Second Deed of Trust, Security Agreement and Financing Statement Page 1 of 21 Prepared by: Return to: State of MississippiCounty of ________________________ Judicial District SECOND DEED OF TRUST, SECURITY AGREEMENT AND FINANCING STATEMENT Name and Address of Grantor/Beneficiary:Name and Address of Trustee: Name and Address of Secured Party/Beneficiary: See Legal Description Attached as Exhibit A Indexing Instructions:
Second Deed of Trust, Security Agreement and Financing Statement Page 2 of 21 KNOW ALL MEN BY THESE PRESENTS: That______________, a ______________ Joint Venture, and ______________, a
______________ Corporation doing business as "______________," herein
after called
"Grantor" (whether one or more), whose address is ______________, ______________,
__________ ________, of ______________ County, ______________, in consideration of the
uses, purposes and trusts hereinafter set forth, HAS GRANTED, BARGAINED, SOLD AND
CONVEYED and by these presents DOES GRANT, SELL AND CONVEY unto
______________, Trustee, whose address is c/o Beneficiary as set out below, of
______________ County, Mississippi, and his successors in trust and assigns, all of the
following described real estate lying and being situated in the County of ______________, State
of ______________, to-wit: [Insert Legal Description of Statement "See Exhibit A"] Together with all improvements and buildings thereon or hereafter to be placed thereon,
and all and singular, the rights and appurtenances to the same belonging or in anywise incident
or appertaining thereto; and together with all fixtures and attachments which are now or hereafter
attached to the herein described real estate, or improvements or buildings thereon, and all goods
which are to became fixtures attached to the herein described real estate or improvements or
buildings thereon; said fixtures, attachments and goods include, but are not limited to, all
heating, plumbing, water heating and cooling, air conditioning, water conditioning, lighting,
ventilating, refrigerating, cooking, laundry and incinerating equipment and any other goods
which became so related to the real estate herein described that an interest in them arises under
the real property law of the State of _________. This Deed of Trust shall be effective as a
financing statement filed as a fixture filing; provided, however, this instrument shall not operate
as a waiver of any of Beneficiary's rights or interests in said fixtures and attachments arising
under the real property law of the State of __________. All property included in this Deed of Trust is hereinafter called "real property” or
"property. " TO HAVE AND TO HOLD unto the Trustee and to his successors and assigns
forever, hereby covenanting and agreeing forever to WARRANT AND DEFEND the property
unto said Trustee and to the Substitute Trustee and to the assigns of any Trustee hereunder
against all persons whomsoever lawfully claiming or to claim the same or any part thereof,
provided, however, it is understood and agreed that this instrument is second and subordinate to
the lien of the following: (1) The Deed of Trust, Security Agreement and Financing Statement dated
__________ ___, ____, recorded in Volume _______, Page ________, Real
Property Records, __________ County, __________, from Grantor to said
Trustee for the benefit of __________;
Second Deed of Trust, Security Agreement and Financing Statement Page 3 of 21 (2) The Conditional Assignment of Rentals dated __________ ___, ____,
recorded in Volume ___, Page ___, Real Property Records, __________ County,
___, from __________ to __________; and (3) The Assignment of leases dated __________ ___, ____, recorded in
Volume ___, Page ___, Real Property Records, ___ County, ___, from
___________ to ____________. This conveyance is intended as a trust however for the better securing of ____________,
whose address is ____________, ____________, ____________, MS ____________
(hereinafter called "Beneficiary") and assigns in the payment of one Promissory Note of even
date herewith for the principal sum of ____________ Dollars ($____________), signed by said
Grantor and payable to the order of said Beneficiary at its office in ____________, Mississippi
(or such other place as the legal holder thereof may from time to time in writing designate),
bearing interest and maturing as stated in said Note, said Note being further described as follows,
to-wit: One Promissory Note of even date herewith in the amount of
____________ Dollars ($____________), bearing interest from date at the
initial rate of ____________ Percent (____ %) per annum through
__________ ___, ____, and bearing interest thereafter at a rate equivalent
to the "Prime Rate" of __________ (said "Prime Rate" being further
defined in said Note), plus One Percent
(1%) per annum, such rate to be
adjusted on April 15 and October 15 each year, with a minimum interest
rate of ____ Percent (____ %) and a maximum rate of ____ (____ %), the
principal and interest of said Note being due and payable in ____
consecutive monthly installments based on an amortization adjusted in
accordance with the terms of said Note, the first principal and interest
payment being due on __________ ___, ____, and with the final payment
of all unpaid principal and interest falling due on __________ ___, ____,
said Note providing for acceleration of maturity and attorney's fees as
therein stipulated, reference being hereby made to said Note for a more
particular description of the terms thereof. The word "Grantor" hereinafter used shall include the above named Grantor and any other
obligor or obligors of the Note, whether primary, secondary or contingent. It is agreed that this Deed of Trust may be enforced and the powers herein given
exercised in the event of default in the payment of the above described Note as well as in the
event of default in the payment of any other indebtedness secured hereby. The word
"indebtedness" hereinafter used in this Deed of Trust means the above described Note and all
other present and all future indebtedness herein secured. For the better securing of said indebtedness with all interest to become due thereon,
Grantor hereby covenants and agrees as follows:
Second Deed of Trust, Security Agreement and Financing Statement Page 4 of 21 (a) Grantor will pay said indebtedness and the interest thereon as the same become
due and payable. (b) Grantor has good and perfect title to said property and the right to convey same
and said property is clear and free of all lien or encumbrances of every nature except as herein
set forth. Grantor will make such other and further assurances of the property as may be
necessary for conferring title to same to said Trustee and to his successors hereunder and assigns. (c) Grantor will pay before the same became delinquent all taxes, assessments and
special assessments (including paving) of every kind that may be assessed or levied against said
property or any part thereof. (d) If said indebtedness or lien(s) securing same or this Deed of Trust shall ever be
taxed (excluding income or death taxes) Grantor will pay such taxes in addition to the interest
provided for herein and in said Note and/or other evidence of said indebtedness, provided the
total of such interest and such taxes shall never exceed the maximum rate of interest permitted by
applicable law; and any excess if paid shall be applied on said principal. (e) Until final payment of said indebtedness Grantor will keep all buildings that may
at any time be on the above described land insured for the term of this loan against fire,
windstorm, earthquake, and other perils included within "extended coverage" insurance and
against such other hazards, casualties and contingencies, including flood insurance if the
property shall at any time be located in an identified "flood prone area" in which flood insurance
has ever been made available pursuant to the Flood Disaster Protection Act of 1973, and in such
amounts and for such periods as may be required by Beneficiary, naming Beneficiary as an
additional insured as its interest may appear with New York Standard Mortgagee Clause, or a
comparable clause, attached to said policies, and will deliver said policies and renewals thereof
to said Beneficiary, with a receipt on said policies showing full payment of the premium thereon,
or separate receipts delivered therewith showing payment of said premiums for the term thereof.
If said Grantor shall obtain more insurance than required by the beneficiary, then all of said
insurance shall be made payable by said Standard Mortgagee Clause to the Beneficiary herein.
Said insurance policies shall be with a reputable insurance company or companies acceptable to
Beneficiary. In the event of any loss under any such insurance policy covering the said property, the
proceeds of such policy shall be applied as follows: (1)If all or any part of the property is destroyed or damaged at any
time by fire, or any cause whatsoever, and provided sufficient insurance proceeds are
available to Grantor, Grantor shall have the option to repair, rebuild, restore, renew, and
replace the same and pay therefore. The money to be expended for such work shall be
paid by Beneficiary from the insurance proceeds on the certificate of an architect,
selected by Grantor and approved by Beneficiary, in charge of the work, to the effect that
the work and material to the amount of such order has actually been supplied and used in
such work. Beneficiary may act on such certificate without any further evidence
regarding the application of the money and without any liability for the misapplication
thereof by any person other than Beneficiary. In the event that Grantor, in the case of
Second Deed of Trust, Security Agreement and Financing Statement Page 5 of 21 damage to or destruction of the mortgaged property or any part thereof, shall with
reasonable dispatch, repair, rebuild, restore, renew, and replace the same, the net amount
of the insurance proceeds received by Beneficiary shall be expended for such purposes,
but an amount of money may at all times be retained by Beneficiary sufficient to pay for
the completion of such work free from all liens except this Deed of Trust. (2) In the event that Grantor fails within a reasonable period of time to
repair, renew, restore, rebuild, or replace the mortgaged property or any part thereof, as
above provided, Beneficiary, in the absolute discretion of Beneficiary, is hereby
authorized, but not required, and without prejudice to any other right or remedy
hereunder, in the name of Grantor or otherwise, to do such repairing, rebuilding,
restoring, renewing, or replacing and to have all net proceeds of insurance applied toward
the cost thereof, and to do everything else necessary or proper to restore or preserve the
security of this Deed of Trust. In such event and for such purpose, the interest of Grantor
in all insurance proceeds shall be by virtue hereof assigned and transferred pursuant to
this Deed of Trust to Beneficiary. (3) In the event that Grantor fails within a reasonable period of time to
repair, rebuild, restore, renew, or replace the mortgaged property damaged or destroyed
in accordance with the terms and conditions of this Deed of Trust, and in the event that
Beneficiary elects not to repair, rebuild, restore, renew, or replace the mortgaged property
destroyed or damaged, Beneficiary shall apply the net proceeds of such insurance policy
or policies to the indebtedness secured by this Deed of Trust in such manner as
Beneficiary may elect. (f) Grantor shall pay all taxes as they shall fall due each year, and at once forward the
original tax receipts to said Beneficiary, and also shall pay promptly all judgments which may
become liens on said above described property. Until final payment of said indebtedness,
Beneficiary shall at any time have the right to require Grantor to pay to the Beneficiary each
month, to be carried in a trust account, 1/12 of the taxes and insurance premiums on the property
of the year in which said payment is to be made, and before said taxes become delinquent the
Beneficiary may out of and with the funds so accumulated pay the taxes on the property and the
insurance premiums. Grantor shall not be entitled to interest on said sums. (g) Should the Grantor fail to pay, as herein stipulated, all taxes, assessments, liens,
or judgments, or to insure the property and pay the premiums therefor, then the said Beneficiary,
its successors and assigns, may at its option pay any such unpaid taxes, assessments, liens, or
judgments, and insure said improvements, pay the premiums thereof, and, without notice, at its
option, declare the whole debt secured by this Deed of Trust to be due and payable and proceed
to foreclose same at once. All taxes, assessments, liens, judgments, and insurance premiums paid
by the said Beneficiary, and all necessary expenses incurred by said Beneficiary in connection
therewith, including any expense incurred in defending the title of the Grantor to this real estate,
where necessary for the protection of the said Beneficiary's interests, or in defending this Deed of
Trust as a valid lien on the real estate described or intended to be described herein, where
necessary, or in seeking to have this Deed of Trust reformed by judicial proceedings, where
necessary because of mistake herein, shall constitute a part of the debt secured by this instrument
and become immediately due and payable to the said Beneficiary. The Grantor agrees to pay all
Second Deed of Trust, Security Agreement and Financing Statement Page 6 of 21 necessary and usual charges incident to the consummation of this loan, and likewise the usual
and necessary costs incident to the cancellation upon the record or records of this Deed of Trust
after the Loan has been paid in full. (h) Grantor will keep the improvements and mortgaged property in good condition
and repair at his expense and will not damage or demolish any part or do any act by which the
value of said property will be impaired. It is further agreed that Grantor will commit no waste on
the property conveyed herein, and that, in the event the undersigned Grantor fails to keep in as
good state of repair as they now are the buildings and appurtenances hereinabove conveyed, the
Beneficiary herein shall have the right at its option to make any needed repairs, betterments, or
improvements, and that any expenditure for such purpose will be a legitimate indebtedness
against the undersigned and against the property embraced in this Deed of Trust, and the cost of
any such repairs, betterments, or improvements will become a part of the debt secured by this
instrument. Grantor agrees not to abandon said property, and a breach of this condition shall
cause the entire indebtedness secured hereby to become due and payable at the option of the said
Beneficiary or its assigns. (i) Any additional security hereafter given for the payment of said indebtedness shall
not release or in anywise affect the security herein given but shall be deemed cumulative thereto. (j) As further security for said indebtedness, the rentals accrued and to accrue from
the above described property are hereby assigned to Beneficiary, and Grantor grants a security
interest therein to Beneficiary and in case of default in the payment of any part of said principal
or interest, Beneficiary may collect said rents and credit the same, less cost of collection, on said
indebtedness and in such order as Beneficiary may determine. This agreement may be enforced
by the appointment of a receiver by the court, without notice to Grantor or necessity of proof that
the value of the security is less than the indebtedness. This assignment shall continue despite any
disability or incompetence of Grantor.
(k)
During the life of this Deed of Trust, should any improvements or alterations be
made or erected upon the said property, this Deed of Trust shall attach to such improvements and
alterations as additional security and shall constitute a lien not only against the real estate and
present improvements but also against such future alterations or improvements prior to any other
lien(s) that may be given or created after the date hereof, and such other lien(s) shall be and
remain a second lien inferior to the lien of this Deed of Trust. (1)
Grantor may not sell, convey, transfer, dispose of or further encumber the
property or any part thereof or any interest therein or permit the assumption of the indebtedness
secured by this Deed of Trust or agree to do so without first obtaining the written consent of
Beneficiary thereto. If Grantor is a partnership or joint venture, Grantor will not consent to a
change in its members in excess of Fifty Percent (50%), whether by addition or deletion, or agree
to do so without first obtaining the written consent of Beneficiary thereto, provided, however, the
ownership interest of a joint venturer may be distributed to the heirs or beneficiaries of the joint
venturer upon the death of such joint venturer. if Grantor is a Corporation, Grantor will not
consent to a conveyance of a controlling interest in its stock or agree to do so without first
Second Deed of Trust, Security Agreement and Financing Statement Page 7 of 21 obtaining the written consent of Beneficiary thereto, provided, however, the stock of a
shareholder may be distributed to the heirs or beneficiaries of such shareholder upon the death of
such shareholder. Upon the occurrence of any of such events without the written consent of
Beneficiary having first been obtained, then Beneficiary shall have the right, at its option, to
declare all sums secured hereby immediately due and payable. Upon the occurrence of any such
transaction with respect to which Beneficiary has given or waived giving its written consent,
Beneficiary may charge a reasonable assumption fee, provided that any such assumption fee
shall not result in an effective interest rate which is in excess of the maxi un rate permitted by
applicable law. If Beneficiary consents to any such transaction and/or to assumption of the
indebtedness secured by this Deed of Trust, regardless of whether an assumption fee is charged,
Grantor shall not be released from any obligations hereunder. Consent to any such transaction
shall not be deemed to be consent or waiver of a necessity of consent to any other, further or
successive transactions. (m) If this Deed of Trust lien should ever be held to be invalid as to any portion of
said indebtedness, the first payments made on said indebtedness shall be applied on the portion
as to which the lien is held invalid. (n) Any monies paid in condemnation proceedings or under threat thereof or in any
governmental taking of all or any part of the mortgaged property, shall be paid to the Beneficiary
for application on the indebtedness in such order as Beneficiary may determine, or Beneficiary,
at its sole election, may release all or part of such monies for use in repairing or restoring the
property. (o) If prior to receipt by Beneficiary of proceeds of insurance policies under (e) above
or such award or payment under (n) above, the property or any part shall have been sold at
Trustee's sale or foreclosure of this Deed of Trust, Beneficiary shall have the right to receive said
insurance proceeds or award or payment as the case may be to the extent of any deficiency
remaining after Trustee's or foreclosure sale with interest thereon and reasonable attorney's fees,
costs and disbursements incurred by Beneficiary in connection with the collection of such
monies. (p) No waiver by Beneficiary, expressed or implied, of any breach of any one or more
of the covenants or agreements herein contained shall be deemed or taken to be a waiver of the
continuation of such breach or any succeeding or other breach. No express waiver shall affect
any default other than the default specified in the express waiver and then only for the time and
to the extent therein stated. (q)
The rights of Beneficiary under the clauses, covenants and agreements contained
in this Deed of Trust shall be separate, distinct and cumulative and none of them shall be an
exclusion of the other. No act of Beneficiary shall be construed as an election to proceed under
any one provision herein to the exclusion of any other provision. (r) If Grantor or any subsequent owner of the above described land or any part
thereof owns or at any time during the life of this Deed of Trust shall own any interest in the
adjacent streets, roads, alleys or ways or improvements thereon, or any easements or
appurtenances adjoining and used in connection with the above described property, then such
Second Deed of Trust, Security Agreement and Financing Statement Page 8 of 21 interest shall be included within the terms of this Deed of Trust and shall constitute a part of the
property subject to the lien hereof. (s)
In the event of any breach by Grantor or failure to observe any of the agreements
or covenants herein contained, then and at any time thereafter during the continuation of such
breach or non-observance, said indebtedness and all interest accrued thereon shall at the option
of Beneficiary or other legal holder of said indebtedness or any part immediately become due
and payable without notice, notice of intention to accelerate, notice of acceleration (notice being
expressly waived), demand or presentment, and the holder of said indebtedness or any part may
proceed to collect sane by sale under this Deed of Trust, suit for personal judgment, court
foreclosure, receivership and/or otherwise as such holder may elect. Notwithstanding anything to
the contrary in this Deed of Trust, if Grantor should default in the performance of any of the
agreements set forth herein or in the Note secured hereby, Beneficiary shall not accelerate the
maturity of the indebtedness secured by this Deed of Trust or commence foreclosure proceedings
pursuant to this Deed of Trust until Beneficiary has first mailed written notice of such default to
each Grantor in the manner hereafter provided and has afforded each Grantor a period of fifteen
(15) days from the date of mailing said notice within which to cure such default. Any notice to
Grantors provided for in this Deed of Trust shall be given by mailing such notice by certified
mail addressed to__________ , __________, at __________, __________, __________
__________, and to __________ , __________, at __________, __________, __________,
__________ __________. The address of either Grantor for the purpose of said notice may be
changed by giving written notice of such change to Beneficiary or its assigns.
(t) Regardless of any other provision in this Deed of Trust, or in the Note, or any
other evidence of indebtedness, Grantor shall never be required to pay any unearned interest on
the indebtedness and shall never be required to pay interest thereon at any rate in excess of the
maximum allowed by law. Any excess if paid shall be credited on principal. This paragraph,
however, has no application to any bonus or premium which may be agreed upon for any
voluntary prepayment by Grantor of any part of the indebtedness. (u) Without affecting the liability of Grantor or any other person (except any person
expressly released in writing) for payment of said indebtedness or for performance of any
obligation contained herein, and without affecting the rights of Beneficiary with respect to any
security not expressly released in writing, Beneficiary may, at any time and from time to time,
either before or after the maturity of said indebtedness, and without notice or consent: (i) refuse
to fly with any request of Grantor or any other party so obligated to take action to foreclose this
Deed of Trust; (ii) release any person liable for payment of all or any part of the indebtedness or
for performance of any obligation; (iii) make any agreement extending the time or otherwise
altering the terms of payment of all or any part of the indebtedness, or modifying or waiving any
obligation, or subordinating, modifying or otherwise dealing with the lien or charge hereof; (iv)
release regardless of consideration any part of the security held for indebtedness without, as to
the remainder of security, in anywise impairing or affecting the lien and rights under this Deed of
Trust or other security or the priority of such lien(s) over any subordinate lien. Beneficiary may
resort for the payment of said indebtedness to any security therefore in such order and manner as
Beneficiary may elect.
Second Deed of Trust, Security Agreement and Financing Statement Page 9 of 21 (v) Beneficiary shall have the right from time to time to sue for any sums whether
principal, interest, installments of either or both, taxes or any other sums required to be paid
under the terms of this Deed of Trust as the ease become due without regard to whether or not
the principal sum or any other sums shall be due and without prejudice to the rights of
Beneficiary thereafter to bring an action for foreclosure or any other action for default or defaults
by Grantor existing at the time such earlier action was commenced. (w)
If Trustee or any Substitute Trustee be an officer, stockholder, agent or employee
of Beneficiary, such fact shall not disqualify said Trustee or Substitute Trustee from acting as
such and enforcing the terms of this Deed of Trust, or the Beneficiary, its officers, agents and
employees from becoming purchaser at any Trustee's sale or other sale of foreclosure of this
Deed of Trust. (x) The undersigned __________ , warrants that it is in good standing in the State of
__________, that all franchise taxes currently due and owing the State of __________ have been
paid, that all future franchise taxes to the state of __________ will be paid before delinquency,
and that said Grantor will, at any time, and from time to time, upon request of the Beneficiary,
furnish the Beneficiary certificates of existence and good standing from the secretary and
Comptroller of the State of __________. (y)
In the event the Grantor should become insolvent, or apply to a bankruptcy court
to be adjudicated a voluntary bankrupt, or proceedings be instituted to put Grantor in involuntary
bankruptcy, or should any proceedings be taken against the Grantor looking to the appointment
of a receiver, assignee, or trustee, or should any default be made in the payment of the
indebtedness secured hereby, or should there be any breach of the covenants or agreements
contained herein, then in either or any such case all rents becoming due thereafter on the
property herein conveyed shall, at the option of the Beneficiary, be due and payable to the
Beneficiary herein to be applied to the indebtedness secured hereby, and the whole indebtedness
hereby secured may, at the option of said Beneficiary of its assigns, be declared due and payable. (z) Grantor hereby assigns to the Beneficiary all of Grantor's right, title and interest
which it has as lessor in and to all present and future leases on any and all of the real estate
described in this Deed of Trust, and all amendments, renewals and additions thereto, and directs
and authorizes all future payments due thereon to be made direct to the Beneficiary of this Deed
of Trust, or its assigns, upon notice in writing from said Beneficiary, delivered by regular U.S.
Mail or Certified U.S. Mail to the respective lessee, to make such payments direct to said
Beneficiary or its assigns, without any further notice being necessary. (aa) Grantor agrees to protect and preserve the security, and with respect to the herein-
described real property not to (i) use or permit the use of the property as a land fill or dump, (ii)
store or bury or permit the storage or burying of any hazardous substances which require the
issuance of a permit by the Environmental Protection Agency or any state or local agency
governing the issuance of hazardous substances permits for disposal sites, or (iii) request or
permit a change in zoning or land use classification except to the extent such zoning or land use
change is for commercial use.
Second Deed of Trust, Security Agreement and Financing Statement Page 10 of 21 (bb) Grantor shall, at Grantor's sole cost and expense, comply with all federal, state and
local laws, rules, regulations and orders with respect to the discharge and removal of hazardous
substances, pay immediately when due the cost of removal of any such substances, and keep the
real estate herein described free of any lien imposed pursuant to such laws, rules, regulations and
orders. In the event Grantor fails to do so, after notice to Grantor and the expiration of the earlier
of (i) any applicable cure period, or
(ii) the cure period permitted under the applicable law, rule,
regulation or order, Beneficiary may either declare this Deed of Trust to be in default or cause
the real estate to be freed from the hazardous substances, and the cost of the removal shall be so
much additional indebtedness secured hereby and shall became immediately due and payable
without notice and with interest thereon at the rate provided for in said Note. Grantor shall give
to Beneficiary and its agents and its employees access to the real estate and hereby specifically
grants to Beneficiary a license, effective upon expiration of the applicable cure period, to remove
the hazardous substances. Grantor shall indemnify Beneficiary and hold Beneficiary harmless
from and against all loss, cost, damage and expense (including, without limitation, attorney's fees
and costs incurred in the investigation, defense and settlement of claims) that Beneficiary may
incur as a result of or in connection with the assertion against Beneficiary or any claim relating
to the presence or removal of any hazardous substances, referred to in this paragraph, or
compliance with any federal, state or local laws, rules, regulations or orders relating thereto. Te
agreement to indemnify Beneficiary shall survive payment of the Note of Grantor and a release
of this Deed of Trust by Beneficiary. Grantor acknowledges that Beneficiary has no role in the
management of the real property described herein or the improvements thereon. As used in paragraphs (aa) and (bb) above, the term "hazardous substances" shall mean
all hazardous and toxic substances, wastes or materials, any pollutants or contaminants
(including asbestos and raw materials which include hazardous constituents), or any other similar
substances, or materials which are included under or regulated by any local, state or federal law,
rule or regulation pertaining to environmental regulation, contamination or clean-up, including
the Comprehensive Environmental Response, Compensation, and Liability Act as amended, and
the Resource Conservation and Recovery Act as amended, and/or any state lien or state superlien
or environmental clean-up statutes. (cc) Grantor hereby grants to Beneficiary, its successors and assigns and their officers
and agents, the right to inspect the lands herein described during normal daylight hours for the
purpose of assuring Beneficiary there has been no breach of the above-described covenants and
agreements. In the event of any breach of the above described agreements, this Deed of Trust
shall be in default. (dd) Grantor shall maintain sufficient general liability insurance with such coverage and
limits for personal and/or property damage as Beneficiary may from time to time require, said
insurance to be with a reputable insurance many or companies licensed to do business in Texas
and acceptable to Beneficiary. Beneficiary shall be named as mortgagee in such policies and said
policies shall provide that such insurance may not be cancelled unless Beneficiary is notified in
writing at least ten (10) days prior to such cancellation. Premiums for such policies shall be paid
by Grantor one (1) year in advance.
Second Deed of Trust, Security Agreement and Financing Statement Page 11 of 21 (ee) FINANCIAL COVENANTS __________ and __________, further covenant and
agree with Beneficiary as follows: (1):Definitions: As used in this paragraph (ee), the following terms shall have the
following meanings:(i) "Joint Venture" shall mean __________, a __________ Joint Venture.(ii) "Corporation" shall mean __________. (iii) "Assets" shall mean anything owned by Corporation or Joint Venture or any
right or interest therein, excluding goodwill, patents, trademarks, service marks, and
similar assets of an intangible nature. (iv) "Beneficiary" shall mean __________, a Mississippi insurance Corporation. (v) "Liabilities" shall mean all debts or other financial obligations of Joint
Venture or Corporation, including all of their funded debt and other borrowed money. (vi) "__________ loan" shall mean that certain Loan of $__________ dated
__________ ___, ____, from __________ to__________. (vii) "This Loan" shall mean that certain Loan of $__________ dated as of this
instrument to Joint Venture and Corporation. (viii) "Net Worth" means all assets less all liabilities. (xiv) "Interest Coverage Ratio" means earnings before interest, taxes, depreciation
and amortization, divided by interest and shall be computed by taking an average of the
previous four quarters (i.e., "rolling quarters"), and shall include both the __________
Loan as well as this Loan for purposes of computing this ratio. (xv) "Grantor" shall mean both Corporation and Joint Venture. (xvi) "Affiliated Person" shall mean: a) Any joint venturer (i.e., partner) in__________; b) Any natural person, corporation, partnership, joint venture, trust, or
unincorporation association which owns Ten Percent (10%) or more of any class
of equity securities or Ten Percent (10%) or more of the equity interest in
Grantor; or c) Any person related, within the third degree, to any joint venturer
described in subpart (a) above or related to any natural person described in
subpart (b) above.
Second Deed of Trust, Security Agreement and Financing Statement Page 12 of 21 (2) Grantor shall each month supply to Beneficiary monthly roan occupancy level
statements of __________ in a form normally prepared by Grantor and acceptable to
Beneficiary. Said statements shall be prepared and forwarded to Beneficiary within thirty
(30) days of the end of the subject month. (3) Grantor shall supply monthly profit and loss statements within sixty (60) days
of the end of each month prepared by Grantor's internal accountants in form satisfactory
to Beneficiary showing the financial condition of Grantor and the results of its operations
on a monthly basis, unaudited but certified by a financial officer or managing partner of
Grantor (subject to audit and year-end adjustment). Grantor shall supply quarterly
financial statements within ninety (90) days of the end of each quarter, which statements
need not be audited, but shall contain a certification and, warranty
and shall be
substantially in the forms attached as Exhibits "A" and "B, " and the attachments and
computations shall be in reasonable detail and in form satisfactory to Beneficiary. Such
compliance certificates shall be certified by a principal financial officer of Grantor.
(4) Grantor shall maintain an interest coverage ratio of 1.50X and shall maintain
full and accurate books of account and other records reflecting the results of the
operations of Grantor, and will furnish, or cause to be furnished, to Beneficiary as soon as
possible after the end of Grantor's fiscal year, but in no event later than ninety (90) days
after the end of Grantor's fiscal year, two copies of the balance sheets of Grantor as of the
end of such fiscal year and the related statements of income and retained earnings and
cash flows for such fiscal year for Grantor, in each case setting forth, in comparative
form, the figures for the preceding fiscal year, all in reasonable detail. Such financial
statements shall be accompanied by an opinion with respect thereto of a certified public
accountant satisfactory to Beneficiary (the "CPA") which opinion shall state that the
examination of the CPA in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and, accordingly, included such
tests of accounting records and such other auditing procedures as were considered
necessary under the circumstances. Said CPA opinion shall also state that such financial
statements present fairly the financial condition of Grantor as of such date and the results
of operations thereof for such period, and have been prepared in accordance with
generally accepted accounting principles consistently applied. Such financial statements
shall also be certified on behalf of Grantor by its chief executive officer or chief financial
officer, stating that such financial statements are consistent with the information
presented to the CPA for use in preparation of the audited financial statements of
Grantor. (5) At any time, and from time to time, Grantor shall deliver to Beneficiary such other
financial data as Beneficiary shall reasonably request with respect to the ownership,
maintenance, use, and operation of said _____________ located on the property described
herein, and Beneficiary shall have the right, at reasonable times and upon reasonable notice, to
audit, examine, and make copies or extracts of Grantor's books of accounting and records
relating to said ________________ and the property described herein, all of which shall be
maintained and made available to Beneficiary and Beneficiary's representatives for such purpose
Second Deed of Trust, Security Agreement and Financing Statement Page 13 of 21 at __________, __________, __________ __________, or at such other location as Beneficiary
may approve. (6)Each Partner in the Joint Venture shall maintain a minimum net worth of at least
such Partner's percentage of ownership in the Joint Venture as multiplied by the unpaid balance
of this Loan. For purposes of illustration, the initial net worth of each Partner, prior to any
payment on this Loan, must be as follows:__________$ ____________________$ ____________________$ ____________________$ ____________________$ ____________________$ ____________________$ ____________________$ __________(7) Management fees paid by Grantor each year to Affiliated Persons regaling operations
of said __________ shall not exceed __________ Percent (___ %) of the gross room revenues. (8) The present rate of depreciation and amortization of Grantor shall not be changed
without prior approval of Beneficiary; provided, however, prior approval shall not be required
when increases in such rates are required by Federal or state law. (9) Cash and cash equivalents of Grantor are to be retained within Grantor with the
following exceptions: (i) cash and cash equivalents used in the customary and usual operation of
said Holiday Inn; (ii) Dividends paid annually by Corporation (beginning in __________ on
__________ net income) which dividends shall in no event exceed the net income
of the previous year after depreciation and amortization; and (iii) Distributions paid annually to partners in Joint Venture (beginning in
__________ on __________ net income), which distributions shall in no event
exceed the net income of the previous year after depreciation and amortization. In the event of any breach by Grantor or failure to observe any of the agreements or
covenants herein contained or contained in any other agreement securing said Note, each of said
Partners shall provide an affidavit of such Partner's minimum net worth and a certification of net
worth by a certified public accountant. Such affidavit and certification shall be in a form
acceptable to Beneficiary and shall be provided to Beneficiary within thirty (30) days of the
notice of any such breach or failure. (ff) The proceeds of said Note shall be used for improvements and renovations to the
subject real property. During the construction of such improvements and said renovations, a
Second Deed of Trust, Security Agreement and Financing Statement Page 14 of 21 monthly statement shall be furnished by Grantor, which statement shall (1) attest to the fact that
all invoices submitted to Grantor for expenses relating to such construction and renovations have
been duly paid, minus any statutory hold-back which Grantor is obligated to retain; (2) list such
monthly expenses along with the name of each payee; and (3) give the remaining balance
necessary to completely pay for such improvements and renovations which are to be made. (gg) If at any time during the term of said Note, __________ , loses its franchise right to
operate a __________ on subject property and said Grantor fails, within thirty (30) days of the
loss of its __________ franchise right, to procure the right to operate as a __________,
__________ or __________ acceptable to Beneficiary, the indebtedness secured hereby shall, at
the option of the Beneficiary or the legal holder of the indebtedness, become immediately due
and payable, and a failure to pay the same within ten (10) days of the exercise of such option
shall constitute a default hereunder according to the terms and conditions of this instrument. (hh) Within six months of the date hereof, Grantor shall take such action as is necessary
to have an endorsement made to the lawyers Title Insurance Corporation Mortgagee Policy
covering the subject real property, which endorsement shall eliminate any exception in the
coverage of such policy as to contractors', subcontractors', mechanics', laborers', or materialmen's
liens. (ii) As additional security for the above described debt, Grantor hereby grants a security
interest to Beneficiary in and to all equipment, personal property, and fixtures of Grantor now or
hereafter located on or attached to the subject real property and used in the operation of any
motel or restaurant business now or hereafter located on said real property. (jj) Notwithstanding any provision herein to the contrary, the indebtedness secured
hereby shall, at the option of the Beneficiary or the legal holder of the indebtedness, also become
immediately due and payable upon the occurrence of any of the following events: (1) Both __________ and __________ sell or otherwise dispose of any part of
their ownership interest in __________, provided, however, distributions to the heirs or
beneficiaries of said __________ and __________, upon their death, may be made if
such heirs or beneficiaries have sufficient experience in the hotel industry to the
satisfaction of Beneficiary; or (2) __________ and __________ cease to be shareholders in __________.,
provided, however, no default will be declared if such shares pass to the heirs or
beneficiaries of said __________ and __________, upon their death, if such heirs or
beneficiaries have sufficient experience in the hotel industry to the satisfaction of
Beneficiary. The failure of the undersigned to pay said indebtedness within ten (10) days of the exercise of
such option shall constitute a default hereunder according to the terms and conditions of this
instrument. (kk) This Deed of Trust shall be construed in accordance with and governed by the laws
of the State of Texas and of the United States of America.
Second Deed of Trust, Security Agreement and Financing Statement Page 15 of 21 (11) Grantor represents, covenants and agrees that: (i) none of the transactions
contemplated by this Deed of Trust or any other agreement securing said indebtedness (including
the direct or indirect use of the proceeds from the loan evidenced hereby) will violate or result in
violation of Section 7 of the Securities Exchange Act or any regulations issued pursuant thereto,
including, without limitation, Regulation G of the Board of Governors of the Federal Reserve
System (12 CFR, part 207), as amended, and Regulation T (12 CFR, Part 220), as amended, and
Regulation X (12 CFR, Part 224), as amended, of said Board of Governors; (ii) no part of the
proceeds from the loan secured hereby will be used for the purpose (whether immediate,
incidental, or ultimate) of "purchasing" or "carrying" any "margin security" within the meaning
of such Regulation G, or for the purpose of reducing or retiring any indebtedness, which was
originally incurred for such purpose; and (iii) Grantor does not have any present intention of
acquiring any such margin securities as aforesaid in violation of Regulation G. (mm) In addition to the lien created by this Deed of Trust, the indebtedness secured by
this Deed of Trust is also secured by the Deed of Trust, Security Agreement and Financing
Statement dated __________, recorded in Volume __________, Page __________, Real
Property Records, __________ County, Texas ("Senior Deed of Toast") from Grantor for the
benefit of Beneficiary. A default in the observance or performance of any of the terms,
covenants, or agreements of the Senior Deed of Trust shall constitute a default under this Deed
of Trust, and any event of default under this Deed of Trust shall constitute a default under the
Senior Deed of Trust, entitling Beneficiary to exercise all rights and remedies provided
hereunder, and under any other agreement made as security for the indebtedness secured by this
Deed of Trust or the Senior Deed of Trust. Now therefore, if said indebtedness be fully paid, including principal, interest and
collection expenses, if any, as the same become due and payable, and if said covenants and
agreements be kept and performed, then this conveyance shall terminate and this Deed of Trust
and any other security shall be released at the expense of Grantor; otherwise to continue in full
force and effect. In case of default or failure, however, on the part of Grantor to pay said indebtedness,
principal or interest, and collection expenses, if any, as the same become due and payable, or to
keep or perform any of the covenants or agreements herein contained, Grantor hereby authorizes
and empowers said Trustee and his successors hereunder (and it is hereby made his or its duty at
the request of said Beneficiary or other legal holder of any part of said indebtedness) to give
notice of sale in the manner and for the time required by the laws of the State of _____________,
and, at the time and place so advertised, to sell said premises or any part thereof at public sale for
cash to the highest bidder. Trustee may sell said property as a whole or in lots or parcels as to
him may seem expedient. Beneficiary may become the purchaser at such sale, being the highest
bidder. After such sale Trustee shall execute and deliver to the purchaser or purchasers thereof
good and sufficient deed or deeds to the property thus sold. The recitals in any such deed shall be
prima facie evidence of the truth of the matters therein stated (even though such recitals are
general and in the form of legal conclusions) and shall be accepted by all courts of law and
equity as such and all prerequisites to said sale shall be presumed to have been performed and
any such sale shall forever be a bar against Grantor, his heirs, personal representatives and
assigns and all persons claiming under him. Trustee shall receive the proceeds of sale and apply
Second Deed of Trust, Security Agreement and Financing Statement Page 16 of 21 the same as follows: first to expenses of foreclosure, advertising, sale and conveyance and a
reasonable Trustee's fee of 5% of the sale price and second to the payment of said indebtedness
with all interest thereon, attorney's fees, taxes, as well as other payments that may have been
made by Beneficiary as hereinbefore provided with interest and shall hold the remainder of the
money, if any, for subordinate lien holders, if any, and Grantor. In the event of death of the Trustee or any Substitute Trustee appointed hereunder or
refusal, failure or inability of any Trustee or substitute Trustee for any reason to act hereunder or
in the event the holder of said indebtedness shall deem it desirable to remove without cause the
Trustee or any Substitute Trustee and appoint another to execute this trust, then and in any of
said events the holder of said indebtedness shall have the right and is hereby authorized and
empowered to appoint by instrument in writing a Substitute Trustee in lieu of the Trustee named
herein or in lieu of any previously appointed Substitute Trustee, who shall thereupon (with or
without filing his appointment of record) become vested with and succeed to all the title, power
and duties hereby conferred upon the Trustee named herein the same as if said Substitute Trustee
had been named original Trustee in this Deed of Trust. After any sale under this Deed of Trust, Grantor and any one claiming under him and in
possession, shall be a tenant at sufferance of the purchaser of said property at Trustee's sale and
purchaser shall be entitled to immediate possession thereof and if Grantor or party in possession
fails to vacate the premises immediately, purchaser shall have all the rights and remedies under
the law against Grantor or such party in possession as a tenant at sufferance. Each such right and
remedy is cumulative of the other. In the event any suit in forcible detainer or eviction be
brought by the purchaser of the property after the Trustee's sale, Grantor, or his successors in
title, waives all notices to quit said premises, and agrees that said action may be filed without
said notice. With respect to the herein described fixtures, attachments, goods which are to become
fixtures attached to the herein described real estate, or improvements or buildings thereon, and
any personal property herein described, (together herein called "Collateral"), this Deed of Trust
shall constitute a security agreement between Grantor and Beneficiary and Grantor does hereby
grant to Beneficiary a security interest in and to all such Collateral. Cumulative of all other rights
of Beneficiary hereunder, Beneficiary shall have all of the rights conferred upon a secured party
by the Uniform Commercial Code of ________________. Grantor agrees to execute one or more
financing statements covering such collateral, in the manner, substance and form required by law
and to the satisfaction of Beneficiary. Beneficiary may exercise any or all of the remedies of a
secured party available to it under the Uniform Commercial Code of __________ with respect to
such Collateral and it is expressly agreed that if upon default Beneficiary should elect to dispose
of the Collateral in accordance with the provisions of the Uniform Commercial Code of
__________, ten (10) days' notice by Beneficiary to Grantor shall be deemed to be reasonable
notice under any provisions of the Uniform Commercial Code of __________ requiring such
notice; provided, however, that Beneficiary may, at its option, proceed as to both the real estate
herein described and the Collateral in accordance with its rights and remedies in respect of the
real property pursuant to the provisions of this Deed of Trust, in lieu of proceeding under the
Uniform Commercial Code of __________, and, if Beneficiary exercises such option, it shall not
be necessary to have present at the place of sale held pursuant to this Deed of Trust the Collateral
or any part thereof.
Second Deed of Trust, Security Agreement and Financing Statement Page 17 of 21 In construing this Deed of Trust: Pronouns of any gender shall include the other genders,
the singular or plural shall include the other; if Grantor consists of more than one party such
Grantors shall be jointly and severally liable under any and all obligations, covenants and
agreements of Grantor contained herein and if more than one party is or shall because the legal
holder of said indebtedness the rights and remedies herein granted unto the Beneficiary shall
accrue and incur to the benefit of said legal holders jointly and severally. This Deed of Trust and each and all the term hereof inure to the benefit of the
Beneficiary, its heirs, personal representatives, successors and assigns and are binding upon
Grantor, its heirs, personal representatives, successor and assigns. The right of sale hereunder shall not be exhausted by one or any sale, but, so long as any
amount due under the Note or any additional indebtedness secured by the terms and provisions
of this Deed of Trust remains undischarged, the Trustee and/or his/her successors and assigns
may make other and successive sales until all the property described above shall be legally sold.
Until all the property covered by this Deed of Trust has been legally sold, no one or more
foreclosure sale shall exhaust the power of the Trustee or his/her successors and assigns to
conduct future foreclosures nor in any way limit the powers of sale provided for in this Deed of
Trust. Without limiting any of the powers or remedies set forth in this Deed of Trust, Grantor
hereby agrees that in the event the Note or other indebtedness secured hereby is payable in
installments or includes, at any time, item of matured as well as unmatured indebtedness, the
holder of the matured installments or items of indebtedness shall have the right to have the
property herein described sold, subject to the part of the indebtedness secured hereby which is
unmatured at the time the Trustee (or Substitute Trustee) is requested to make such sale. Any
Trustee's sale (or Substitute Trustee's sale) to satisfy the lien and security interest securing the
matured portion of the indebtedness shall not limit in any way the Trustee's (or Substitute
Trustee's) power or otherwise affect the liens, assignments and security interests of this Deed of
Trust existing to secure that portion of the indebtedness to which the sale is to be made subject. The indebtedness secured hereby is also secured in part by a Guaranty Agreement
executed as of this day by __________, __________, __________, __________, __________,
__________, the Estate of __________, __________, and __________. Notwithstanding anything to the contrary contained in this Deed of Trust, Grantors and
Beneficiary do hereby agree that Beneficiary shall not at any time bring any action, suit or
proceeding against the undersigned Grantors or any general partner of __________, or their
successors or assigns, to recover a money judgment for any sums due hereunder or secured
hereby, except in an action to enforce said Guaranty Agreement or to foreclose the lien granted
by this Deed of Trust or other security agreement, and in such foreclosure action, Beneficiary,
for itself and its successors and assigns, by its acceptance of the Note secured hereby and this
Deed of Trust, waives its right to a deficiency judgment against the undersigned Grantors and the
partners of __________, and agrees to look to Grantors' interest in and to the property described
herein and to any other property pledged to secure the Note for the satisfaction of any money
judgment in connection with such foreclosure suit.
Second Deed of Trust, Security Agreement and Financing Statement Page 18 of 21 Executed this ___ day of _________, ____, to be effective ___ day of _________, ____
.__________A ___________ Joint Venture By: __________Joint Venturer By: __________Joint Venturer __________D/B/A __________ By: __________President Attest: __________Secretary (CORPORATE SEAL) The mailing address of Trustee is:______________________________The mailing address of each Beneficiary is:______________________________STATE OF __________COUNTY OF __________
Second Deed of Trust, Security Agreement and Financing Statement Page 19 of 21 Personally appeared before me, the undersigned notary public in and for the jurisdiction
aforesaid, __________, personally known to me to be one of the two managing Joint Venturers
of__________, a __________ Joint Venture, and whose name is subscribed to the foregoing
instrument, and who acknowledged to me that he signed, executed and delivered the above and
foregoing instrument on the day and date therein stated for the purposes and consideration
therein expressed in the name of, and for and on behalf of and as the act and deed of said Joint
Venture, having first been duly authorized so to do by all Joint Venturers of said Joint Venture. GIVEN under my hand and seal of office this ___ day of _________, ____.Notary Public, State of Notary's Printed Name: My Commission Expires: STATE OF __________COUNTY OF __________Personally appeared before me, the undersigned notary public in and for the jurisdiction
aforesaid, __________, personally known to me to be one of the two managing Joint Venturers
of __________, a __________ Joint Venture, and whose name is subscribed to the foregoing
instrument, and who acknowledged to me that he signed, executed and delivered the above and
foregoing at on the day and date therein stated for the purposes and consideration therein
expressed in the name of, and for and on behalf of and as the act and deed of said Joint Venture,
having first been duly authorized so to do by all Joint Venturers of said Joint Venture. GIVEN under my hand and seal of office this ___ day of _________, ____.Notary Public, State of Notary's Printed Name: My Commission Expires:
Second Deed of Trust, Security Agreement and Financing Statement Page 20 of 21 STATE OF _________COUNTY OF _________Before me, the undersigned Notary Public, on this day personally appeared _________
and _________, the President and Secretary respectively of _________, a _________
Corporation, known to me to be the persons whose names are subscribed to the foregoing
instrument, and acknowledged that they executed and delivered the foregoing instrument for the
purposes and consideration therein expressed, and as the act of said Corporation. GIVEN under my hand and seal of office this ___ day of _________, ____.Notary Public, State of Notary's Printed Name: My Commission Expires:
Second Deed of Trust, Security Agreement and Financing Statement Page 21 of 21EXHIBIT A
