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EXHIBIT 10.45
This instrument was prepared by: William C. Matthews, Jr.
whose address is: Womble Carlyle Sandridge & Rice, PLLC
Post Office Box 831
Raleigh, North Carolina 27602
) DEED OF TRUST, ASSIGNMENT OF RENTS,
) SECURITY AGREEMENT AND FINANCING
COUNTY ) STATEMENT
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT and
FINANCING STATEMENT made and entered into as of the 29th day of October, 1996,
by and among WINN LIMITED PARTNERSHIP, a North Carolina limited partnership,
whose address is c/o Winston Hotels, Inc., 2209 Century Drive, Suite 300,
Raleigh, North Carolina 27612 (hereinafter called Grantor, whether one or more
in number), and NEW SALEM, INC., a North Carolina corporation, Trustee
(hereinafter called Trustee), and WACHOVIA BANK OF NORTH CAROLINA, N.A., a
national banking association, as Collateral Agent (the "Collateral Agent") on
behalf of the Banks referred to in that certain Credit Agreement between the
Grantor, the Corporation (hereinafter defined), the Banks referred to therein
and being parties thereto (the "Banks"), Wachovia Bank of North Carolina, N.A.,
as Collateral Agent, and Wachovia Bank of Georgia, N.A., as Administrative
Agent (the "Credit Agreement"), the address of the Collateral Agent being c/o
Commercial Mortgage Group, 100 North Main Street, Winston- Salem, North
Carolina 27150, Attention: Group Executive (the Collateral Agent is hereinafter
referred to as the "Beneficiary");
RECITALS:
Grantor and Winston Hotels, Inc, a North Carolina corporation (the
"Corporation") (the Corporation and the Grantor being collectively referred to
as the "Borrower"), are indebted to the Banks in the sum of up to ONE HUNDRED
TWENTY FIVE MILLION AND NO/100 DOLLARS ($125,000,000.00), subject to the
limitations and conditions set out in the Credit Agreement (the "Maximum Loan
Amount"), as evidenced by Borrower's promissory notes, dated of even date
herewith, in the aggregate principal amount of $125,000,000.00 (hereinafter
referred to as the Notes, which term shall include any and all renewals,
modifications, replacements, and extensions thereof).
COLLATERAL INCLUDES FIXTURES
This Deed of Trust is given to secure all present and future
obligations which may be incurred from time to time pursuant to the terms of
the Credit Agreement. As provided in the Credit Agreement, the Borrower may
pay such future obligations and then reborrow from time to time under the line
of credit thereby established up to the Maximum Loan Amount (as hereinabove
defined), in accordance with the provisions of the Credit Agreement. The
period in which future obligations may be incurred and secured by this Deed of
Trust is the period between the date hereof and that date which is the earlier
of (i) the stated maturity date of the Notes, subject to extensions from time
to time as provided in the Credit Agreement, or (ii) fifteen (15)
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years from the date hereof. The amount of present obligations secured by this
Deed of Trust is Zero Dollars, and the maximum principal amount, including
present and future obligations, which may be secured by this Deed of Trust at
any one time is One Hundred Twenty Five Million and No/100 Dollars
($125,000,000.00). Any additional amounts advanced by Beneficiary pursuant to
the provisions of this Deed of Trust shall be deemed necessary expenditures for
the protection of the security. Grantor need not sign any instrument or
notation evidencing or stipulating that future advances are secured by this
Deed of Trust.
Grantor desires to secure (a) payment of the Notes with interest and
any renewals, modifications, replacements or extensions thereof, in whole or in
part, (b) the additional payments hereinafter agreed to be made, and (c)
performance of the covenants and agreements of the Grantor set out herein, by
the collateral hereinafter described.
NOW, THEREFORE, in consideration of the premises, and the sum of One
Dollar ($1.00) paid to Grantor by Trustee, receipt of which is hereby
acknowledged, Grantor has given, granted, bargained, sold and conveyed, and by
these presents does give, grant, bargain, sell and convey unto Trustee the
following property consisting of thirteen distinct tracts located in various
counties of North Carolina (the "Mortgaged Premises"):
(a) The real property lying and being in __________________________
and described in EXHIBIT A ATTACHED HERETO AND INCORPORATED HEREIN BY REFERENCE
(the "Land");
(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, storm sashes AND ANY OTHER
PERSONAL PROPERTY COLLATERAL DESCRIBED IN ANY SCHEDULE OF ADDITIONAL PERSONAL
PROPERTY COLLATERAL ATTACHED HERETO, 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");
(c) All rents, issues, profits, royalties, income and other benefits
derived from the Land and the Improvements, including, without limitation,
accounts receivable and funds payable for the temporary and transient use of
rooms (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;
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(d) All liquor (to the full extent legally assignable), occupancy,
hotel, motel and other licenses, permits and authorizations necessary for the
operation of the Improvements as a motel or hotel issued in the name of or
presently held by the Grantor; 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.
TO HAVE AND TO HOLD the Mortgaged 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
Mortgaged Premises in fee and has the right to convey the same in fee simple;
that the same are free and clear of all encumbrances, and that Grantor will
warrant and defend the title to the same against the lawful claims of all
persons.
THIS CONVEYANCE IS MADE UPON THIS SPECIAL TRUST, that if Borrower
shall pay the Notes in accordance with their terms and all sums owing under the
Credit Agreement and shall comply with all the covenants, terms and conditions
of this Deed of Trust, this conveyance shall be null and void and may be
canceled of record at the request and at the cost of Grantor. Grantor hereby
further covenants and agrees with Trustee and Beneficiary as follows:
Section 1. COMMITMENT LETTER; LOAN AGREEMENT. The terms and
provisions of any commitment letter relating to the loan evidenced by the Notes
and of the Credit Agreement between Borrower and Beneficiary relating to the
loans evidenced by the Notes (the "Commitment Letter") are incorporated herein
by reference. A default under any of such Notes or the Credit Agreement shall
for all purposes constitute a default hereunder. If there is any conflict
between the terms of the Commitment Letter and this Deed of Trust, the
Commitment Letter shall control.
Section 2. FINANCIAL STATEMENTS. Grantor will furnish to
Beneficiary without cost to Beneficiary an annual statement, in form and
certified in a manner satisfactory to Beneficiary, setting forth all income and
expenses derived or incurred from the operation of Grantor's business conducted
upon the Mortgaged Premises. The Grantor will also furnish to the Beneficiary
upon request of Beneficiary such information with respect to each other income
property owned by the Grantor or any such guarantor of the Notes. Such annual
statements shall be furnished within ninety (90) days from the end of the
calendar or fiscal year of such operations. In addition, Grantor will furnish
to Beneficiary financial statements (in form satisfactory to Beneficiary) of
Grantor and of each guarantor or endorser, if any, of the Notes as required by
the Credit Agreement.
Section 3. PAYMENT OF INDEBTEDNESS; IMPOSITIONS. Grantor will
pay, when due, the Notes and all real and personal property taxes and
assessments, general and special, and all other taxes and assessments of any
kind or nature whatsoever, including without limitation non-
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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 Mortgaged Premises. If at any time after the
date hereof, there shall be assessed or imposed (a) a tax or assessment on the
Mortgaged 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, or, at the option of
Beneficiary, all obligations secured hereby with interest thereon shall
immediately become due and payable.
Section 4. INSURANCE. Grantor will keep the Improvements
insured against loss and damage by fire, flood, tornado and windstorm, and
against such other hazards as Beneficiary may require, including rent loss or
business interruption for not less than twelve months, in amounts satisfactory
to Beneficiary which amounts shall at no time be less than the total
replacement cost of such Improvements, plus an amount sufficient to prevent any
co-insurance liability on the part of the owner of the Mortgaged Premises or
Beneficiary, for the benefit of Beneficiary, loss, if any, to be made payable
in the policy or policies of insurance to Beneficiary as its interest may
appear, the loss payable clauses to be in such form as Beneficiary may require.
All insurance shall be in companies approved by Beneficiary and the policies
and renewals thereof shall, when issued, be immediately delivered to
Beneficiary to be held by it; Grantor will pay all premiums for such insurance
when due and immediately deliver to Beneficiary official receipts therefor, and
if Grantor fails or refuses to keep the Mortgaged Premises so insured
Beneficiary may obtain such insurance without prejudice to its right to
foreclose hereunder by reason of such default. In the event of loss Grantor
will give immediate notice by mail to Beneficiary who may make proof of loss if
not made promptly by Grantor, and each insurance company concerned is hereby
authorized and directed to make payment for such loss directly to Beneficiary
instead of to Grantor and Beneficiary jointly. The proceeds of any insurance,
or any part thereof, may be applied by Beneficiary, at its option, either to
the reduction of the Notes or to the restoration or repair of the property
damaged. Beneficiary may, at its option, pay any such insurance premiums or
any Impositions against the Mortgaged Premises 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 Credit Agreement and their payment shall
be secured by this Deed of Trust.
Section 5. MAINTENANCE OF MORTGAGED PREMISES; COMPLIANCE WITH
LAWS. Grantor will keep the Mortgaged Premises in good order, repair and
condition, reasonable wear and tear excepted and shall not commit or permit any
waste. Grantor will also comply with all applicable laws, statutes,
ordinances, codes and judicial decisions of all applicable state, federal or
local governmental entities.
Section 6. CONVEYANCE OF MORTGAGED PREMISES. Grantor will not
sell, convey, transfer or encumber the Mortgaged Premises, or any part thereof
or interest therein, legal or equitable, without the prior written consent of
Beneficiary; provided, however, that Grantor may dispose of, free and clear of
the security interest granted herein and the lien hereof, any personal
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property or fixtures which, in the reasonable judgment of Grantor, have become
obsolete or unfit for use or which are no longer useful in Grantor's
operations, on the condition that Grantor shall replace such personal property
or fixtures by, or substitute for the same, other personal property or fixtures
(not necessarily of the same character) owned by Grantor, which shall (a) be of
at least equal value to the personal property or fixtures disposed of and (b)
perform a function or serve a purpose the same as, similar to or related to
that of the personal property or fixtures disposed of. Any such replacement
personal property or fixtures shall forthwith, without further action, become
subject to the security interest granted in, and the lien created by, this Deed
of Trust, and such security interest is hereby granted by Grantor.
Beneficiary's consent to any conveyance or encumbrance may be conditioned upon
an increase in the interest rate specified in the Credit Agreement, an
extension or curtailment of the maturity of the Notes, or other modification of
the Notes, the Credit Agreement or this Deed of Trust. For purposes of this
Section 6, a change of ownership of partnership interests in Grantor shall not
be considered a conveyance or transfer of the Mortgaged Premises, provided that
the Corporation shall remain as the sole general partner of the Grantor.
Section 7. HAZARDOUS MATERIAL.
7.01 REPRESENTATIONS AND WARRANTIES. Grantor represents,
warrants and agrees that (a) no Hazardous Material (as hereinafter defined) has
been used or placed on the Mortgaged Premises in violation of Environmental
Laws (as hereinafter defined); (b) no notice has been received with regard to
any Hazardous Material on the Mortgaged Premises; (c) the Mortgaged Premises
are presently in compliance with Environmental Laws; (d) no action,
investigation or proceeding is pending or to Grantor's knowledge threatened
which seeks to enforce any right or remedy against Grantor or the Mortgaged
Premises under any Environmental Law; (e) Grantor shall permit no installation
or placement of Hazardous Material on the Mortgaged Premises in violation of
Environmental Laws; (f) Grantor shall permit no release of Hazardous Material
onto or from the Mortgaged Premises; (g) Grantor shall cause the Mortgaged
Premises to comply with Environmental Laws and be free and clear of any liens
imposed pursuant to Environmental Laws; (h) all licenses, permits and other
governmental or regulatory actions necessary for the Mortgaged Premises to
comply with Environmental Laws (the "Permits") shall be obtained and maintained
and Grantor shall assure compliance therewith; and (i) Grantor shall give
Beneficiary prompt written notice if Grantor receives any notice with regard to
Hazardous Material on, from or affecting the Mortgaged Premises and shall
conduct and complete all investigations and all cleanup actions necessary to
remove, in accordance with Environmental Laws, such Hazardous Material from the
Mortgaged Premises.
7.02 INSPECTIONS AND AUDITS. Beneficiary shall have the
right at any time during the term of this Deed of Trust, whether before or
after default, to conduct or cause to be conducted an environmental inspection
or audit of the Mortgaged Premises by itself or by a qualified environmental
consultant or engineer selected by Beneficiary; and Grantor hereby grants to
Beneficiary and its employees, agents, and independent contractors (hereinafter
collectively called "Beneficiary and its Representatives"), the right to enter
the Mortgaged Premises upon reasonable notice for the purpose of conducting,
whether before or after default, any inspection,
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audit or tests, making soil borings, extracting samples, installing monitoring
wells, and conducting such other procedures as Beneficiary and its
Representatives deem necessary or desirable in connection with such inspection
or audit. At any time during the term of this Deed of Trust, provided
Beneficiary has a reasonable basis for doing so, Beneficiary may require
Grantor to cause to be performed, at the expense of Grantor, for the benefit of
Grantor and Beneficiary, an inspection or audit of the Mortgaged Premises by an
environmental consultant or engineer approved by Beneficiary, and Grantor shall
furnish to Beneficiary, at no cost to Beneficiary, the written inspection or
audit report certifying as to the presence or absence of Hazardous Material on,
at, or under the Mortgaged Premises.
7.03 INDEMNIFICATION. Grantor shall indemnify and hold
harmless Beneficiary from and against all losses, expenses (including, without
limitation, attorneys' fees) and claims of every kind suffered by or asserted
against Beneficiary as a direct or indirect result of (i) the presence on or
release from the Mortgaged Premises of any Hazardous Material, whether or not
caused by Grantor, (ii) the violation of Environmental Laws applicable to the
Mortgaged Premises, whether or not caused by Grantor, (iii) the failure by
Grantor to comply fully with the terms and provisions of this section, or (iv)
any warranty or representation made by Grantor in this section being false or
untrue in any material respect.
7.04 DEFINITIONS; SURVIVAL OF PROVISIONS. "Hazardous
Material" means polychlorinated biphenyls, petroleum, flammable explosives,
radioactive materials, asbestos, lead and any hazardous, toxic or dangerous
waste, substance or material defined as such in (or for purposes of)
Environmental Laws or listed as such by the Environmental Protection Agency.
"Environmental Laws" means any current or future federal, state or local law,
regulation or ruling applicable to environmental conditions on, under or about
the Mortgaged Premises including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act and the Clean
Water Act. Grantor's obligations under this section shall survive a
foreclosure of or exercise of power of sale under this Deed of Trust, a
delivery of a deed in lieu of foreclosure, and a cancellation or termination of
record of this Deed of Trust.
Section 8. EXECUTION BY PARTIES OTHER THAN GRANTOR. Any Grantor
who executes this Deed of Trust but does not execute the Notes has executed
this Deed of Trust only to subject whatever interest, if any, such Grantor has
or may hereafter have in the Mortgaged Premises to the lien of this Deed of
Trust, has no personal liability under the Notes or under this Deed of Trust
(nothing herein limits or affects such Grantor's liability to Beneficiary under
any separate guaranty or any other instrument), and agrees that Beneficiary and
any other Grantor hereunder may extend, modify, forbear, or make any other
accommodations with regard to the terms of this Deed of Trust or the Notes
without such Grantor's consent and without releasing such Grantor hereunder or
modifying or affecting this Deed of Trust as to such Grantor's interest in the
Mortgaged Premises.
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Section 9. ASSIGNMENT OF RENTS; LEASES.
9.01 ASSIGNMENT. As further security for the payment of
the Notes and sums owing under the Credit Agreement and for the faithful
performance of all the covenants, agreements, terms and provisions of this Deed
of Trust, Grantor hereby sells, transfers and assigns unto Beneficiary all the
right, title and interest of Grantor in and to the Rents, and to that end
Grantor hereby assigns and sets over unto Beneficiary all leases of the
Mortgaged Premises now made, executed or delivered, whether written or verbal,
or hereafter made, whether written or verbal, specifically including, but not
limited to, those certain lease agreements described in the attached Schedule 1
between Grantor and Winston Hospitality, Inc. (the "Lessee") (collectively, the
"Lease") (all such leases, including the Lease, are hereinafter referred to
individually and collectively as the "Tenants' Leases"), and Grantor does
hereby authorize and empower Beneficiary to collect the Rents when due, and
does hereby direct each tenant of the Mortgaged Premises to pay the Rents to
Beneficiary, upon demand for payment thereof by Beneficiary; it being
understood and agreed, however, that no such demand shall be made absent the
occurrence of an Event of Default hereunder; and until such demand is made,
Grantor is authorized to collect or continue collecting the Rents; such
privilege to collect or continue collecting the Rents by Grantor shall not
operate, however, to permit the collection of any Rents more than thirty (30)
days in advance of their due date.
9.02 COMPLIANCE WITH LEASES. Grantor will promptly and
fully keep, perform and comply with all the terms and covenants imposed upon or
assumed by Grantor as landlord under the Tenants' Leases and will not do,
permit anything to be done, or omit or refrain from doing anything, the doing
or omission of which will entitle any tenant to terminate any of the Tenants'
Leases.
9.03 SEPARATE ASSIGNMENT OF LEASES. A default under any
separate assignment of Grantor's interest in leases given as additional
security for the Notes shall constitute an Event of Default hereunder.
Section 10. 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 Mortgaged Premises
to such extent and as often as Beneficiary, in its sole 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 Mortgaged 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 rate
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provided for in the Credit Agreement. All sums so expended by Beneficiary, and
the interest thereon, shall be added to and secured by the lien of this Deed of
Trust.
Section 11. CONDEMNATION. Upon condemnation of the Mortgaged
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
("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 has the right to and may 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 Mortgaged 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 Notes, whether or not then due and payable, and any
excess shall be delivered to the parties legally entitled thereto. In the
event of a partial taking of the Mortgaged Premises, the portion of the
Condemnation Proceeds necessary to prevent impairment of the security of this
Deed of Trust shall be set aside, withheld or paid over to Beneficiary and
applied to the Notes, 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 Mortgaged Premises, this Deed
of Trust shall continue in full force as security for the unpaid portion of the
indebtedness secured hereby. Upon any partial taking of the Mortgaged
Premises, Grantor covenants with Beneficiary to restore the Mortgaged Premises
as nearly as possible to the condition thereof immediately prior to such taking
and to apply Grantor's portion of any Condemnation Proceeds together with any
other necessary funds to complete and pay for the costs of restoration.
(b) Notwithstanding any contrary provision of this Deed of Trust, (i)
upon condemnation of the entire Mortgaged Premises, or (ii) if it shall at any
time be determined that N.C. Gen. Stat. Sec. 40A-68 shall for any reason be
unenforceable or inapplicable to this Deed of Trust, the Condemnation Proceeds
shall be paid over to Beneficiary and applied against the outstanding principal
balance of the Notes.
Section 12. INSPECTION. Beneficiary may inspect the Mortgaged
Premises at all reasonable times, and access thereto shall be permitted for
that purpose to Beneficiary and its Representatives.
Section 13. EVENTS OF DEFAULT. The following shall constitute
defaults or events of default hereunder ("Events of Default");
(a) Failure by Grantor to pay when due any payment of interest,
principal, principal and interest, commitment fees, deposits or other payments
which are due and payable under any of the
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Notes, the Credit Agreement, this Deed of Trust or any documents executed in
connection therewith or as security therefor after the passage of any
applicable cure period for such default specifically set out in the Credit
Agreement.
(b) Failure by Grantor to keep, perform or observe any covenant, term
or condition required to be kept, performed or observed by Grantor under this
Deed of Trust, the Notes, the Credit Agreement or any documents executed in
connection therewith or as security therefor (after the passage of any
applicable cure period for such default specifically set out in the Credit
Agreement).
(c) The occurrence of any event or condition which would allow
Beneficiary to accelerate the Notes, or would constitute a default or event of
default (after the passage of any applicable cure period for such default
specifically set out in the Credit Agreement) under the terms of the Notes,
this Deed of Trust, the Credit Agreement, that certain Subordination Agreement;
Agreement with Respect to Leases and Franchise Agreements, dated of even date
herewith, executed by the Grantor, Winston Hospitality, Inc. and the Collateral
Agent (the "Subordination"), or any documents executed in connection with the
loans evidenced by the Notes or as security therefor.
(d) If Grantor or any general partner thereof or any guarantor (i)
files a petition or has a petition filed against it under the Bankruptcy Code
or any proceeding for the relief of insolvent debtors; (ii) generally fails to
pay its debts as such debts become due; (iii) has a custodian appointed for
Grantor or any general partner thereof or a guarantor or for the assets of any
thereof; (iv) benefits from or is subject to the entry of an order for relief
by any court of insolvency; (v) makes an admission of insolvency seeking the
relief provided in the Bankruptcy Code or any other insolvency law; (vi) makes
an assignment for the benefit of creditors; (vii) has a receiver appointed,
voluntarily or otherwise, for its property; (viii) suspends business; (ix)
permits a judgment in the amount of $100,000 or more to be obtained against it
which is not promptly paid or promptly appealed and secured pending appeal; or
(x) becomes insolvent, however otherwise evidenced.
(e) If any representation, warranty or certificate given by Grantor
in connection with the Credit Agreement or at any time hereafter required to be
given by Grantor hereunder shall be false or erroneous in any material respect
when made.
(f) A breach of or a failure of performance by Grantor of any
provision of or the occurrence of any default under the terms and provisions of
any documents, instruments, security agreements, mortgages or deeds of trust
granting security interests in or liens upon the Mortgaged Premises or any part
thereof, whether prior to or subordinate to the lien of this Deed of Trust.
(g) Any attempted enforcement of or realization upon any security
interest, lien or judgment affecting the Mortgaged Premises or any part
thereof, whether prior to or subordinate to the lien of this Deed of Trust.
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(h) Any actual or threatened demolition or injury or waste to the
Mortgaged Premises which may impair the value of the Mortgaged Premises.
Section 14. ACCELERATION. If an Event of Default shall have
occurred, the Notes shall, at the option of Beneficiary, immediately become due
and payable without further notice or demand, time being of the essence of this
Deed of Trust; and no omission on the part of Beneficiary to exercise such
option when entitled to do so shall be construed as a waiver of such right.
Upon the occurrence of an Event of Default, the Beneficiary may, at its option,
defer application by it to the Trustee to sell the Mortgaged Premises and may
take action under and invoke such other rights and remedies as may be provided
in the Credit Agreement, this Deed of Trust, or any other loan documents
evidencing or securing the Notes.
Section 15. POWER OF SALE. Upon the occurrence of an Event of
Default, Beneficiary may notify Trustee to exercise the power of sale granted
hereunder and upon such notification it shall be lawful for and the duty of
Trustee, and Trustee is hereby authorized and empowered to expose to sale and
to sell the Mortgaged Premises or any part thereof at public sale to the
highest bidder for cash, in compliance with applicable requirements of North
Carolina law governing the exercise of powers of sale contained in deeds of
trust and upon such sale, Trustee shall collect the purchase proceeds and
convey title to the portion of the Mortgaged Premises so sold to the purchaser
in fee simple. In the event of a sale of the Mortgaged Premises or any part
thereof, the proceeds of sale shall be applied in the following order of
priority: (i) to the payment of all costs and expenses for and in connection
with such sale, including a commission for Trustee's services as hereinafter
provided and reasonable attorneys' fees incurred by Trustee for legal services
actually performed; (ii) to the reimbursement of Beneficiary for all sums
expended or incurred by Beneficiary under the terms of this Deed of Trust or to
establish, preserve or enforce this Deed of Trust or to collect the Notes
(including, without limitation, reasonable attorneys' fees); (iii) to the
payment of the Notes and interest thereon and all other indebtedness hereby
secured; and (iv) the balance, if any, shall be paid to the parties lawfully
entitled thereto. In the event of a sale hereunder, Beneficiary shall have the
right to bid at such sale and shall have the right to credit all or any portion
of the indebtedness secured hereby against the purchase price. 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.
Trustee may require the successful bidder at any sale to deposit immediately
with Trustee cash or certified check or cashier's check in an amount up to five
percent (5%) 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 Mortgaged
Premises 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. Pursuant to
Section 25-9- 501(4) of the North Carolina General Statutes (or any amendment
thereto), Trustee is expressly authorized and empowered to expose to sale and
sell, together with the real estate, any portion of the Mortgaged
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Premises which constitutes personal property. If personal property is sold
hereunder, it need not be at the place of sale. The Mortgaged Premises may be
sold in such parcels or lots without regard to principles of marshaling and may
be sold at one sale or in multiple sales, all as determined by Trustee. A
previous exercise of the power of sale hereunder by Trustee shall not be deemed
to extinguish the power of sale which power of sale shall continue in full
force and effect until all the Mortgaged Premises shall have been finally sold
and properly conveyed to the purchasers at the sale. Trustee's commission
shall be reasonable but shall not exceed five percent (5%) of the gross
proceeds of the sale for a completed foreclosure. In the event foreclosure is
commenced but not completed, Grantor shall pay all expenses incurred by
Trustee, including reasonable attorneys' fees, and a reasonable partial
commission not exceeding five percent (5%) of the outstanding indebtedness in
accordance with the following schedule: one-fourth (1/4th) thereof before
Trustee issues a notice of hearing on the right to foreclose; one-half (1/2)
thereof after issuance of said notice; three-fourths (3/4ths) thereof after
such hearing; and the full commission after the initial sale.
Section 16. APPOINTMENT OF RECEIVER. Beneficiary shall have the
right, after the occurrence of an Event of Default, to the appointment of a
receiver to collect the Rents from the Mortgaged Premises, and to operate and
manage the Mortgaged Premises, without notice to Grantor or any other party
(Grantor hereby waiving any right to such notice) and without consideration of
the value of the Mortgaged Premises or the solvency of any person liable for
the payment of the amounts then owing, and all amounts collected by the
receiver shall, after expenses of the receivership, be applied to the payment
of the indebtedness hereby secured, and Beneficiary, at its option, in lieu of
an appointment of a receiver shall have the right to do the same. If such
receiver should be appointed, or if there should be a sale of the Mortgaged
Premises, as provided in Section 15, Grantor, or any person in possession of
the Mortgaged Premises thereunder, as tenant or otherwise, shall become a
tenant at will of the receiver or of the purchaser and may be removed by a writ
of ejectment, summary ejectment or other lawful remedy.
Section 17. DELAY NOT TO OPERATE AS WAIVER; INDEMNIFICATION OF
TRUSTEE AND BENEFICIARY. No delay or forbearance by Beneficiary in exercising
any rights hereunder or otherwise afforded by law, shall operate as a waiver
thereof or preclude the exercise thereof during the continuance of any default
hereunder, and all such rights shall be cumulative. In case Beneficiary or
Trustee voluntarily or otherwise shall become a party to any suit or legal
proceeding to protect the Mortgaged Premises or the lien of this Deed of Trust,
Trustee and Beneficiary shall be saved harmless and reimbursed by Grantor for
any amounts paid, including all reasonable costs, charges and attorneys' fees
incurred in any such suit or proceeding, which obligations shall be secured by
this Deed of Trust.
Section 18. BENEFICIARY'S POWERS. Without affecting the
liability of any other person liable for the payment of the Notes, and without
affecting the lien or charge of this Deed of Trust upon any portion of the
Mortgaged Premises not then or theretofore released as security for the Notes,
Beneficiary may, from time to time and without notice, (i) release any person
so liable, (ii) extend the maturity or alter any of the terms of the Notes,
(iii) grant other indulgences, (iv)
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release or reconvey (or cause to be released or reconveyed at any time at
Beneficiary's option) any part or all of the Mortgaged Premises, (v) take or
release any other or additional security for any obligation hereby secured,
(vi) make compositions or other arrangements with debtors in relation thereto,
or (vii) advance additional funds to protect the security hereof or pay or
discharge the obligations of Grantor hereunder, or under the Notes or any
document executed in connection with or securing the Notes, and all amounts so
advanced, with interest thereon at the applicable rate set forth in the Credit
Agreement, shall be secured hereby.
Whenever in this Deed of Trust or any other Loan Document the
Grantor is obligated to reimburse the Beneficiary for sums advanced, with
interest at the "applicable rate set forth in the Credit Agreement" (or similar
provision), interest on such sums shall be calculated as a Base Rate Loan (as
defined in the Credit Agreement), unless an Event of Default has occurred.
Upon the occurrence of such an Event of Default, interest shall accrue at the
Default Rate (as defined in the Credit Agreement).
Section 19. WAIVERS. Grantor hereby waives any rights or
remedies on account of any extensions of time, releases granted or other
dealings between Beneficiary and any subsequent owner of the Mortgaged Premises
as said activities are contemplated or otherwise addressed in N.C. Gen. Stat.
Sec. 45-45.1 or any similar or subsequent law. The foregoing waiver shall not
be construed as affecting or otherwise amending the covenants of Grantor
contained in Section 6 hereof. Upon the occurrence of an Event of Default,
neither Grantor nor anyone claiming through or under Grantor shall or may set
up, claim or seek to take advantage of any appraisement, valuation, stay,
extension, homestead, exemption or redemption laws now or hereafter in force,
to prevent or hinder the enforcement or foreclosure of this Deed of Trust, or
the sale of the Mortgaged Premises, or the possession thereof by the purchaser
immediately after such sale, and Grantor, for itself and those claiming through
or under it, hereby waives to the full extent that it may lawfully so do, the
benefit of all such laws, and any right to have the Mortgaged Premises
marshaled upon any foreclosure of the lien hereof. Grantor further waives any
and all notices including, without limitation, notice of intention to
accelerate and of acceleration of the Notes.
Section 20. INTEREST NOT TO EXCEED MAXIMUM ALLOWED BY LAW. The
parties hereto shall in no event be deemed to have contracted for a greater
rate of interest than the maximum rate permitted by law. Should a greater
amount be collected, it shall be construed as a mutual mistake of the parties
and the excess shall be returned to the party paying same.
Section 21. ESCROW OF TAXES, INSURANCE. In addition to the
scheduled payments of principal and/or interest, as the case may be, under the
terms of the Notes, Grantor will, upon request of Beneficiary, pay on the first
day of each month, or on the due date of scheduled payments of principal and/or
interest, to Beneficiary a sum equal to one-twelfth of the known or estimated
(by Beneficiary) yearly taxes, assessments and insurance premiums on or against
the Mortgaged Premises. Beneficiary shall hold such payments (and Grantor does
hereby expressly agree that Beneficiary shall be under no obligation to pay
interest thereon) and shall apply the same to the payment of taxes, assessments
and insurance premiums as and when due. If the total
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of such monthly payments shall exceed the amount needed, the excess shall be
held for future needs; but, should such monthly payments at any time fail to
provide sufficient funds to pay taxes, assessments and insurance premiums when
due, then Grantor shall, upon demand, pay to Beneficiary the amount necessary
to cover the deficiency. When the Borrower shall have paid the Notes,
Beneficiary shall refund to Grantor or other person lawfully entitled thereto
any excess funds accumulated hereunder. In the event of a foreclosure sale of
the Mortgaged Premises, Beneficiary may apply any balance remaining of the
funds accumulated for the above purposes to the payment of the Notes.
Section 22. SUBSTITUTION OF TRUSTEE. Beneficiary shall at any
time have the irrevocable right to remove Trustee herein named without notice
or cause and to appoint its successor by an instrument in writing, duly
acknowledged and recorded.
Section 23. LIFE INSURANCE. If any policy or policies of life
insurance upon the life of Grantor or of any other person shall be assigned as
additional security for the payment of the Notes, Grantor covenants and agrees
that Grantor will pay or cause to be paid all premiums on such policy or
policies as they become due, and will keep such policy or policies in effect
and assigned to Beneficiary as additional security for the payment of the Notes
until the Notes have been paid in full. If Grantor shall fail to pay any
premium for such insurance when due, Beneficiary may, at its option, make such
payments and in such case the amounts so paid shall immediately become debts
due Beneficiary by Grantor, and any amounts so paid shall be secured by this
Deed of Trust and repaid with interest, at the applicable rate set forth in the
Credit Agreement from the date of payment thereof by the Beneficiary.
Section 24. SECURITY AGREEMENT. This Deed of Trust shall
constitute a security agreement pursuant to the Uniform Commercial Code for any
items constituting a part of the Mortgaged Premises which, under applicable
law, may be subjected to a security interest pursuant to the Uniform Commercial
Code, and Grantor hereby grants Beneficiary a security interest in such items.
Grantor agrees that Beneficiary may file this Deed of Trust, or a copy thereof,
in the real estate records or other appropriate index, as a financing statement
for any of such items including, without limitation, those items which are, or
are to become fixtures with respect to the Land. Grantor shall also execute
and deliver to Beneficiary, upon Beneficiary's request, any financing
statements and continuation statements, as Beneficiary may require to perfect a
security interest with respect to such items. Grantor shall pay all costs of
filing such financing and continuation statements and releases thereof.
Without the prior written consent of Beneficiary, Grantor shall not create or
suffer to be created any other security interest in such items, including
replacements and additions thereto. Upon the occurrence of an Event of
Default, Beneficiary shall have the remedies of a secured party under the
Uniform Commercial Code. In exercising such remedies, Beneficiary may proceed
against the real property and personal property described herein separately or
together and in any order whatsoever, without in any way affecting the
availability of Beneficiary's remedies under the Uniform Commercial Code or
herein. This Deed of Trust shall constitute a financing statement filed as a
fixture filing in accordance with N.C. Gen. Stat. Section 25-9-402 (or any
amendment thereto). For purposes of complying with the requirements of N.C.
Gen. Stat. Section 25-9-402, the name of Grantor, as Debtor, and Beneficiary,
as Secured Party,
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and the respective addresses of Grantor, as Debtor, and Beneficiary, as Secured
Party, are set forth on the first page of this Deed of Trust; the types or
items of Collateral are described in this Section and in the definition of the
"Mortgaged Premises" appearing in the granting clauses of this Deed of Trust;
and the description of the Land is set forth on Exhibit "A" attached hereto.
The Collateral is or includes fixtures.
Section 25. NOTICES. All notices and other communications
required under this Deed of Trust shall be in writing and shall be deemed to
have been properly given, when given as provided in the Credit Agreement. Any
notice to the Trustee shall be delivered to New Salem, Inc., 100 North Main
Street, Winston-Salem, North Carolina 27150, or such other address as the
Trustee may hereafter specify in writing by notice to the other parties hereto.
Any party may designate a change of address by written notice to the other,
given at least ten (10) business days before such change of address is to
become effective.
Section 26. SUCCESSORS AND ASSIGNS. The covenants, terms and
conditions herein contained shall bind, and the benefits and powers shall inure
to the respective heirs, executors, administrators, successors and assigns of
the parties hereto. Whenever used herein, the singular number shall include
the plural, the plural the singular, and the term "Beneficiary" shall include
any payee of the indebtedness hereby secured and any transferee or assignee
thereof, whether by operation of law or otherwise.
Section 27. GOVERNING LAW. THIS DEED OF TRUST SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ____________
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
Section 28. SEVERABILITY. If any provisions of this Deed of
Trust or the application thereof to any person or circumstance shall be invalid
or unenforceable to any extent under applicable law, the remainder of this Deed
of Trust and the application of such provisions to other persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
Section 29. HEADINGS. The headings of the sections, paragraphs,
and subparagraphs of this Deed of Trust are for the convenience of reference
only, are not to be considered a part hereof and shall not limit or otherwise
affect any of the terms hereof.
Section 30. MARSHALING; MULTIPLE-TRACT PROVISIONS. It is
specifically covenanted and agreed (i) that the Beneficiary may proceed, at the
same or at different times, to foreclose this Deed of Trust, or any other
mortgage or deed of trust with respect to other property given to further
secure the indebtedness also secured hereby (the "Other Deeds of Trust"), by
any proceedings appropriate in the state where any of the properties now or
hereafter encumbered as security for the Notes (the "Tracts") lies , (ii) that
no exercise of remedies granted in this Deed of Trust or the Other Deeds of
Trust taking place in any state [including, without limiting the generality of
the foregoing, any pending foreclosure, judgment or decree of foreclosure,
foreclosure sale, rents received, possession taken, deficiency judgment or
decree, or judgment
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taken on the indebtedness secured hereby], shall in any manner stay, preclude
or bar enforcement of this Deed of Trust or the Other Deeds of Trust in any
other proceeding, and (iii) that the Beneficiary may pursue any or all its
remedies to the maximum extent permitted by state law until all the debt now or
hereafter secured by any or all of the loan documents has been paid and
discharged in full.
Neither the Grantor, nor any person claiming under the Grantor, either
has or enjoys any right to marshaling of assets, all such right being hereby
expressly waived as to the Grantor and all persons claiming under or through
the Grantor. No release of personal liability of any person whatever and no
release of any portion of the property now or hereafter subject to the lien of
any of the loan documents shall have any effect whatever by way of impairment
or disturbance of the lien or priority of this Deed of Trust or any of the
Other Deeds of Trust. Any foreclosure or other appropriate remedy brought with
respect to any Tract may be brought and prosecuted as to any part of the
collateral securing the indebtedness also secured by, wherever located, without
regard to the fact that foreclosure proceedings or other appropriate remedies
have or have not been instituted on any other tract subject to the lien of this
Deed of Trust or the Other Deeds of Trust.
Section 31. RELEASE PROVISIONS. The Credit Agreement contains
release provisions pursuant to which the Grantor is entitled to releases of
Tracts in certain circumstances. These release provisions are incorporated
herein by reference.
Section 32. COUNTERPARTS. This Deed of Trust is executed in
multiple counterparts, one to be recorded in each county in which the Land is
located. These counterparts together constitute a single instrument as to the
various tracts described herein. The Beneficiary may, however, exercise its
rights hereunder with respect to one tract without being required to exercise
its rights as to the other tracts. Likewise, the Beneficiary may release one
tract described herein without releasing any other tract.
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IN WITNESS WHEREOF, Grantor has caused this Deed of Trust to be
executed under seal the day and year first above written.
WINN LIMITED PARTNERSHIP, a North Carolina
limited partnership (SEAL)
By: WINSTON HOTELS, INC., a North Carolina
corporation, its general partner
ATTEST:
By:
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Senior Vice President
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Assistant Secretary
[CORPORATE SEAL]
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NORTH CAROLINA
WAKE COUNTY
I, _____________________________, a Notary Public of Wake County,
North Carolina, do hereby certify that ___________________________ personally
came before me this day and acknowledged that [s]he is the Assistant Secretary
of Winston Hotels, Inc., a North Carolina corporation, and that by authority
duly given and as the act of the corporation, and as the act of WINN Limited
Partnership, a North Carolina limited partnership (the "Partnership") in which
the corporation is a general partner (the "General Partner"), the foregoing
instrument was signed in its name by its Senior Vice President, sealed with its
corporate seal and attested by himself/herself as its Assistant Secretary.
Witness my hand and notarial seal, this _____ day of ________________,
1996.
-----------------------------
Notary Public
[NOTARY SEAL]
My Commission Expires:
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EXHIBIT A
LEGAL DESCRIPTION
19
SCHEDULE 1
HOTEL LEASES
WINN Limited Partnership is Lessor of Each Hotel
Winston Hospitality, Inc. is the Lessee of Each Hotel
Street Address City County Lease Date
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