appointment of a receiver or taking any other
affirmative action.
SECTION 5.3 BANKRUPTCY PROVISIONS. Without limitation of the
---------------------
absolute nature of the assignment of the Rents hereunder, Grantor and
Beneficiary agree that (a) this Deed of Trust shall constitute a "security
agreement" for purposes of Section 552(b) of the Bankruptcy Code, (b) the
security interest created by this Deed of Trust extends to property of Grantor
acquired before the commencement of a case in bankruptcy and to all amounts paid
as Rents and (c) such security interest shall extend to all Rents acquired by
the estate after the commencement of any case in bankruptcy.
SECTION 5.4 NO MERGER OF ESTATES. So long as part of the
--------------------
Indebtedness and the Obligations secured hereby remain unpaid and undischarged,
the fee and leasehold estates to the Trust Property shall not merge, but shall
remain separate and distinct, notwithstanding the union of such estates either
in Grantor, Beneficiary, any tenant or any third party by purchase or otherwise.
10
ARTICLE 6
SECURITY AGREEMENT
------------------
SECTION 6.1 SECURITY INTEREST. This Deed of Trust constitutes a
-----------------
"Security Agreement" on personal property within the meaning of the UCC and
other applicable law and with respect to the Personalty, Fixtures, Leases, Rents
and Property Agreements. To this end, Grantor grants to Beneficiary a first and
prior security interest in the Personalty, Fixtures, Leases, Rents and Property
Agreements and all other Trust Property which is personal property to secure the
payment of the Indebtedness and performance of the Obligations, and agrees that
Beneficiary shall have all the rights and remedies of a secured party under the
UCC with respect to such property. Any notice of sale, disposition or other
intended action by Beneficiary with respect to the Personalty, Fixtures, Leases,
Rents and Property Agreements sent to Grantor at least five days prior to any
action under the UCC shall constitute reasonable notice to Grantor.
SECTION 6.2 FINANCING STATEMENTS. Grantor shall execute and deliver
--------------------
to Beneficiary, in form and substance satisfactory to Beneficiary, such
financing statements and such further assurances as Beneficiary may, from time
to time, reasonably consider necessary to create, perfect and preserve
Beneficiary's security interest hereunder and Beneficiary may cause such
statements and assurances to be recorded and filed, at such times and places as
may be required or permitted by law to so create, perfect and preserve such
security interest. Grantor's chief executive office is in the State of North
Carolina at the address set forth in the first paragraph of this Deed of Trust.
SECTION 6.3 FIXTURE FILING. This Deed of Trust shall also constitute
--------------
a "fixture filing" for the purposes of the UCC against all of the Trust Property
which is or is to become fixtures. Information concerning the security interest
herein granted may be obtained at the addresses of Debtor (Grantor) and Secured
Party (Beneficiary) as set forth in the first paragraph of this Deed of Trust.
For the purposes of complying with N.C. Gen. Stat. (S) 25-9-402: (i) the types
or items of collateral are described in Section 6.1 hereof, as further described
-----------
in Section 1.1.2 hereof; and (ii) the description of the Land to which any
-------------
fixtures are attached is set forth in Exhibit A hereto. The collateral is or
includes fixtures.
ARTICLE 7
MISCELLANEOUS
-------------
SECTION 7.1 NOTICES. Any notice required or permitted to be given
-------
under this Deed of Trust shall be given in accordance with the provisions of the
Credit Agreement.
SECTION 7.2 COVENANTS RUNNING WITH THE LAND. All Obligations
-------------------------------
contained in this Deed of Trust are intended by Grantor and Beneficiary to be,
and shall be construed as, covenants running with the Trust Property. As used
herein, "Grantor" shall refer to the party named in the first paragraph of this
Deed of Trust and to any subsequent owner of all or any
11
portion of the Trust Property. All Persons who may have or acquire an interest
in the Trust Property shall be deemed to have notice of, and be bound by, the
terms of the Credit Agreement and the other Loan Documents; however, no such
party shall be entitled to any rights thereunder without the prior written
consent of Beneficiary.
SECTION 7.3 ATTORNEY-IN-FACT. Grantor hereby irrevocably appoints
----------------
Beneficiary and its successors and assigns, as its attorney-in-fact, which
agency is coupled with an interest, (a) to execute and/or record any notices of
completion, cessation of labor or any other notices that Beneficiary deems
appropriate to protect Beneficiary's interest, if Grantor shall fail to do so
within ten (10) days after written request by Beneficiary, (b) upon the issuance
of a deed pursuant to the foreclosure of this Deed of Trust or the delivery of a
deed in lieu of foreclosure, to execute all instruments of assignment,
conveyance or further assurance with respect to the Leases, Rents, Personalty,
Fixtures and Property Agreements in favor of the grantee of any such deed and as
may be necessary or desirable for such purpose, (c) to prepare, execute and file
or record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve
Beneficiary's security interests and rights in or to any of the Trust Property,
and (d) while any Event of Default exists, to perform any obligation of Grantor
hereunder, however: (1) Beneficiary shall not under any circumstances be
obligated to perform any obligation of Grantor; (2) any sums advanced by
Beneficiary in such performance shall be added to and included in the
Indebtedness and shall bear interest at the rate or rates at which interest is
then computed on the Indebtedness; (3) Beneficiary as such attorney-in-fact
shall only be accountable for such funds as are actually received by
Beneficiary; and (4) Beneficiary shall not be liable to Grantor or any other
person or entity for any failure to take any action which it is empowered to
take under this Section.
-------
SECTION 7.4 SUCCESSORS AND ASSIGNS. This Deed of Trust shall be
----------------------
binding upon and inure to the benefit of Beneficiary, the Lenders, and Grantor
and their respective successors and assigns. Grantor shall not, without the
prior written consent of Beneficiary, assign any rights, duties or obligations
hereunder.
SECTION 7.5 NO WAIVER. Any failure by Beneficiary to insist upon
---------
strict performance of any of the terms, provisions or conditions of the Loan
Documents shall not be deemed to be a waiver of same, and Beneficiary or the
Lenders shall have the right at any time to insist upon strict performance of
all of such terms, provisions and conditions.
SECTION 7.6 CREDIT AGREEMENT. If any conflict or inconsistency
----------------
exists between this Deed of Trust and the Credit Agreement, the Credit Agreement
shall govern.
SECTION 7.7 RELEASE OR RECONVEYANCE. Upon payment in full of the
-----------------------
Indebtedness and performance in full of the Obligations, the conveyance of the
Trust Property to Trustee under this Deed of Trust shall be null and void, and
upon Grantor's request, Trustee and Beneficiary, at Grantor's expense, shall
release and cancel of record the liens and security
12
interests created by this Deed of Trust or reconvey the Trust Property to
Grantor. In addition, as long as no Event of Default has occurred and is then
continuing or would be caused thereby, if Grantor sells or transfers for value
any portion of the Trust Property as permitted under Section 7.7 of the Credit
-----------
Agreement, Beneficiary shall release the liens and security interests created by
this Deed of Trust on such Trust Property or reconvey such Trust Property to
Grantor, concurrently with the consummation of such sale or other transfer.
Such release or reconveyance shall be at Grantor's sole cost and expense, and
only upon not less than thirty days' prior written notice to Beneficiary.
SECTION 7.8 WAIVER OF STAY, MORATORIUM AND SIMILAR RIGHTS. Grantor
---------------------------------------------
agrees, to the full extent that it may lawfully do so, that it will not at any
time insist upon or plead or in any way take advantage of any stay, marshalling
of assets, extension, redemption or moratorium law now or hereafter in force and
effect so as to prevent or hinder the enforcement of the provisions of this Deed
of Trust or the Indebtedness secured hereby, or any agreement between Grantor
and Beneficiary or any rights or remedies of Beneficiary or the Lenders.
SECTION 7.9 APPLICABLE LAW. The provisions of this Deed of Trust
--------------
regarding the creation, perfection and enforcement of the liens and security
interests herein granted shall be governed by and construed under the laws of
the state in which the Trust Property is located. All other provisions of this
Deed of Trust and the Obligations shall be governed by the laws of the State of
New York (including, without limitation, Section 5-1401 of the General
Obligations Law of the State of New York), without regard to conflicts of laws
principles.
SECTION 7.10 HEADINGS. The Article, Section and Subsection titles
--------
hereof are inserted for convenience of reference only and shall in no way alter,
modify or define, or be used in construing, the text of such Articles, Sections
or Subsections.
SECTION 7.11 ENTIRE AGREEMENT. This Deed of Trust and the other Loan
----------------
Documents embody the entire agreement and understanding between Beneficiary and
Grantor and supersede all prior agreements and understandings between such
parties relating to the subject matter hereof and thereof. Accordingly, the
Loan Documents may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.
SECTION 7.12 SUBSTITUTION OF TRUSTEE. If, for any reason,
-----------------------
Beneficiary shall elect a substitute for the Trustee herein named or any
successor to said Trustee(s), Beneficiary shall have the right to appoint a
successor Trustee by duly acknowledged written instruments, and each new Trustee
immediately upon recordation of the instrument so appointing such new Trustee
shall become successor in title to the Trust Property for the uses and purposes
of this Deed of Trust, and with all the powers, duties and obligations conferred
on the Trustee in the same manner and to the same effect as though he were named
herein as the Trustee, including,
13
without limitation, the power of sale. If more than one Trustee has been
appointed, each of such Trustees and each successor thereto shall be and hereby
is empowered to act independently.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
14
IN WITNESS WHEREOF, Grantor and Beneficiary have on the date set forth in
the acknowledgement hereto, effective as of the date first above written, caused
this instrument to be duly EXECUTED UNDER SEAL AND DELIVERED by authority duly
given.
THE PANTRY, INC., a Delaware corporation
By: _______________________________________
Name: William T. Flyg
Title: Senior Vice President, Finance, Chief Financial
Officer and Secretary
FIRST UNION NATIONAL BANK, in its capacity as Agent
By: _______________________________________
Name: Mark Felker
Title: Senior Vice President
S-1
ACKNOWLEDGEMENT
STATE OF NEW YORK
COUNTY OF NEW YORK
I, the undersigned, Notary Public of the County and State aforesaid,
certify that William T. Felker personally came before me this day and
acknowledged that he is Secretary of The Pantry, Inc., a corporation and that by
authority duly given and as the act of the corporation, the foregoing instrument
was signed in its name by its Senior Vice President, sealed with its corporate
seal, and attested by her/him as its _____________________ Secretary.
WITNESS my hand and official stamp or seal this _____ day of October, 1997.
_______________________________________
Notary Public
My Commission expires:
___________________________
[AFFIX NOTARIAL STAMP
OR SEAL]
S-2
STATE OF NEW YORK
COUNTY OF NEW YORK
I, the undersigned, Notary Public of the County and State aforesaid,
certify that Mark Felker personally came before me this day and acknowledged
that he is _________________________ Secretary of First Union National Bank, a
corporation and that by authority duly given and as the act of the corporation,
the foregoing instrument was signed in its name by its Senior Vice President,
sealed with its corporate seal, and attested by her/him as its
_____________________ Secretary.
WITNESS my hand and official stamp or seal this _____ day of October, 1997.
_______________________________________
Notary Public
My Commission expires:
___________________________
[AFFIX NOTARIAL STAMP
OR SEAL]
S-3
EXHIBIT A
TRUST PROPERTY
A-1
EXHIBIT B
ORIGINAL DEEDS OF TRUST
B-1
ANTINOVATION CLAUSE
Trustor's obligations under the Mortgage Notes, the Forbearance Agreement and
the other instruments executed and delivered in connection therewith, as amended
by and pursuant to the General Restructuring Agreement and the New Instruments,
shall continue to be secured by the Existing Mortgages, which are hereby amended
to conform to the terms thereof and to secure the obligations of Trustor
thereunder. Except as amended by this Amendment, the Existing Mortgages shall
continue unmodified and in full force and effect. The parties hereto hereby
ratify and confirm the Existing Mortgages, as amended herein.
B-2