Exhibit 10.3
DEED OF TRUST
from
POWERSECURE, INC.,
as Grantor
in favor of
Mary C. Tucker,
as Trustee
for the benefit of
CITIBANK, N.A.,
as Administrative Agent, as Beneficiary
January 17, 2008

 

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TABLE OF CONTENTS

              Page
ARTICLE I DEFINITIONS
    1  
1.1 Definitions
    1  
1.2 Additional Definitions
    9  
 
       
ARTICLE II GRANT
    9  
2.1 Grant
    9  
 
       
ARTICLE III WARRANTIES AND REPRESENTATIONS
    10  
3.1 Information
    10  
3.2 Title and Lien
    10  
3.3 Business Purposes
    10  
3.4 Taxes
    10  
3.5 Mailing Address
    10  
3.6 Relationship of Grantor and Beneficiary and Secured Creditors
    10  
3.7 No Reliance on Beneficiary or any Secured Creditor
    11  
3.8 Environmental and Hazardous Substances
    11  
3.9 No Litigation
    13  
 
       
ARTICLE IV AFFIRMATIVE COVENANTS
    13  
4.1 Compliance with Legal Requirements
    13  
4.2 First Lien Status
    13  
4.3 Payment of Impositions
    13  
4.4 Repair
    13  
4.5 Insurance
    14  
4.6 Inspection
    15  
4.7 Payment for Labor and Materials
    15  
4.8 Further Assurances and Corrections
    15  
4.9 Tax on Deed of Trust
    15  
4.10 Expenses
    15  
4.11 Delivery of Contracts
    16  
4.12 Environment and Hazardous Substances
    16  
 
       
ARTICLE V NEGATIVE COVENANTS
    18  
5.1 Use Violations
    18  
5.2 Waste; Alterations
    18  
5.3 Replacement of Fixtures and Personalty
    18  
5.4 Change in Zoning
    18  
5.5 No Drilling
    18  
5.6 No Disposition
    19  
5.7 No Subordinate Mortgages
    19  
5.8 Change of Entity; Address
    19  

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TABLE OF CONTENTS
(Continued)

              Page
ARTICLE VI EVENTS OF DEFAULT
    19  
6.1 False Representation
    19  
6.2 No Further Encumbrances
    19  
6.3 Disposition of Mortgaged Property and Beneficial Interest in Grantor
    19  
6.4 Condemnation
    20  
6.5 Destruction of Improvements
    20  
6.6 Abandonment
    20  
6.7 Event of Default in Loan Documents
    20  
 
       
ARTICLE VII REMEDIES
    20  
7.1 Beneficiary’s Remedies Upon Default
    20  
7.2 Other Rights of Beneficiary
    27  
7.3 Possession After Foreclosure
    28  
7.4 Application of Proceeds
    28  
7.5 Abandonment of Sale
    28  
7.6 Payment of Fees
    29  
7.7 Miscellaneous
    29  
7.8 Waiver of Deficiency Statute
    30  
 
       
ARTICLE VIII SPECIAL PROVISIONS
    31  
8.1 Condemnation Proceeds
    31  
8.2 Insurance Proceeds
    31  
8.3 Reserve for Impositions and Insurance Premiums
    32  
8.4 INDEMNITY
    32  
8.5 Subrogation
    34  
8.6 Waiver of Setoff
    34  
8.7 Setoff
    35  
 
       
ARTICLE IX ASSIGNMENT OF SPACE LEASES AND RENTS
    35  
9.1 Assignment
    35  
9.2 Limited License
    35  
9.3 Enforcement of Space Leases
    35  
9.4 No Merger of Estates
    36  
 
       
ARTICLE X SECURITY AGREEMENT
    36  
10.1 Security Interest
    36  
10.2 Financing Statements
    36  
10.3 Fixture Filing
    36  
 
       
ARTICLE XI CONCERNING THE TRUSTEE
    37  
11.1 No Required Action
    37  
11.2 Certain Rights
    37  
11.3 Retention of Money
    38  

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TABLE OF CONTENTS
(Continued)

              Page
11.4 Successor Trustees
    38  
11.5 Perfection of Appointment
    38  
11.6 Succession Instruments
    38  
11.7 No Representation by Trustee or Beneficiary
    38  
 
       
ARTICLE XII MISCELLANEOUS
    39  
12.1 Release
    39  
12.2 Performance at Grantor’s Expense
    39  
12.3 Survival of Obligations
    39  
12.4 Recording and Filing
    39  
12.5 Notices
    39  
12.6 Covenants Running with the Land
    40  
12.7 Successors and Assigns
    40  
12.8 No Waiver; Severability
    40  
12.9 Counterparts
    40  
12.10 Applicable Law
    41  
12.11 Interest Provisions
    41  
12.12 Subrogation
    42  
12.13 Rights Cumulative
    42  
12.14 Payments
    43  
12.15 Exceptions to Covenants
    43  
12.16 Reliance
    43  
12.17 Change of Security
    43  
12.18 Headings
    44  
12.19 Entire Agreement; Amendment
    44  
12.20 Waiver of Right to Trial by Jury
    44  

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When recorded, return to:
James R. Littlejohn
Winstead PC
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
DEED OF TRUST
     This DEED OF TRUST (herein referred to as the “Deed of Trust”), entered
into as of January 17, 2008, by, PowerSecure, Inc., a Delaware corporation,
(“Grantor”), whose chief executive office and mailing address for notice
hereunder is at 1609 Heritage Commerce Ct., Wake Forest, North Carolina 27587,
Attention: President and Chief Executive Officer, and whose organizational
identification number issued by the State of Delaware is DE3278285, to Mary C.
Tucker (“Trustee”), whose address is 3950 Regent Boulevard, Mail Stop S1B135,
Irving, Texas 75063, for the benefit of the hereinafter described Beneficiary.
W I T N E S S E T H:
ARTICLE I
DEFINITIONS
     1.1 Definitions. As used herein, the following terms shall have the
following meanings:
     Administrative Agent: As defined in each of the Existing Credit Agreement
and the Term Credit Agreement.
     Beneficiary: Citibank, N.A., in its capacity as Administrative Agent, for
the benefit of Secured Creditors, whose address for notice hereunder is 8401 N.
Central Expressway, Suite 500, Dallas, Texas 75225, Attention: Gary D. Pitcock
     Charges: As defined in Section 12.11(b) hereof.
     Constituent Party: Any signatory to this Deed of Trust that signs on
Grantor’s behalf that is a corporation, general partnership, limited
partnership, joint venture, trust, or other type of business organization.
     Contracts: All of the right, title, and interest of Grantor in, to, and
under any and all (i) contracts for the purchase of all or any portion of the
Mortgaged Property, whether such Contracts are now or at any time hereafter
existing, including but without limitation, any and all earnest money or other
deposits escrowed or to be escrowed or letters of credit provided or to be
provided by the purchasers under the Contracts, including all amendments and
supplements to and renewals and extensions of the Contracts at any

DEED OF TRUST - Page 1

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time made, and together with all payments, earnings, income, and profits arising
from sale of all or any portion of the Mortgaged Property or from the Contracts
and all other sums due or to become due under and pursuant thereto and together
with any and all earnest money, security, letters of credit or other deposits
under any of the Contracts; (ii) contracts, licenses, permits, and rights
relating to living unit equivalents or other entitlements for water, wastewater,
and other utility services whether executed, granted, or issued by a private
Person or a Governmental Authority or quasi-governmental agency, which are
directly or indirectly related to, or connected with, the development of the
Mortgaged Property, whether such contracts, licenses, and permits are now or at
any time thereafter existing, including without limitation, any and all rights
of living unit equivalents or other entitlements with respect to water,
wastewater, and other utility services, certificates, licenses, zoning
variances, permits, and no-action letters from each Governmental Authority
required: (a) to evidence compliance by Grantor and all improvements constructed
or to be constructed on the Mortgaged Property with all legal requirements
applicable to the Mortgaged Property, and (b) to develop and/or operate the
Mortgaged Property as a commercial and/or residential project; (iii) any and all
right, title, and interest Grantor may have in any financing arrangements
relating to the financing of or the purchase of all or any portion of the
Mortgaged Property by future purchasers; (iv) all contracts with architects,
engineers or other professionals relating to the design and/or construction of
the Improvements, plans, including all amendments and supplements to and
renewals and extensions of such contracts at any time made, and together with
all rebates, refunds or deposits, and all other sums due or to become due under
and pursuant thereto and together with all powers, privileges, options, and
other benefits of Grantor under such contracts; and (v) all other contracts
which in any way relate to the use, enjoyment, occupancy, operation,
maintenance, management or ownership of the Mortgaged Property (save and except
any and all leases, subleases or other agreements pursuant to which Grantor is
granted a possessory interest in the Land), including but not limited to
maintenance and service contracts and management agreements.
     Debtor Relief Laws: The Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.
     Default Rate: The rate of interest specified in the Credit Agreement as the
“Default Rate” to be paid at the times specified in the Credit Agreement, but
not in excess of the Highest Lawful Rate.
     Disposition: Any sale, lease (except as permitted under this Deed of
Trust), sublease, exchange, assignment, conveyance, transfer, trade, or other
disposition of all or any portion of the Mortgaged Property (or any interest
therein) or all or any part of the beneficial ownership interest in Grantor (if
Grantor is a corporation, partnership, general partnership, limited partnership,
joint venture, trust, or other type of business association or legal entity).

DEED OF TRUST - Page 2

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     Environmental Law: Any federal, state, or local Law, statute, ordinance, or
regulation, whether now or hereafter in effect, pertaining to health, industrial
hygiene, or the environmental conditions on, under, or about the Mortgaged
Property, including without limitation, the following, as now or hereafter
amended: Comprehensive Environmental Response, Compensation, and Liability Act
of 1980 (“CERCLA”), 42 U.S.C. § 9601 et seq.; Resource, Conservation and
Recovery Act (“RCRA”), 42 U.S.C. § 6901 et seq. as amended by the Superfund
Amendments and Reauthorization Act of 1986 (“SARA”), Pub. L. 99-499, 100 Stat.
1613; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; Emergency
Planning and Community Right to Know Act of 1986, 42 U.S.C. § 1101 et seq.;
Clean Water Act (“CWA”), 33 U.S.C. § 1251 et seq.; Clean Air Act (“CAA”), 42
U.S.C. § 7401 et seq.; Federal Water Pollution Control Act (“FWPCA”), 33 U.S.C.
§ 1251 et seq.; and any corresponding state Laws or ordinances; and regulations,
rules, guidelines, or standards promulgated pursuant to such Laws, statutes and
regulations, as such statutes, regulations, rules, guidelines, and standards are
amended from time to time.
     Event of Default: Any happening or occurrence described in Article VI
hereof.
     Existing Credit Agreement: The Credit Agreement dated as of August 23,
2007, among PowerSecure International, Inc., Citibank, N.A., as Administrative
Agent, and the other lenders party thereto.
     Fixtures: All materials, supplies, equipment, systems, apparatus, and other
items now owned or hereafter acquired by Grantor and now or hereafter attached
to, installed in, or used in connection with (temporarily or permanently) any of
the Improvements or the Land, which are now owned or hereafter acquired by
Grantor and are now or hereafter attached to the Land or the Improvements, and
including but not limited to any and all partitions, dynamos, window screens and
shades, draperies, rugs and other floor coverings, awnings, motors, engines,
boilers, furnaces, pipes, cleaning, call and sprinkler systems, fire
extinguishing apparatus and equipment, water tanks, swimming pools, heating,
ventilating, refrigeration, plumbing, laundry, lighting, generating, cleaning,
waste disposal, transportation (of people or things, including but not limited
to, stairways, elevators, escalators, and conveyors), incinerating, air
conditioning and air cooling equipment and systems, gas and electric machinery,
appurtenances and equipment, disposals, dishwashers, refrigerators and ranges,
recreational equipment and facilities of all kinds, and lighting, traffic
control, waste disposal, raw and potable water, gas, electrical, storm and
sanitary sewer, telephone and cable television facilities, and all other
utilities whether or not situated in easements, together with all accessions,
appurtenances, replacements, betterments, and substitutions for any of the
foregoing and the proceeds thereof.
     Governmental Authority: Any and all applicable courts, boards, agencies,
commissions, offices, or authorities of any nature whatsoever for any
governmental unit (federal, state, county, district, municipal, city or
otherwise), whether now or hereafter in existence.

DEED OF TRUST - Page 3

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     Grantor: The Person described as Grantor in the initial paragraph of this
Deed of Trust and any and all subsequent owners of the Mortgaged Property or any
part thereof (without hereby implying Beneficiary’s consent to any Disposition
of the Mortgaged Property).
     Guarantor (individually and/or collectively, as the context may require):
Those Persons, if any, designated as Guarantor in the Guaranty.
     Guaranty (individually and/or collectively, as the context may require):
That or those instruments of guaranty, if any, now or hereafter in effect, from
Guarantor to Beneficiary, Administrative Agent or any Secured Creditor
guaranteeing the repayment and performance of all or any part of the
Indebtedness or the satisfaction of, or continued compliance with, the
Obligations, or both.
     Hazardous Substance: Hazardous Substance is any substance, product, waste,
or other material which is or becomes listed, regulated, or addressed as being a
toxic, hazardous, polluting, or similarly harmful substance under any
Environmental Law, including without limitation: (i) any substance included
within the definition of “hazardous waste” pursuant to Section 1004 of RCRA;
(ii) any substance included within the definition of “hazardous substance”
pursuant to Section 101 of CERCLA; (iii) any substance included within (a) the
definition of “regulated substance” pursuant to any Law; or (b) the definition
of “hazardous substance” pursuant to any Law; (iv) asbestos; (v) polychlorinated
biphenyls; (vi) petroleum products; (vii) underground storage tanks, whether
empty, filled or partially filled with any substance; (viii) any radioactive
materials, urea formaldehyde foam insulation or radon; (ix) any substance
included within the definition of “waste” or “pollutant” pursuant to any Law;
and (x) any other chemical, material or substance, the exposure to which is
prohibited, limited or regulated by any Governmental Authority on the basis that
such chemical, material or substance is toxic, hazardous or harmful to human
health or the environment.
     Highest Lawful Rate: As defined in Section 12.11 hereof.
     Impositions: (i) All real estate and personal property taxes, charges,
assessments, standby fees, excises, and levies and any interest, costs, or
penalties with respect thereto, general and special, ordinary and extraordinary,
foreseen and unforeseen, of any kind and nature whatsoever which at any time
prior to or after the execution hereof may be assessed, levied, or imposed upon
the Mortgaged Property or the ownership, use, occupancy, or enjoyment thereof,
or any portion thereof, or the sidewalks, streets, or alleyways adjacent
thereto; (ii) any charges, fees, license payments, or other sums payable for or
under any easement, license, or agreement maintained for the benefit of the
Mortgaged Property; (iii) water, gas, sewer, electricity, and other utility
charges and fees relating to the Mortgaged Property; and (iv) assessments and
charges arising under any subdivision, condominium, planned unit development, or
other declarations, restrictions, regimes, or agreements affecting the Mortgaged
Property.
     Improvements: Any and all buildings, covered garages, air conditioning
towers, open parking areas, structures and other improvements, and any and all
additions,

DEED OF TRUST - Page 4

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alterations, betterments or appurtenances thereto, now or at any time hereafter
situated, placed, or constructed upon the Land or any part thereof.
     Indebtedness: (i) The Secured Obligations, (ii) the principal of, interest
on, or other sums evidenced by the Loan Documents; (iii) any other amounts,
payments, or premiums payable under the Loan Documents; (iv) such additional
sums, with interest thereon, as may hereafter be borrowed from any Secured
Creditor pursuant to a Loan Document, its successors or assigns, by the then
record owner of the Mortgaged Property, when evidenced by a promissory note
which, by its terms, is secured hereby (it being contemplated by Grantor,
Beneficiary and Secured Creditors that such future indebtedness may be
incurred); (v) any and all other indebtedness, obligations, and liabilities of
any kind or character of Grantor to Beneficiary or any Secured Creditor pursuant
to a Loan Document or other agreement evidencing or governing the Secured
Obligations, now or hereafter existing, absolute or contingent, due or not due,
arising by operation of Law or otherwise, or direct or indirect, primary or
secondary, joint, several, joint and several, fixed or contingent, secured or
unsecured by additional or different security or securities, including
indebtedness, obligations, and liabilities to Beneficiary or any Secured
Creditor pursuant to a Loan Document or other agreement evidencing or governing
the Secured Obligations of Grantor as a member of any partnership, joint
venture, trust or other type of business association, or other group, and
whether incurred by Grantor as principal, surety, endorser, guarantor,
accommodation party or otherwise, it being contemplated by Grantor and
Beneficiary and Secured Creditors that Grantor may hereafter become indebted to
Beneficiary and Secured Creditors in further sum or sums, and (vi) all present
and future amounts in respect of the foregoing that would become due but for the
operation of any provision of Debtor Relief Laws, and all present and future
accrued and unpaid interest, including, without limitation, post-petition
interest if Grantor or any other Loan Party voluntarily or involuntarily becomes
subject to any Debtor Relief Laws. Notwithstanding the foregoing provisions of
this definition, this Deed of Trust shall not secure any such other loan,
advance, debt, obligation or liability with respect to which Beneficiary or any
Secured Creditor is by applicable Law prohibited from obtaining a lien on real
estate, nor shall this definition operate or be effective to constitute or
require any assumption or payment by any Person, in any way, of any debt or
obligation of any other Person to the extent that the same would violate or
exceed the limit provided in any applicable usury or other Law.
     Land: The real property or interest therein described in Exhibit “A”
attached hereto and incorporated herein by this reference, together with all
right, title, interest, and privileges of Grantor in and to (i) all streets,
ways, roads, alleys, easements, rights-of-way, licenses, rights of ingress and
egress, vehicle parking rights and public places, existing or proposed,
abutting, adjacent, used in connection with or pertaining to such real property
or the improvements thereon; (ii) any strips or gores of real property between
such real property and abutting or adjacent properties; (iii) all water and
water rights, timber and crops pertaining to such real estate; and (iv) all
appurtenances and all reversions and remainders in or to such real property.
     Law: As defined in each of the Existing Credit Agreement and the Term
Credit Agreement.

DEED OF TRUST - Page 5

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     Legal Requirements: (i) Any and all present and future judicial decisions,
statutes, rulings, rules, regulations, permits, certificates, or ordinances of
any Governmental Authority in any way applicable to Grantor, any Guarantor or
the Mortgaged Property, including, without limiting the generality of the
foregoing, the ownership, use, occupancy, possession, operation, maintenance,
alteration, repair, or reconstruction thereof, (ii) any and all covenants,
conditions, and restrictions contained in any deeds, other forms of conveyance,
or in any other instruments of any nature that relate in any way or are
applicable to the Mortgaged Property or the ownership, use, or occupancy
thereof, (iii) Grantor’s or any Guarantor’s presently or subsequently effective
bylaws and articles of incorporation or partnership, limited partnership, joint
venture, trust, or other form of business association agreement, (iv) any and
all Space Leases, (v) any and all Contracts, and (vi) any and all leases, other
than those described in (iv) above, and other contracts (written or oral) of any
nature that relate in any way to the Mortgaged Property and to which Grantor or
any Guarantor may be bound, including, without limiting the generality of the
foregoing, any lease or other contract pursuant to which Grantor is granted a
possessory interest in and to the Land and/or the Improvements.
     License: As defined in Section 9.2 hereof.
     Loan Documents: As defined in each of the Existing Credit Agreement and the
Term Credit Agreement.
     Loan Party: As defined in each of the Existing Credit Agreement and the
Term Credit Agreement.
     Material Adverse Effect: (i) a Material Adverse Effect (as defined in each
of the Existing Credit Agreement and the Term Credit Agreement) and (ii) any
material and adverse effect on the value of the Mortgaged Property.
     Minerals: All substances in, on, or under the Land which are now, or may
become in the future, intrinsically valuable, that is, valuable in themselves,
and which now or may be in the future enjoyed through extraction or removal from
the property, including without limitation, oil, gas, and all other
hydrocarbons, coal, lignite, carbon dioxide and all other nonhydrocarbon gases,
uranium and all other radioactive substances, and gold, silver, copper, iron and
all other metallic substances or ores, including all as-extracted collateral (as
defined in the UCC).
     Mortgaged Property: The Land, Fixtures, Improvements, Personalty,
Contracts, Space Leases and Rents, and any interest of Grantor now owned or
hereafter acquired in and to the Land, Minerals, Fixtures, Improvements,
Personalty, Contracts, Space Leases and Rents, together with any and all other
security and collateral of any nature whatsoever, now or hereafter given for the
repayment or performance of the Indebtedness or the performance and discharge of
the Obligations. As used in this Deed of Trust, the term “Mortgaged Property”
shall be expressly defined as meaning all or, where the context permits or
requires, any portion of the above and all or, where the context permits or
requires, any interest therein.

DEED OF TRUST - Page 6

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     Notes: As defined in each of the Existing Credit Agreement and the Term
Credit Agreement.
     Obligations: Any and all of the covenants, conditions, warranties,
representations, and other obligations (other than to repay or perform the
Indebtedness) made or undertaken by Grantor, Guarantor, or any other Person or
party to the Loan Documents to Beneficiary, any Secured Creditor, Trustee, or
others as set forth in the Loan Documents, the Space Leases, and in any deed,
lease, sublease, or other form of conveyance, or any other agreement pursuant to
which Grantor is granted a possessory interest in the Land.
     Permitted Exceptions: The liens, easements, restrictions, security
interests, and other matters (if any) as reflected on Exhibit “B” attached
hereto and incorporated herein by reference and the liens and security interests
created by the Loan Documents.
     Person: As defined in each of the Existing Credit Agreement and the Term
Credit Agreement.
     Personalty: All of the right, title, and interest of Grantor in and to
(i) furniture, furnishings, equipment, machinery, goods (including, but not
limited to, crops, farm products, timber and timber to be cut, and extracted
Minerals); (ii) general intangibles, money, insurance proceeds, accounts,
contract and subcontract rights, trademarks, trade names, inventory; (iii) all
refundable, returnable, or reimbursable fees, deposits or other funds or
evidences of credit or indebtedness deposited by or on behalf of Grantor with
any Governmental Authority, boards, corporations, providers of utility services,
public or private, including specifically, but without limitation, all
refundable, returnable, or reimbursable tap fees, utility deposits, commitment
fees and development costs, any awards, remunerations, reimbursements,
settlements, or compensation heretofore made or hereafter to be made by any
Governmental Authority pertaining to the Land, Improvements, Fixtures,
Contracts, or Personalty, including but not limited to those for any vacation
of, or change of grade in, any streets affecting the Land or the Improvements
and those for municipal utility district or other utility costs incurred or
deposits made in connection with the Land; and (iv) all other personal property
of any kind or character as defined in and subject to the provisions of the UCC
(Article 9 - Secured Transactions); any and all of which are now owned or
hereafter acquired by Grantor, and which are now or hereafter situated in, on,
or about the Land or the Improvements, or used in or necessary to the complete
and proper planning, development, construction, financing, use, occupancy, or
operation thereof, or acquired (whether delivered to the Land or stored
elsewhere) for use in or on the Land or the Improvements, together with all
accessions, replacements, and substitutions thereto or therefor and the proceeds
thereof.
     Related Indebtedness: As defined in Section 12.11(b) hereof.
     Release: “Release,” “removal,” “environment,” and “disposal” shall have the
meanings given such terms in CERCLA, and the term “disposal” shall also have the
meaning given it in RCRA; provided that in the event either CERCLA or RCRA is

DEED OF TRUST - Page 7

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amended so as to broaden the meaning of any term defined thereby, such broader
meaning shall apply subsequent to the effective date of such amendment, and
provided further that to the extent the Laws of the State of North Carolina
establish a meaning for “release,” “removal,” “environment,” or “disposal,”
which is broader than that specified in either CERCLA and RCRA, such broader
meaning shall apply.
     Remedial Work: Any investigation, site monitoring, containment, cleanup,
removal, restoration, or other work of any kind or nature reasonably necessary
or desirable under any applicable Environmental Law in connection with the
current or future presence, suspected presence, release, or suspected release of
a Hazardous Substance in or into the air, soil, ground water, surface water, or
soil vapor at, on, about, under, or within the Mortgaged Property, or any part
thereof.
     Rents: All of the rents, revenues, income, proceeds, profits, security and
other types of deposits (after Grantor acquires title thereto), and other
benefits paid or payable by parties to the Contracts and/or Space Leases, other
than Grantor for using, leasing, licensing, possessing, operating from, residing
in, selling, or otherwise enjoying all or any portion of the Mortgaged Property.
     Secured Creditor: As defined in each of the Existing Credit Agreement and
the Term Credit Agreement.
     Secured Obligations: As defined in each of the Existing Credit Agreement
and the Term Credit Agreement.
     Space Leases: Any and all leases, master leases, subleases, licenses,
concessions, or other agreements (written or oral, now or hereafter in effect)
which grant to third parties a possessory interest in and to, or the right to
use, all or any part of the Mortgaged Property, together with all security and
other deposits or payments made in connection therewith.
     Subordinate Mortgage: Any mortgage, deed of trust, pledge, lien (statutory,
constitutional, or contractual), security interest, encumbrance or charge, or
conditional sale or other title retention agreement, covering all or any portion
of the Mortgaged Property executed and delivered by Grantor, the lien of which
is subordinate and inferior to the lien of this Deed of Trust.
     Term Credit Agreement: The Term Credit Agreement dated as of January 17,
2008, among PowerSecure International, Inc., Citibank, N.A., as Administrative
Agent, and the other lenders party thereto, together with all amendments and
restatements thereto.
     Trustee: The individual described as Trustee in the initial paragraph of
this Deed of Trust.
     UCC: The Uniform Commercial Code, as amended from time to time, in effect
in the state in which the Mortgaged Property is located.

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     1.2 Additional Definitions. As used herein, the following terms shall have
the following meanings:
     (a) “Hereof,” “hereby,” “hereto,” “hereunder,” “herewith,” and similar
terms mean of, by, to, under and with respect to, this Deed of Trust or to the
other documents or matters being referenced.
     (b) “Heretofore” means before, “hereafter” means after, and “herewith”
means concurrently with, the date of this Deed of Trust.
     (c) All pronouns, whether in masculine, feminine or neuter form, shall be
deemed to refer to the object of such pronoun whether same is masculine,
feminine or neuter in gender, as the context may suggest or require.
     (d) All terms used herein, whether or not defined in Section 1.1 hereof,
and whether used in singular or plural form, shall be deemed to refer to the
object of such term whether such is singular or plural in nature, as the context
may suggest or require.
ARTICLE II
GRANT
     2.1 Grant. To secure the full and timely payment and performance of the
Indebtedness and the full and timely performance and discharge of the
Obligations, Grantor has GRANTED, BARGAINED, SOLD and CONVEYED, and by these
presents does GRANT, BARGAIN, SELL and CONVEY, unto Trustee, in trust, the
Mortgaged Property, subject, however, to the Permitted Exceptions, TO HAVE AND
TO HOLD the Mortgaged Property unto Trustee, forever, and Grantor does hereby
bind itself, its successors, and assigns to WARRANT AND FOREVER DEFEND the title
to the Mortgaged Property unto Trustee against every Person whomsoever lawfully
claiming or to claim the same or any part thereof; provided, however, that if
Grantor shall pay and perform (or cause to be paid and performed) the
Indebtedness as and when the same shall become due and payable and shall fully
perform and discharge (or cause to be fully performed and discharged) the
Obligations on or before the date same are to be performed and discharged, then
the liens, security interests, estates, and rights granted by this Deed of Trust
shall terminate, in accordance with the provisions hereof, otherwise same shall
remain in full force and effect. A certificate or other written statement
executed on behalf of Trustee or Beneficiary confirming that the Indebtedness
has not been fully paid and performed or the Obligations have not been fully
performed or discharged shall be sufficient evidence thereof for the purpose of
reliance by third parties on such fact. This Deed of Trust is given wholly or in
part to secure future obligations which may be incurred hereunder and under the
other Loan Documents. The amount of present obligations secured is $2,584,000
and the maximum principal amount, including present and future obligations;
which may be secured hereby at one time is $27,584,000. The period within which
such future obligations may be incurred commences on the date of this Deed of
Trust and ends on the date fifteen (15) years from the date hereof.

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ARTICLE III
WARRANTIES AND REPRESENTATIONS
     Grantor hereby unconditionally warrants and represents to Beneficiary, as
of the date hereof and at all times during the term of this Deed of Trust, as
follows:
     3.1 Information. All information, financial statements, reports, papers,
and data given or to be given to Beneficiary or any Secured Creditor with
respect to the Mortgaged Property are, or at the time of delivery will be,
accurate, complete, and correct in all material respects and do not, or will
not, omit any fact, the inclusion of which is necessary to prevent the facts
contained therein from being materially misleading.
     3.2 Title and Lien. Grantor has good and indefeasible title to the Land in
fee simple and Improvements, and good and marketable title to the Fixtures and
Personalty, free and clear of any liens, charges, encumbrances, security
interests, claim, easements, restrictions, options, leases (other than the Space
Leases), covenants, and other rights, titles, interests, or estates of any
nature whatsoever, except the Permitted Exceptions. This Deed of Trust
constitutes a valid, subsisting first lien on the Land, the Improvements, and
the Fixtures; a valid, subsisting first priority security interest in and to the
Personalty, Contracts, and to the extent that the terms Space Leases and Rents
include items covered by the UCC, in and to the Space Leases and Rents; and a
valid, subsisting first priority assignment of the Space Leases and Rents not
covered by the UCC, all in accordance with the terms hereof.
     3.3 Business Purposes. The loans evidenced by the Notes and other
extensions of credit pursuant to the Loan Documents and other agreements
evidencing or governing the Secured Obligations are solely for the purpose of
carrying on or acquiring a business of Grantor, and is not for personal, family,
household, or agricultural purposes.
     3.4 Taxes. Grantor, each Constituent Party, and each Guarantor have filed
all federal, state, county, municipal, and city income and other tax returns
required to have been filed by them related to the Mortgaged Property and have
paid all taxes and related liabilities which have become due pursuant to such
returns or pursuant to any assessments received by them related to the Mortgaged
Property. Neither Grantor, any Constituent Party, nor any Guarantor knows of any
basis for any additional assessment in respect of any such taxes and related
liabilities related to the Mortgaged Property.
     3.5 Mailing Address. Grantor’s mailing address, as set forth in the opening
paragraph hereof or as changed pursuant to the provisions hereof, is true and
correct.
     3.6 Relationship of Grantor and Beneficiary and Secured Creditors. The
relationship between Grantor and Beneficiary and Secured Creditors is solely
that of debtor and creditor, and neither Beneficiary nor any Secured Creditor
has any fiduciary or other special relationship with Grantor, and no term or
condition of any of the Loan Documents shall be construed so as to deem the
relationship between Grantor and Beneficiary and Secured Creditors to be other
than that of debtor and creditor.

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     3.7 No Reliance on Beneficiary or any Secured Creditor. Grantor is
experienced in the ownership and operation of properties similar to the
Mortgaged Property, and Grantor, Beneficiary and Secured Creditors have and are
relying solely upon Grantor’s expertise and business plan in connection with the
ownership and operation of the Mortgaged Property. Grantor is not relying on
Beneficiary’s or any Secured Creditor’s expertise or business acumen in
connection with the Mortgaged Property.
     3.8 Environmental and Hazardous Substances. The following representations
and warranties of Grantor are made without regard to whether Beneficiary or any
Secured Creditor has, or hereafter obtains, any knowledge or report of the
environmental condition of the Mortgaged Property:
     (a) To Grantor’s knowledge, the Mortgaged Property and the operations
conducted thereon do not violate any applicable Law, statute, ordinance, rule,
regulation, order or determination of any Governmental Authority or any
restrictive covenant or deed restriction (recorded or otherwise), including
without limitation all applicable zoning ordinances and building codes, flood
disaster Laws and Environmental Laws;
     (b) Without limitation of subparagraph (a) immediately preceding, except as
previously disclosed in writing to Beneficiary, to Grantor’s knowledge, the
Mortgaged Property and operations conducted thereon by the current or prior
owner or operator of such Mortgaged Property or operation, are not in violation
of or subject to any existing, pending or threatened action, suit,
investigation, inquiry or proceeding by any Governmental Authority or
nongovernmental entity or Person or to any remedial obligations under any
Environmental Law;
     (c) Grantor has used its best efforts to determine and has determined the
extent of the existence of Hazardous Substances generated, placed, held,
located, disposed of or otherwise released, on, under, from or about the
Mortgaged Property and of any release, suspected release, or threatened release,
thereof;
     (d) Grantor has not undertaken, permitted, authorized or suffered and will
not undertake, permit, authorize or suffer, the presence, use, manufacture,
handling, generation, transportation, storage, treatment, discharge, release,
burial or disposal on, under, from or about the Mortgaged Property of any
Hazardous Substance, or the transportation to or from the Mortgaged Property of
any Hazardous Substance, except in compliance with applicable Laws, regulations
and industry standards;
     (e) Except as otherwise previously disclosed to Beneficiary in writing,
there is no pending or threatened litigation or proceeding before any
Governmental Authority in which any Person alleges the presence, release, threat
of release, placement on, under, from or about the Mortgaged Property, or the
manufacture, handling, generation, transportation, storage, treatment,
discharge, burial, or disposal on, under, from or about the Mortgaged Property,
or the transportation to or from the Mortgaged Property, of any Hazardous
Substance;

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     (f) Except as otherwise previously disclosed to Beneficiary in writing,
Grantor has not received any notice and has no actual or constructive knowledge
that any Governmental Authority or any employee or agent thereof has determined
that there is or has been a presence, release, threat of release, placement on,
under, from or about the Mortgaged Property, or the use, manufacture, handling,
generation, transportation, storage, treatment, discharge, burial or disposal
on, under, from or about the Mortgaged Property, or the transportation to or
from the Mortgaged Property, of any Hazardous Substance;
     (g) Except as previously disclosed to Beneficiary in writing, there have
been no communications or agreements with any Governmental Authority or agency
(federal, state or local) or any private Person, including, but not limited to,
any prior owner or operator of the Mortgaged Property, relating in any way to
any liability arising from, or the violation of any Law, regulation or industry
standard relating to, the presence, release, threat of release, placement on,
under, from or about the Mortgaged Property, or the use, manufacture, handling,
generation, transportation, storage, treatment, discharge, burial or disposal
on, under, from or about the Mortgaged Property, or the transportation to or
from the Mortgaged Property, of any Hazardous Substance except for
communications made in the ordinary course of business in connection with
permits, reports, and routine inspections issued, prepared or conducted by
Government Authorities having jurisdiction over the Mortgaged Property;
     (h) Grantor will permit Beneficiary to join and participate in, as a party
if it so elects, any legal proceedings or actions initiated with respect to the
Mortgaged Property in connection with any Environmental Law or Hazardous
Substance and pay all attorneys’ fees incurred by Beneficiary in connection
therewith;
     (i) Grantor has been issued all required federal, state and local licenses,
certificates or permits relating to, and Grantor and its facilities, business
assets, property, leaseholds and equipment are in compliance in all respects
with all applicable federal, state and local Laws, rules and regulations
relating to, air emissions, water discharge, noise emissions, solid or liquid
waste disposal, hazardous wastes or materials, or other environmental, health or
safety matters;
     (j) Grantor has no material contingent liability in connection with any
release or threatened release of any Hazardous Substance into the indoor or
outdoor environment;
     (k) The use which Grantor or any owner or operator of the Mortgaged
Property makes or intends to make of the Mortgaged Property will not result in
any disposal or other release of any Hazardous Substance on, from, or to the
Mortgaged Property which disposal or release would constitute a violation of any
Environmental Law or any other applicable Law or regulation or industry
standard.
Grantor recognizes and acknowledges that, in entering into the transactions
evidenced by the Loan Documents and the other agreements evidencing or governing
the Secured Obligations and making the extensions of credit creating Secured
Obligations, Beneficiary and Secured Creditors

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are expressly and primarily relying on the truth and accuracy of the foregoing
warranties and representations without any obligation to investigate the
Mortgaged Property and notwithstanding any investigation of the Mortgaged
Property by Beneficiary or any Secured Creditor; that such reliance exists on
the part of Beneficiary and Secured Creditors prior thereto; that such
warranties and representations are a material inducement to Secured Creditors in
making the loans evidenced by the Notes, extending credit pursuant to the Loan
Documents and extending credit creating Secured Obligations; and that Secured
Creditors would not be willing to make the loans evidenced by the Notes,
extending credit pursuant to the Loan Documents and extending credit creating
Secured Obligations in the absence of any of such warranties and
representations.
     3.9 No Litigation. Except as disclosed in writing to Beneficiary, there are
no (i) actions, suits, or proceedings, at law or in equity, before any
Governmental Authority or arbitrator pending or threatened against or affecting
or involving the Mortgaged Property, or (ii) outstanding or unpaid judgments
against the Mortgaged Property.
ARTICLE IV
AFFIRMATIVE COVENANTS
     Grantor hereby unconditionally covenants and agrees with Beneficiary, until
the entire Indebtedness shall have been finally paid in full and all of the
Obligations shall have been fully performed and discharged as follows:
     4.1 Compliance with Legal Requirements. Grantor will promptly and
faithfully comply with, conform to, and obey all Legal Requirements, whether the
same shall necessitate structural changes in, improvements to, or interfere with
the use or enjoyment of, the Mortgaged Property.
     4.2 First Lien Status. Grantor will protect the first lien and security
interest status of this Deed of Trust and the other Loan Documents and will not
permit to be created or to exist in respect of the Mortgaged Property or any
part thereof any lien or security interest on a parity with, superior to, or
inferior to any of the liens or security interests hereof, except for the
Permitted Exceptions.
     4.3 Payment of Impositions. Grantor will duly pay and discharge, or cause
to be paid and discharged, the Impositions not later than the earlier to occur
of (i) the due date thereof, (ii) the day any fine, penalty, interest, or cost
may be added thereto or imposed, or (iii) the day any lien may be filed for the
nonpayment thereof (if such day is used to determine the due date of the
respective item), and Grantor shall deliver to Beneficiary a written receipt
evidencing the payment of the respective Imposition.
     4.4 Repair. Grantor will keep the Mortgaged Property in first-class order
and condition and will make all repairs, replacements, renewals, additions,
betterments, improvements, and alterations thereof and thereto, interior and
exterior, structural and nonstructural, ordinary and extraordinary, foreseen and
unforeseen, which are necessary or reasonably appropriate to keep same in such
order and condition. Grantor will prevent any act,

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occurrence, or neglect which might impair the value or usefulness of the
Mortgaged Property for its intended usage. In instances where repairs,
replacements, renewals, additions, betterments, improvements, or alterations are
required in and to the Mortgaged Property on an emergency basis to prevent loss,
damage, waste, or destruction thereof, Grantor shall proceed to repair, replace,
add to, better, improve, or alter same, or cause same to be repaired, replaced,
added to, bettered, improved, or altered, notwithstanding anything to the
contrary contained in Section 5.2 hereof; provided, however, that in instances
where such emergency measures are to be taken, Grantor will notify Beneficiary
in writing of the commencement of same and the measures to be taken, and, when
same are completed, the completion date and the measures actually taken.
     4.5 Insurance. Grantor will obtain and maintain insurance upon and relating
to the Mortgaged Property with such insurers, in such amounts and covering such
risks as shall be satisfactory to Beneficiary, from time to time, including but
not limited to: (i) owner’s and contractors’ policies of comprehensive general
public liability insurance (including automobile coverage); (ii) hazard
insurance against all risks of loss, including collapse, in an amount not less
than the full replacement cost of all Improvements, including the cost of debris
removal, with annual agreed amount endorsement and sufficient at all times to
prevent Grantor from becoming a coinsurer; (iii) business interruption or rental
loss insurance; (iv) if the Mortgaged Property is in a “Flood Hazard Area,” a
flood insurance policy, or binder therefor, in an amount equal to the principal
amount of the Notes and the maximum credit available pursuant to the Loan
Documents and the other documents evidencing or governing the Secured
Obligations or the maximum amount available under the Flood Disaster Protection
Act of 1973, and regulations issued pursuant thereto, as amended from time to
time, whichever is less, in form complying with the “insurance purchase
requirement” of that Act; (v) workmen’s compensation insurance for Grantor and
any general contractor performing any work on or with respect to the Mortgaged
Property; and (vi) such other insurance, if any, as Beneficiary may require from
time to time. Each insurance policy issued in connection herewith shall provide
by way of endorsements, riders or otherwise that (a) with respect to liability
insurance, it shall name Beneficiary as an additional insured, with respect to
the other insurance, it shall be payable to Beneficiary as a mortgagee and not
as a coinsured, and with respect to all policies of insurance carried by each
Lessee for the benefit of Grantor, it shall be payable to Beneficiary as
Beneficiary’s interest may appear; (b) the coverage of Beneficiary shall not be
terminated, reduced, or affected in any manner regardless of any breach or
violation by Grantor of any warranties, declarations, or conditions in such
policy; (c) no such insurance policy shall be canceled, endorsed, altered, or
reissued to effect a change in coverage for any reason and to any extent
whatsoever unless such insurer shall have first given Beneficiary thirty
(30) days’ prior written notice thereof; and (d) Beneficiary may, but shall not
be obligated to, make premium payments to prevent any cancellation, endorsement,
alteration, or reissuance, and such payments shall be accepted by the insurer to
prevent same. Beneficiary shall be furnished with the original of each such
initial policy coincident with the execution of this Deed of Trust and the
original of each renewal policy not less than fifteen (15) days prior to the
expiration of the initial, or each immediately preceding renewal policy,
together with receipts or other evidence that the premiums thereon have been
paid for one (1) year. Grantor shall furnish to Beneficiary, on or before thirty
(30) days after the close of each of Grantor’s fiscal years, a statement
certified by Grantor or a duly authorized officer of Grantor of the amounts of
insurance maintained in compliance herewith, of the risks covered by such
insurance and of the insurance company or companies which carry such insurance.

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     4.6 Inspection. Grantor will permit Trustee and Beneficiary, and their
agents, representatives, and employees, to inspect the Mortgaged Property at all
reasonable times, with or without prior notice to Grantor.
     4.7 Payment for Labor and Materials. Grantor will promptly pay all bills
for labor, materials, and specifically fabricated materials incurred in
connection with the Mortgaged Property and never permit to exist in respect of
the Mortgaged Property or any part thereof any lien or security interest, even
though inferior to the liens and security interests hereof, for any such bill,
and in any event never permit to be created or exist in respect of the Mortgaged
Property or any part thereof any other or additional lien or security interest
on a parity with, superior, or inferior to any of the liens or security
interests hereof, except for the Permitted Exceptions.
     4.8 Further Assurances and Corrections. From time to time, at the request
of Beneficiary, Grantor will (i) promptly correct any defect, error, or omission
which may be discovered in the contents of this Deed of Trust or in any other
Loan Document or in the execution or acknowledgment thereof; (ii) execute,
acknowledge, deliver, record and/or file such further instruments (including,
without limitation, further deeds of trust, security agreements, financing
statements, continuation statements and assignments of rents or leases) and
perform such further acts and provide such further assurances as may be
necessary, desirable, or proper, in Beneficiary’s opinion, to carry out more
effectively the purposes of this Deed of Trust and the Loan Documents and to
subject to the liens and security interests hereof and thereof any property
intended by the terms hereof or thereof to be covered hereby or thereby,
including without limitation, any renewals, additions, substitutions,
replacements, or appurtenances to the Mortgaged Property; (iii) execute,
acknowledge, deliver, procure, file, and/or record any document or instrument
(including without limitation, any financing statement) deemed advisable by
Beneficiary to protect the liens and the security interests herein granted
against the rights or interests of third Persons; and (iv) pay all costs
connected with any of the foregoing.
     4.9 Tax on Deed of Trust. At any time any Law shall be enacted imposing or
authorizing the imposition of any tax upon this Deed of Trust, or upon any
rights, titles, liens, or security interests created hereby, or upon the
Indebtedness or any part thereof, Grantor will immediately pay all such taxes,
provided that if such Law as enacted makes it unlawful for Grantor to pay such
tax, Grantor shall not pay nor be obligated to pay such tax. Nevertheless, if a
Law is enacted making it unlawful for Grantor to pay such taxes, then Grantor
must prepay the Indebtedness in full within sixty (60) days after demand
therefor by Beneficiary.
     4.10 Expenses. Subject to the provisions of Section 12.11 hereof, Grantor
will pay on demand all and bona fide out-of-pocket costs, fees, and expenses and
other expenditures, including, but not limited to, attorneys’ fees and expenses,
paid or incurred by Beneficiary or Trustee to third parties incident to this
Deed of Trust or any other Loan Document (including without limitation,
attorneys’ fees and expenses in connection with the negotiation, preparation,
and execution hereof and of any other Loan Document and any amendment hereto or
thereto, any release hereof, any consent, approval or waiver hereunder or under
any other Loan Document, the making of any advance under the Notes or extension
of credit pursuant to the Loan Documents, and any suit to which Beneficiary or
Trustee is a party involving this Deed of Trust

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or the Mortgaged Property) or incident to the enforcement of the Indebtedness or
the Obligations or the exercise of any right or remedy of Beneficiary under any
Loan Document.
     4.11 Delivery of Contracts. Grantor will deliver to Beneficiary a copy of
each Contract promptly after the execution of same by all parties thereto.
Within twenty (20) days after a request by Beneficiary, Grantor shall prepare
and deliver to Beneficiary a complete listing of all Contracts, showing date,
term, parties, subject matter, concessions, whether any defaults exist, and
other information specified by Beneficiary, of or with respect to each of such
Contracts, together with a copy thereof (if so requested by Beneficiary).
     4.12 Environment and Hazardous Substances. Grantor will:
     (a) except pursuant to and in compliance with applicable Environmental Laws
and regulations and industry standards, not knowingly or recklessly use,
generate, manufacture, produce, store, release, discharge, or dispose of on,
under, from or about the Mortgaged Property or transport to or from the
Mortgaged Property any Hazardous Substance and will use its best efforts to
prevent any other Person from doing so;
     (b) maintain the Mortgaged Property in compliance with all Environmental
Laws and industry standards and upon discovery thereof promptly take corrective
action to remedy any noncompliance with any Environmental Law or industry
standard;
     (c) establish and maintain, at Grantor’s sole expense, a system to assure
and monitor continued compliance with Environmental Laws and the presence of
Hazardous Substances on the Mortgaged Property by any and all owners or
operators of the Mortgaged Property, which system shall include (i) annual
reviews of such compliance by employees or agents of Grantor who are familiar
with the requirements of the Environmental Laws; (ii) at the request of
Beneficiary, but no more than once each year, a detailed review of such
compliance and of the environmental condition of the Mortgaged Property;
(iii) an Environmental Report in scope satisfactory to Beneficiary and prepared
by an environmental consultant approved in advance by Beneficiary; provided,
however, that if any Environmental Report indicates a violation of any
Environmental Law or a need for Remedial Work, such system shall include, at the
request of Beneficiary, a detailed review of the status of such violation or
Remedial Work (a “Supplemental Report”) prepared by such environmental
consultant. Grantor shall furnish an Environmental Report or such Supplemental
Report to Beneficiary within sixty (60) days after Beneficiary so requests,
together with such additional information as Beneficiary may reasonably request;
     (d) give prompt written notices to Beneficiary of: (i) any proceeding or
inquiry by any Governmental Authority or nongovernmental Person with respect to
the presence of any Hazardous Substance on, under, from or about the Mortgaged
Property or the migration thereof from or to other property; (ii) all claims
made or threatened by any third party against Grantor or the Mortgaged Property
or any other owner or operator of the Mortgaged Property relating to any loss or
injury resulting from any Hazardous Substance; and (iii) Grantor’s discovery of
any occurrence or condition on any real property adjoining or in the vicinity of
the Mortgaged Property that could cause the

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Mortgaged Property or any part thereof to be subject to any investigation or
cleanup of the Mortgaged Property pursuant to any Environmental Law or that
could result in Grantor becoming liable for any cost related to any
investigation or cleanup of such real property;
     (e) permit Beneficiary to join and participate in, as a party if it so
elects, any legal proceedings or actions initiated with respect to the Mortgaged
Property in connection with any Environmental Law or Hazardous Substance and
Grantor shall pay all attorneys’ fees incurred by Beneficiary in connection
therewith;
     (f) PROTECT, INDEMNIFY AND HOLD HARMLESS TRUSTEE, BENEFICIARY AND EACH
SECURED CREDITOR, THEIR RESPECTIVE PARENTS, SUBSIDIARIES, DIRECTORS, OFFICERS,
EMPLOYEES, REPRESENTATIVES, AGENTS, SUCCESSORS AND ASSIGNS FROM AND AGAINST ANY
AND ALL LOSS, DAMAGE, COSTS, EXPENSE, ACTION, CAUSES OF ACTION, OR LIABILITY
(INCLUDING ATTORNEYS’ FEES AND COSTS) (WHETHER OR NOT CAUSED BY OR ARISING, IN
WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE, AND
EXCLUDING ONLY LOSSES RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,
OF ANY SUCH PERSON) DIRECTLY OR INDIRECTLY ARISING FROM OR ATTRIBUTABLE TO THE
USE, GENERATION, MANUFACTURE, PRODUCTION, STORAGE, RELEASE, THREATENED RELEASE,
DISCHARGE, DISPOSAL, OR PRESENCE OF A HAZARDOUS SUBSTANCE ON, UNDER, FROM OR
ABOUT THE MORTGAGED PROPERTY, WHETHER KNOWN OR UNKNOWN AT THE TIME OF THE
EXECUTION HEREOF, INCLUDING WITHOUT LIMITATION (I) ALL FORESEEABLE CONSEQUENTIAL
DAMAGES OF ANY SUCH USE, GENERATION, MANUFACTURE, PRODUCTION, STORAGE, RELEASE,
THREATENED RELEASE, DISCHARGE, DISPOSAL OR PRESENCE; AND (II) THE COSTS OF ANY
REQUIRED OR NECESSARY ENVIRONMENTAL INVESTIGATION OR MONITORING, ANY REPAIR,
CLEANUP OR DETOXIFICATION OF THE MORTGAGED PROPERTY AND THE PREPARATION AND
IMPLEMENTATION OF ANY CLOSURE, REMEDIAL OR OTHER REQUIRED PLANS. THIS COVENANT
AND THE INDEMNITY CONTAINED HEREIN SHALL SURVIVE THE RELEASE OF ANY LIENS HELD
BY TRUSTEE, BENEFICIARY AND EACH SECURED CREDITOR ON THE MORTGAGED PROPERTY, OR
THE EXTINGUISHMENT OF SUCH LIENS BY FORECLOSURE OR ACTION IN LIEU THEREOF; AND
     (g) in the event that Remedial Work is reasonably necessary or desirable
because of, or in connection with, the current or future presence, suspected
presence, release or suspected release of a Hazardous Substance in or into the
air, soil, groundwater, surface water or soil vapor at, on, about, under or
within the Mortgaged Property (or any portion thereof), within thirty (30) days
after written demand for performance thereof by Beneficiary (or such shorter
period of time as may be required under any applicable Law, regulation, order or
agreement), commence and thereafter

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diligently prosecute to completion, all such Remedial Work; subject, however, to
Grantor’s obtaining any necessary or desirable consent, concurrence or approval
of any applicable Governmental Authority. All Remedial Work shall be performed
by contractors under the supervision of a consulting engineer approved by
Beneficiary. All costs and expenses of such Remedial Work shall be paid by
Grantor including, without limitation, Beneficiary’s attorneys’ fees and costs
incurred in connection with monitoring or review of such Remedial Work. In the
event Grantor shall fail to timely commence, or cause to be commenced, or fail
to diligently prosecute to completion, such Remedial Work, Beneficiaries may,
but shall not be required to, cause such Remedial Work to be performed and all
costs and expenses thereof, or incurred in connection therewith, shall become
part of the Indebtedness.
ARTICLE V
NEGATIVE COVENANTS
     Grantor hereby unconditionally covenants and agrees with Beneficiary until
the entire Indebtedness shall have been finally paid and performed in full and
all of the Obligations shall have been fully performed and discharged as
follows:
     5.1 Use Violations. Grantor will not use, maintain, operate, or occupy, or
allow the use, maintenance, operation, or occupancy of, the Mortgaged Property
in any manner which (i) violates any Legal Requirement, (ii) may be dangerous
unless safeguarded as required by Law and/or appropriate insurance,
(iii) constitutes a public or private nuisance, or (iv) makes void, voidable, or
cancelable, or increases the premium of, any insurance then in force with
respect thereto.
     5.2 Waste; Alterations. Grantor will not commit or permit any waste or
impairment of the Mortgaged Property and will not (subject to the provisions of
Sections 4.3 and 4.6 hereof), without the prior written consent of Beneficiary,
make or permit to be made any alterations or additions to the Mortgaged Property
of a material nature.
     5.3 Replacement of Fixtures and Personalty. Grantor will not, without the
prior written consent of Beneficiary, permit any of the Fixtures or Personalty
to be removed at any time from the Land or Improvements unless the removed item
is removed temporarily for maintenance and repair or, if removed permanently, is
replaced by an article of equal suitability and value, owned by Grantor, free
and clear of any lien or security interest except as may be approved in writing
by Beneficiary.
     5.4 Change in Zoning. Grantor will not seek or acquiesce in a zoning
reclassification of all or any portion of the Mortgaged Property or grant or
consent to any easement, dedication, plat, or restriction (or allow any easement
to become enforceable by prescription), or any amendment or modification
thereof, covering all or any portion of the Mortgaged Property, without
Beneficiary’s prior written consent.
     5.5 No Drilling. Grantor will not, without the prior written consent of
Beneficiary, permit any drilling or exploration for or extraction, removal, or
production of, any Minerals from

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the surface or subsurface of the Land regardless of the depth thereof or the
method of mining or extraction thereof.
     5.6 No Disposition. Grantor will not make a Disposition without obtaining
Beneficiary’s prior written consent to the Disposition.
     5.7 No Subordinate Mortgages. Grantor will not create, place, or permit to
be created or placed, or through any act or failure to act, acquiesce in the
placing of, or allow to remain any Subordinate Mortgage regardless of whether
such Subordinate Mortgage is expressly subordinate to the liens or security
interests of the Loan Documents with respect to the Mortgaged Property, other
than the Permitted Exceptions.
     5.8 Change of Entity; Address. Grantor shall not change the jurisdiction of
its organization from the jurisdiction specified in the initial paragraph of
this Deed of Trust, its type of entity from the type of entity specified in the
initial paragraph of this Deed of Trust, its name from the name specified in the
initial paragraph of this Deed of Trust, or its organizational identification
number from the organizational number specified in the initial paragraph of this
Deed of Trust, unless Grantor has delivered to Beneficiary 30 days prior written
notice and taken such actions as Beneficiary may reasonably require with respect
to such change. Absent such official written notice of a change in address for
Grantor, then Beneficiary and Trustee shall be entitled for all purposes under
this Deed of Trust to rely upon Grantor’s address as set forth in the initial
paragraph of this Deed of Trust, as same may have been theretofore changed in
accordance with the provisions hereof.
ARTICLE VI
EVENTS OF DEFAULT
     The term “Event of Default,” as used herein, shall mean the occurrence or
happening, at any time and from time to time, of any one or more of the
following:
     6.1 False Representation. Any representation, warranty, or statement made
by Grantor in, under, or pursuant to this Deed of Trust or any affidavit or
other instrument executed or delivered with respect to this Deed of Trust or the
Indebtedness is determined to be false or misleading in any material respect as
of the date hereof or thereof or shall become so at any time prior to the final
repayment and performance in full of the Indebtedness.
     6.2 No Further Encumbrances. Grantor creates, places, or permits to be
created or placed, or through any act or failure to act, acquiesces in the
placing of, or allows to remain, any Subordinate Mortgage, regardless of whether
such Subordinate Mortgage is expressly subordinate to the liens or security
interests of the Loan Documents, with respect to the Mortgaged Property, other
than the Permitted Exceptions.
     6.3 Disposition of Mortgaged Property and Beneficial Interest in Grantor.
Grantor makes a Disposition, without the prior written consent of Beneficiary.

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     6.4 Condemnation. Any condemnation proceeding is instituted or threatened
which would, in Beneficiary’s sole judgment, materially impair the use and
enjoyment of the Mortgaged Property for its intended purposes.
     6.5 Destruction of Improvements. The Mortgaged Property is demolished,
destroyed, or substantially damaged so that, in Beneficiary’s sole judgment, it
cannot be restored or rebuilt with available funds to the condition existing
immediately prior to such demolition, destruction, or damage within a reasonable
period of time.
     6.6 Abandonment. Grantor abandons all or any portion of the Mortgaged
Property.
     6.7 Event of Default in Loan Documents. An Event of Default as defined in
any of the Loan Documents.
ARTICLE VII
REMEDIES
     7.1 Beneficiary’s Remedies Upon Default. Upon the occurrence of an Event of
Default or any event or circumstance which, with the lapse of time, or the
giving of notice, or both, would constitute an Event of Default, Beneficiary
may, at Beneficiary’s option, and by or through Trustee, by Beneficiary itself
or otherwise, do any one or more of the following:
     (a) Right to Perform Grantor’s Covenants. If Grantor has failed to keep or
perform any covenant whatsoever contained in this Deed of Trust or the other
Loan Documents, Beneficiary may, but shall not be obligated to any Person to do
so, perform or attempt to perform said covenant, and any payment made or expense
incurred in the performance or attempted performance of any such covenant shall
be and become a part of the Indebtedness, and Grantor promises, upon demand, to
pay to Beneficiary, at the place where the Notes are payable, all sums so
advanced or paid by Beneficiary, with interest from the date when paid or
incurred by Beneficiary at the Default Rate. No such payment by Beneficiary
shall constitute a waiver of any Event of Default. In addition to the liens and
security interests hereof, Beneficiary shall be subrogated to all rights,
titles, liens, and security interests securing the payment of any debt, claim,
tax, or assessment for the payment of which Beneficiary may make an advance, or
which Beneficiary may pay.
     (b) Right of Entry. Beneficiary may, prior or subsequent to the institution
of any foreclosure proceedings, enter upon the Mortgaged Property, or any part
thereof, and take exclusive possession of the Mortgaged Property and of all
books, records, and accounts relating thereto and to exercise without
interference from Grantor any and all rights which Grantor has with respect to
the management, possession, operation, protection, or preservation of the
Mortgaged Property, including without limitation the right to rent the same for
the account of Grantor and to deduct from such Rents all costs, expenses, and
liabilities of every character incurred by Beneficiary in collecting such Rents
and in managing, operating, maintaining, protecting, or preserving the Mortgaged
Property and to apply the remainder of such Rents on the Indebtedness in such
manner as

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Beneficiary may elect. All such costs, expenses, and liabilities incurred by
Beneficiary in collecting such Rents and in managing, operating, maintaining,
protecting, or preserving the Mortgaged Property, if not paid out of Rents as
hereinabove provided, shall constitute a demand obligation owing by Grantor and
shall bear interest from the date of expenditure until paid at the Default Rate,
all of which shall constitute a portion of the Indebtedness. If necessary to
obtain the possession provided for above, Beneficiary may invoke any and all
legal remedies to dispossess Grantor, including specifically one or more actions
for forcible entry and detainer, trespass to try title, and restitution. In
connection with any action taken by Beneficiary pursuant to this subsection,
neither Beneficiary nor any Secured Creditor shall be liable for any loss
sustained by Grantor resulting from any failure to let the Mortgaged Property,
or any part thereof, or from any other act or omission of Beneficiary in
managing the Mortgaged Property unless such loss is caused by the willful
misconduct of Beneficiary, nor shall Beneficiary be obligated to perform or
discharge any obligation, duty, or liability under any Space Lease or under or
by reason hereof or the exercise of rights or remedies hereunder. Should
Beneficiary incur any such liability, the amount thereof, including without
limitation costs, expenses, and attorneys’ fees, together with interest thereon
from the date of expenditure until paid at the Default Rate, shall be secured
hereby, and Grantor shall reimburse Beneficiary therefor immediately upon
demand. Nothing in this subsection shall impose any duty, obligation, or
responsibility upon Beneficiary or any Secured Creditor for the control, care,
management, leasing, or repair of the Mortgaged Property, nor for the carrying
out of any of the terms and conditions of any such Space Lease; nor shall it
operate to make Beneficiary or any Secured Creditor responsible or liable for
any waste committed on the Mortgaged Property by the tenants or by any other
parties, or for any Hazardous Substance on or under the Mortgaged Property, or
for any dangerous or defective condition of the Mortgaged Property or for any
negligence in the management, leasing, upkeep, repair, or control of the
Mortgaged Property resulting in loss or injury or death to any tenant, licensee,
employee, or stranger. Grantor hereby assents to, ratifies, and confirms any and
all actions of Beneficiary with respect to the Mortgaged Property taken under
this subsection.
     The remedies in this subsection are in addition to other remedies available
to Beneficiary and the exercise of the remedies in this subsection shall not be
deemed to be an election of nonjudicial or judicial remedies otherwise available
to Beneficiary. The remedies in this Article VII are available under and
governed by the real property Laws of North Carolina and are not governed by the
personal property Laws of North Carolina, including but not limited to, the
power to dispose of personal property in a commercially reasonable manner under
Section 9.610 of the UCC. No action by Beneficiary, taken pursuant to this
subsection, shall be deemed to be an election to dispose of personal property
under Section 9.621 of the UCC. Any receipt of consideration received by
Beneficiary pursuant to this subsection shall be immediately credited against
the Indebtedness (in the order provided in the Loan Documents) and the value of
said consideration shall be treated like any other payment against the
Indebtedness.
     (c) Right to Accelerate. As provided in the Term Credit Agreement and the
Existing Credit Agreement and the other documents evidencing the Secured
Obligations, Beneficiary or Secured Creditors (in such number as may be required
by the Term Credit

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Agreement and the Existing Credit Agreement) may, without notice, demand,
presentment, notice of nonpayment or nonperformance, protest, notice of protest,
notice of intent to accelerate, notice of acceleration, or any other notice or
any other action, all of which are hereby waived by Grantor and all other
parties obligated in any manner whatsoever on the Indebtedness, declare the
entire unpaid balance of the Indebtedness immediately due and payable, and upon
such declaration, the entire unpaid balance of the Indebtedness shall be
immediately due and payable. The Term Credit Agreement and the Existing Credit
Agreement also provide for circumstances in which the Indebtedness is
automatically accelerated without any action by Beneficiary or any Secured
Creditor. The failure to exercise any remedy available to Beneficiary or any
Secured Creditor shall not be deemed to be a waiver of any rights or remedies of
Beneficiary or any Secured Creditor under the Loan Documents or any document
evidencing or governing the Secured Obligations, at law or in equity.
(d) Foreclosure-Power of Sale. Beneficiary may request Trustee to proceed with
foreclosure under the power of sale which is hereby conferred, such foreclosure
to be accomplished in accordance with the following provisions:
     (1) Public Sale. Trustee is hereby authorized and empowered, and it shall
be Trustee’s special duty, upon such request of Beneficiary, to sell the
Mortgaged Property, or any part thereof, in accordance with the applicable
requirements, at the time of the sale, of the statute or statutes governing
sales of North Carolina real property under powers of sale conferred by deeds of
trust or otherwise.
     (2) Right to Require Proof of Financial Ability and/or Cash Bid. At any
time during the bidding, Trustee may require a bidding party (A) to disclose its
full name, state and city of residence, occupation, and specific business office
location, and the name and address of the principal the bidding party is
representing (if applicable), and (B) to demonstrate reasonable evidence of the
bidding party’s financial ability (or, if applicable, the financial ability of
the principal of such bidding party), as a condition to the bidding party
submitting bids at the foreclosure sale. If any such bidding party (the
“Questioned Bidder”) declines to comply with Trustee’s requirement in this
regard, or if such Questioned Bidder does respond but Trustee, in Trustee’s sole
and absolute discretion, deems the information or the evidence of the financial
ability of the Questioned Bidder (or, if applicable, the principal of such
bidding party) to be inadequate, then Trustee may continue the bidding with
reservation; and in such event (1) Trustee shall be authorized to caution the
Questioned Bidder concerning the legal obligations to be incurred in submitting
bids, and (2) if the Questioned Bidder is not the highest bidder at the sale, or
if having been the highest bidder the Questioned Bidder fails to deliver the
cash purchase price payment promptly to Trustee, all bids by the Questioned
Bidder shall be null and void. Trustee may, in Trustee’s sole and absolute
discretion, determine that a credit bid may be in the best interest of Grantor
and Beneficiary, and elect to sell the Mortgaged Property for credit or for a
combination of cash and credit; provided, however, that Trustee shall have no
obligation to accept any bid except an all cash bid. In the event

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Trustee requires a cash bid and cash is not delivered within a reasonable time
after conclusion of the bidding process, as specified by Trustee, but in no
event later than 3:45 p.m. local time on the day of sale, then said contingent
sale shall be null and void, the bidding process may be recommenced, and any
subsequent bids or sale shall be made as if no prior bids were made or accepted.
     (3) Sale Subject to Unmatured Indebtedness. In addition to the rights and
powers of sale granted under the preceding provisions of this subsection, if
default is made in the payment of any installment or any performance of the
Indebtedness, Beneficiary may, at Beneficiary’s option, at once or at any time
thereafter while any matured installment remains unpaid, without declaring the
entire Indebtedness to be due and payable, orally or in writing direct Trustee
to enforce this trust and to sell the Mortgaged Property subject to such
unmatured Indebtedness and to the rights, powers, liens, security interests, and
assignments securing or providing recourse for payment of such unmatured
Indebtedness, in the same manner, all as provided in the preceding provisions of
this subsection. Sales made without maturing the Indebtedness may be made
hereunder whenever there is a default in the payment of any installment or any
performance of the Indebtedness, without exhausting the power of sale granted
hereby, and without affecting in any way the power of sale granted under this
subsection, the unmatured balance of the Indebtedness or the rights, powers,
liens, security interests, and assignments securing or providing recourse for
payment or any performance of the Indebtedness.
     (4) Partial Foreclosure. Sale of a part of the Mortgaged Property shall not
exhaust the power of sale, but sales may be made from time to time until the
Indebtedness is finally paid and performed in full and the Obligations are
performed and discharged in full. It is intended by each of the foregoing
provisions of this subsection that Trustee may, after any request or direction
by Beneficiary, sell not only the Land and the Improvements, but also the
Fixtures and Personalty and other interests constituting a part of the Mortgaged
Property or any part thereof, along with the Land and the Improvements or any
part thereof, as a unit and as a part of a single sale, or may sell at any time
or from time to time any part or parts of the Mortgaged Property separately from
the remainder of the Mortgaged Property. It shall not be necessary to have
present or to exhibit at any sale any of the Mortgaged Property.
     (5) Trustee’s Deeds. After any sale under this subsection, Trustee shall
make good and sufficient deeds, assignments, and other conveyances to the
purchaser or purchasers thereunder in the name of Grantor, conveying the
Mortgaged Property or any part thereof so sold to the purchaser or purchasers
with general warranty of title by Grantor. It is agreed that in any deeds,
assignments or other conveyances given by Trustee, any and all statements of
fact or other recitals therein made as to the identity of Beneficiary, the
occurrence or existence of any Event of Default, the notice of intention to
accelerate, or acceleration of, the maturity of the Indebtedness, the request to
sell, notice of sale, time, place, terms and manner of sale, and receipt,
distribution, and application of

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the money realized therefrom, the due and proper appointment of a substitute
trustee, and without being limited by the foregoing, any other act or thing
having been duly done by or on behalf of Beneficiary or by or on behalf of
Trustee, shall be taken by all courts of law and equity as prima facie evidence
that such statements or recitals state true, correct, and complete facts and are
without further question to be so accepted, and Grantor does hereby ratify and
confirm any and all acts that Trustee may lawfully do in the premises by virtue
hereof.
     (e) Beneficiary’s Judicial Remedies. Beneficiary, or Trustee, upon written
request of Beneficiary, may proceed by suit or suits, at law or in equity, to
enforce the payment and performance of the Indebtedness and the performance and
discharge of the Obligations in accordance with the terms hereof, of the Notes,
and the other Loan Documents, to foreclose the liens and security interests of
this Deed of Trust as against all or any part of the Mortgaged Property, and to
have all or any part of the Mortgaged Property sold under the judgment or decree
of a court of competent jurisdiction. This remedy shall be cumulative of any
other nonjudicial remedies available to Beneficiary with respect to the Loan
Documents. Proceeding with a request or receiving a judgment for legal relief
shall not be or be deemed to be an election of remedies or bar any available
nonjudicial remedy of Beneficiary.
     (f) Beneficiary’s Right to Appointment of Receiver. Beneficiary, as a
matter of right and without regard to the sufficiency of the security for
repayment and performance of the Indebtedness and performance and discharge of
the Obligations, without notice to Grantor and without any showing of
insolvency, fraud, or mismanagement on the part of Grantor, and without the
necessity of filing any judicial or other proceeding other than the proceeding
for appointment of a receiver, shall be entitled to the appointment of a
receiver or receivers of the Mortgaged Property or any part thereof, and of the
Rents, and Grantor hereby irrevocably consents to the appointment of a receiver
or receivers. Any receiver appointed pursuant to the provisions of this
subsection shall have the usual powers and duties of receivers in such matters.
     (g) Beneficiary’s Uniform Commercial Code Remedies. Beneficiary may
exercise its rights of enforcement with respect to Fixtures and Personalty under
the UCC, and in conjunction with, in addition to or in substitution for the
rights and remedies under the UCC Beneficiary may and Grantor agrees as follows:
     (1) without demand or notice to Grantor, enter upon the Mortgaged Property
to take possession of, assemble, receive, and collect the Personalty, or any
part thereof, or to render it unusable; and
     (2) Beneficiary may require Grantor to assemble the Personalty and make it
available at a place Beneficiary designates which is mutually convenient to
allow Beneficiary to take possession or dispose of the Personalty; and
     (3) written notice mailed to Grantor as provided herein at least ten
(10) days prior to the date of public sale of the Personalty or prior to the
date after

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which private sale of the Personalty will be made shall constitute reasonable
notice; and
     (4) any sale made pursuant to the provisions of this subsection shall be
deemed to have been a public sale conducted in a commercially reasonable manner
if held contemporaneously with the sale of the other Mortgaged Property under
power of sale as provided herein upon giving the same notice with respect to the
sale of the Personalty hereunder as is required for such sale of the other
Mortgaged Property under power of sale, and such sale shall be deemed to be
pursuant to a security agreement covering both real and personal property under
Section 9.604 of the UCC; and
     (5) in the event of a foreclosure sale, whether made by Trustee under the
terms hereof, or under judgment of a court, the Personalty and the other
Mortgaged Property may, at the option of Beneficiary, be sold as a whole; and
     (6) it shall not be necessary that Beneficiary take possession of the
Personalty, or any part thereof, prior to the time that any sale pursuant to the
provisions of this subsection is conducted, and it shall not be necessary that
the Personalty or any part thereof be present at the location of such sale; and
     (7) prior to application of proceeds of disposition of the Personalty to
the Indebtedness, such proceeds shall be applied to the reasonable expenses of
retaking, holding, preparing for sale or lease, selling, leasing and the like,
and the reasonable attorneys’ fees and legal expenses incurred by Beneficiary;
and
     (8) after notification, if any, hereafter provided in this subsection,
Beneficiary may sell, lease, or otherwise dispose of the Personalty, or any part
thereof, in one or more parcels at public or private sale or sales, at
Beneficiary’s offices or elsewhere, for cash, on credit, or for future delivery.
Upon the request of Beneficiary, Grantor shall assemble the Personalty and make
it available to Beneficiary at any place designated by Beneficiary that is
reasonably convenient to Grantor and Beneficiary. Grantor agrees that
Beneficiary shall not be obligated to give more than ten (10) days’ written
notice of the time and place of any public sale or of the time after which any
private sale may take place and that such notice shall constitute reasonable
notice of such matters. Grantor shall be liable for all expenses of retaking,
holding, preparing for sale, or the like, and all attorneys’ fees, legal
expenses, and all other costs and expenses incurred by Beneficiary in connection
with the collection of the Indebtedness and the enforcement of Beneficiary’s and
Secured Creditors’ rights under the Loan Documents. Beneficiary shall apply the
proceeds of the sale of the Personalty against the Indebtedness in accordance
with the provisions of Section 7.4 of this Deed of Trust. Grantor shall remain
liable for any deficiency if the proceeds of any sale or disposition of the
Personalty are insufficient to pay and perform the Indebtedness in full. Grantor
waives all rights of marshalling in respect of the Personalty; and

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     (9) any and all statements of fact or other recitals made in any bill of
sale or assignment or other instrument evidencing any foreclosure sale
hereunder, the nonpayment of the Indebtedness, the occurrence of any Event of
Default, Beneficiary having declared all or a portion of such Indebtedness to be
due and payable, the notice of time, place, and terms of sale and of the
properties to be sold having been duly given, or any other act or thing having
been duly done by Beneficiary, shall be taken as prima facie evidence of the
truth of the facts so stated and recited; and
     (10) Beneficiary may appoint or delegate any one or more Persons as agent
to perform any act or acts necessary or incident to any sale held by
Beneficiary, including the sending of notices and the conduct of the sale, but
in the name and on behalf of Beneficiary.
     (h) Rights Relating to Space Leases and Rents. Grantor has, pursuant to
Article IX of this Deed of Trust, assigned, as collateral, to Beneficiary all
Rents under each of the Space Leases covering all or any portion of the
Mortgaged Property. Beneficiary, or Trustee on Beneficiary’s behalf, may at any
time, and without notice, either in person, by agent, or by receiver to be
appointed by a court, enter and take possession of the Mortgaged Property or any
part thereof, and in its own name, sue for or otherwise collect the Rents.
Grantor hereby agrees with Beneficiary, upon notice from Trustee or Beneficiary
to Grantor of the occurrence of an Event of Default, terminate the limited
license granted to Grantor in Section 9.2 hereof, and thereafter direct the
lessees under the Space Leases to pay direct to Beneficiary the Rents due and to
become due under the Space Leases and attorn in respect of all other obligations
thereunder direct to Beneficiary, or Trustee on Beneficiary’s behalf, without
any obligation on their part to determine whether an Event of Default does in
fact exist or has in fact occurred. All Rents collected by Beneficiary, or
Trustee acting on Beneficiary’s behalf, shall be applied as provided for in
Section 7.4 of this Deed of Trust; provided, however, that if the costs,
expenses, and attorneys’ fees shall exceed the amount of Rents collected, the
excess shall be added to the Indebtedness, shall bear interest at the Default
Rate, and shall be immediately due and payable. The entering upon and taking
possession of the Mortgaged Property, the collection of Rents, and the
application thereof as aforesaid shall not cure or waive any Event of Default or
notice of default, if any, hereunder nor invalidate any act done pursuant to
such notice, except to the extent any such default is fully cured. Failure or
discontinuance by Beneficiary, or Trustee on Beneficiary’s behalf, at any time
or from time to time, to collect said Rents shall not in any manner impair the
subsequent enforcement by Beneficiary, or Trustee on Beneficiary’s behalf, of
the right, power and authority herein conferred upon it. Nothing contained
herein, nor the exercise of any right, power, or authority herein granted to
Beneficiary, or Trustee on Beneficiary’s behalf, shall be, or shall be construed
to be, an affirmation by it of any tenancy, lease, or option, nor an assumption
of liability under, nor the subordination of, the lien or charge of this Deed of
Trust, to any such tenancy, lease, or option, nor an election of judicial
relief, if any such relief is requested or obtained as to Space Leases or Rents,
with respect to the Mortgaged Property or any other collateral given by Grantor
to Beneficiary. In addition, from time to time Beneficiary may elect, and notice
hereby is given to each lessee under any Space Lease, to subordinate the lien of
this Deed of Trust to any Space

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Lease by unilaterally executing and recording an instrument of subordination,
and upon such election the lien of this Deed of Trust shall be subordinate to
the Space Lease identified in such instrument of subordination; provided,
however, in each instance such subordination will not affect or be applicable
to, and expressly excludes any lien, charge, encumbrance, security interest,
claim, easement, restriction, option, covenant and other rights, titles,
interests or estates of any nature whatsoever with respect to all or any portion
of the Mortgaged Property to the extent that the same may have arisen or
intervened during the period between the recordation of this Deed of Trust and
the execution of the Space Lease identified in such instrument of subordination.
     (i) Other Rights. Beneficiary (i) may surrender the insurance policies
maintained pursuant to Section 4.7 hereof or any part thereof, and upon receipt
shall apply the unearned premiums as a credit on the Indebtedness, in accordance
with the provisions of Section 7.4 hereof, and, in connection therewith, Grantor
hereby appoints Beneficiary as agent and attorney-in-fact (which, together with
each other power of attorney herein granted, is coupled with an interest and is
therefore irrevocable) for Grantor to collect such premiums; and (ii) apply the
reserve for Impositions and insurance premiums, if any, required by the
provisions of this Deed of Trust, toward payment of the Indebtedness; and
(iii) shall have and may exercise any and all other rights and remedies which
Beneficiary may have at law or in equity, or by virtue of any Loan Document or
under the UCC, or otherwise.
     (j) Beneficiary as Purchaser. Beneficiary may be the purchaser of the
Mortgaged Property or any part thereof, at any sale thereof, whether such sale
be under the power of sale herein vested in Trustee or upon any other
foreclosure of the liens and security interests hereof, or otherwise, and
Beneficiary shall, upon any such purchase, acquire good title to the Mortgaged
Property so purchased, free of the liens and security interests hereof, unless
the sale was made subject to an unmatured portion of the Indebtedness.
Beneficiary, as purchaser, shall be treated in the same manner as any third
party purchaser and the proceeds of Beneficiary’s purchase shall be applied in
accordance with Section 7.4 of this Deed of Trust.
     7.2 Other Rights of Beneficiary. Should any part of the Mortgaged Property
come into the possession of Beneficiary, whether before or after default,
Beneficiary may (for itself or by or through other Persons) hold, lease, manage,
use, or operate the Mortgaged Property for such time and upon such terms as
Beneficiary may deem prudent under the circumstances (making such repairs,
alterations, additions, and improvements thereto and taking such other action as
Beneficiary may from time to time deem necessary or desirable) for the purpose
of preserving the Mortgaged Property or its value, pursuant to the order of a
court of appropriate jurisdiction or in accordance with any other rights held by
Beneficiary in respect of the Mortgaged Property. Grantor covenants to promptly
reimburse and pay to Beneficiary on demand, at the place where the Notes are
payable, the amount of all expenses (including without limitation the cost of
any insurance, Impositions, or other charges) incurred by Beneficiary in
connection with Beneficiary’s custody, preservation, use, or operation of the
Mortgaged Property, together with interest thereon from the date incurred by
Beneficiary at the Default Rate; and all such expenses, costs, taxes, interest,
and other charges shall be and become a part of the Indebtedness. It is agreed,
however, that the risk of loss or damage to the Mortgaged

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Property is on Grantor, and Beneficiary shall have no liability whatsoever for
decline in value of the Mortgaged Property, for failure to obtain or maintain
insurance, or for failure to determine whether insurance in force is adequate as
to amount or as to the risks insured. Possession by Beneficiary shall not be
deemed an election of judicial relief, if any such possession is requested or
obtained, with respect to any Mortgaged Property or collateral not in
Beneficiary’s possession.
     7.3 Possession After Foreclosure. If the liens or security interests hereof
shall be foreclosed by power of sale granted herein, by judicial action, or
otherwise, the purchaser at any such sale shall receive, as an incident to
purchaser’s ownership, immediate possession of the property purchased, and if
Grantor or Grantor’s successors shall hold possession of said property or any
part thereof subsequent to foreclosure, Grantor and Grantor’s successors shall
be considered as tenants at sufferance of the purchaser at foreclosure sale
(without limitation of other rights or remedies, at a reasonable rental per day,
due and payable daily, based upon the value of the portion of the Mortgaged
Property so occupied and sold to such purchaser), and anyone occupying such
portion of the Mortgaged Property, after demand is made for possession thereof,
shall be guilty of forcible detainer and shall be subject to eviction and
removal, forcible or otherwise, with or without process of Law, and all damages
by reason thereof are hereby expressly waived.
     7.4 Application of Proceeds. The proceeds from any sale, lease, or other
disposition made pursuant to this Article VII, or the proceeds from the
surrender of any insurance policies pursuant hereto, or any Rents collected by
Beneficiary from the Mortgaged Property, or the reserve for Impositions and
insurance premiums, if any, required by the provisions of this Deed of Trust or
sums received pursuant to Section 8.1 hereof, or proceeds from insurance which
Beneficiary elects to apply to the Indebtedness pursuant to Section 8.2 hereof,
shall be applied by Trustee, or by Beneficiary, as the case may be, to the
Indebtedness in the following order and priority: (i) to the payment of all
expenses of advertising, selling, and conveying the Mortgaged Property or part
thereof, and/or prosecuting or otherwise collecting Rents, proceeds, premiums,
or other sums including reasonable attorneys’ fees and a reasonable fee or
commission to Trustee, not to exceed five percent (5%) of the proceeds thereof
or sums so received; (ii) to the remainder of the Indebtedness in the order as
provided in the Term Credit Agreement and the Existing Credit Agreement;
(iii) the balance, if any and to the extent applicable, remaining after the full
and final payment of the Indebtedness and full performance and discharge of the
Obligations to the holder or beneficiary of any inferior liens covering the
Mortgaged Property, if any, in order of the priority of such inferior liens
(Trustee and Beneficiary shall hereby be entitled to rely exclusively upon a
commitment for title insurance issued to determine such priority); and (iv) the
cash balance, if any, to Grantor. The application of proceeds of sale or other
proceeds as otherwise provided herein shall be deemed to be a payment of the
Indebtedness like any other payment. The balance of the Indebtedness remaining
unpaid, if any, shall remain fully due and owing in accordance with the terms of
the Notes or the other Loan Documents.
     7.5 Abandonment of Sale. In the event a foreclosure hereunder is commenced
by Trustee in accordance with Subsection 7.1(d) hereof, at any time before the
sale, Trustee may abandon the sale, and Beneficiary may then institute suit for
the collection of the Indebtedness and for the foreclosure of the liens and
security interests hereof and of the Loan Documents. If Beneficiary should
institute a suit for the collection of the Indebtedness and for a foreclosure of
the liens and security interests, Beneficiary may, at any time before the entry
of a final judgment

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in said suit, dismiss the same and require Trustee to sell the Mortgaged
Property or any part thereof in accordance with the provisions of this Deed of
Trust.
     7.6 Payment of Fees. If the Notes or any other part of the Indebtedness
shall be collected or if any of the Obligations shall be enforced by legal
proceedings, whether through a probate or bankruptcy court or otherwise, or
shall be placed in the hands of an attorney for collection after maturity,
whether matured by the expiration of time or as provided in the Loan Documents
of other documents evidencing or governing the Secured Obligations or by an
option given to Beneficiary or Secured Creditors to mature same, or if
Beneficiary becomes a party to any suit where this Deed of Trust or the
Mortgaged Property or any part thereof is involved, Grantor agrees to pay
Beneficiary’s attorneys’ fees and expenses incurred, and such fees shall be and
become a part of the Indebtedness and shall bear interest from the date such
costs are incurred at the Default Rate.
     7.7 Miscellaneous.
     (a) In case Beneficiary shall have proceeded to invoke any right, remedy,
or recourse permitted under the Loan Documents and shall thereafter elect to
discontinue or abandon same for any reason, Beneficiary shall have the
unqualified right so to do and, in such event, Grantor and Beneficiary shall be
restored to their former positions with respect to the Indebtedness, the Loan
Documents, the Mortgaged Property or otherwise, and the rights, remedies,
recourses and powers of Beneficiary shall continue as if same had never been
invoked.
     (b) In addition to the remedies set forth in this Article, upon the
occurrence of an Event of Default, Beneficiary and Trustee shall, in addition,
have all other remedies available to them at law or in equity.
     (c) All rights, remedies, and recourses of Beneficiary granted in the
Notes, this Deed of Trust, the other Loan Documents, any other pledge of
collateral, or otherwise available at law or equity: (i) shall be cumulative and
concurrent; (ii) may be pursued separately, successively, or concurrently
against Grantor, the Mortgaged Property, or any one or more of them, at the sole
discretion of Beneficiary; (iii) may be exercised as often as occasion therefor
shall arise, it being agreed by Grantor that the exercise or failure to exercise
any of same shall in no event be construed as a waiver or release thereof or of
any other right, remedy, or recourse; (iv) shall be nonexclusive; (v) shall not
be conditioned upon Beneficiary exercising or pursuing any remedy in relation to
the Mortgaged Property prior to Beneficiary bringing suit to recover the
Indebtedness or suit on the Obligations; and (vi) in the event Beneficiary
elects to bring suit on the Indebtedness and/or the Obligations and obtains a
judgment against Grantor prior to exercising any remedies in relation to the
Mortgaged Property, all liens and security interests, including the lien of this
Deed of Trust, shall remain in full force and effect and may be exercised at
Beneficiary’s option.
     (d) Beneficiary may release, regardless of consideration, any part of the
Mortgaged Property without, as to the remainder, in any way impairing,
affecting, subordinating, or releasing the lien or security interests evidenced
by this Deed of Trust

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or the other Loan Documents or affecting the obligations of Grantor or any other
party to pay or perform the Indebtedness or perform and discharge the
Obligations. For payment or performance of the Indebtedness, Beneficiary may
resort to any of the collateral therefor in such order and manner as Beneficiary
may elect. No collateral heretofore, herewith, or hereafter taken by Beneficiary
shall in any manner impair or affect the collateral given pursuant to the Loan
Documents, and all collateral shall be taken, considered, and held as
cumulative.
     (e) Grantor hereby irrevocably and unconditionally waives and releases:
(i) all benefits that might accrue to Grantor by virtue of any present or future
Law exempting the Mortgaged Property from attachment, levy or sale on execution
or providing for any appraisement, valuation, stay of execution, exemption from
civil process, redemption, or extension of time for payment; (ii) all notices of
any Event of Default or of Trustee’s exercise of any right, remedy, or recourse
provided for under the Loan Documents; and (iii) any right to a marshalling of
assets or a sale in inverse order of alienation.
     (f) Grantor and Beneficiary mutually agree that there are no, nor shall
there be any, implied covenants of good faith and fair dealing or other similar
covenants or agreements in this Deed of Trust and the other Loan Documents. All
agreed contractual duties are set forth in this Deed of Trust, the Notes, and
the other Loan Documents.
     (g) The remedies in this Article VII are available under and governed by
the real property Laws of North Carolina and are not governed by the personal
property Laws of North Carolina, including but not limited to, the power to
dispose of personal property in a commercially reasonable manner under
Section 9.610 of the UCC.
     7.8 Waiver of Deficiency Statute.
     (a) In the event an interest in any of the Mortgaged Property is foreclosed
upon pursuant to a judicial or nonjudicial foreclosure sale, Grantor agrees as
follows. To the extent permitted by Law, Grantor agrees that Beneficiary and
Secured Creditors shall be entitled to seek a deficiency judgment from Grantor
and any other party obligated on the Notes and the other Indebtedness equal to
the difference between the amount owing on the Notes and the other Indebtedness
and the amount for which the Mortgaged Property was sold pursuant to judicial or
nonjudicial foreclosure sale. Grantor expressly recognizes that this section
constitutes a waiver of any Law which would otherwise permit Grantor and other
Persons against whom recovery of deficiencies is sought or each Guarantor
independently (even absent the initiation of deficiency proceedings against
them) to present competent evidence of the fair market value of the Mortgaged
Property as of the date of the foreclosure sale and offset against any
deficiency the amount by which the foreclosure sale price is determined to be
less than such fair market value. Grantor further recognizes and agrees that
this waiver creates an irrebuttable presumption that the foreclosure sale price
is equal to the fair market value of the Mortgaged Property for purposes of
calculating deficiencies owed by Grantor, Guarantor, and others against whom
recovery of a deficiency is sought.

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     (b) Alternatively, in the event the waiver provided for in subsection (a)
above is determined by a court of competent jurisdiction to be unenforceable,
the following shall be the basis for the finder of fact’s determination of the
fair market value of the Mortgaged Property as of the date of the foreclosure
sale in any legal proceedings with respect to the Mortgaged Property: (i) the
Mortgaged Property shall be valued in an “as is” condition as of the date of the
foreclosure sale, without any assumption or expectation that the Mortgaged
Property will be repaired or improved in any manner before a resale of the
Mortgaged Property after foreclosure; (ii) the valuation shall be based upon an
assumption that the foreclosure purchaser desires a resale of the Mortgaged
Property for cash promptly (but no later than twelve (12) months) following the
foreclosure sale; (iii) all reasonable closing costs customarily borne by the
seller in commercial real estate transactions should be deducted from the gross
fair market value of the Mortgaged Property, including, without limitation,
brokerage commissions, title insurance, a survey of the Mortgaged Property, tax
prorations, attorneys’ fees, and marketing costs; (iv) the gross fair market
value of the Mortgaged Property shall be further discounted to account for any
estimated holding costs associated with maintaining the Mortgaged Property
pending sale, including, without limitation, utilities expenses, property
management fees, taxes and assessments (to the extent not accounted for in
(iii) above), and other maintenance, operational and ownership expenses; and
(v) any expert opinion testimony given or considered in connection with a
determination of the fair market value of the Mortgaged Property must be given
by Persons having at least five (5) years experience in appraising property
similar to the Mortgaged Property and who have conducted and prepared a complete
written appraisal of the Mortgaged Property taking into consideration the
factors set forth above.
ARTICLE VIII
SPECIAL PROVISIONS
     8.1 Condemnation Proceeds. Beneficiary shall be entitled to receive any and
all sums which may be awarded and become payable to Grantor for condemnation of
the Mortgaged Property or any part thereof, for public or quasi-public use, or
by virtue of private sale in lieu thereof, and any sums which may be awarded or
become payable to Grantor for damages caused by public works or construction on
or near the Mortgaged Property. All such sums are hereby assigned to
Beneficiary, and Grantor shall, upon request of Beneficiary, make, execute,
acknowledge, and deliver any and all additional assignments and documents as may
be necessary from time to time to enable Beneficiary to collect and receipt for
any such sums. Beneficiary shall not be, under any circumstances, liable or
responsible for failure to collect, or exercise diligence in the collection of,
any of such sums. Any sums received by Beneficiary as a result of condemnation
shall be applied to the Indebtedness in accordance with the provisions of
Section 7.4 hereof.
     8.2 Insurance Proceeds. The proceeds of any and all insurance upon the
Mortgaged Property (other than proceeds of general public liability insurance)
shall be collected by Beneficiary, and Beneficiary shall have the option, in
Beneficiary’s sole discretion, to apply any proceeds so collected either to the
restoration of the Mortgaged Property, in the amounts,

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manner, method and pursuant to such requirements and documents as Beneficiary
may require, or to the liquidation of the Indebtedness in accordance with the
provisions of Section 7.4 hereof.
     8.3 Reserve for Impositions and Insurance Premiums. At Beneficiary’s
request, Grantor shall create a fund or reserve for the payment of all insurance
premiums and Impositions against or affecting the Mortgaged Property by paying
to Beneficiary, on the first day of each calendar month prior to the maturity of
the Notes, a sum equal to the premiums that will next become due and payable on
the insurance policies covering Grantor, the Mortgaged Property or any part
thereof or such other insurance policies required hereby or by the Loan
Documents, plus Impositions next due on the Mortgaged Property or any part
thereof as estimated by Beneficiary, less all sums paid previously to
Beneficiary therefor, divided by the number of months to elapse before one month
prior to the date when each of such premiums and Impositions will become due,
such sums to be held by Beneficiary without interest to Grantor, unless interest
is required by applicable Law, for the purposes of paying such premiums and
Impositions. Any excess reserve shall, at the discretion of Beneficiary, be
credited by Beneficiary on subsequent reserve payments or subsequent payments to
be made on the Notes by the maker thereof and the other Indebtedness, and any
deficiency shall be paid by Grantor to Beneficiary on or before the date when
Beneficiary demands such payment to be made, but in no event after the date when
such premiums and Impositions shall become delinquent. In the event there exists
a deficiency in such fund or reserve at any time when Impositions or insurance
premiums are due and payable, Beneficiary may, but shall not be obligated to,
advance the amount of such deficiency on behalf of Grantor and such amounts so
advanced shall become a part of the Indebtedness, shall be immediately due and
payable, and shall bear interest at the Default Rate from the date of such
advance through and including the date of repayment. Transfer of legal title to
the Mortgaged Property shall automatically transfer to the holder of legal title
to the Mortgaged Property the interest of Grantor in all sums deposited with
Beneficiary under the provisions hereof or otherwise.
     8.4 INDEMNITY. GRANTOR SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS
BENEFICIARY, TRUSTEE AND SECURED CREDITORS, THEIR PARENTS, SUBSIDIARIES,
DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS, SUCCESSORS, AND ASSIGNS
FROM AND AGAINST ANY AND ALL LIABILITY, DAMAGE, LOSS, COST, OR EXPENSE
(INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES AND EXPENSES), ACTION, CAUSE OF
ACTION, PROCEEDING, CLAIM OR DISPUTE INCURRED OR SUFFERED BY BENEFICIARY,
TRUSTEE OR A SECURED CREDITOR, WHETHER VOLUNTARILY OR INVOLUNTARILY INCURRED OR
SUFFERED, IN RESPECT OF THE FOLLOWING:
     (1) ANY LITIGATION CONCERNING THIS DEED OF TRUST, THE OTHER LOAN DOCUMENTS
OR THE MORTGAGED PROPERTY, OR ANY INTEREST OF GRANTOR, TRUSTEE OR BENEFICIARY
THEREIN, OR THE RIGHT OF OCCUPANCY THEREOF BY GRANTOR OR BENEFICIARY, WHETHER OR
NOT ANY SUCH LITIGATION IS PROSECUTED TO A FINAL, NON-APPEALABLE JUDGMENT;

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     (2) ANY DISPUTE, INCLUDING DISPUTES AS TO THE DISBURSEMENT OF PROCEEDS OF
THE NOTES NOT YET DISBURSED OR THE USE OF ANY PROCEEDS OF INDEBTEDNESS, AMONG OR
BETWEEN ANY OF THE CONSTITUENT PARTIES OR OTHER PARTNERS OR VENTURERS OF GRANTOR
IF GRANTOR IS A GENERAL OR LIMITED PARTNERSHIP, OR AMONG OR BETWEEN ANY
EMPLOYEES, OFFICERS, DIRECTORS OR SHAREHOLDERS OF GRANTOR IF GRANTOR IS A
CORPORATION, OR AMONG OR BETWEEN ANY MEMBERS, TRUSTEES OR OTHER RESPONSIBLE
PARTIES IF GRANTOR IS AN ASSOCIATION, TRUST OR OTHER ENTITY;
     (3) ANY ACTION TAKEN OR NOT TAKEN BY BENEFICIARY OR TRUSTEE WHICH IS
ALLOWED OR PERMITTED UNDER THIS DEED OF TRUST OR ANY OF THE OTHER LOAN DOCUMENTS
RELATING TO GRANTOR, THE MORTGAGED PROPERTY, ANY CONSTITUENT PARTIES OR
OTHERWISE IN CONNECTION WITH THE LOAN DOCUMENTS, INCLUDING WITHOUT LIMITATION,
THE PROTECTION OR ENFORCEMENT OF ANY LIEN, SECURITY INTEREST, ASSIGNMENT AND/OR
ENFORCEMENT OF THE ASSIGNMENT OF LEASES AND RENTS, OR OTHER RIGHT, REMEDY OR
RECOURSE CREATED OR AFFORDED BY THIS DEED OF TRUST OR THE OTHER LOAN DOCUMENTS;
     (4) THE USE, GENERATION, MANUFACTURE, PRODUCTION, STORAGE, RELEASE,
THREATENED RELEASE, DISCHARGE, DISPOSAL, OR PRESENCE OF A HAZARDOUS SUBSTANCE
ON, UNDER OR ABOUT THE MORTGAGED PROPERTY, WHETHER KNOWN OR UNKNOWN AT THE TIME
OF THE EXECUTION HEREOF, INCLUDING WITHOUT LIMITATION (i) ALL FORESEEABLE
CONSEQUENTIAL DAMAGES OF ANY SUCH USE, GENERATION, MANUFACTURE, PRODUCTION,
STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL, OR PRESENCE, AND
(ii) THE COSTS OF ANY REQUIRED OR NECESSARY ENVIRONMENTAL INVESTIGATION OR
MONITORING, ANY REPAIR, CLEANUP, OR DETOXIFICATION OF THE MORTGAGED PROPERTY,
AND THE PREPARATION AND IMPLEMENTATION OF ANY CLOSURE, REMEDIAL, OR OTHER
REQUIRED PLANS;
     (5) THE EXERCISE OF THE RIGHTS OR REMEDIES UNDER SECTION 7.1(b) HEREOF, AND
FROM ANY AND ALL CLAIMS AND DEMANDS WHATSOEVER WHICH MAY BE ASSERTED AGAINST
BENEFICIARY OR ANY SECURED CREDITOR BY REASON OF ANY ALLEGED OBLIGATIONS OR
UNDERTAKINGS ON ITS PART TO PERFORM OR DISCHARGE ANY OF THE TERMS, COVENANTS, OR
AGREEMENTS CONTAINED IN ANY SPACE LEASE; AND
     (6) ANY ACTION BROUGHT BY BENEFICIARY, TRUSTEE OR ANY SECURED CREDITOR
AGAINST GRANTOR UNDER THIS DEED OF

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TRUST OR THE OTHER LOAN DOCUMENTS, WHETHER OR NOT SUCH ACTION IS PROSECUTED TO A
FINAL, NON-APPEALABLE JUDGMENT.
BENEFICIARY AND/OR TRUSTEE MAY EMPLOY AN ATTORNEY OR ATTORNEYS TO PROTEST OR
ENFORCE ITS RIGHTS, REMEDIES AND RECOURSES UNDER THIS DEED OF TRUST AND THE
OTHER LOAN DOCUMENTS, AND TO ADVISE AND DEFEND BENEFICIARY AND/OR TRUSTEE WITH
RESPECT TO ANY SUCH ACTIONS AND OTHER MATTERS. GRANTOR SHALL REIMBURSE
BENEFICIARY AND/OR TRUSTEE FOR THEIR RESPECTIVE ATTORNEYS’ FEES AND EXPENSES
(INCLUDING EXPENSES AND COSTS FOR EXPERTS) IMMEDIATELY UPON RECEIPT OF A WRITTEN
DEMAND THEREFOR, WHETHER ON A MONTHLY OR OTHER TIME INTERVAL, AND WHETHER OR NOT
AN ACTION IS ACTUALLY COMMENCED OR CONCLUDED. ALL OTHER REIMBURSEMENT AND
INDEMNITY OBLIGATIONS HEREUNDER SHALL BECOME DUE AND PAYABLE WHEN ACTUALLY
INCURRED BY BENEFICIARY AND/OR TRUSTEE. ANY PAYMENTS NOT MADE WITHIN FIVE
(5) DAYS AFTER WRITTEN DEMAND THEREFOR SHALL BEAR INTEREST AT THE DEFAULT RATE
FROM THE DATE OF SUCH DEMAND UNTIL FULLY PAID. THE PROVISIONS OF THIS SECTION
8.4 SHALL SURVIVE REPAYMENT OF THE INDEBTEDNESS AND PERFORMANCE OF THE
OBLIGATIONS, THE RELEASE OF THE LIEN OF THIS DEED OF TRUST, ANY FORECLOSURE (OR
ACTION IN LIEU OF FORECLOSURE) AND THE EXERCISE BY BENEFICIARY OF ANY AND ALL
REMEDIES SET FORTH HEREIN OR IN THE LOAN DOCUMENTS.
     8.5 Subrogation. Grantor waives any and all right to claim, recover, or
subrogation against Beneficiary and Secured Creditors or their respective
officers, directors, employees, agents, attorneys, or representatives for loss
or damage to Grantor, the Mortgaged Property, Grantor’s property or the property
of others under Grantor’s control from any cause insured against or required to
be insured against by the provisions of the Loan Documents.
     8.6 Waiver of Setoff. The Indebtedness, or any part thereof, shall be paid
by Grantor without notice, demand, counterclaim, setoff, deduction, or defense
and without abatement, suspension, deferment, diminution, or reduction by reason
of: (i) any damage to, destruction of, or any condemnation or similar taking of
the Mortgaged Property; (ii) any restriction or prevention of or interference
with any use of the Mortgaged Property; (iii) any title defect or encumbrance or
any eviction from the Mortgaged Property by superior title or otherwise;
(iv) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation, or other like proceeding relating to Trustee,
Beneficiary, any Secured Creditor, or Grantor, or any action taken with respect
to this Deed of Trust by any trustee or receiver of Beneficiary, any Secured
Creditor or Grantor, or by any court, in any such proceeding; (v) any claim
which Grantor has or might have against Trustee, Beneficiary or any Secured
Creditor; (vi) any default or failure on the part of Beneficiary or any Secured
Creditor to perform or comply with any of the terms hereof or of any other
agreement with Grantor; or (vii) any other occurrence whatsoever, whether
similar or dissimilar to the foregoing, whether or not Grantor shall have notice
or knowledge of any of the foregoing. Except as expressly provided herein,
Grantor waives all rights now or hereafter conferred by statute or otherwise to
any abatement, suspension, deferment, diminution, or reduction of the
Indebtedness.

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     8.7 Setoff. Beneficiary and each Secured Creditor shall be entitled to
exercise both the rights of setoff and banker’s lien, if applicable, against the
interest of Grantor in and to each and every account and other property of
Grantor which are in the possession of Beneficiary or such Secured Creditor to
the full extent of the outstanding balance of the Indebtedness.
ARTICLE IX
ASSIGNMENT OF SPACE LEASES AND RENTS
     9.1 Assignment. For Ten Dollars ($10.00) and other good and valuable
consideration, including the Indebtedness, the receipt and sufficiency of which
are hereby acknowledged and confessed, Grantor has GRANTED, BARGAINED, SOLD, and
CONVEYED, and by these presents does GRANT, BARGAIN, SELL, and CONVEY unto
Beneficiary, as security for the payment and performance of the Indebtedness and
the performance and discharge of the Obligations, the Space Leases and the Rents
subject only to the Permitted Exceptions applicable thereto and the License
(herein defined); TO HAVE AND TO HOLD the Space Leases and the Rents unto
Beneficiary, forever, and Grantor does hereby bind itself, its successors, and
assigns to warrant and forever defend the title to the Space Leases and the
Rents unto Beneficiary against every Person whomsoever lawfully claiming or to
claim the same or any part thereof; provided, however, that if Grantor shall pay
or cause to be paid and performed the Indebtedness as and when same shall become
due and payable and shall perform and discharge or cause to be performed and
discharged the Obligations on or before the date same are to be performed and
discharged, then this assignment shall terminate and be of no further force and
effect, and all rights, titles, and interests conveyed pursuant to this
assignment shall become vested in Grantor without the necessity of any further
act or requirement by Grantor, Trustee, or Beneficiary.
     9.2 Limited License. Beneficiary hereby grants to Grantor a limited license
(the “License”), nonexclusive with the rights of Beneficiary reserved in
Section 9.4 hereof, to exercise and enjoy all incidences of the status of a
lessor of the Space Leases and the Rents, including without limitation, the
right to collect, demand, sue for, attach, levy, recover, and receive the Rents,
and to give proper receipts, releases, and acquittances therefor. Grantor hereby
agrees to receive all Rents and hold the same as a trust fund to be applied, and
to apply the Rents so collected, first to the payment and performance of the
Indebtedness, next to the payment of the Impositions, and then to the
performance and discharge of the Obligations. Thereafter, Grantor may use the
balance of the Rent collected in any manner not inconsistent with the Loan
Documents.
     9.3 Enforcement of Space Leases. So long as the License is in effect,
Grantor shall (i) submit any and all proposed Space Leases to Beneficiary for
approval prior to the execution thereof, (ii) duly and punctually perform and
comply with any and all representations, warranties, covenants, and agreements
expressed as binding upon the lessor under any Space Lease, (iii) maintain each
of the Space Leases in full force and effect during the term thereof,
(iv) appear in and defend any action or proceeding in any manner connected with
any of the Space Leases, (v) deliver to Beneficiary copies of all Space Leases,
and (vi) deliver to Beneficiary such further information, and execute and
deliver to Beneficiary such further assurances and assignments, with respect to
the Space Leases as Beneficiary may from time to

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time request. Without Beneficiary’s prior written consent, Grantor shall not
(i) do or knowingly permit to be done anything to impair the value of any of the
Space Leases, (ii) except for security or similar deposits, collect any of the
Rent more than one (1) month in advance of the time when the same becomes due
under the terms of any Space Lease, (iii) discount any future accruing Rents,
(iv) amend, modify, or terminate any of the Space Leases, or (v) assign or grant
a security interest in or to the License or any of the Space Leases and/or
Rents.
     9.4 No Merger of Estates. So long as any part of the Indebtedness and the
Obligations secured hereby remain unpaid and unperformed or undischarged, the
fee and leasehold estates to the Mortgaged Property shall not merge but rather
shall remain separate and distinct, notwithstanding the union of such estates
either in Grantor, Beneficiary, any lessee, or any third party purchaser or
otherwise.
ARTICLE X
SECURITY AGREEMENT
     10.1 Security Interest. This Deed of Trust (a) shall be construed as a deed
of trust on real property, and (b) shall also constitute and serve as a
“Security Agreement” on personal property within the meaning of, and shall
constitute until the grant of this Deed of Trust shall terminate as provided in
Article II hereof, a first and prior security interest under the UCC as to
property within the scope thereof and in the state where the Mortgaged Property
is located with respect to the Personalty, Fixtures, Contracts, Space Leases and
Rents. To this end, Grantor has GRANTED, BARGAINED, CONVEYED, ASSIGNED,
TRANSFERRED, and SET OVER, and by these presents does GRANT, BARGAIN, CONVEY,
ASSIGN, TRANSFER and SET OVER, unto Trustee and Beneficiary, a security interest
in all of Grantor’s right, title and interest in, to, under and with respect to
the Personalty, Fixtures, Contracts, Space Leases, and Rents to secure the full
and timely payment and performance of the Indebtedness and the full and timely
performance and discharge of the Obligations. It is the intent of Grantor,
Beneficiary, and Trustee that this Deed of Trust encumber all Space Leases and
Rents, that all items contained in the definition of “Space Leases” and “Rents”
which are included within the UCC be covered by the security interest granted in
this Article X, and that all items contained in the definition of “Space Leases”
and “Rents” which are excluded from the UCC be covered by the provisions of
Article II and Article IX hereof.
     10.2 Financing Statements. Grantor hereby agrees with Beneficiary to
authenticate and deliver to Beneficiary, in form and substance satisfactory to
Beneficiary, such “Financing Statements” and such further assurances as
Beneficiary may, from time to time, reasonably consider necessary to create,
perfect, and preserve Beneficiary’s security interest herein granted, and
Beneficiary may cause such statements and assurances to be recorded and filed,
at such times and places as may be required or permitted by Law to so create,
perfect, and preserve such security interest.
     10.3 Fixture Filing. This Deed of Trust shall also constitute a “fixture
filing” for the purposes of the UCC. All or part of the Mortgaged Property are
or are to become fixtures; information concerning the security interest herein
granted may be obtained from either party at the address of such party set forth
herein. For purposes of the security interest herein granted,

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the address of debtor (Grantor) is set forth in the first paragraph of this Deed
of Trust and the address of the secured party (Beneficiary) is set forth in
Article I hereof. Grantor does own an interest of record in the Mortgaged
Property. The complete and current name of the owner of all fee interest in the
Land is as stated in Exhibit A.
ARTICLE XI
CONCERNING THE TRUSTEE
     11.1 No Required Action. Trustee shall not be required to take any action
toward the execution and enforcement of the trust hereby created or to
institute, appear in, or defend any action, suit, or other proceeding in
connection therewith where, in his opinion, such action would be likely to
involve him in expense or liability, unless requested so to do by a written
instrument signed by Beneficiary and, if Trustee so requests, unless Trustee is
tendered security and indemnity satisfactory to Trustee against any and all
cost, expense, and liability arising therefrom. Trustee shall not be responsible
for the execution, acknowledgment, or validity of the Loan Documents, or for the
proper authorization thereof, or for the sufficiency of the lien and security
interest purported to be created hereby, and Trustee makes no representation in
respect thereof or in respect of the rights, remedies, and recourses of
Beneficiary.
     11.2 Certain Rights. With the approval of Beneficiary, Trustee shall have
the right to take any and all of the following actions: (i) to select, employ,
and advise with counsel (who may be, but need not be, counsel for Beneficiary)
upon any matters arising hereunder, including the preparation, execution, and
interpretation of the Loan Documents, and shall be fully protected in relying as
to legal matters on the advice of counsel, (ii) to execute any of the trusts and
powers hereof and to perform any duty hereunder either directly or through his
agents or attorneys, (iii) to select and employ, in and about the execution of
his duties hereunder, suitable accountants, engineers and other experts, agents
and attorneys-in-fact, either corporate or individual, not regularly in the
employ of Trustee, and Trustee shall not be answerable for any act, default,
negligence, or misconduct of any such accountant, engineer or other expert,
agent or attorney-in-fact, if selected with reasonable care, or for any error of
judgment or act done by Trustee in good faith, or be otherwise responsible or
accountable under any circumstances whatsoever, except for Trustee’s gross
negligence or bad faith, and (iv) any and all other lawful action as Beneficiary
may instruct Trustee to take to protect or enforce Beneficiary’s rights
hereunder. Trustee shall not be personally liable in case of entry by Trustee,
or anyone entering by virtue of the powers herein granted to Trustee, upon the
Mortgaged Property for debts contracted for or liability or damages incurred in
the management or operation of the Mortgaged Property. Trustee shall have the
right to rely on any instrument, document, or signature authorizing or
supporting any action taken or proposed to be taken by Trustee hereunder,
believed by Trustee in good faith to be genuine. Trustee shall be entitled to
reimbursement for expenses incurred by Trustee in the performance of Trustee’s
duties hereunder and to reasonable compensation for such of Trustee’s services
hereunder as shall be rendered. Grantor will, from time to time, pay the
compensation due to Trustee hereunder and reimburse Trustee for, and save
Trustee harmless against, any and all liability and expenses which may be
incurred by Trustee in the performance of Trustee’s duties.

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     11.3 Retention of Money. All moneys received by Trustee shall, until used
or applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated in any manner from any other moneys
(except to the extent required by applicable Law) and Trustee shall be under no
liability for interest on any moneys received by Trustee hereunder.
     11.4 Successor Trustees. Trustee may resign by the giving of notice of such
resignation in writing or verbally to Beneficiary. If Trustee shall die, resign,
or become disqualified from acting in the execution of this trust, or if, for
any reason, Beneficiary shall prefer to appoint a substitute trustee or multiple
substitute trustees, or successive substitute trustees or successive multiple
substitute trustees, to act instead of the aforenamed Trustee, Beneficiary shall
have full power to appoint a substitute trustee (or, if preferred, multiple
substitute trustees) in succession who shall succeed (and if multiple substitute
trustees are appointed, each of such multiple substitute trustees shall succeed)
to all the estates, rights, powers, and duties of the aforenamed Trustee. Such
appointment may be executed by any authorized agent of Beneficiary, and if such
Beneficiary be a corporation and such appointment be executed in its behalf by
any officer of such corporation, such appointment shall be conclusively presumed
to be executed with authority and shall be valid and sufficient without proof of
any action by the board of directors or any superior officer of the corporation.
Grantor hereby ratifies and confirms any and all acts which the aforenamed
Trustee, or his successor or successors in this trust, shall do lawfully by
virtue hereof. If multiple substitute Trustees are appointed, each of such
multiple substitute Trustees shall be empowered and authorized to act alone
without the necessity of the joinder of the other multiple substitute trustees,
whenever any action or undertaking of such substitute trustees is requested or
required under or pursuant to this Deed of Trust or applicable Law.
     11.5 Perfection of Appointment. Should any deed, conveyance, or instrument
of any nature be required from Grantor by any Trustee or substitute Trustee to
more fully and certainly vest in and confirm to Trustee or substitute Trustee
such estates, rights, powers, and duties, then, upon request by Trustee or
substitute Trustee, any and all such deeds, conveyances and instruments shall be
made, executed, acknowledged, and delivered and shall be caused to be recorded
and/or filed by Grantor.
     11.6 Succession Instruments. Any substitute Trustee appointed pursuant to
any of the provisions hereof shall, without any further act, deed, or
conveyance, become vested with all the estates, properties, rights, powers, and
trusts of its or his predecessor in the rights hereunder with like effect as if
originally named as Trustee herein; but nevertheless, upon the written request
of Beneficiary or of the substitute Trustee, Trustee ceasing to act shall
execute and deliver any instrument transferring to such substitute Trustee, upon
the trusts herein expressed, all the estates, properties, rights, powers, and
trusts of Trustee so ceasing to act, and shall duly assign, transfer and deliver
any of the property and moneys held by such Trustee to the substitute Trustee so
appointed in Trustee’s place.
     11.7 No Representation by Trustee or Beneficiary. By accepting or approving
anything required to be observed, performed, or fulfilled or to be given to
Trustee or Beneficiary pursuant to the Loan Documents, including without
limitation, any officer’s certificate, balance sheet, statement of profit and
loss or other financial statement, survey, appraisal, or insurance

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policy, neither Trustee nor Beneficiary shall be deemed to have warranted,
consented to, or affirmed the sufficiency, legality, effectiveness, or legal
effect of the same, or of any term, provision, or condition thereof, and such
acceptance or approval thereof shall not be or constitute any warranty or
affirmation with respect thereto by Trustee or Beneficiary.
ARTICLE XII
MISCELLANEOUS
     12.1 Release. If the Indebtedness is finally paid and performed in full in
accordance with the terms of this Deed of Trust, the Notes, and the other Loan
Documents and Secured Creditors shall have no further obligation to extend
credit under and pursuant to the provisions in the Loan Documents, and if
Grantor shall well and truly perform each and every of the Obligations to be
performed and discharged in accordance with the terms of this Deed of Trust, the
Notes and the other Loan Documents, then this conveyance shall become null and
void and be released at Grantor’s request and expense.
     12.2 Performance at Grantor’s Expense. Subject to the provisions of Section
12.11 hereof, Grantor shall (i) pay all legal fees incurred by Beneficiary in
connection with the preparation of the Loan Documents (including any amendments
thereto or consents, releases, or waivers granted thereunder); (ii) reimburse
Beneficiary, promptly upon demand, for all amounts expended, advanced, or
incurred by Beneficiary to satisfy any obligation of Grantor under the Loan
Documents, which amounts shall include all court costs, attorneys’ fees
(including, without limitation, for trial, appeal, or other proceedings), fees
of auditors and accountants and other investigation expenses reasonably incurred
by Beneficiary in connection with any such matters; and (iii) any and all other
costs and expenses of performing or complying with any and all of the
Obligations. Except to the extent that costs and expenses are included within
the definition of “Indebtedness,” the payment of such costs and expenses shall
not be credited, in any way and to any extent, against any installment on or
portion of the Indebtedness.
     12.3 Survival of Obligations. Each and all of the Obligations shall survive
the execution and delivery of the Loan Documents and the consummation of the
loan called for therein and shall continue in full force and effect until the
Indebtedness shall have been finally paid and performed in full; provided,
however, that nothing contained in this Section shall limit the obligations of
Grantor as otherwise set forth herein.
     12.4 Recording and Filing. Grantor will cause the Loan Documents (requested
by Beneficiary) and all amendments and supplements thereto and substitutions
therefor to be recorded, filed, re-recorded, and refiled in such manner and in
such places as Trustee or Beneficiary shall reasonably request, and will pay all
such recording, filing, re-recording and refiling taxes, documentary stamp
taxes, fees, and other charges.
     12.5 Notices. All notices or other communications required or permitted to
be given pursuant to this Deed of Trust shall be in writing and shall be
considered as properly given if (i) mailed by first class United States mail,
postage prepaid, registered or certified with return receipt requested, (ii) by
delivering same in person to the intended addressee, (iii) by delivery to an
independent third party commercial delivery service for same day or next day
delivery and

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providing for evidence of receipt at the office of the intended addressee, or
(iv) by prepaid telegram, telex, or telefacsimile to the addressee. Notice so
mailed shall be effective upon its deposit with the United States Postal Service
or any successor thereto; notice sent by such a commercial delivery service
shall be effective upon delivery to such commercial delivery service; notice
given by personal delivery shall be effective only if and when received by the
addressee; and notice given by other means shall be effective only if and when
received at the office or designated place or machine of the intended addressee.
For purposes of notice, the addresses of the parties shall be as set forth
herein; provided, however, that either party shall have the right to change its
address for notice hereunder to any other location within the continental United
States by the giving of thirty (30) days’ notice to the other party in the
manner set forth herein.
     12.6 Covenants Running with the Land. All Obligations contained in this
Deed of Trust and the other Loan Documents are intended by Grantor, Beneficiary,
and Trustee to be, and shall be construed as, covenants running with the
Mortgaged Property until the lien of this Deed of Trust has been fully released
by Beneficiary.
     12.7 Successors and Assigns. Subject to the provisions of Section 6.8
hereof, all of the terms of the Loan Documents shall apply to, be binding upon,
and inure to the benefit of the parties thereto, their successors, assigns,
heirs, and legal representatives, and all other Persons claiming by, through, or
under them.
     12.8 No Waiver; Severability. Any failure by Trustee or Beneficiary to
insist, or any election by Trustee or Beneficiary not to insist, upon strict
performance by Grantor or others of any of the terms, provisions, or conditions
of the Loan Documents shall not be deemed to be a waiver of same or of any other
terms, provisions, or conditions thereof, and Trustee or Beneficiary shall have
the right at any time or times thereafter to insist upon strict performance by
Grantor or others of any and all of such terms, provisions, and conditions. The
Loan Documents are intended to be performed in accordance with, and only to the
extent permitted by, all applicable Legal Requirements. If any provision of any
of the Loan Documents or the application thereof to any person or circumstance
shall, for any reason and to any extent, be invalid or unenforceable, then
neither the remainder of the instrument in which such provision is contained nor
the application of such provision to other persons or circumstances nor the
other instruments referred to herein shall be affected thereby, but rather shall
be enforced to the greatest extent permitted by Law.
     12.9 Counterparts. To facilitate execution, this Deed of Trust may be
executed in as many counterparts as may be convenient or required. It shall not
be necessary that the signature and acknowledgment of, or on behalf of, each
party, or that the signature and acknowledgment of all Persons required to bind
any party, appear on each counterpart. All counterparts shall collectively
constitute a single instrument. It shall not be necessary in making proof of
this Deed of Trust to produce or account for more than a single counterpart
containing the respective signatures and acknowledgment of, or on behalf of,
each of the parties hereto. Any signature and acknowledgment page to any
counterpart may be detached from such counterpart without impairing the legal
effect of the signatures and acknowledgments thereon and thereafter attached to
another counterpart identical thereto except having attached to it additional
signature and acknowledgment pages.

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     12.10 Applicable Law. This Deed of Trust shall be governed by and construed
according to the Laws of the State of North Carolina from time to time in effect
except to the extent preempted by United States federal Law.
     12.11 Interest Provisions.
     (a) Savings Clause. It is expressly stipulated and agreed to be the intent
of Grantor and Beneficiary at all times to comply strictly with the applicable
Law governing the maximum rate or amount of interest payable on the Notes or the
Related Indebtedness (or applicable United States federal Law to the extent that
it permits Beneficiary of any Secured Creditor to contract for, charge, take,
reserve or receive a greater amount of interest than under applicable Law). If
the applicable Law is ever judicially interpreted so as to render usurious any
amount (i) contracted for, charged, taken, reserved or received pursuant to the
Notes, any of the other Loan Documents or any other communication or writing by
or between or among Grantor and Beneficiary and any Secured Creditor related to
the transaction or transactions that are the subject matter of the Loan
Documents, (ii) contracted for, charged or received by reason of any
acceleration the maturity of the Notes and/or the Related Indebtedness, or
(iii) Grantor will have paid or Beneficiary or any Secured Creditor will have
received by reason of any voluntary prepayment by Grantor of the Notes and/or
the Related Indebtedness, then it is Grantor’s, Beneficiary’s and Secured
Creditors’ express intent that all amounts charged in excess of the Highest
Lawful Rate shall be automatically cancelled, ab initio, and all amounts in
excess of the Highest Lawful Rate theretofore collected by Beneficiary and
Secured Creditors shall be credited on the principal balance of the Notes and/or
the Related Indebtedness (or, if the Notes and all Related Indebtedness have
been or would thereby be paid in full, refunded to Grantor), and the provisions
of the Notes and the other Loan Documents immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the
applicable Law, but so as to permit the recovery of the fullest amount otherwise
called for hereunder and thereunder; provided, however, if the Notes and/or the
Related Indebtedness have been paid in full before the end of the stated term of
the Notes and/or the Related Indebtedness, then Grantor, Beneficiary and Secured
Creditors agree that Beneficiary and Secured Creditors shall, with reasonable
promptness after Beneficiary or any Secured Creditor discovers or is advised by
Grantor that interest was received in an amount in excess of the Highest Lawful
Rate, either refund such excess interest to Grantor and/or credit such excess
interest against the Notes and/or any Related Indebtedness then owing by Grantor
to Beneficiary and Secured Creditors. Grantor hereby agrees that as a condition
precedent to any claim seeking usury penalties against Beneficiary or any
Secured Creditor, Grantor will provide written notice to Beneficiary and Secured
Creditors, advising Beneficiary and Secured Creditors in reasonable detail of
the nature and amount of the violation, and Beneficiary and Secured Creditors
shall have sixty (60) days after receipt of such notice in which to correct such
usury violation, if any, by either refunding such excess interest to Grantor or
crediting such excess interest against the Notes and/or the Related Indebtedness
then owing by Grantor to Beneficiary and Secured Creditors. All sums contracted
for, charged or received by Beneficiary and Secured Creditors for the use,
forbearance or detention of any debt evidenced by the Notes and/or the Related

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Indebtedness shall, to the extent permitted by applicable Law, be amortized or
spread, using the actuarial method, throughout the stated term of the Notes
and/or the Related Indebtedness (including any and all renewal and extension
periods) until payment in full so that the rate or amount of interest on account
of the Notes and/or the Related Indebtedness does not exceed the Highest Lawful
Rate from time to time in effect and applicable to the Notes and/or the Related
Indebtedness for so long as debt is outstanding. Notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents, it is not the
intention of Beneficiary or any Secured Creditor to accelerate the maturity of
any interest that has not accrued at the time of such acceleration or to collect
unearned interest at the time of such acceleration.
     (b) Definitions. As used herein, the term “Highest Lawful Rate” means at
the particular time in question the maximum rate of interest which, under
applicable Law, any Secured Creditor is then permitted to charge on the
Indebtedness. If the maximum rate of interest which, under applicable Law, any
Secured Creditor is permitted to charge on the Indebtedness shall change after
the date hereof, the Highest Lawful Rate shall be automatically increased or
decreased, as the case may be, from time to time as of the effective time of
each change in the Highest Lawful Rate without notice to Grantor, taking into
account all Charges (as herein defined) made in connection with the transaction
evidenced by the Notes and the other Loan Documents. As used herein, the term
“Charges” shall mean all fees, charges and/or any other things of value, if any,
contracted for, charged, received, taken or reserved by Beneficiary or any
Secured Creditor in connection with the transactions relating to the Notes and
the other Loan Documents, which are treated as interest under applicable Law. As
used herein, the term “Related Indebtedness” shall mean any and all debt paid or
payable by Grantor to Beneficiary or any Secured Creditor pursuant to the Loan
Documents or any other agreement evidencing or governing the Secured Obligations
or any other communication or writing by or between Grantor and Beneficiary or
any Secured Creditor related to the transaction or transactions that are the
subject matter of the Loan Documents, except such debt which has been paid or is
payable by Grantor to Secured Creditors under the Notes.
     12.12 Subrogation. If any or all of the proceeds of the Notes or other
Indebtedness have been used to extinguish, extend or renew any indebtedness
heretofore existing against the Mortgaged Property, then, to the extent of such
funds so used, Beneficiary shall be subrogated to all of the rights, claims,
liens, titles, and interests existing against the Mortgaged Property heretofore
held by, or in favor of, the holder of such indebtedness and such former rights,
claims, liens, titles, and interests, if any, are not waived but rather are
continued in full force and effect in favor of Beneficiary and are merged with
the lien and security interest created herein as cumulative security for the
repayment and performance of the Indebtedness and the performance and discharge
of the Obligations.
     12.13 Rights Cumulative. Trustee and Beneficiary shall have all rights,
remedies, and recourses granted in the Loan Documents and available at law or in
equity (including, without limitation, those granted by the UCC and applicable
to the Mortgaged Property or any portion thereof), and the same (i) shall be
cumulative and concurrent, (ii) may be pursued separately, successively, or
concurrently against Grantor or others obligated for the Indebtedness or any
part thereof, or against any one or more of them, or against the Mortgaged
Property, at the sole

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discretion of Beneficiary, (iii) may be exercised as often as occasion therefor
shall arise, it being agreed by Grantor that the exercise, discontinuance of the
exercise of or failure to exercise any of the same shall in no event be
construed as a waiver or release thereof or of any other right, remedy, or
recourse, and (iv) are intended to be, and shall be, nonexclusive. All rights
and remedies of Trustee and Beneficiary hereunder and under the other Loan
Documents shall extend to any period after the initiation of foreclosure
proceedings, judicial or otherwise, with respect to the Mortgaged Property.
     12.14 Payments. Remittances in payment of any part of the Indebtedness
other than in the required amount in funds immediately available at the place
where the Notes are payable shall not, regardless of any receipt or credit
issued therefor, constitute payment until the required amount is actually
received by Beneficiary or any Secured Creditor in funds immediately available
at the place where the Notes are payable (or such other place as Beneficiary, in
Beneficiary’s sole discretion, may have established by delivery of written
notice thereof to Grantor) and shall be made and accepted subject to the
condition that any check or draft may be handled for collection in accordance
with the practice of the collecting bank or banks. Acceptance by Beneficiary or
any Secured Creditor of any payment in an amount less than the amount then due
shall be deemed an acceptance on account only, and the failure to pay the entire
amount then due shall be and continue to be an Event of Default.
     12.15 Exceptions to Covenants. Grantor shall not be deemed to be permitted
to take any action or to fail to take any action with respect to any particular
covenant or condition contained herein or in any of the Loan Documents if the
action or omission would result in the breach of any other covenant or condition
contained herein or in any of the Loan Documents which has not been specifically
waived or consented to by Beneficiary, nor shall Beneficiary be deemed to have
consented to any such act or omission if the same would provide cause for
acceleration of the Indebtedness as a result of the breach of any other covenant
or condition contained herein or in any of the Loan Documents which has not been
specifically waived or consented to by Beneficiary.
     12.16 Reliance. Grantor recognizes and acknowledges that in entering into
the transaction evidenced by the Loan Documents, extending credit to create
Secured Obligations and accepting this Deed of Trust, Beneficiary and Secured
Creditors are expressly and primarily relying on the truth and accuracy of the
foregoing warranties and representations set forth in Article III hereof without
any obligation to investigate the Mortgaged Property and notwithstanding any
investigation of the Mortgaged Property by Beneficiary or any Secured Creditor;
that such reliance exists on the part of Beneficiary and Secured Creditors prior
hereto; that such warranties and representations are a material inducement to
Beneficiary and Secured Creditors in extending credit evidenced by the Loan
Documents, extending credit to create Secured Obligations and accepting of this
Deed of Trust; and that Beneficiary and Secured Creditors would not be willing
to extend credit evidenced by the Loan Documents, extending credit to create
Secured Obligations and accept this Deed of Trust in the absence of any of such
warranties and representations.
     12.17 Change of Security. Any part of the Mortgaged Property may be
released, regardless of consideration, by Beneficiary from time to time without
impairing, subordinating, or affecting in any way the lien, security interest,
and other rights hereof against the remainder.

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The lien, security interest, and other rights granted hereby shall not be
affected by any other security taken for the Indebtedness or Obligations, or any
part thereof. The taking of additional collateral, or the amendment, extension,
renewal, or rearrangement of the Indebtedness or Obligations, or any part
thereof, shall not release or impair the lien, security interest, and other
rights granted hereby, or affect the liability of any endorser or guarantor or
improve the right of any junior lienholder; and this Deed of Trust, as well as
any instrument given to secure any amendment, extension, renewal, or
rearrangement of the Indebtedness or Obligations, or any part thereof, shall be
and remain a first and prior lien, except as otherwise provided herein, on all
of the Mortgaged Property not expressly released until the Indebtedness is fully
and finally paid and performed and the Obligations are fully performed and
discharged.
     12.18 Headings. The Article, Section, and Subsection entitlements hereof
are inserted for convenience of reference only and shall in no way alter,
modify, or define, or be used in construing the text of such Articles, Sections,
or Subsections.
     12.19 Entire Agreement; Amendment. THIS DEED OF TRUST AND THE OTHER LOAN
DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. The provisions
hereof and the other Loan Documents may be amended or waived only by an
instrument in writing signed by Grantor and Beneficiary.
     12.20 Waiver of Right to Trial by Jury. GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT,
PROCEEDING, OR COUNTERCLAIM THAT RELATES TO OR ARISES OUT OF ANY OF THE LOAN
DOCUMENTS OR THE ACTS OR FAILURE TO ACT OF OR BY BENEFICIARY OR ANY SECURED
CREDITOR IN THE ENFORCEMENT OF ANY OF THE TERMS OR PROVISIONS OF THIS DEED OF
TRUST OR THE OTHER LOAN DOCUMENTS.

The Remainder of This Page is Intentionally Left Blank.

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     EXECUTED as of the date first above written.

            POWERSECURE, INC.
      By:    /s/ Christopher T. Hutter        Christopher T. Hutter        Chief
Financial Officer    

STATE OF NORTH CAROLINA
COUNTY OF                                         
     I                                         , a Notary Public of
                     County, State of North Carolina, certify that Christopher
T. Hutter (the “Signatory”) personally came before me this day and acknowledged
that he is Chief Financial Officer of PowerSecure, Inc., a Delaware corporation,
and that he, in such capacity and being authorized to do so, executed the
foregoing on behalf of the corporation.
     I certify that the Signatory personally appeared before me this day, and
(check one of the following and mark through all blank lines or spaces in the
certificate)

         
 
  ___   (I have personal knowledge of the identity of the Signatory); or
 
  ___   (I have seen satisfactory evidence of the Signatory’s identity, by a
current state or federal identification with the Signatory’s photograph in the
form of:

(check one of the following)

         
 
  ___   a driver’s license or
 
  ___   in the form of                                         ); or

         
 
  ___   (a credible witness has sworn to the identity of the Signatory).

     The Signatory acknowledged to me that he voluntarily signed the foregoing
instrument for the purpose stated and in the capacity indicated.
     Witness my hand and official stamp or seal this                      day of
                                          ,                     .

                                              Notary Public
   
 
  Print Name:                           [Note: Notary Public must sign exactly
as on notary seal]         My Commission Expires:            
 
     
 
 
                        E [NOTARY SEAL] (MUST BE FULLY LEGIBLE)    

DEED OF TRUST - Signature Page -

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EXHIBIT “A”
Land Description
Name of owner of fee title to Land: PowerSecure, Inc.

EXHIBIT “A”, Land Description - Solo Page

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EXHIBIT “B”
Permitted Exceptions
[NONE]

EXHIBIT “B”, Permitted Exceptions - Page 1