Exhibit 10.5

 

RETURN TO:

 

Reid H. Harbin, Esq.

Harbin & Miller, LLC

3085 E. Shadowlawn Avenue

Atlanta, Georgia  30305

 

DEED TO SECURE DEBT AND SECURITY AGREEMENT

 

THIS DEED TO SECURE DEBT AND SECURITY AGREEMENT (hereinafter referred to as this
“Deed”) is made and entered into this 27th day of July, 2011, by and ERIN
PROPERTY HOLDINGS, LLC, party of the first part, as grantor, whose address is
3050 Peachtree Road, NW, Suite 355, Two Buckhead Plaza, Atlanta, Georgia  30305
(hereinafter referred to as “Borrower”), and BANK OF ATLANTA, party of the
second part, as grantee, whose address is 1970 Satellite Blvd., Duluth, Georgia 
30097 (hereinafter referred to as “Lender”);

 

W I T N E S S E T H:

 

THAT FOR AND IN CONSIDERATION of the sum of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency whereof are
hereby acknowledged, and in order to secure the indebtedness and other
obligations of Borrower hereinafter set forth, Borrower does hereby grant,
bargain, sell, convey, assign, transfer, pledge and set over unto Lender and the
successors, successors-in-title, and assigns of Lender all of the following
described land and interests in land, estates, easements, rights, improvements,
personal property, fixtures, equipment, furniture, furnishings, appliances and
appurtenances (hereinafter referred to collectively as the “Premises”):

 

(a)           All those certain tracts, pieces or parcels of land more
particularly described in Exhibit “A” (commonly known as 606 Simmons St.,
Dublin, Laurens County, Georgia 30121) attached hereto and by this reference
made a part hereof (hereinafter referred to as the “Land”).

 

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(b)           All of Borrower’s right, title and interest in and into all
buildings, structures and improvements of every nature whatsoever now or
hereafter situated on the Land, and all gas and electric fixtures, radiators,
heaters, engines and machinery, boilers, ranges, elevators and motors, plumbing
and heating fixtures, carpeting and other floor coverings, fire extinguishers
and any other safety equipment required by governmental regulation or law,
washers, dryers, water heaters, mirrors, mantels, air conditioning apparatus,
refrigerating plants, refrigerators, cooking apparatus and appurtenances, window
screens, awning and storm sashes, which are or shall be attached to said
buildings, structures or improvements and all other furnishings, furniture,
fixtures, machinery, equipment, appliances, vehicles (excluding Borrower’s
personal automobiles, if any), building supplies and materials, books and
records, chattels, farm products, consumer goods and personal property of every
kind and nature whatsoever now or hereafter owned by Borrower and located in, on
or about, or used or intended to be used with or in connection with the use,
operation or enjoyment of the Premises, including all extensions, additions,
improvements, betterments, after-acquired property, renewals, replacements and
substitutions, or proceeds from a permitted sale of any of the foregoing, and
all the right, title and interest of Borrower in any such furnishings,
furniture, fixtures, machinery, equipment, appliances, vehicles and personal
property subject to or covered by any prior security agreement, conditional
sales contract, chattel mortgage or similar lien or claim, together with the
benefit of any deposits or payments now or hereafter made by Borrower or on
behalf of Borrower, to the extent assignable all tradenames, trademarks,
servicemarks, logos and goodwill related thereto which in any way now or
hereafter belong, relate or appertain to the Premises or any part thereof or are
now or hereafter acquired by Borrower; and all equipment, fixtures, farm
products and consumer goods constituting proceeds acquired with cash proceeds of
any of the property described hereinabove, all of which are hereby declared and
shall be deemed to be fixtures and accessions to the Land and a part of the
Premises as between the parties hereto and all persons claiming by, through or
under them, and which shall be deemed to be a portion of the security for the
indebtedness herein described and to be secured by this Deed.  The location of
the above described collateral is also the location of the Land.

 

(c)           All of Borrower’s right, title and interest in all; easements,
rights-of-way, strips and gores of land, vaults, streets, ways, alleys,
passages, sewer rights, waters, water courses, water rights and powers,
minerals, flowers, shrubs, crops, trees, timber and other emblements now or
hereafter located on the Land or under or above the same or any part or parcel
thereof, and all estates, rights, titles, interests, privileges, liberties,
tenements, hereditaments and appurtenances, reversion and reversions, remainder
and remainders, whatsoever, in any way belonging, relating or appertaining to
the Premises or any part thereof, or which hereafter shall in any way belong,
relate or be appurtenant thereto, whether now owned or hereafter acquired by
Borrower.

 

(d)           All income, rents, issues, profits and revenues of the Premises
from time to time accruing (including without limitation all payments under
leases or tenancies, proceeds of insurance, condemnation payments, tenant
security deposits whether held by Borrower or in a trust account, and escrow
funds), and all the estate, right, title, interest, property, possession, claim
and demand whatsoever at law, as well as in equity, of Borrower of, in and to
the same; reserving only the right to Borrower to collect expend, apply and
otherwise deal with the same so long as Borrower is not in Default, as defined
in 2.01 hereunder.

 

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TO HAVE AND TO HOLD the Premises and all parts, rights, members and
appurtenances thereof, to the use, benefit and behoof of Lender and the
successors and assigns of Lender, IN FEE SIMPLE forever; and Borrower covenants
that Borrower is lawfully seized and possessed of the Premises as aforesaid, and
has good right to convey the same, that the same are unencumbered except for
those matters (hereinafter referred to as the “Permitted Encumbrances”)
expressly set forth in Exhibit “B” attached hereto and by this reference made a
part hereof, and that Borrower does warrant and will forever defend the title
thereto against the claims of all person whomsoever, except as to the Permitted
Encumbrances.

 

This Deed is intended to operate and is to be construed as a deed passing the
title to the Premises to Lender and is made under those provisions of the
existing laws of the State of Georgia relating to deeds to secure debt, and not
as a mortgage, and is given to secure the payment of the following described
indebtedness (hereinafter referred to collectively as the “Indebtedness”):

 

(a)           The debt evidenced by that certain promissory note (hereinafter
referred to as the “Note”) dated of even date herein, made by Borrower to the
order of Lender in the principal face amount of Five Million and No/100 Dollars
($5,000,000.00), with the final payment being due on or before July 27, 2036;
together with any and all renewals, modifications, consolidations and extensions
of the indebtedness evidenced by the Note;

 

(b)           Any and all additional advances made by Lender to protect or
preserve the Premises or the security interest created hereby on the Premises,
or for taxes, assessments or insurance premiums as hereinafter provided or for
performance of any of Borrower’s obligations hereunder or for any other purpose
provided herein (whether or not the original Borrower remains the owner of the
Premises at the time of such advances).

 

Should the Indebtedness be paid according to the tenor and effect thereof when
the same shall become due and payable, and should Borrower perform all covenants
herein contained in a timely manner, then this Deed shall be canceled and
surrendered.

 

Borrower hereby further covenants and agrees with Lender as follows:

 

ARTICLE I

 

1.01         Payment of Indebtedness.  Borrower and/or Borrower shall pay the
Note according to the tenor thereof and the remainder of the Indebtedness
promptly as the same shall become due.

 

1.02         Taxes, Liens and Other Charges.

 

(a)           Borrower, unless being contested in good faith, shall pay, on or
before the due date thereof, all taxes, assessments, levies, license fees,
permit fees and all other charges (in each case whether general or special,
ordinary or extraordinary, or foreseen or unforeseen) of every character
whatsoever (including all penalties and interest thereof) now or hereafter
levied, assessed, confirmed or imposed on, or in respect of, or which may be a
lien upon, the Premises, or any part thereof, or any estate, right or interest
therein, or upon the rents, issues, income or profits thereof, and shall submit
to Lender such evidence of the due and punctual payment of all such taxes,

 

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assessments and other fees and charges as Lender may require in writing. 
Notwithstanding the above, the Borrower shall pay in full the above taxes,
assessments, levies, fees and charges within sixty (60) days of delinquency.

 

(b)           Borrower, unless being contested in good faith, shall pay, on or
before the due date thereof, all taxes, assessments, charges, expenses, costs
and fees which may now or hereafter be levied upon, or assessed or charged
against, or incurred in connection with, the Note, the other Indebtedness, this
Deed or any other instrument now or hereafter evidencing, securing or otherwise
relating to the Indebtedness, and shall submit to Lender such evidence of the
due and punctual payment of all such taxes, assessments, charges, expenses,
costs and fees as Lender may require in writing. Notwithstanding the above, the
Borrower shall pay in full the above taxes, assessments, levies, fees and
charges within sixty (60) days of delinquency.

 

(c)           Borrower shall pay, on or before the due date thereof: all
premiums on policies of insurance covering, affecting or relating to the
Premises, as required pursuant to Paragraph 1.03.  Borrower shall submit to
Lender such evidence of the due and punctual payment of all such premiums,
rentals and other sums as Lender may require in writing.

 

(d)           In the event of the passage of any state, federal, municipal or
other governmental law, order, rule or regulation, subsequent to the date
hereof, in any manner changing or modifying the laws now in force governing the
taxation of deeds to secure debt or security agreements or debts secured thereby
or the manner of collecting such taxes so as to adversely affect Lender,
Borrower will pay any such tax on or before the due date thereof. If Borrower
fails to make such prompt payment or if, in the opinion of Lender, any such
state, federal, municipal, or other governmental law, order, rule or regulation
prohibits Borrower from making such payment or would penalize Lender if Borrower
makes such payment or if, in the opinion of Lender, the making of such payment
might result in the imposition of interest beyond the maximum amount permitted
by applicable law, then the entire balance of the Indebtedness and all interest
accrued thereon shall, at the option of Lender, become immediately due and
payable 90 days from such written notice from Lender.

 

1.03         Insurance.

 

Borrower agrees to keep the Premises insured against loss or damage by fire and
other casualty with extended coverage and against any other risks or hazards
which in the reasonable opinion of Lender should be insured against, and in any
case against all risks which persons, engaged in the same business as is carried
on at the Premises, customarily insure against, in an amount acceptable to
Lender with endorsements for vandalism and malicious mischief.  Borrower shall
also carry insurance against the risk of rental or business interruption at the
Premises, in an amount reasonably acceptable to Lender, not to exceed 12
months.  All of such insurance shall be placed with a company or companies and
in such form and with such endorsements as may be approved or required by
Lender.  Loss under all such insurance shall be payable to Lender in accordance
with this paragraph, and all such insurance policies shall be endorsed with a
standard, non-contributory mortgagee’s clause in favor of Lender.  Borrower
shall also carry public liability insurance, in such form, amount and with such
companies as Lender may from time to time reasonably require, naming Lender as
an additional insured.  The

 

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policy or policies evidencing all insurance referred to in this paragraph and
receipts for the payments of premiums thereon shall be delivered to and held by
Lender.  All such insurance policies shall contain a provision requiring at
least ten (10) days notice to Lender prior to any cancellation or modification. 
Borrower shall give Lender satisfactory evidence of renewal of all such policies
with premiums paid at least thirty (30) days before expiration.  Borrower agrees
to pay all premiums on such insurance as they become due, and will not permit
any condition to exist on or with respect to the Premises which would wholly or
partially invalidate any insurance thereon.  Lender shall not by the fact of
approving, disapproving, accepting, preventing, obtaining or failing to obtain
any such insurance, incur any liability for the form or legal sufficiency of
insurance contracts, solvency of insurers, or payment of losses, and Borrower
hereby expressly assumes full responsibility therefor and all liability, if any,
thereunder.  Effective upon the acceleration of the indebtedness evidenced
hereby, by reason of any default hereunder, all of Borrower’s right, title and
interest in and to all such policies and any unearned premiums paid thereon are
hereby assigned to Lender, who shall have the right, but not the obligation, to
assign the same to any purchaser of the Premises at any judicial foreclosure
sale or any sale pursuant to the power of sale created hereby.  The requirements
of Borrower for insurance under the provisions of this paragraph may be modified
or amended in whole or in part by Lender, in its reasonable discretion, and
Borrower agrees, upon any expiration of any existing policy or policies of
insurance, to provide a replacement policy or polices which shall meet such
amended or modified insurance standards.  In the event of loss, Borrower shall
give immediate written notice to the insurance carrier and Lender.  Borrower
hereby authorizes Lender  to make proof of loss, to adjust and prosecute any
action arising from such insurance policies, to collect and receive insurance
proceeds, and to deduct therefrom Lender’s actual expenses incurred in the
collection of such proceeds.  Borrower understands and agrees that the power of
attorney hereby granted to Lender is a power coupled with an interest and is
irrevocable until Lender’s interest hereunder is terminated by the payment and
performance of all of Borrower’s obligations and indebtedness secured hereby. 
Borrower further authorizes Lender, (a) to hold the balance of such proceeds to
be used to reimburse Borrower for the costs of reconstruction or repair of the
Premises as provided in Paragraph 1.05(a)(iii) below, or (b) to apply the
balance of such proceeds to the payment of the sums secured by this Deed to
Secure Debt and Security Agreement, whether or not then due, in accordance with
the terms hereby.

 

1.04         Monthly Deposits.  Upon Default, at the option of Lender and
further to secure the payment of the taxes and assessments referred to in
Paragraph 1.02 and the premiums on the insurance referred to in Paragraph 1.03,
Borrower shall deposit with Lender, on the due date of each installment under
the Note, such amounts as, in the reasonable estimation of Lender, shall be
necessary to pay such charges as they become due; said deposits to be held by
Lender, free of interest, and free of any liens or claims on the part of
creditors of Borrower and as part of the security of Lender, and to be used by
Lender to pay current taxes and assessments and insurance premiums on the
Premises as the same accrue and are payable.  Payment from said sums for said
purposes shall be made by Lender in a timely fashion for any proper purpose. 
Said deposits shall not be, nor be deemed to be, trust funds but may be
commingled with the general funds of Lender.  If said deposits are insufficient
to pay the taxes and assessments and insurance premiums in full as the same
become payable, Borrower will deposit, upon written request, with Lender such
additional sum or sums as may be required in order for Lender to pay such taxes
and assessments and insurance premiums in full.  Upon any default in the
provisions of this Deed or the Note, or any

 

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instrument evidencing, securing or in any way related to the Indebtedness,
Lender may, at its option, apply any money in the fund resulting from said
deposits to the payment of the Indebtedness in such manner as it may elect.

 

1.05         Condemnation. (a)               Immediately upon its obtaining
knowledge of the institution or the threatened institution of any proceeding for
the condemnation of the Premises or any part thereof, Borrower shall notify
Lender of such fact.  Borrower shall then, if requested by Lender, file or
defend its rights thereunder and prosecute same with due diligence to its final
disposition and shall cause any awards or settlements to be paid over to Lender
for disposition pursuant to the terms of this Deed to Secure Debt and Security
Agreement.  Borrower may be the nominal party in such proceeding but Lender
shall be entitled to participate in and to control same and to be represented
therein by counsel of its own choice, and Borrower will deliver, or cause to be
delivered, to Lender such instruments as may be requested by it from time to
time to permit such participation.  If the Premises or any part thereof is taken
or diminished in value, or if a consent settlement is entered, by or under
threat of such proceeding, the award or settlement payable to Borrower by virtue
of its interest in the Premises shall be, and by these presents is, assigned,
transferred and set over unto Lender to be held by it, in trust, subject to the
lien and security interest of this Deed to Secure Debt and Security Agreement,
and disbursed as follows:

 

(i)            If (1) all of the Premises is taken, (2) so much of the Premises
is taken, or the Premises is so diminished in value, that the remainder thereof
cannot (in Lender’s reasonable judgment) continue to be operated profitably for
the purpose for which it was being used immediately prior to such taking or
diminution, (3) an event of default hereunder shall have occurred, or (4) the
Premises is partially taken or diminished in value and (in Lender’s reasonable
judgment) need not be rebuilt, restored or repaired in any manner, then in any
such event the entirety of the sums so paid to Lender shall be applied by it in
the order recited in subparagraph 1.05(b) hereinbelow; or

 

(ii)           If (1) only a portion of the Premises is taken and the portion
remaining can (in Lender’s reasonable judgment), with rebuilding, restoration or
repair, be profitably operated for the purpose for which it was being used
immediately prior to such taking or diminution, and (2) none of the other facts
recited in subparagraph 1.05(a)(i) hereinabove exists, Lender may elect, in its
reasonable discretion, to require Borrower to repair, restore or rebuild the
Premises to its condition existing immediately prior to such taking or
diminution in value to the extent reasonably possible, in accordance with the
provisions of Paragraph 1.05(a)(iii).

 

(iii)          In the event Lender elects to require repair, restoration or
rebuilding as provided herein, Borrower shall deposit with Lender any funds
which may be required for such repair, restoration or rebuilding in excess of
the net funds received in respect of the taking or diminution in value or the
net insurance proceeds received, which funds shall be deposited with Lender and
held and disbursed by it, together with the net funds received in respect of the
taking or diminution in value or the net insurance proceeds received, in
accordance with usual practices of Lender or other Lenders making construction
loans.  In the event Lender elects to require or permit the repair, restoration
or rebuilding hereunder, within forty-five (45) days after notice to Borrower of
such

 

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election Borrower shall deliver to Lender plans and specifications for such
rebuilding, restoration or repair reasonably acceptable to Lender, which
acceptance shall be evidenced by Lender’s written consent thereto, and Borrower
shall thereafter commence the rebuilding, restoration or repair and complete
same, all in substantial accordance with the plans and specifications and within
six (6) months after the date of the damage or destruction.  In the event Lender
elects to require rebuilding, restoration or repair hereunder and Borrower fails
to comply with the requirements of this Deed to Secure Debt and Security
Agreement with respect thereto, Lender may accelerate payment of the
indebtedness secured hereby and demand immediate payment of all of such
indebtedness, and may apply the net funds received in respect of the taking or
diminution in value, or the net insurance proceeds received, to the payment of
such indebtedness in the order provided herein.

 

(b)           All net proceeds received by Lender with respect to a taking or a
diminution in value of the Premises, and all net insurance proceeds received in
the event of an insured casualty, in the event such proceeds are to be applied
to the indebtedness secured hereby in accordance with the terms hereof, shall be
applied in the following order of priority:

 

(i)            First, to reimburse Lender all costs and expenses, including
reasonable attorneys’ fees, actually incurred in connection with collection of
the said proceeds without regard to statutory presumption;

 

(ii)           Thereafter, the balance, if any, shall be applied to the payment
of (a) the Note; (b) any or all other sums secured hereby; and (c) the
remainder, if any, to the person or persons legally entitled thereto, in the
order of their priority and if none, Borrower.

 

1.06         Care of Premises.

 

(a)           Borrower will keep the buildings, parking areas, roads and
walkways, recreational facilities, landscaping and all other improvements of any
kind now or hereafter erected on the Land or any part thereof in good condition
and repair, will not commit or suffer any waste and will not do or, to the
extent within its control, suffer to be done anything which would or could
increase the risk of fire or other hazard to the Premises or any other part
thereof or which would or could, to the extent within its control, result in the
cancellation of any insurance policy carried with respect to the Premises.

 

(b)           Borrower will not remove, demolish or alter the structural
character of any improvement located on the Land without the written consent of
Lender.

 

(c)           If the Premises or any part thereof is damaged by fire or other
cause, Borrower will give immediate written notice thereof to Lender.

 

(d)           Lender or its representative is hereby authorized to enter upon
and inspect the Premises without interfering with operations at any time upon
advance verbal notice during normal business hours.

 

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(e)           Borrower will promptly comply with all present and future laws,
ordinances, rules and regulations of any governmental authority affecting the
Premises or any part thereof in all material respects.

 

(f)            If all or any part of the Premises shall be damaged by fire or
other casualty, Borrower will promptly restore the Premises to the equivalent of
its original condition; and if a part of the Premises shall be damaged through
condemnation, Borrower will promptly restore, repair or alter the remaining
portions of the Premises in a manner reasonably satisfactory to Lender. 
Notwithstanding the foregoing, Borrower shall not be obligated so to restore,
repair or alter unless in each instance, Lender agrees to make available to
Borrower (pursuant to a procedure satisfactory to Lender) any net insurance or
condemnation proceeds actually received by Lender hereunder in connection with
such casualty loss or condemnation, to the extent such proceeds are required to
defray the expense of such restoration, repair or alteration; provided, however,
that the insufficiency of any such insurance or condemnation proceeds to defray
the entire expense of restoration, repair or alteration shall in no way relieve
Borrower of its obligation to restore, repair or alter.  In the event all or any
portion of the Premises shall be damaged or destroyed by fire or other casualty
or by condemnation, Borrower shall promptly deposit with Lender a sum equal to
the amount by which the estimated cost of the restoration of the Premises (as
determined by Lender in its good faith judgment) exceeds the actual net
insurance or condemnation proceeds with respect to such damage or destruction.

 

1.07                           Leases, Contracts, Etc.

 

(a)           As additional collateral and further security for the
Indebtedness, Borrower does hereby assign to Lender all of Borrower’s right,
title, and interest, to the extent assignable, any and all tenant leases, tenant
contracts, rental agreements, franchise agreements, management contracts,
construction contracts, and other contracts, licenses and permits now or
hereafter affecting the Premises, or any part thereof, and Borrower agrees to
execute and deliver to Lender such additional instruments, in form and substance
reasonably satisfactory to Lender, as may hereafter be requested by Lender
further to evidence and confirm said assignment; provided, however, that
acceptance of any such assignment shall not be construed as a consent by Lender
to any lease, tenant contract, rental agreement, franchise agreement, management
contract, construction contract, or other contract, license or permit, or to
impose upon Lender any obligation with respect thereto.  Without first obtaining
on each occasion the written approval of Lender, Borrower shall not cancel any
such tenant lease, tenant contract, rental agreement, franchise agreement,
management contract, construction contract, or other contract, license or
permit, or to impose upon Lender any obligation with respect thereto.  Without
first obtaining on each occasion the written approval of Lender, Borrower shall
not cancel any such tenant lease, tenant contract, rental agreement, franchise
agreement, management contract, construction contract or other contract, license
or permit, or modify any of said instruments, or accept, or permit to be made,
any prepayment of any installment of rent fees thereunder (except for security
deposits and the usual prepayments for room reservations. Borrower shall
faithfully keep and perform, or cause to be kept and performed, all of the
covenants, conditions and agreements contained in each of said instruments, now
or hereafter existing, on the part of Borrower to be kept and performed and
shall at all time do all things necessary to compel performance by each other
party to said instruments of all obligations,

 

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covenants and agreements by such other party to be performed thereunder.  Lender
acknowledges that the Premises are to be utilized as a nursing home facility.

 

(b)           Borrower shall not execute any assignment of the income, rents,
issues or profits, or any part thereof, from the Premises unless Lender shall
first consent to such assignment and unless such assignment shall expressly
provide that it is subordinate to the assignment contained in this Deed and any
assignment executed pursuant hereto or concerning the Indebtedness.

 

(e)           Notwithstanding any other provisions of this Deed, Borrower shall
not hereafter enter into any tenant lease, tenant contract, rental agreement,
franchise agreement, management contract or other contract, license or permit
affecting the Premises, or any part thereof, without the prior written consent
of Lender and except upon the following conditions; (i) each such instrument
shall contain a provision that the rights of the parties thereunder are
expressly subordinate to all of the rights and title of Lender under this Deed;
(ii) any such instrument shall contain a provision whereby the parties
thereunder expressly recognize and agree that, notwithstanding such
subordination, Lender may sell the Premises in the manner provided in
Article II, and thereby, at the option of Lender, sell the same subject to such
instrument, and (iii) at or prior to the time of execution of any such
instrument, Borrower shall, as a condition to such execution, procure from the
other party or parties thereto an agreement in favor of Lender, in form and
substance reasonably satisfactory to Lender, under which such party or parties
agree to be bound by the provisions of Article II, regarding the manner in which
Lender may foreclosure or exercise the power of sale under this Deed.

 

1.08         Security Agreement.

 

Borrower hereby grants to Lender a security interest in all of the Property
which constitutes personal property or fixtures.  In addition to its rights
hereunder or otherwise, Lender shall have all of the rights of a secured party
under the Uniform Commercial Code of Georgia, or under the Uniform Commercial
Code in force in any other state to the extent the same is applicable law.

 

With respect to the machinery, apparatus, equipment, fittings, fixtures,
building supplies and materials, articles of personal property, chattels, farm
products and consumer goods  referred to or described in this Deed, or in any
way connected with the use and enjoyment of the Premises, this Deed is hereby
made and declared to be a security agreement as a part of the Premises, in
compliance with the provisions of the Uniform Commercial Code as enacted in the
State of Georgia.  Upon request by Lender, at any time and from time to time, a
financing statement or statements reciting this Deed to be a security agreement
affecting all of such property shall be executed by Borrower and Lender and
appropriately filed.  The remedies for any violation of the covenants, terms and
conditions of the security agreement contained in this Deed shall be (i) as
prescribed herein, or (ii) as prescribed by general law, or (iii) as prescribed
by the specific statutory consequences now or hereafter enacted and specified in
said Uniform Commercial Code, all at Lender’s reasonable election.  Borrower and
Lender agree that the filing of any such financing statement or statements in
the records normally having to do with personal property shall not in any way
affect the agreement of Borrower and Lender that, other than accounts, accounts
receivable, general intangibles and inventory, everything used in connection
with the production of income from the Premises or adapted for use therein or
which is described or reflected in this Deed, is, and

 

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at all times and for all purposes and in all proceedings, both legal or
equitable, shall be, regarded as part of the real estate conveyed hereby
regardless of whether (i) any such item is physically attached to the
improvements, (ii) serial numbers are used for the better identification of
certain items capable of being thus identified in an exhibit to this Deed, or
(iii) any such item is referred to or reflected in any such financing statement
or statements so filed at any time. Similarly, the mention in any such financing
statement or statements of the rights in and to (i) the proceeds of any fire
and/or hazard insurance policy, or (ii) any award in eminent domain proceedings
for a taking or for loss of value, or (iii) Borrower’s interest as lessor in any
present or future lease or rights to income growing out of the use and/or
occupancy of the Premises, whether pursuant to lease or otherwise, shall not in
any way alter any of the rights of Lender as determined by this Deed or affect
the priority of Lender’s security interest granted hereby or by any other
recorded document, it being understood and agreed that such mention in such
financing statement or statements is solely for the protection of Lender in the
event any court shall at any time hold with respect to the foregoing clauses
(i), (ii) or (iii) of this sentence, that notice of Lender’s priority of
interest, to be effective against a particular class of persons, must be filed
in the Uniform Commercial Code records.

 

1.09         Further Assurances; After-Acquired Property.  At any time, and from
time to time, upon request by Lender, Borrower will make, execute and deliver,
or cause to be made, executed and delivered, to Lender and, where appropriate,
cause to be recorded and/or filed and from time to time thereafter to be
re-recorded and/or refiled at such time and in such offices or places as shall
be deemed desirable by Lender, any and all such other and further deeds to
secure debt, mortgages, deeds of trust, security agreements, financing
statements, continuation statements, instrument of further assurance,
certificates and other documents as may, in the reasonable opinion of Lender, be
necessary or desirable in order to effectuate, complete or perfect, or to
continue and preserve (i) the obligation of Borrower under the Note and under
this Deed and (ii) the security interest created by this Deed as a first and
prior security interest upon and security title in and to all of the Premises,
whether now owned or hereafter acquired by Borrower. Upon any failure by
Borrower so to do, Lender may make, execute, record, file, re-record and/or
re-file any and all such deeds to secure debt, security agreements, financing
statements, continuation statements, instruments, certificates and documents for
and in the name of Borrower, and Borrower hereby irrevocably appoints Lender the
agent and attorney-in-fact of Borrower so to do.  The security title of this
Deed and the security interest created hereby will automatically attach, without
further act, to all after-acquired property attached to and/or used in the
operation of the Premises or any part thereof.

 

1.10         Expenses.  Borrower will pay or reimburse Lender, upon demand
therefore, for all reasonable attorney’s fees actually incurred, costs and
expenses actually incurred without regard to statutory presumption, by Lender in
any suit, action, legal proceeding or dispute of any kind in which Lender is
made a party or appears as party plaintiff or defendant, affecting the
Indebtedness, this Deed or the interest created herein, or the Premises,
including, but not limited to, the exercise of the power of sale contained in
this Deed, any condemnation action involving the Premises or any action to
protect the security hereof, and any such amounts paid by Lender shall be added
to the Indebtedness and shall be secured by this Deed.

 

1.11         Estoppel Affidavit.  Borrower, upon twenty (20) days’ prior written
notice, shall furnish Lender a written statement, duly acknowledged, setting
forth the unpaid principal of, and interest on, the Indebtedness, stating
whether or not any offsets or defenses exist against the

 

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Indebtedness, or any portion thereof, and, if such offsets or defenses exist,
stating in detail the specific acts relating to each such offset or defense.

 

1.12         Subrogation.  To the full extent of the Indebtedness, Lender is
hereby subrogated to the liens, claims and demands, and to the rights of the
owners and holders of each and every lien, claim, demand and other encumbrance
on the Premises which is paid or satisfied, in whole or in part, out of the
proceeds of the Indebtedness, and the respective liens, claims, demands and
other encumbrances shall be, and each of them is hereby, preserved and shall
pass to and be held by Lender as additional collateral and further security for
the Indebtedness, to the same extent they would have been preserved and would
have been passed to and held by Lender had they been duly and legally assigned,
transferred, set over and delivered unto Lender by assignment, notwithstanding
the fact that any instrument providing public notice of the same may be
satisfied and canceled of record.

 

1.13         Books, Records, Accounts and Annual Reports.  Borrower shall keep
and maintain or shall cause to be kept and maintained, at Borrower’s cost and
expense and in accordance with generally accepted accounting principles, proper
and accurate books, records and accounts reflecting all items of income and
expense in connection with the operation of the Premises and in connection with
any services, equipment or furnishings provided in connection with the operation
of the Premises.  Lender, by Lender’s agents, accountants and attorneys, shall
have the right upon prior verbal notice to Borrower from time to time to examine
such books, records and accounts at the office of Borrower or such other person
or entity maintaining such books, records and accounts, to make copies or
extracts thereof as Lender shall desire and to discuss Borrower’s affairs,
finances and accounts with Borrower and with the officers and principals of
Borrower, at such reasonable times during normal business hours as may be
requested by Lender. Borrower will furnish to Lender annually within ninety (90)
days after the end of Borrower’s fiscal year a compiled financial statement
containing a profit and loss statement and all supporting schedules covering the
operation of the Property certified by an officer of Borrower and a certified
public accountant acceptable to Lender to be true and accurate in all material
respects, in reasonable detail, prepared in accordance with generally accepted
accounting standards consistently applied, and, at any time, Lender shall have
the right to reasonably request complied statements certified by Borrower’s
principal financial or accounting officer, covering such financial matters as
Lender may reasonably request from Borrower, to be furnished to Lender within
forty-five (45) days after such request by Lender.  The compiled statements
shall include, without limitation, monthly operating statements with respect to
the Premises.

 

1.14         Limit of Validity.  If from any circumstances whatsoever,
fulfillment of any provision of this Deed or the note, at the time performance
of such provision shall be due, shall involve transcending the limit of validity
presently prescribed by any applicable usury statute or any other applicable
law, with regard to obligations of like character and amount, then, ipso facto,
the obligation to be fulfilled shall be reduced to the limit of such validity,
so that in no event shall any exaction be possible under this Deed or under the
Note that is in excess of the current limit of such validity, but such
obligation shall be fulfilled to the limit of such validity.  The provisions of
this Paragraph 1.14 shall control every other provision of this Deed and of the
Note.

 

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1.15         Use and Management of Premises.  Borrower shall at all times
operate the Premises as described in Exhibit “C” attached hereto and by this
reference made a part hereof.  Borrower shall not be permitted to alter or
change the use of the Premises or to abandon the Premises without the prior
written consent of Lender.

 

1.16         Conveyance of Premises.  Borrower hereby acknowledges to Lender
that (i) the identity and expertise of Borrower were and continue to be material
circumstances upon which Lender has relied in connection with, and which
constitute valuable consideration to Lender for, the extending to Borrower of
the Indebtedness evidenced by the Note and (ii) any change in such identity or
expertise could materially impair or jeopardize the security for the payment of
the Note granted to Lender by this Deed.  Borrower therefore covenants and
agrees with Lender, as part of the consideration for the extending to Borrower
of the indebtedness evidenced by the Note, that Borrower shall not encumber,
pledge, convey, transfer or assign any or all of its interest in the Premises
(or any interest in or all of the interest in Borrower if Borrower is a
corporation, partnership or some other entity) without the prior written consent
of Lender.  If Borrower does so encumber, pledge, convey, transfer or assign any
or all of its interest in the Premises (or in Borrower) without the prior
written consent of Lender, then Lender may, at Lender’s option, declare the
Indebtedness to be immediately due and payable.

 

1.17         Acquisition of Collateral.  Borrower shall not acquire any portion
of the personal property covered by this Deed subject to any security interest,
conditional sales contract, title retention arrangement or other charge or lien
taking precedence over the security title and lien of this Deed.

 

1.18         Junior Financing.  Borrower shall not without the prior written
consent of Lender incur any additional indebtedness or create or permit to be
created or to remain, any mortgage, pledge, lien, lease, encumbrance or charge
on, or conditional sale or other title retention agreement, whether prior or
subordinate to the liens of this Deed with respect to the Premises or any part
thereof or income therefrom other than the Deed, purchase money security
interests incurred in the ordinary course of business herein and the Permitted
Encumbrances.  Notwithstanding the above, the Lender acknowledges a shared first
lien position with a $800,000.00 SBA loan from Lender of even date.

 

1.19         Hazardous Materials.

 

(a)           Borrower represents, warrants and agrees that, to its knowledge,
(i) neither Borrower nor, to the best knowledge of Borrower, any other person
has used or installed any Hazardous Material (as hereinafter defined) on, from
or affecting the Premises or received any written notice from any governmental
agency, entity or other person with regard to Hazardous Materials on, from or
affecting the Premises; (ii) neither Borrower nor, to the best knowledge of
Borrower, any other person has violated any applicable Environmental Laws (as
hereinafter defined) relating to or affecting the Premises or any other property
owned by Borrower; (iii) to the best of Borrower’s knowledge, the Premises are
presently in compliance with all Environmental Laws, and there are no facts or
circumstances presently existing upon or under the Premises, or relating to the
Premises, which may violate any applicable Environmental Laws, and there is not
now pending or, to the best knowledge of the Borrower, threatened any action,
suit, investigation or proceeding against

 

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Borrower or the Premises (or against any other party relating to the Premises)
seeking to enforce any right or remedy under any of the Environmental Laws;
(iv) the Premises Property shall be kept free of Hazardous Materials, and shall
not be used to generate, manufacture, refine, transport, treat, store, handle,
dispose, transfer, produce, or process Hazardous Materials to the extent within
Borrower’s control; (v) Borrower shall not cause or permit the installation of
Hazardous Materials in, on, over or under the Premises or a Release (as
hereinafter defined) of Hazardous Materials onto or from the Premises or suffer
the presence of Hazardous Materials in, on, over or under the Premises to the
extent within Borrower’s control; (vi) Borrower shall comply with, and ensure
compliance by all other parties with, all applicable Environmental Laws relating
to or affecting the Premises to the extent within Borrower’s control, and
Borrower shall keep the Premises free and clear of any liens imposed pursuant to
any applicable Environmental Laws, all at Borrower’s sole cost and expense;
(vii) Borrower has obtained and will at all times continue to obtain and/or
maintain all licenses, permits and/or other governmental or regulatory actions
necessary to comply with the Environmental Laws (the “Permits”) and Borrower is
and will continue to be and at all times remain in full compliance with the
terms and provisions of the Permits; (viii) there has been no Release of any
Hazardous Materials on or form the Premises, whether or not such Release
emanated from the land or any contiguous real estate; and (ix) Borrower shall
immediately give Lender oral and written notice in the event that Borrower
receives any notice from any governmental agency, entity, or any other party
with regard to Hazardous Materials on, from or affecting the Premises and
Borrower shall conduct and complete all investigations, studies, sampling, and
testing, and all remedial, removal, and other actions necessary to clean up and
remove all Hazardous Materials on, from or affecting the Premises in accordance
with all applicable Environmental Laws.

 

(b)           For purposes of this Deed:  (i) “Hazardous Material” or “Hazardous
Materials” means and includes petroleum products and gas products, flammable
explosives, radioactive materials, asbestos or any material containing asbestos,
polychlorinated biphenyls, and/or any hazardous, toxic or dangerous waste,
substance or material defined as such, or as a Hazardous Substance or any
similar term, by, in or for the purposes of the Environmental Laws, including,
without limitation Section 101(14) of CERCLA (as hereinafter defined);
(ii) “Release” shall have the meaning given such term, or any similar term, in
the Environmental Laws, including, without limitation, Section 101(22) of
CERCLA; and (iii) “Environmental Law” or “Environmental Laws” shall mean any
“Super Fund” or Super Lien” law, or any other federal, state or local statute,
law, ordinance, code, rule, regulation, order or decree, regulating, relating to
or imposing liability or standards of conduct concerning any Hazardous Materials
as may now or at any time hereafter be in effect, including, without limitation,
the following, as the same may be amended or replaced from time to time, and all
regulations promulgated thereunder or in connection therewith: the Super Fund
Amendments and Reauthorization Act of 1986 (“SARA”); the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”); the
Clean Air Act (“CAA”); the Clean Water Act (“CWA”); the Toxic Substances Control
Act (“TSCA”); the Solid Waste Disposal Act (“SWDA”), as amended by the Resource
Conservation and Recovery Act (“RCRA”); the Hazardous Waste Management System;
and the Occupational Safety and Health Act of 1970 (“OSHA”).  The obligations
and liabilities of Borrower under this Paragraph 2.04 shall survive the exercise
of power of sale under or foreclosure of this Deed, the delivery of a deed in
lieu of foreclosure, the cancellation or release of record of this Deed, and/or
the payment and cancellation of the Note.

 

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ARTICLE II

 

2.01         The occurrence of any one or more of the following shall constitute
an “Event of Default” or “Default” (either term having the same meaning):

 

(a)                                  Nonpayment, when due, of any principal,
accrued interest, premium, fee or other charge due under the Note.

 

(b)                                 Default by Borrower in the due observance or
performance of any term, covenant, condition or agreement on its part to be
performed under this Deed to Secure Debt and Security Agreement, the Note, or
under any other document contemplated by this Deed to Secure Debt and Security
Agreement.

 

(c)                                  If Borrower shall:

 

(1)                                  Make a general assignment for the benefit
of its creditors;

 

(2)                                  File a voluntary petition in bankruptcy;

 

(3)                                  Be adjudicated as bankrupt or insolvent;

 

(4)                                  File any petition or answer seeking,
consenting to, or acquiescing in, reorganization, arrangement, composition,
liquidation, dissolution or similar relief, under any present or future statute,
law or regulation;

 

(5)                                  File an answer admitting or failing to deny
the material allegations of the petition against it for any such relief;

 

(6)                                  Admit in writing its inability to pay its
debts as they mature;

 

(7)                                  Discontinue business; or

 

(8)                                  Be unable to pay debts as they become due.

 

(d)                                 Borrower fails to have vacated or set aside
within thirty (30) days of its entry any court order appointing a receiver or
trustee for all or a substantial portion of the Borrower’s property.

 

(e)                                  Any warranty, representation or statements
made or furnished to Lender by Borrower in connection with the Loan or in
connection with this Agreement (including any warranty, representation or
statement in the application of Borrower for the Loan or in any accompanying
financial statements) or to induce Lender to make the Loan, proves to be untrue,
misleading or false in any material respect.

 

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(f)                                    Borrower suffers or permits any lien,
encumbrance or security interest to attach to any of its property, except as
herein otherwise expressly permitted, or if any judgment shall be entered
against Borrower or any attachment shall be made against any property of
Borrower, which judgment or attachment shall remain undischarged, unbonded, or
undismissed for a period of ten (10) days.

 

(g)                                 Borrower defaults in the payment of any
principal or interest on any obligation to Lender or to any other creditor.

 

(h)                                 Borrower shall sell, lease, or otherwise
transfer or convey any of the Collateral, or any interest therein without
Lender’s prior written approval, except as herein otherwise expressly permitted.

 

(i)                                     The Premises are subject to actual or
threatened waste or any part thereof is removed, demolished or altered without
the prior written consent of Lender; or

 

(j)                                     Borrower or any endorser or guarantor of
the Note (if a corporation) is liquidated or dissolved or its charter expires or
is revoked, or Borrower or such endorser or guarantor (if a partnership or
business association) is dissolved or partitioned, or Borrower or such endorser
or guarantor (if a trust) is terminated or expires, or Borrower or such endorser
or guarantor (if an individual) dies.

 

(k)                                  The filing of any federal tax lien or claim
of lien for labor or material is filed of record against Borrower or Premises
and same not being removed by payment in full or bond within thirty (30) days
from the date of recording.

 

2.02         Acceleration of Maturity.  If a Default shall have occurred, then
the entire Indebtedness shall, at the option of Lender, immediately become due
and payable without notice or demand, time being of the essence of this Deed;
and no omission on the part of Lender to exercise such option when entitled to
do so shall be construed as a waiver of such right.

 

2.03         Right to Enter and Take Possession.

 

(a)           If a Default shall have occurred, Borrower, upon demand of Lender,
shall forthwith surrender to Lender the actual possession of the Premises and
if, and to the extent, permitted by law, Lender itself, or by such officers or
agents as it may appoint, may enter and take possession of all of the Premises
without the appointment of a receiver, or an application therefore, and may
exclude Borrower and its agents and employees wholly therefrom, and may have
joint access with Borrower to the books, papers and accounts of Borrower.

 

(b)           If Borrower shall for any reason fail to surrender or deliver the
Premises or any part thereof after such demand by Lender, Lender may obtain a
judgment or decree conferring upon Lender the right to immediate possession of
the Premises to Lender, and Borrower hereby

 

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specifically covenants and agrees that Borrower will not oppose, contest or
otherwise hinder or delay Lender in any action or proceeding by Lender to obtain
such judgment or decree.  Borrower will pay to Lender upon demand, all
reasonable expenses actually incurred of obtaining such judgment or decree,
including reasonable compensation to Lender, its attorneys and agents, and all
such expenses and compensation shall, until paid, become part of the
Indebtedness and shall be secured by this Deed.

 

(c)           Upon every such entering upon or taking possession, Lender may
hold, store, use, operate, manage and control the Premises and conduct the
business thereof, and, from time to time (i) make all necessary and proper
maintenance, repairs, renewals, replacements, additions, betterments and
improvements thereto and thereon and purchase or otherwise acquire additional
fixtures, personalty and other property; (ii) insure or keep the Premises
insured; (iii) manage and operate the Premises and exercise all the rights and
powers of Borrower to the same extent as Borrower could in its own name or
otherwise act with respect to the same; and (iv) enter into any and all
agreements with respect to the exercise by others of any of the powers herein
granted to Lender, all as Lender from time to time may determine to be in its
best interest.  Lender may collect and receive all the income, rents, issues,
profits and revenues from the Premises, including those past due as well as
those accruing thereafter, and Lender may apply any monies and proceeds received
by Lender, in whatever order or priority Lender in its sole discretion may
determine, to the payment of (i) all expenses of taking, holding, managing and
operating the Premises (including compensation for the services of all persons
employed for such purposes); (ii) the cost of all such maintenance, repairs,
renewals, replacements, additions, betterments, improvements, purchases and
acquisitions; (iii) the cost of such insurance; (iv) such taxes, assessments and
other similar charges as Lender may at its option pay; (v) other proper charges
upon the Premises or any part thereof; (vi) the reasonable compensation,
expenses and disbursements of the attorneys and agents of Lender; (vii) accrued
interest; (viii) deposits required in Paragraph 1.04 and other sums required to
be paid under this Deed; or (ix) overdue installments of principal.  Anything in
this Paragraph 2.03 to the contrary notwithstanding, Lender shall not be
obligated to discharge or perform the duties of a landlord to any tenant or
incur any liability as the result of any exercise by Lender of its rights under
this Deed, and Lender shall be liable to account only for the rents, incomes,
issues, profits and revenues actually received by Lender.

 

(d)           In the event that all such interest, deposits and principal
installments and other sums due under any of the terms, covenants, conditions
and agreements of this Deed shall be paid and all Defaults shall be cured, and
as a result thereof Lender surrenders possession of the Premises to Borrower,
the same right of taking possession shall continue to exist if any subsequent
Default shall occur.

 

2.04         Performance by Lender.  If Borrower shall Default in the payment,
performance or observance of any term, covenant or condition of this Deed,
Lender may, at its option, pay, perform or observe the same, and all payments
made or costs or expenses actually incurred by Lender in connection therewith
shall be secured hereby and shall be, repaid by Borrower to Lender with interest
thereon at the default rate provided in the Note.  Lender shall be the sole
judge of the necessity for any such actions and of the amounts to be paid. 
Lender is hereby empowered to enter and to authorize others to enter upon the
Premises or any part thereof for the purpose of performing

 

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or observing any such defaulted term, covenant or condition without thereby
becoming liable to Borrower or any person in possession holding under Borrower.

 

2.05         Receiver.  If a Default shall have occurred, Lender, upon
application to a court of competent jurisdiction, shall be entitled as a matter
of strict right, without notice and without regard to the adequacy or value of
any security for the Indebtedness or the solvency of any party bound for its
payment, to the appointment of a receiver to take possession of and to operate
the Premises and to collect and apply the incomes, rents, issues, profits and
revenues thereof.  The receiver shall have all of the rights and powers
permitted under the laws of the State of Georgia.  Borrower will pay to Lender
upon demand all reasonable expenses, including receiver’s fees, attorney’s fees,
costs and agent’s compensation actually incurred, incurred pursuant to the
provisions of this Paragraph 2.05, and any such amounts paid by Lender shall be
added to the Indebtedness and shall be secured by this Deed.

 

2.06         Enforcement.

 

(a)           If a Default shall have occurred, Lender, at its option, may sell
the Premises or any part of the Premises at one or more public sale or sales
before the door of the courthouse of the county in which the Land or any part of
the Land is situated, to the highest bidder for cash, in order to pay the
Indebtedness, and all expenses of sale and of all proceedings in connection
therewith, including reasonable attorney’s fees actually incurred, after
advertising the time, place and terms of sale once a week for four (4) weeks
immediately preceding such sale (but without regard to the number of days) in a
newspaper in which Sheriff’s sales are advertised in said county.  At any such
public sale, Lender may execute and deliver to the purchaser a conveyance of the
Premises or any part of the Premises in fee simple, with full warranties of
title and to this end, Borrower hereby constitutes and appoints Lender the agent
and attorney-in-fact of Borrower to make such sale and conveyance, and thereby
to divest Borrower of all right, title and equity that Borrower may have in and
to the Premises and to vest the same in the purchaser or purchasers at such sale
or sales, and all the acts and doings of said agent and attorney-in-fact are
hereby ratified and confirmed and any recitals in said conveyance or conveyances
as to facts essential to a valid sale shall be binding upon Borrower.  The
aforesaid power of sale and agency hereby granted are coupled with an interest
and are irrevocable by death or otherwise, are granted as cumulative of the
other remedies provided hereby or by law for collection of the Indebtedness and
shall not be exhausted by one exercise thereof but may be exercised until full
payment of all of the Indebtedness.  In the event of any sale under this Deed by
virtue of the exercise of the powers herein granted, or pursuant to any order in
any judicial proceeding or otherwise, the Premises may be sold as an entirety or
in separate parcels and in such manner or order as Lender in its sole discretion
may elect, and if Lender so elects, Lender may sell the personal property
covered by this Deed at one or more separate sales in any manner permitted by
the Uniform Commercial Code of the State of Georgia, and one or more exercises
of the powers herein granted shall not extinguish nor exhaust such powers, until
the entire Premises are sold or the Indebtedness is paid in full.  If the
Indebtedness is now or hereafter further secured by any chattel mortgages,
pledges, contracts of guaranty, assignments of lease or other security
instruments, Lender may at its option exhaust the remedies granted under any of
said security instruments either concurrently or independently, and in such
order as Lender may determine.

 

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(b)           If a Default shall have occurred, Lender may, in addition to and
not in abrogation of the rights covered under Subparagraph 2.06(a), either with
or without entry or taking possession as herein provided or otherwise, proceed
by a suit or suits in law or in equity or by any other appropriate proceeding or
remedy (i) to enforce payment of the Note or the performance of any term,
covenant, condition or agreement of this Deed or any other right and (ii) to
pursue any other remedy available to it, all as Lender in its sole discretion
shall elect.

 

2.07         Purchase by Lender.  Upon any foreclosure sale or sales of all or
any portion of the Premises under the power herein granted, Lender may bid for
and purchase the Premises and shall be entitled to apply all or any part of the
Indebtedness as a credit to the purchase price.

 

2.08         Application of Proceeds of Sale.  In the event of a foreclosure or
sale of all or any portion of the Premises under the power herein granted, the
proceeds of said sale shall be applied, in whatever order Lender in its sole
discretion may decide, to the expenses of such sale and of all proceedings in
connection therewith, including reasonable attorney’s fees actually incurred, to
insurance premiums, liens, assessments, taxes and charges including utility
charges advanced by Lender, to payment of the outstanding principal balance of
the Indebtedness, or to the accrued interest on all of the foregoing; and the
remainder, if any, shall be paid to Borrower, or to the person or entity
lawfully entitled thereto.

 

2.09         Borrower as Tenant Holding Over.  In the event of any such
foreclosure sale or sales under the power herein granted, Borrower shall be
deemed a tenant holding over and shall forthwith deliver possession to the
purchaser or purchasers at such sale or be summarily dispossessed according to
provisions of law applicable to tenants holding over.

 

2.10         Waiver of Appraisement, Valuation, Etc.  Borrower agrees, to the
full extent permitted by law, that in case of a Default on the part of Borrower
hereunder, neither Borrower nor anyone claiming through or under Borrower will
set up, claim or seek to take advantage of any moratorium, reinstatement,
forbearance, appraisement, valuation, stay, extension, homestead, exemption or
redemption laws now or hereafter in force, in order to prevent or hinder the
enforcement or foreclosure of this Deed, or the absolute sale of the Premises,
or the delivery of possession thereof immediately after such sale to the
purchaser at such sale, and Borrower, for itself and all who may at any time
claim through or under it, hereby waives to the full extent that it may lawfully
so do, the benefit of all such laws, and any and all right to have the assets
subject to the security interest of this Deed marshalled upon any foreclosure or
sale under the power herein granted.

 

2.11         Waiver of Redemption, Notice, Marshalling, Etc.  Borrower hereby
waives and releases (a) all benefit that might accrue to Borrower by virtue of
any present or future law exempting the Premises, or any part of the proceeds
arising from any sale thereof, from attachment, levy or sale on execution, or
providing for any appraisement, valuation, stay of execution, exemption from
civil process, redemption of extension of term for payment (b) unless
specifically required herein, all notices of Borrower default or of Lender’s
election to exercise, or Lender’s actual exercise, of any option or remedy under
the Note, the Guaranty or the Security Documents, and (c) any right to have the
Premises marshalled.

 

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2.12         Leases.  Lender, at its option, is authorized to foreclose this
Deed subject to the rights of any tenants of the Premises, and the failure to
make any such tenants parties to any such foreclosure proceedings and to
foreclose their rights will not be, nor be asserted to be by Borrower, a defense
to any proceedings instituted by Lender to collect the Indebtedness.

 

2.13         Discontinuance of Proceedings.  In case Lender shall have proceeded
to enforce any right, power or remedy under this Deed by foreclosure, entry or
otherwise or in the event Lender commences advertising of the intended exercise
of the sale under power provided hereunder, and such proceeding or advertisement
shall have been withdrawn, discontinued or abandoned for any reason, or shall
have been determined adversely to Lender, then in every such case (i) Borrower
and Lender shall be restored to their former positions and rights, (ii) all
rights, powers and remedies of Lender shall continue as if no such proceeding
had been taken, (iii) each and every Default declared or occurring prior or
subsequent to such withdrawal, discontinuance or abandonment shall and shall be
deemed to be a continuing Default and (iv) neither this Deed, nor the Note, nor
the Indebtedness, nor any other instrument concerned therewith, shall be or
shall be deemed to have been reinstated or otherwise affected by such
withdrawal, discontinuance or abandonment; and Borrower hereby expressly waives
the benefit of any statute or rule of law now provided, or which may hereafter
be provided, which would produce a result contrary to or in conflict with the
above.

 

2.14         Remedies Cumulative.  No right, power or remedy conferred upon
reserved to Lender by this Deed is intended to be exclusive of any other right,
power and remedy, but each and every such right, power and remedy shall be
cumulative and concurrent and shall be in addition to any other right, power and
remedy given hereunder or now or hereafter existing at law, in equity or by
statute.

 

2.15         Waiver.

 

(a)           No delay or omission by Lender or by any holder of the Note to
exercise any right, power or remedy accruing upon any breach or Default shall
exhaust or impair any such right, power or remedy or shall be construed to be a
waiver of any such breach or Default, or acquiescence therein, and every right,
power and remedy given by this Deed to Lender may be exercised from time to time
and as often as may be deemed expedient by Lender.  No consent or waiver,
expressed or implied, by Lender to or of any breach or Default by Borrower in
the performance of the obligations of Borrower hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or Default in the
performance of the same or any other obligations by Borrower hereunder.  Failure
on the part of Lender to complain of any act or failure to act or to declare a
Default, irrespective of how long such failure continues, shall not constitute a
waiver by Lender of its rights hereunder or impair any rights, powers or
remedies of Lender hereunder.

 

(b)           No act or omission by Lender shall release, discharge, modify,
change or otherwise affect the original liability under the Note, this Deed or
any other obligation of Borrower or any subsequent purchaser of the Premises or
any part thereof, or any maker, co-signer, endorser, surety or guarantor, or
preclude Lender from exercising any right, power or privilege herein granted or
intended to be granted in the event of any Default then made or of any
subsequent Default, or alter the security title, security interest or lien of
this Deed except as expressly provided in an instrument or instruments executed
by Lender.  Without limiting the generality of the foregoing, Lender may:

 

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(i) grant forbearance or an extension of time for the payment of all or any
portion of the Indebtedness; (ii) take other or additional security for the
payment of the Indebtedness; (iii) waive or fail to exercise any right granted
hereunder or in the Note; (iv) consent to the granting of any easement or other
right affecting the Premises; (vii) make or consent to any agreement
subordinating the security title, security interest or lien hereof; or
(viii) take or omit to take any action whatsoever with respect to the Note, this
Deed, the Premises or any document or instrument evidencing, securing or in any
way related to the Indebtedness; all without releasing, discharging, modifying,
changing or affecting any such liability, or precluding Lender from exercising
any such right, power of privilege or affecting the security title, security
interest or lien of this Deed.  In the event of the sale or transfer by
operation of law or otherwise of all of any part of the Premises, Lender,
without notice, is hereby authorized and empowered to deal with any such vendee
or transferee with reference to the Premises or the Indebtedness, or with
reference to any of the terms, covenants, conditions or agreements hereof, as
fully and to the same extent as it might deal with the original parties hereto
and without in any way releasing and/or discharging any liabilities, obligations
or undertakings.

 

2.16         Suits to Protect the Premises.  Lender shall have the power to
institute and maintain such suits and proceedings as it may deem expedient
(i) to prevent any impairment of the Premises by any acts which may be unlawful
or constitute a Default under this Deed, (ii) to preserve or protect its
interest in the Premises and in the incomes, rents, issues, profits and revenues
arising therefrom, and (iii) to restrain the enforcement of or compliance with
any legislation or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if the enforcement of or compliance with
such enactment, rule or order would impair the security hereunder or be
prejudicial to the interest of Lender.

 

2.17         Proofs of Claim.  In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
proceedings affecting Borrower, its creditors or its property, Lender, to the
extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the claims of
Lender allowed in such proceedings for the entire amount of the Indebtedness at
the date of the institution of such proceedings and for any additional amount of
the Indebtedness after such date.

 

2.18         Waiver of Borrower’s Rights to Judicial Hearing and Non-Statutory
Notice.  BY EXECUTION OF THIS DEED AND BY INITIALING THIS PARAGRAPH 2.18,
BORROWER EXPRESSLY:  (A) ACKNOWLEDGES THE RIGHT OF LENDER TO ACCELERATE THE
INDEBTEDNESS EVIDENCED BY THE NOTE AND ANY OTHER INDEBTEDNESS AND THE POWER OF
ATTORNEY GIVEN HEREIN TO LENDER TO SELL THE PREMISES BY NONJUDICIAL FORECLOSURE
UPON DEFAULT BY BORROWER WITHOUT ANY JUDICIAL HEARING AND WITHOUT ANY NOTICE
OTHER THAN SUCH NOTICE (IF ANY) AS IS SPECIFICALLY REQUIRED TO BE GIVEN UNDER
THE PROVISIONS OF THIS DEED:  (B) WAIVES ANY AND ALL RIGHTS WHICH B0RROWER
MAY HAVE UNDER THE CONSTITUTION OF THE UNITED STATES OF AMERICA (INCLUDING,
WITHOUT LIMITATION, THE FIFTH AND FOURTEENTH AMENDMENTS THEREOF), THE VARIOUS
PROVISIONS OF THE CONSTITUTIONS FOR THE SEVERAL STATES, OR BY REASON OF ANY
OTHER APPLICABLE LAW, (1) TO NOTICE AND TO JUDICIAL HEARING PRIOR TO THE
EXERCISE BY LENDER OF ANY RIGHT OR REMEDY HEREIN

 

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PROVIDED TO LENDER, EXCEPT SUCH NOTICE (IF ANY) AS IS SPECIFICALLY REQUIRED TO
BE GIVEN UNDER THE PROVISIONS OF THIS DEED AND (2) CONCERNING THE APPLICATION,
RIGHTS OR BENEFITS OF ANY STATUTE OF LIMITATION OR ANY MORATORIUM,
REINSTATEMENT, MARSHALLING FORBEARANCE, APPRAISEMENT VALUATION, STAY EXTENSION,
HOMESTEAD, EXEMPTION OR REDEMPTION LAWS:  (C) ACKNOWLEDGES THAT BORROWER HAS
READ THIS DEED AND ANY AND ALL QUESTIONS OF BORROWER REGARDING THE LEGAL EFFECT
OF THIS DEED AND ITS PROVISIONS HAVE BEEN EXPLAINED FULLY TO BORROWER, AND
BORROWER HAS CONSULTED WITH COUNSEL OF BORROWER’S CHOICE PRIOR TO EXECUTING THIS
DEED AND INITIALING THIS PARAGRAPH 2.18; AND (D) ACKNOWLEDGES THAT ALL WAIVERS
OF THE AFORESAID RIGHTS OF BORROWER HAVE BEEN MADE KNOWINGLY, INTENTIONALLY AND
WILLINGLY BY BORROWER AS PART OF A BARGAINED FOR LOAN TRANSACTION AND THAT THIS
DEED IS VALID AND ENFORCEABLE BY LENDER AGAINST BORROWER IN ACCORDANCE WITH ALL
THE TERMS AND CONDITIONS HEREOF.

 

INITIALED BY BORROWER: CB

 

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ARTICLE III

 

3.01         Successors and Assigns.  This Deed shall inure to the benefit of
and be binding upon Borrower and Lender and their respective heirs, executors,
legal representatives, successors, successors-in-title and assigns.  Whenever a
reference is made in this Deed to “Borrower” or “Lender” such reference shall be
deemed to include a reference to the heirs, executors, legal representatives,
successors, successors-in-title and assigns of Borrower and Lender, as the case
may be.  The provisions of this paragraph 3.01 are subject to the restrictions
on transfer contained in Paragraph 1.16.

 

3.02         Terminology.  All personal pronouns used in this Deed whether used
in the masculine, feminine or neuter gender, shall include all other genders;
the singular shall include the plural, and vice versa.  Titles of articles and
paragraphs are for convenience only and neither limit nor amplify the provisions
of this Deed, and all references herein to articles, paragraphs or subparagraphs
shall refer to the corresponding articles, paragraphs or subparagraphs of this
Deed unless specific reference is made to articles, paragraphs or subparagraphs
of another document or instrument.

 

3.03         Severability.  If any provisions of this Deed or the application
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Deed 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.

 

3.04         Applicable Law.  This Deed will be governed by, construed and
enforced in accordance with federal law and the laws of the State of Georgia.

 

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3.05         Notices. Any and all notices, elections, demands, requests and
responses thereto permitted or required to be given under this Agreement shall
be in writing, signed by or on behalf of the party giving the same, and shall be
deemed to have been properly given and shall be effective upon being personally
delivered, or upon being deposited in the United States mail, postage prepaid,
certified with return receipt requested (the delivery date being the date of the
confirmed return receipt requested), or upon being deposited with an overnight
commercial delivery service requiring proof of delivery, to the other party or
parties at the address of such other party or parties set forth below or at such
other address within the continental United States as such other party or
parties may designate by notice specifically designated as a notice of change of
address and given in accordance herewith; provided, however, that the time
period in which a response to any such notice, election, demand or request must
be given shall commence on the date of receipt thereof; and provided further
that no notice of change of address shall be effective until the date of receipt
thereof.  Personal delivery to a party or to any officer, partner, agent or
employee of such party at said address shall constitute receipt.  Rejection or
other refusal to accept or inability to deliver because of changed address of
which no notice has been received shall also constitute receipt.  Any such
notice, election, demand, request or response, if given to Lender, shall be
addressed as follows:

 

BANK OF ATLANTA

Attn:  Thomas Dorman

1970 Satellite Blvd.

Duluth, Georgia  30097

 

with a copy to:

 

HARBIN & MILLER, LLC

3085 E. Shadowlawn Avenue

Atlanta, Georgia 30305

Attn: Reid H. Harbin, Esq.

 

and, if given to Borrower, shall be addressed as follows:

 

ERIN PROPERTY HOLDINGS, LLC

3050 Peachtree Road, NW, Suite 355

Two Buckhead Plaza

Atlanta, Georgia  30305

 

3.06         Replacement of Note.  Upon receipt of evidence reasonably
satisfactory to Borrower of the loss, theft, destruction or mutilation of the
Note, and in the case of any such loss, theft or destruction, upon delivery of
an indemnity agreement reasonably satisfactory to Borrower or, in the case of
any such mutilation, upon surrender and cancellation of the Note, Borrower will
execute and deliver, in lieu thereof, a replacement Note, identical in form and
substance to the Note and dated as of the date of the Note and upon such
execution and delivery all references in this Deed to the Note shall be deemed
to refer to such replacement Note.

 

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3.07         Assignment.  This Deed is assignable by Lender, and any assignment
hereof by Lender shall operate to vest in the assignee all rights and powers
herein conferred upon and granted to Lender.

 

3.08         Time is of the Essence.  Time is of the essence with respect to
each and every covenant, agreement and obligation of Borrower under this Deed,
the Note and any and all other instruments now or hereafter evidencing, securing
or otherwise relating to the Indebtedness.

 

3.09         Attorney’s Fees.  Whenever the term “attorney’s fees” is used
herein, said term shall be deemed to mean only reasonable attorney’s fees
actually incurred, including, without limitation, reasonable out-of-pocket
expenses actually incurred therewith.

 

3.10         Further Stipulations.  The covenants, agreements and provisions, if
any, set forth in Exhibit “D” attached hereto are hereby made a part of this
Deed.  In the event of any conflict between such further stipulations and any of
the printed provisions of this Deed, such further stipulations shall be deemed
to control.

 

IN WITNESS WHEREOF, Borrower has executed this Deed under seal, as of the day
and year first above written.

 

 

Signed, sealed and delivered in the presence of:

 

BORROWER:

 

 

 

 

 

 

/s/ illegible

 

ERIN PROPERTY HOLDINGS, LLC

Witness

 

 

 

 

 

 

 

 

 

/s/ Damaris Marriaga

 

By:

/s/ Chris Brogdon

(L.S.)

Notary Public (affix seal and commission expiration date)

 

 

Chris Brogdon, Manager

 

 

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EXHIBIT “A”

 

(LEGAL DESCRIPTION)

 

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EXHIBIT “B”

 

(TITLE EXCEPTIONS)

 

1.                                       All ad valorem real property taxes for
the calendar year 2011, and all years subsequent thereto, and those taxes and
special assessments that become due or payable subsequent to Date of Policy,
which are liens not yet due or payable.

 

2.                                       This policy insures the location of the
boundary lines of the subject property as shown on the survey referenced below,
but does not insure the engineering calculations used in computing the exact
acreage contained herein.

 

3.                                       Right-of-Way Easement from
Mrs. Hortense Wong Collier and Mrs. Virdie Rooks to Georgia Power Company, filed
October 19, 1943, and recorded at Deed Book 91, page 507, Laurens County,
Georgia Records, as shown and located on ALTA/ACSM Survey for Erin Nursing, LLC,
prepared by LandPro Surveying and Mapping, bearing the certification of James H.
Rader, G.R.L.S. No. 3033, dated January 26, 2011.

 

4.                                       Right-of-Way Easement from Mayme Dudley
to Georgia Power Company, dated May 31, 1966, filed June 9, 1966, recorded at
Deed Book 243, page 241, Laurens County, Georgia Records, as shown and located
on ALTA/ACSM Survey for Erin Nursing, LLC, prepared by LandPro Surveying and
Mapping, bearing the certification of James H. Rader, G.R.L.S. No. 3033, dated
January 26, 2011.

 

5.                                       Long Branch Interceptor Sewer Easement
from Laurens Convalescent Center, Inc. to the City of Dublin, dated November 5,
1992, filed November 24, 1992, and recorded at Deed Book 681, page 293, Laurens
County, Georgia Records, as shown and located on ALTA/ACSM Survey for Erin
Nursing, LLC, prepared by LandPro Surveying and Mapping, bearing the
certification of James H. Rader, G.R.L.S. No. 3033, dated January 26, 2011.

 

6.                                       The following matters as shown by
ALTA/ACSM Survey for Erin Nursing, LLC, prepared by LandPro Surveying and
Mapping, bearing the certification of James H. Rader, G.R.L.S. No. 3033, dated
January 26, 2011:

 

a.                                       Rights of upper and lower riparian
owners in and to the waters of Long Branch Creek crossing subject property, free
from diminution or pollution;

 

b.                                      Encroachment of driveway, appurtenant to
subject property, across the easterly portion of the southerly property line;

 

c.                                       Overhead electric lines and poles
located throughout subject property;

 

d.                                      Encroachment of fence, appurtenant to
subject property, across the southerly property line.

 

7.                                       Rights of patients under patient care
agreements.

 

8.                                       Deed to Secure Debt from Erin Property
Holdings, LLC to Bank of Atlanta, dated July         , 2011, and recorded at
Deed Book             , page           , Laurens County, Georgia Records, to
secure an $800,000.00 indebtedness (shared lien position).

 

9.                                       Pari Passu Agreement by and between
Erin Property Holdings, LLC. and Bank of Atlanta, dated July             , 2011,
and recorded at Deed Book               , page               , Laurens County,
Georgia Records.

 

10.                                 Credit Agreement with Gemino Healthcare
Finance, LLC for working capital financing and related security agreements.

 

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EXHIBIT “C”

 

(USE OF PREMISES)

 

Borrower shall at all times operate the Premises as a nursing home facility.

 

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EXHIBIT “D”

 

NONE

 

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