Exhibit 10.05

 

PREFERRED SECURITIES CERTIFICATE

 

THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND SUCH PREFERRED SECURITIES OR ANY INTEREST
THEREIN MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY
PREFERRED SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE PREFERRED
SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.

 

THE HOLDER OF THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES
FOR THE BENEFIT OF THE TRUST AND THE DEPOSITOR THAT (A) SUCH PREFERRED
SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE
TRUST, or (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A “QUALIFIED
PURCHASER” (AS DEFINED IN SECTION 2(a)(51) OF THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED), AND (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY PREFERRED
SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

 

THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING AN AGGREGATE LIQUIDATION AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF PREFERRED SECURITIES, OR ANY
INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE LIQUIDATION AMOUNT OF LESS THAN
$100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID
AND OF NO LEGAL EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH PREFERRED
SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
PRINCIPAL OF OR INTEREST ON SUCH PREFERRED SECURITIES, OR ANY INTEREST THEREIN,
AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN
SUCH PREFERRED SECURITIES.

 

THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF
OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE
BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
(“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
“CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN
ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON
INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS PREFERRED SECURITY
OR ANY INTEREST THEREIN. ANY PURCHASER OR HOLDER OF THE PREFERRED SECURITIES OR
ANY INTEREST

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THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF
THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR
OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER
PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO
FINANCE SUCH PURCHASE.

 

THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY
AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE
CORPORATION (THE “FDIC”).

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Certificate Number: P-1  

Twenty Six Million Two Hundred Fifty

Thousand Aggregate Liquidation Amount

Preferred Securities

 

Certificate Evidencing Preferred Securities

 

of

 

JAMESON INNS FINANCING TRUST I

 

Preferred Securities

(liquidation amount $1,000 per Preferred Security)

 

Jameson Inns Financing Trust I, a statutory trust created under the laws of the
State of Delaware (the “Trust”), hereby certifies that Sigler & Co. (the
“Holder”) is the registered owner of 26,250 Preferred Securities of the Trust
representing an undivided preferred beneficial interest in the assets of the
Trust and designated the Jameson Inns Financing Trust I Preferred Securities,
(liquidation amount $1,000 per Preferred Security) (the “Preferred Securities”).
Subject to the terms of the Trust Agreement (as defined below), the Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer as provided in Section 5.7 of the Trust
Agreement (as defined below). The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities are set forth in, and this certificate and the Preferred Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust, dated
as of March 15, 2005 as the same may be amended from time to time (the “Trust
Agreement”), among Jameson Inns, Inc., as Depositor, JPMorgan Chase Bank,
National Association, as Property Trustee, Chase Bank USA, National Association,
as Delaware Trustee, the Administrative Trustees named therein and the Holders,
from time to time, of Trust Securities. The Trust will furnish a copy of the
Trust Agreement to the Holder without charge upon written request to the
Property Trustee at its Corporate Trust Office.

 

Upon receipt of this certificate, the Holder is bound by the Trust Agreement and
is entitled to the benefits thereunder.

 

This Preferred Securities Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.

 

All capitalized terms used but not defined in this Preferred Securities
Certificate are used with the meanings specified in the Trust Agreement,
including the Schedules and Exhibits thereto.

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IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed
on behalf of the Trust this certificate this 15th day of March, 2005.

 

JAMESON INNS FINANCING TRUST I

By:

 

/s/ Craig R. Kitchin

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Name:

 

Craig R. Kitchin

   

Administrative Trustee

 

This is one of the Preferred Securities referred to in the within-mentioned
Trust Agreement.

 

Dated: March 15, 2005

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

not in its individual capacity, but solely as Property

Trustee

By:

 

/s/ Maria Calzado

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Authorized signatory

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REVERSE OF SECURITY

 

The Trust promises to pay Distributions from March 15, 2005, or from the most
recent Distribution Date to which Distributions have been paid or duly provided
for, quarterly in arrears on March 30, June 30, September 30 and December 30 of
each year, commencing on June 30, 2005, at a fixed rate equal to 8.46% per annum
through the interest payment date in March 30, 2010 and thereafter at a variable
rate equal to LIBOR plus 4.20% per annum of the Liquidation Amount of the
Preferred Securities represented by this Preferred Securities Certificate,
together with any Additional Interest Amounts, in respect to such period.

 

Distributions on the Trust Securities shall be made by the Paying Agent from the
Payment Account and shall be payable on each Distribution Date only to the
extent that the Trust has funds then on hand and available in the Payment
Account for the payment of such Distributions.

 

Distributions on the Securities must be paid on the dates payable to the extent
that the Trust has funds available for the payment of such Distributions in the
Payment Account of the Trust. The Trust’s funds available for Distribution to
the Holders of the Preferred Securities will be limited to payments received
from the Depositor.

 

During any Event of Default, the Depositor shall not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Depositor’s capital stock or
(ii) make any payment of principal of or any interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Depositor that rank pari
passu in all respects with or junior in interest to the Notes (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Depositor in connection with (1) any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, (2) a dividend reinvestment or stockholder
stock purchase plan or (3) the issuance of capital stock of the Depositor (or
securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to an Event of
Default, (b) as a result of an exchange or conversion of any class or series of
the Depositor’s capital stock (or any capital stock of a Subsidiary (as defined
in the Indenture) of the Depositor) for any class or series of the Depositor’s
capital stock or of any class or series of the Depositor’s indebtedness for any
class or series of the Depositor’s capital stock, (c) the purchase of fractional
interests in shares of the Depositor’s capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any Rights Plan
(as defined in the Indenture), the issuance of rights, stock or other property
under any Rights Plan, or the redemption or repurchase of rights pursuant
thereto or (e) any dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock).

 

On each Note Redemption Date, on the stated maturity (or any date of principal
repayment upon early maturity) of the Notes and on each other date on (or in
respect of) which any principal on the Notes is repaid, the Trust will be
required to redeem a Like Amount of Trust Securities at the Redemption Price.
Under the Indenture, the Notes may be redeemed by the

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Depositor on any Interest Payment Date, at the Depositor’s option, on or after
March 30, 2010 in whole or in part from time to time at the Optional Note
Redemption Price of the principal amount thereof or the redeemed portion
thereof, as applicable, together, in the case of any such redemption, with
accrued interest, including any Additional Interest, to but excluding the date
fixed for redemption; provided, that the Depositor shall have received the prior
approval of any Applicable Insurance Regulatory Authority then required. The
Notes may also be redeemed by the Depositor, at its option, at any time, in
whole but not in part, upon the occurrence of an Investment Company Event or a
Tax Event at the Special Note Redemption Price; provided, that the Depositor
shall have received the prior approval of any Applicable Insurance Regulatory
Authority then required; and provided, further, that such Investment Company
Event or a Tax Event is continuing on the Redemption Date.

 

The Trust Securities redeemed on each Redemption Date shall be redeemed at the
Redemption Price with the proceeds from the contemporaneous redemption or
payment at maturity of Notes. Redemptions of the Trust Securities (or portion
thereof) shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Trust has funds then on hand and
available in the Payment Account for the payment of such Redemption Price.

 

Payments of Distributions (including any Additional Interest Amounts), the
Redemption Price, Liquidation Amount or any other amounts in respect of the
Preferred Securities shall be made by wire transfer at such place and to such
account at a banking institution in the United States as may be designated in
writing at least ten (10) Business Days prior to the date for payment by the
Person entitled thereto unless proper written transfer instructions have not
been received by the relevant record date, in which case such payments shall be
made by check mailed to the address of such Person as such address shall appear
in the Security Register. If any Preferred Securities are held by a Depositary,
such Distributions shall be made to the Depositary in immediately available
funds.

 

The indebtedness evidenced by the Notes is, to the extent provided in the
Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Debt (as defined in the Indenture), and this Security is
issued subject to the provisions of the Indenture with respect thereto.

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ASSIGNMENT

 

FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Securities Certificate to:

 

 

(Insert assignee’s social security or tax identification number)

 

 

(Insert address and zip code of assignee)

and irrevocably appoints

 

 

agent to transfer this Preferred Securities Certificate on the books of the
Trust. The agent may substitute another to act for him or her.

 

Date:                             

Signature:
______________________________________________________________________________________________

(Sign exactly as your name appears on the other side of this Preferred
Securities Certificate)

 

The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.