Exhibit 10.28

 

MORTGAGE AND SECURITY AGREEMENT

 

This Mortgage and Security Agreement (the “Mortgage”), dated 8th day
of June 2012, between MT. V PROPERTY HOLDINGS, LLC (hereinafter referred to as
“Mortgagor”) whose mailing address is 3050 Peachtree Road, NW, Suite 355, Two
Buckhead Plaza, Atlanta, Georgia 30305, and Economic Development Corporation of
Fulton County , the address of which is 5534 Old National Highway,  College
Park, GA 30349, (hereinafter “Mortgagee”).

 

W I T N E S S E T H:

 

MORTGAGOR HEREBY IRREVOCABLY GRANTS, BARGAINS, SELLS, TRANSFERS, ASSIGNS AND
CONVEYS TO MORTGAGEE WITH WARRANTY COVENANTS:

 

All that certain property and all buildings and all other improvements now
thereon or hereafter constructed thereon situated in the County of Stone, State
of Arkansas, described in Exhibit “A” attached hereto and made a part hereof by
reference, (commonly known as 706 Oak Grove Street, Mountain View, Arkansas
72560) (the “Premises”);

 

TOGETHER WITH all of the following which, with the Premises, are herein
collectively called the “Mortgaged Property”:

 

(a)           All appurtenances and all estate and rights of Mortgagor in and to
the Premises;

 

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(b)           All water and water rights, ditch and ditch rights, reservoir and
reservoir rights, stock or interests in irrigation or ditch companies,
royalties, minerals, oil and gas rights, lease or leasehold interests owned by
Mortgagor, now or hereafter used or useful in connection with, appurtenant to or
related to the Premises;

 

(c)           All right, title and interest of Mortgagor in and to all streets,
roads and public places, opened or proposed, and all easements and rights of
way, public or private, now or hereafter used in connection with the Premises;

 

(d)           All improvements, fixtures, equipment, furniture, inventory and
other articles of personal property, and all rights therein, now owned or
hereafter acquired by Mortgagor and affixed to, placed upon or used in
connection with the Premises, and all replacements thereof and substitutions
therefor (as further described in paragraph A.7); and

 

(e)           All awards, payments or other amounts, including interest thereon,
which may be made with respect to the Mortgaged Property as a result of injury
to or decrease in the value of the Mortgaged Property or as a result of the
exercise of the power of condemnation or eminent domain.

 

(f)            All rights to the rents, issues and profits of the Mortgaged
Property as well as the fees, charges, accounts, or other payments for the use
or occupancy of rooms and other public facilities (provided, however, that the
Mortgagor shall be entitled to the collect and retain the above until a Default
has occurred hereunder).

 

FOR THE PURPOSE OF SECURING, in such order of priority as Mortgagee may elect,
the full and prompt payment, observance and performance when due, of all present
and future obligations and indebtedness of Mortgagor to Mortgagee, whether at
the stated time, by acceleration or otherwise, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, whether or not of
the same or similar class or of like kind to any indebtedness incurred
contemporaneously with the execution of this Mortgage, and whether now or
hereafter existing, or due or to become due, including without limitation, the
following:

 

(a)           Obligations under Promissory Note. Payment of any and all amounts
owed by Mortgagor under that certain Promissory Note from MT. V PROPERTY
HOLDINGS, LLC of even date herewith, in the original principal sum of One
Million Three Hundred Four Thousand and No/100 Dollars ($1,304,000.00) (the
“Note”) with a maturity date of July 1, 2032, with interest thereon according to
the provisions thereof, and all obligations of Mortgagor under, in connection
with and/or pursuant to this Mortgage granted by Mortgagor as security for
payment of the foregoing indebtedness; and

 

(b)           All Sums in Connection with Note and Mortgage.  All sums advanced
or expenses or costs paid or incurred (including without limitation reasonable
attorneys’ fees and other legal expenses) by Mortgagee pursuant to or in
connection with the Note, Guarantee or this Mortgage, plus any interest on such
sums, expenses or costs; and

 

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(c)           Any Changes to Note.  Any extensions, amendments, modifications,
changes, substitutions, restatements, renewals or increases or decreases to the
Note and all other indebtedness secured by this Mortgage; and

 

(d)           Any Additional Loans.  Such additional sums with interest thereon
as may be hereafter borrowed from Mortgagee, its successors or assigns, by the
then record owner or owners of the Mortgaged Property when evidenced by another
promissory note or notes, which are by the terms thereof secured by this
Mortgage; and

 

(e)           Any and All Other Indebtedness.  All other indebtedness,
obligations and liabilities of any kind, of Mortgagor to Mortgagee, now or
hereafter existing, absolute or contingent, direct or indirect, joint and/or
several, due or not due, secured or unsecured, arising by operation of law or
otherwise including indebtedness, obligations and liabilities to Mortgagee of
Mortgagor as a member of any partnership, syndicate or association or other
group and whether incurred by Mortgagor as principal, surety, endorser,
guarantor, accommodation party or otherwise, and any obligations which give rise
to an equitable remedy for breach of performance if such breach gives rise to an
obligation by Mortgagor to pay Mortgagee, and including any judgments in
connection with any of the foregoing.

 

This Mortgage shall secure all of such obligations up to the maximum principal
amount of One Million Three Hundred Four Thousand and No/100 Dollars
($1,304,000.00) and such amount may be advanced and repaid in whole or in part
and again advanced and repaid in whole or in part from time to time without
affecting the existence or priority of the lien of this Mortgage and this total
shall limit only the total amount of principal which may be secured by this
Mortgage at any one time.

 

A.            PROVISIONS RELATING TO THE MORTGAGED PROPERTY

 

A.1          Taxes and Governmental Claims and Other Liens.  Mortgagor agrees to
pay or cause to be paid, prior to the date they would become delinquent if not
paid, all taxes, assessments and governmental charges whatsoever levied upon or
assessed or charged against the Mortgaged Property, including, without
limitation, all water and sewer taxes, assessments and other charges, taxes,
impositions and rents, if any.  Mortgagor shall give to Mortgagee a receipt or
receipts, or certified copies thereof, evidencing every such payment by
Mortgagor, not later than forty-five (45) days after such payment is made but
not later than forty-five (45) days after such payment would become delinquent
if not paid.  Mortgagor also agrees to promptly and faithfully pay, satisfy, and
obtain the release of all other claims, liens, encumbrances, and contracts,
affecting or purporting to affect the title to, or which may be or appear to be
liens on, the Mortgaged Property or any part thereof, and all costs, charges,
interest and penalties on account thereof, including, without limitation, the
claims of all persons supplying labor or materials to the Mortgaged Property and
to give Mortgagee, upon demand, evidence satisfactory to Mortgagee of the
payment, satisfaction or release thereof.

 

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A.2          Insurance.  Mortgagor agrees to keep the Mortgaged Property insured
against loss or damage by fire and other casualty with extended coverage and
against any other risks or hazards which in the opinion of Mortgagee should be
insured against, and in any case against all risks which persons engaged in the
same business as is carried on at the Premises customarily insure against, with
the minimum amount of said insurance to be no less than the amount of the Note. 
Mortgagor shall also carry insurance against the risk of rental or business
interruption at the Premises, in an amount deemed satisfactory by Mortgagee. 
All of such insurance shall be placed with a company or companies and in such
form and with such endorsements as may be approved or required by Mortgagee. 
Loss under all such insurance shall be payable to Mortgagee in accordance with
this paragraph, and all such insurance policies shall be endorsed with a
standard, non-contributory Mortgagee’s clause in favor of Mortgagee. Mortgagor
shall also carry public liability insurance, in such form, amount and with such
companies as Mortgagee may from time to time require, naming Mortgagee as an
additional insured.  The policy or policies evidencing all insurance referred to
in this paragraph and receipts for the payments of premiums thereon shall be
delivered to and held by Mortgagee.  All such insurance policies shall contain a
provision requiring at least ten (10) days notice to Mortgagee prior to any
cancellation or modification.  Mortgagor shall give Mortgagee satisfactory
evidence of renewal of all such policies with premiums paid at least thirty (30)
days before expiration.  Mortgagor agrees to pay all premiums on such insurance
as they become due, and will not permit any condition to exist on or with
respect to the Mortgaged Property which would wholly or partially invalidate any
insurance thereon.  Mortgagee shall not by the fact of approving, disapproving,
accepting, preventing, obtaining or failing to obtain any such insurance, incur
any liability for the form or legal sufficiency or absence of insurance
contracts, solvency of insurers, or payment of losses, and Mortgagor hereby
expressly assumes full responsibility therefor and all liability, if any,
thereunder.  Effective upon any default hereunder, all of Mortgagor’s right,
title and interest in and to all such policies and any unearned premiums paid
thereon are hereby assigned to Mortgagee, which shall have the right, but not
the obligation, to assign the same to any purchaser of the Mortgaged Property at
any foreclosure sale or other disposition thereof.  The requirements of
Mortgagee for insurance under the provisions of this paragraph may be modified
or amended in whole or in part by Mortgagee, in its reasonable discretion, and
Mortgagor agrees, upon any expiration of any existing policy or policies of
insurance, to provide a replacement policy or policies which shall meet such
amended or modified insurance standards.   In the event of a loss,  Mortgagor
shall give immediate written notice to the insurance carrier and Mortgagee. 
Mortgagor hereby appoints Mortgagee its attorney-in-fact for the purposes
hereinafter set out, and authorizes and empowers Mortgagee, at Mortgagee’s
option and in Mortgagee’s sole discretion as attorney-in-fact for Mortgagor, to
make proof of loss, to adjust and prosecute any action arising from such
insurance policies, to collect and receive insurance proceeds, and to deduct
therefrom Mortgagee’s expenses incurred in the collection of such proceeds. 
Mortgagor understands and agrees that the power of attorney hereby granted to
Mortgagee is a power coupled with an interest and is irrevocable until
Mortgagee’s interest hereunder is terminated by the payment and performance of
all of Mortgagor’s obligations and indebtedness secured hereby.  In the event of
any insured damage to or destruction of the Mortgaged Property or any part
thereof (herein called an “Insured Casualty”), if (A) in the reasonable judgment
of Mortgagee, the Mortgaged Property can be restored within ten (10) months
after insurance proceeds are made available to an economic unit not less
valuable and not less useful than the same was prior to the

 

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Insured Casualty, and after such restoration will adequately secure the
outstanding balance of the Indebtedness, and (B) no Event of Default
(hereinafter defined) shall have occurred and be then continuing, then the
proceeds of insurance may, in Mortgagee’s sole discretion, be applied to
reimburse Mortgagor for the cost of restoring, repairing, replacing or
rebuilding the Mortgaged Property or part thereof subject to Insured Casualty,
as provided below; and Mortgagor hereby covenants and agrees forthwith to
commence and diligently to prosecute such restoring, repairing, replacing or
rebuilding; provided, however, in any event Mortgagor shall pay all costs (and
if required by Mortgagee, Mortgagor shall deposit the total thereof with
Mortgagee in advance) of such restoring, repairing, replacing or rebuilding in
excess of the net proceeds of insurance made available pursuant to the terms
hereof.  Notwithstanding the above, the proceeds of insurance collected upon any
Insured Casualty shall, at the option of Mortgagee, in its sole discretion, be
applied to the payment of the Indebtedness, whether or not then due, or applied
to reimburse Mortgagor for the cost of restoring, repairing, replacing or
rebuilding the Mortgaged Property or part thereof subject to the Insured
Casualty, in the manner set forth below.  Any such application to the
Indebtedness shall not be considered a voluntary prepayment requiring payment of
the prepayment consideration provided in the Note, and shall not reduce or
postpone any payments otherwise required pursuant to the Note, other than the
final payment on the Note.  If proceeds of insurance, if any, are made available
to Mortgagor for the restoring, repairing, replacing or rebuilding of the
Mortgaged Property, Mortgagor hereby convenants to restore, repair, replace or
rebuild the same to be of at least equal value and of substantially the same
character as prior to such damage or destruction, all to be effected in
accordance with applicable law and plans and specifications approved in advance
by Mortgagee.  If Mortgagor is entitled to reimbursement out of insurance
proceeds held by Mortgagee, such proceeds shall be disbursed from time to time
upon Mortgagee being furnished with (1) evidence satisfactory to it (which
evidence may include inspection[s] of the work performed) that the restoration,
repair, replacement and rebuilding covered by the disbursement has been
completed in accordance with plans and specifications approved by Mortgagee,
(2) evidence satisfactory to it of the estimated cost of completion of the
restoration, repair, replacement and rebuilding, (3) funds, or, at Mortgagee’s
option, assurances satisfactory to Mortgagee that such funds are available,
sufficient in addition to the proceeds of insurance to complete the proposed
restoration, repair, replacement and rebuilding, and (4) such architect’s
certificates, waivers of lien, contractor’s sworn statements, title insurance
endorsements, bonds, plats of survey and such other evidences of cost, payment
and performance as Mortgagee may reasonably require and approve; and Mortgagee
may, in any event, require that all plans and specifications for such
restoration, repair, replacement and rebuilding be submitted to and approved by
Mortgagee prior to commencement of work.  With respect to disbursements to be
made by Mortgagee:  (A) no payment made prior to the final completion of the
restoration, repair, replacement and rebuilding shall exceed ninety percent
(90%) of the value of the work performed from time to time:  (B) funds other
than proceeds of insurance shall be disbursed prior to disbursement of such
proceeds; and (C) at all times, the undisbursed balance of such proceeds
remaining in the hands of Mortgagee, together with funds deposited for that
purpose or irrevocably committed to the satisfaction of Mortgagee by or on
behalf of Mortgagor for that purpose, shall be at least sufficient in the
reasonable judgment of Mortgagee to pay for the cost of completion of the
restoration, repair, replacement or rebuilding, free and clear of all liens or
claims for lien and the costs.  Any surplus which may remain out of insurance
proceeds held by Mortgagee after payment of such costs of restoration,

 

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repair, replacement or rebuilding shall be paid to any party entitled thereto. 
In no event shall Mortgagee assume any duty or obligation for the adequacy, form
or content of any such plans and specifications, nor for the performance,
quality or workmanship of any restoration, repair, replacement and rebuilding. 
Notwithstanding anything to the contrary contained herein, the proceeds of
insurance reimbursed to Mortgagor in accordance with the terms and provisions of
this Mortgage shall be reduced by the reasonable costs (if any) incurred by
Mortgagee in the adjustment and collection thereof and in the reasonable costs
incurred by Mortgagee of paying out such proceeds (including, without
limitation, reasonable attorney’s fees and costs paid to third parties for
inspecting the restoration, repair, replacement and rebuilding and reviewing the
plans and specifications therefor).  If the insurance proceeds are applied to
the payment of the sums secured by this Mortgage, any such application of
proceeds to principal shall be in such order as Mortgagee may determine and, if
after so applying such insurance proceeds Mortgagee reasonably determines the
remaining security to be inadequate to secure the remaining indebtedness,
Mortgagor shall upon written demand from Mortgagee prepay on principal such an
amount as will reduce the remaining indebtedness to a balance for which adequate
security is present.

 

A.3          Condemnation and Other Awards.  If the Mortgaged Property or any
part thereof is taken or diminished in value, or if a consent settlement is
entered, by or under threat of such proceeding, the award or settlement payable
to Mortgagor by virtue of its interest in the Mortgaged Property shall be, and
by these presents is, assigned, transferred and set over unto, and to be held by
Mortgagee subject to the lien and security interest of this Mortgage, and
disbursed at Mortgagee’s option, (a) to hold all or any portion of such proceeds
to be used to reimburse Mortgagor for the costs of reconstruction or repair of
the Mortgaged Property, or (b) to apply all or any portion of such proceeds to
the payment of the sums secured by this Mortgage, whether or not then due. In
the event of a taking of the Mortgaged Property or any part thereof (herein
called a “Condemnation”), if (A) in the reasonable judgment of Mortgagee, the
Mortgaged Property can be restored within ten (10) months after the proceeds of
the condemnation proceeds are made available to an economic unit not less
valuable (including an assessment by Mortgagee of the impact of the termination
of any Leases due to such Condemnation) and not less useful than the same was
prior to the Condemnation, and after such restoration will adequately secure the
outstanding balance of the Indebtedness, and (B) no Event of Default
(hereinafter defined) shall have occurred and be then continuing, then the
proceeds may, in Mortgagee’s sole discretion, be applied to reimburse Mortgagor
for the cost of restoring, repairing, replacing or rebuilding the Mortgaged
Property or part thereof subject to the Condemnation, as provided below; and
Mortgagor hereby covenants and agrees forthwith to commence and diligently to
prosecute such restoring, repairing, replacing or rebuilding; provided, however,
in any event Mortgagor shall pay all costs (and if required by Mortgagee,
Mortgagor shall deposit the total thereof with Mortgagee in advance) of such
restoring, repairing, replacing or rebuilding in excess of the net proceeds of
the Condemnation made available pursuant to the terms hereof.  Notwithstanding
the above, the proceeds collected upon any Condemnation shall, at the option of
Mortgagee, in its sole discretion, be applied to the payment of the
Indebtedness, whether or not then due, or applied to reimburse Mortgagor for the
cost of restoring, repairing, replacing or rebuilding the Mortgaged Property or
part thereof subject to the Condemnation, in the manner set forth below.  Any
such application to the Indebtedness shall not

 

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be considered a voluntary prepayment requiring payment of the prepayment
consideration provided in the Note, and shall not reduce or postpone any
payments otherwise required pursuant to the Note, other than the final payment
on the Note.  If proceeds of the Condemnation, if any, are made available to
Mortgagor for the restoring, repairing, replacing or rebuilding of the Mortgaged
Property, Mortgagor hereby covenants to restore, repair, replace or rebuild the
same to be of at least equal value and of substantially the same character as
prior to such damage or destruction, all to be effected in accordance with
applicable law and plans and specifications approved in advance by Mortgagee. 
If Mortgagor is entitled to reimbursement out of the proceeds of the
Condemnation held by Mortgagee, such proceeds shall be disbursed from time to
time upon Mortgagee being furnished with (1) evidence satisfactory to it (which
evidence may include inspection[s] of the work performed) that the restoration,
repair, replacement and rebuilding covered by the disbursement has been
completed in accordance with plans and specifications approved by Mortgagee,
(2) evidence satisfactory to it of the estimated cost of completion of the
restoration, repair, replacement and rebuilding, (3) funds, or, at Mortgagee’s
option, assurances satisfactory to Mortgagee that such funds are available,
sufficient in addition to the proceeds of Condemnation to complete the proposed
restoration, repair, replacement and rebuilding, and (4) such architect’s
certificates, waivers of lien, contractor’s sworn statements, title insurance
endorsements, bonds, plats of survey and such other evidences of cost, payment
and performance as Mortgagee may reasonably require and approve; and Mortgagee
may, in any event, require that all plans and specifications for such
restoration, repair, replacement and rebuilding be submitted to and approved by
Mortgagee prior to commencement of work.  With respect to disbursements to be
made by Mortgagee:  (A) no payment made prior to the final completion of the
restoration, repair, replacement and rebuilding shall exceed ninety percent
(90%) of the value of the work performed from time to time:  (B) funds other
than proceeds of the Condemnation shall be disbursed prior to disbursement of
such proceeds; and (C) at all times, the undisbursed balance of such proceeds
remaining in the hands of Mortgagee, together with funds deposited for that
purpose or irrevocably committed to the satisfaction of Mortgagee by or on
behalf of Mortgagor for that purpose, shall be at least sufficient in the
reasonable judgment of Mortgagee to pay for the cost of completion of the
restoration, repair, replacement or rebuilding, free and clear of all liens or
claims for lien and the costs.  Any surplus which may remain out of the
Condemnation proceeds held by Mortgagee after payment of such costs of
restoration, repair, replacement or rebuilding shall be paid to any party
entitled thereto.  In no event shall Mortgagee assume any duty or obligation for
the adequacy, form or content of any such plans and specifications, nor for the
performance, quality or workmanship of any restoration, repair, replacement and
rebuilding.  Notwithstanding anything to the contrary contained herein, the
proceeds of the Condemnation reimbursed to Mortgagor in accordance with the
terms and provisions of this Mortgage shall be reduced by the reasonable costs
(if any) incurred by Mortgagee in the adjustment and collection thereof and in
the reasonable costs incurred by Mortgagee of paying out such proceeds
(including, without limitation, reasonable attorney’s fees and costs paid to
third parties for inspecting the restoration, repair, replacement and rebuilding
and reviewing the plans and specifications therefor).  If the Condemnation
proceeds are applied to the payment of the sums secured by this Mortgage, any
such application of proceeds to principal shall be in such order as Mortgagee
may determine and, if after so applying such proceeds Mortgagee reasonably
determines the remaining security to be inadequate to secure the remaining
indebtedness, Mortgagor shall upon written demand from Mortgagee prepay on

 

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principal such an amount as will reduce the remaining indebtedness to a balance
for which adequate security is present.

 

A.4          Condition of Mortgaged Property.

 

(a)           Mortgagor agrees to properly care for and keep the Mortgaged
Property in good condition and repair.  Without the prior written consent of
Mortgagee, Mortgagor agrees not to cause or permit any building or improvement
which constitutes a part of the Premises to be removed, demolished or
structurally altered, in whole or in part, or any fixture or article of personal
property which constitutes a portion of the Mortgaged Property to be removed
(other than in the ordinary course of Mortgagor’s business), damaged or
destroyed.  Mortgagee consents to the removal and replacement of fixtures and
articles of personal property if such articles of personal property are
simultaneously replaced with fixtures and articles of equal or greater value,
that are free and clear of all liens other than that of Mortgagee’s, and if the
value of the Mortgaged Property is not diminished thereby.  Mortgagor agrees not
to abandon the Premises or leave the Premises unprotected, unguarded, vacant or
deserted, and not to cause or permit any waste to the buildings, improvements or
fixtures constituting any portion of the Mortgaged Property.  Mortgagor agrees
(i) to repair, restore and reconstruct in good and workmanlike manner to the
condition required hereby any improvement which constitutes a part of the
Mortgaged Property which may be damaged or destroyed, in accordance with the
provisions of Paragraph A.2 hereof (provided however, Mortgagor shall not be
required to so repair, restore or reconstruct if Mortgagee elects under
Paragraph A.2 to retain the insurance proceeds and apply them to the sums
secured by this Mortgage, and further provided, if Mortgagee elects to use such
proceeds to reimburse Mortgagor for the costs of such repair, restoration or
reconstruction, provided however, if such proceeds are not adequate, Mortgagor
shall deposit with Mortgagee such additional funds as may be required to
accomplish such repair, restoration or reconstruction);  (ii) not to permit any
lien of mechanics or materialmen to attach to the Mortgaged Property, provided,
however, that the filing of any such lien shall not constitute a default
hereunder if Mortgagor shall provide an adequate bond with respect to any such
lien, in accordance with applicable law or shall provide indemnification with
respect to such lien with security therefor acceptable to Mortgagee in
Mortgagee’s sole discretion; (iii) to comply with all laws, ordinances,
regulations or governmental orders affecting the Mortgaged Property or requiring
any alterations or improvements thereto; (iv) not to commit, suffer or permit
any act with respect to the Mortgaged Property in violation of law or of any
covenants, prior encumbrances, conditions or restrictions affecting the
Mortgaged Property; (v) to make or cause to be made from time to time all needed
or proper replacements, repairs and renewals; (vi) to perform all obligations
and pay all amounts as and when required to protect Mortgagor’s interest in the
Premises; and (vii) to do any other act or acts, all in a timely and proper
manner which from the character or use of the Mortgaged Property may be
reasonably necessary to protect and preserve the value of the Mortgaged
Property.  Mortgagor covenants and agrees that the Mortgaged Property shall be
used for a skilled nursing facility and for no other purpose without Mortgagee’s
prior written consent.

 

(b)           Mortgagee may, during normal business hours and upon reasonable
notice to Mortgagor, enter and inspect or protect the Mortgaged Property, in
person or by agent, in such

 

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manner and to such extent as it may deem necessary.  In the event that Mortgagor
fails to maintain the Mortgaged Property in the manner specified herein,
Mortgagee may, at its option, undertake such repairs or maintenance, for the
account of Mortgagor, as Mortgagee deems necessary.  The cost of any such
repairs or maintenance undertaken by Mortgagee shall become immediately due and
payable by Mortgagor to Mortgagee and Mortgagee shall be reimbursed therefor in
accordance with the provisions of Paragraph B.2 hereof.  The right of Mortgagee
to undertake such repairs or maintenance shall be optional, shall not impose any
duties on Mortgagee, and shall not be deemed to cure any Default under this
Mortgage for failure to maintain the Mortgaged Property in accordance with the
covenants herein.

 

A.5          Alterations and Additions.  Mortgagor agrees that, as to any
alteration, addition, construction or improvement to be made upon the Premises,
all plans and specifications therefor shall be prepared by or on behalf of
Mortgagor and shall be subject to Mortgagee’s written approval in advance of the
commencement of work; once commenced, all work thereunder shall be prosecuted
with due diligence; all construction thereof will be in substantial accordance
with the plans and specifications so approved and will comply with all laws,
ordinances or regulations made or promulgated by any governmental agency or
other lawful authority and with the rules of the applicable Board of Fire
Underwriters.  Should Mortgagor at any time fail to comply with any notice or
demand by any governmental agency, which alleges a failure to comply with any
such plan, specification, law, ordinance or regulation, such failure shall, at
Mortgagee’s option, constitute a default hereunder.

 

A.6          Status of Title.  Mortgagor represents and warrants that it is the
lawful owner of the Mortgaged Property in fee simple, subject to no liens or
encumbrances, except for covenants, conditions, restrictions, easements and
rights-of-way of record, if any.  Mortgagor represents and warrants that it has
full right, power and authority to convey and mortgage the Mortgaged Property
and to execute this Mortgage.  Mortgagor also agrees to protect, preserve and
defend its interest in the Mortgaged Property and title thereto, including full
performance of any prior claim or lien; to appear and defend this Mortgage in
any action or proceeding affecting or purporting to affect the Mortgaged
Property, the lien of this Mortgage thereon or any of the rights of Mortgagee
hereunder, and to pay all costs and expenses incurred by Mortgagee in connection
with any such action or proceeding, including, without limitation, reasonable
attorneys’ fees, whether any such action or proceeding progresses to judgment
and whether brought by or against Mortgagee, Mortgagor, or the Mortgaged
Property.  Mortgagee shall be reimbursed for any such costs and expenses in
accordance with the provisions of Paragraph B.2 hereof.  Mortgagee may, but
shall not be under any obligation to, appear or intervene in any such action or
proceeding and retain counsel therein and defend the same or otherwise take such
action therein as it may deem advisable or may settle or compromise the same
and, for any of such purposes, may expend and advance such sums of money as it
may deem necessary, and Mortgagee shall be reimbursed therefor in accordance
with the provisions of Paragraph B.2 hereof. Notwithstanding anything contained
herein, Mortgagee acknowledges a superior lien in favor of Metro City Bank in
the amount of $1,810,000.00.

 

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A.7          Personal Property Security Interest.

 

(a)           This Mortgage shall cover, and Mortgagor hereby grants to
Mortgagee a security interest in, all property now or hereafter affixed or
attached or incorporated upon the Mortgaged Property including without
limitation all furnaces, heating equipment, air conditioners, fans, water
heaters, pipes, ducts, wiring and electrical fixtures, conduits, plumbing,
sinks, partitions, restroom fixtures, light fixtures, windows and window
coverings, and floor, ceiling and wall coverings, and all replacements thereof
and substitutions therefor, which, to the fullest extent permitted by law shall
be deemed fixtures and a part of the real property.  In addition, this Mortgage
shall cover, and Mortgagor hereby grants to Mortgagee a security interest in: 
(i) all building materials, fixtures, equipment and other personal property to
be incorporated into any improvements constructed on the Premises; (ii) all
interest of Mortgagor in all goods, materials, supplies, fixtures, equipment,
machinery, furniture and furnishing and other personal property which are now or
hereafter affixed to, placed upon or used in connection with, the Premises, and
all replacements thereof, and substitutions therefor; (iii) all interest of
Mortgagor in all rents, issues and profits, as well as the fees, charges,
accounts, or other payments for the use or occupancy of rooms and other public
facilities, and insurance policies, insurance and condemnation awards and
proceeds, tradenames, trademarks and service marks, arising from or related to
the Premises and any other business conducted on the Premises; (iv) all of
Mortgagor’s interest in and rights pursuant to any franchise or licensing
agreement or other similar agreement with respect to the Premises but only to
the extent such grant does not violate any such agreement; and (v) all books,
records and files relating to, any of the foregoing.  The security interests
hereby granted are first and prior liens on the property described.  To the
extent any property covered by this Mortgage consists of rights in action or
personal property covered by the Uniform Commercial Code, this Mortgage
constitutes a Security Agreement and is intended to create a security interest
in such property in favor of Mortgagee.  This Mortgage shall be self-operative
with respect to such property, but Mortgagor agrees to execute and deliver on
demand such security agreements, financing statements and other instruments as
Mortgagee may request in order to manifest or perfect the lien hereof more
specifically upon any of such property.  If the lien of this Mortgage on any
property is subject to a prior security agreement covering such property, then
in the event of any default hereunder, all the right, title and interest of
Mortgagor in and to any and all deposits made in connection with the transaction
whereby such prior security agreement was made is hereby assigned to Mortgagee,
together with the benefit of any payments now or hereafter made in connection
with such transactions.

 

(b)           Mortgagor agrees that all property of every nature and
description, whether real or personal covered by this Mortgage, together with
all personal property covered by any separate security interests granted to
Mortgagee, are encumbered as one unit, and that upon default by Mortgagor under
the Note, or under this Mortgage or any security agreement given pursuant to
this paragraph, this Mortgage and such security interest, at Mortgagee’s option,
may be foreclosed and the security sold in the same proceedings, and all of the
Premises (both realty and personalty) may, at Mortgagee’s option, be sold as
such in one unit as a going business.  The filing of any financing statement
relating to any personal property or rights or interest generally or
specifically described herein shall not be construed to diminish or alter any of
Mortgagee’s rights or priorities hereunder.

 

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A.8          Severability.  Should any term, provision, covenant or condition of
this Mortgage be held to be void or invalid, the same shall not affect any other
term, provision, covenant or condition of this Mortgage, but the remainder
hereof shall be effective as though such term, provision, covenant or condition
had not been contained herein.

 

A.9          Usury Disclaimer.  Any provision contained herein or in the Note or
in any other instrument now or hereafter evidencing, securing or otherwise
relating to any indebtedness secured by this Mortgage to the contrary
notwithstanding, neither Mortgagee nor the holder of any such indebtedness shall
be entitled to receive or collect, nor shall Mortgagor be obligated to pay,
interest on any of the secured indebtedness in excess of the maximum rate of
interest at the particular time in question, if any, which, under applicable
law, Mortgagee is then permitted to charge Mortgagor (herein the “Maximum Rate”)
provided that the Maximum Rate shall be automatically increased or decreased as
the case may be, without notice to Mortgagor from time to time as of the
effective time of each change in the Maximum Rate, and if any provision herein
or in the Note or in such other instrument shall ever be construed or held to
permit the collection or to require the payment of any amount of interest in
excess of that permitted by applicable law, the provisions of this Paragraph A.9
shall control and shall override any contrary or inconsistent provision herein
or in the Note or in such other instrument.  The intention of the parties being
to conform strictly to the usury limitations under applicable law, the Note,
this Mortgage, and each other instrument now or hereafter evidencing or relating
to any indebtedness secured by this Mortgage shall be held subject to reduction
to the maximum amount allowed under said applicable law as now or hereafter
construed by the courts having jurisdiction, and any payment by Mortgagor over
the Maximum Rate shall be applied to reduce the principal amount due and owing
to Mortgagee.

 

A.10        Impounds.  Upon an Event of Default, Mortgagor shall, if requested
by Mortgagee, deposit with Mortgagee or Mortgagee’s designee on each monthly
payment date as set forth in the Note one-twelfth (1/12) of the reasonably
estimated amount of real estate taxes assessed or to be assessed against the
Mortgaged Property for the then current year, together with one-twelfth (1/12)
of the reasonably estimated total of all insurance premiums required to be paid
for the then current year, as estimated by Mortgagee, together with any extra
amount necessary so that the next installments of real property taxes and
insurance premiums may be paid from the deposit.  Such moneys shall at proper
times be progressively returned to Mortgagor for use in the actual payment of
said taxes and said insurance premiums or, at the sole election of Mortgagee,
Mortgagee may use said moneys in actual payment of such taxes and premiums, but
nothing in this paragraph shall release Mortgagor from its obligations to pay
said taxes as the same become due and payable under the provisions hereof and to
maintain in force all insurance policies as required hereby.  All impounds
required under this paragraph shall be deposited in a non-interest bearing
account of Mortgagee, to be withdrawn by Mortgagee at such times and in such
amounts as shall be deemed appropriate by Mortgagee.  All amounts deposited
under this paragraph are hereby assigned to Mortgagee as additional security for
all indebtedness secured by this Mortgage, and so long as any Default as set
forth herein including a default in the payment of any money or the performance
of any covenant or obligation herein contained or secured hereby exists, then
any deposits made by Mortgagor under this paragraph may, at the option of

 

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Mortgagee, be applied to the payment of principal and interest or other
indebtedness secured hereby, in lieu of being applied to any of the purposes of
this paragraph A.10 previously stated.

 

A.11        Environmental Representations and Warranties.  Mortgagor represents
and warrants to Mortgagee that: (a) during the period of Mortgagor’s ownership
of the Mortgaged Property, there has not been, nor will there be in the future,
any use, generation, manufacture, storage, treatment, disposal, release, or
threatened release of any hazardous waste or substance by any person or entity
on, or about the Mortgaged Property; (b) Mortgagor has no knowledge of, or
reason to believe that there has been, except as previously disclosed to and
acknowledged by Mortgagee in writing, (i) any use, generation, manufacture,
storage, treatment, disposal, release, or threatened release of any hazardous
waste or substance by any prior owners or occupants of the Mortgaged Property or
(ii) any actual or threatened litigation or claims of any kind by any person or
entity relating to such matters; and (c) except as previously disclosed to and
acknowledged by Mortgagor in writing, (i) neither Mortgagor nor any tenant,
contractor, agent, or other authorized user of the Mortgaged Property shall use,
generate, manufacture, store, treat, dispose of, or release any hazardous waste
or substance on, under, or about the Mortgaged Property and (ii) all such
activity shall be conducted in full compliance with all applicable federal,
state, and local laws, regulations and ordinances.  Mortgagor, at any time
during usual business hours, authorizes Mortgagee and its agents to enter upon
the Mortgaged Property to make such inspections and tests, including, without
limitation, intrusive tests, at Mortgagor’s expense, as Mortgagee may deem
appropriate to determine compliance with this section of the Mortgage and the
absence of any hazardous waste or hazardous substance on or near the Mortgaged
Property.  Any inspections or tests made by Mortgagee shall be for Mortgagee’s
purposes only and shall not be construed to create any responsibility or
liability on the part of Mortgagee.  Mortgagor hereby (a) releases and waives
any future claims against Mortgagee for indemnity or contribution in the event
Mortgagor becomes liable for cleanup or other costs associated therewith, and
(b) agrees to indemnify and hold harmless Mortgagee against any and all claims,
losses, liabilities, damages, penalties, and expenses, which Mortgagee may
directly or indirectly sustain or suffer resulting from a breach of this section
of the Mortgage or as a consequence of any use, generation, manufacture,
storage, disposal, release, or threatened release occurring prior to Mortgagor’s
ownership or interest in the Mortgaged Property, whether or not the same was or
should have been known to Mortgagor.  The provisions of this paragraph of the
Mortgage, including the obligation to indemnify, shall survive the payment of
the indebtedness secured herein and the satisfaction and reconveyance of the
lien of this Mortgage and shall not be affected by Mortgagee’s acquisition of
any interest in the Mortgaged Property, whether by foreclosure or otherwise. 
The terms “hazardous waste,” “disposal,” “release,” and “threatened release,” as
used in this Mortgage shall have the same meanings as set forth in the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments
and Reauthorization Act of 1986, Pub. L. No. 99-499 (“SARA”) the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation Act, 49 U.S.C. Section 6901 et seq., as amended, or other
applicable state or federal laws, rules or regulations adopted pursuant to any
of the foregoing.  The term “hazardous waste” and “hazardous substance” shall
also include, without limitation, petroleum and petroleum by-products and
asbestos.  Notwithstanding anything contained in this paragraph, Mortgagee
acknowledges that the Borrower may use office supplies,

 

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cleaning substances, medical supplies and materials used in the ordinary course
of operation for a nursing home facility and that such use is consistent with
all Environmental Laws.

 

A.12        Time of the Essence.  Time of each payment and performance of each
of Mortgagor’s obligations pursuant to the Note, this Mortgage, and each other
instrument or obligation of Mortgagor secured by this Mortgage or given in
connection with this Mortgage is specifically declared to be of the essence.

 

B.            GENERAL PROVISIONS.

 

B.1          Non-Waiver.  Mortgagee’s acceptance of any sum after the same is
due shall not constitute a waiver of the right either to require prompt payment,
when due, of all other sums hereby secured or to declare a Default as herein
provided.  The acceptance by Mortgagee of any sum in an amount less than the sum
then due shall be deemed an acceptance on account only and upon condition that
it shall not constitute a waiver of the obligation of Mortgagor to pay the
entire sum then due, and Mortgagor’s failure to pay said entire sum then due
shall be and continue to be a default notwithstanding such acceptance of such
amount on account, as aforesaid, and Mortgagee shall be at all times thereafter
and until the entire sum then due shall have been paid, and notwithstanding the
acceptance by Mortgagee thereafter of further sums on account, or otherwise,
entitled to exercise all rights in this Mortgage conferred upon Mortgagee, upon
the occurrence of a default, and the right to proceed with a sale under any
notice of default and election to sell shall in no way be impaired, whether any
of such amounts are received prior or subsequent to such notice.  Consent by
Mortgagee to any transaction or action which is subject to consent or approval
of Mortgagee hereunder shall not be deemed a waiver of the right to require such
consent or approval to future or successive transactions or actions.

 

B.2          Substitute Performance by Mortgagee.  Should Mortgagor fail to pay
or perform when required hereunder any obligation of Mortgagor hereunder, or if
any action or proceeding is commenced which affects the Mortgaged Property or
title thereto or the interest of Mortgagee therein, including but not limited
to, eminent domain, insolvency, code enforcement, or arrangements or proceedings
involving bankruptcy, insolvency or reorganization, Mortgagee may, but shall not
be obligated to, without regard to the adequacy of its security and without
prejudice to its right to declare a Default hereunder, make such appearances,
disburse such sums or take such actions as Mortgagee reasonably deems necessary
to protect Mortgagee’s interest, including, but not limited to disbursement of
attorneys’ fees and entry upon the Mortgaged Property to make repairs without
notice or demand to or upon Mortgagor.  Mortgagor hereby grants to Mortgagee an
easement to enter upon the Property at any time, which easement shall continue
for the duration of this Mortgage.  The payment by Mortgagee of any delinquent
tax, assessment or governmental charge, or any lien or encumbrance which
Mortgagee in good faith believes may be prior to the lien of this Mortgage, or
any insurance premium for insurance which Mortgagor is obligated to provide
hereunder but which Mortgagee in good faith believes has not been supplied,
shall be conclusive between Mortgagor and Mortgagee as to the propriety and
amount so paid.  Mortgagee shall be subrogated to all rights, equities and liens
discharged by any such expenditure.  After any Default hereunder and whether or
not any action is instituted to enforce any provision of this Mortgage or the
Note, Mortgagor promises to pay to Mortgagee, as

 

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incurred, all reasonable sums incurred by Mortgagee for attorneys’ fees and
costs to enforce this Mortgage or the Note or to defend any claims arising from
this Mortgage or the Note.  Any amounts so paid pursuant to this Paragraph B.2,
or the cost of such performance, together with all costs and expenses incurred
by Mortgagee in connection with such payment or performance, and any amounts for
which Mortgagor is specifically obligated to reimburse Mortgagee pursuant to
provisions hereof, including reasonable attorneys’ fees and interest on all such
amounts at the default rate, as described in the Note, from the date paid by
Mortgagee until repaid to Mortgagee, shall be payable by Mortgagor to Mortgagee
immediately upon notice to Mortgagor of the amount owing, without further
demand, shall be secured by this Mortgage and shall be added to the judgment in
any suit brought by Mortgagee against Mortgagor.  Failure to pay any such amount
within ten (10) days after notice to Mortgagor of the amount owing shall
constitute a Default hereunder and Mortgagee may, at its option, accelerate and
demand full payment of all amounts secured hereby.

 

B.3          Powers of Mortgagee.  At any time or from time to time, without
liability therefor and without notice, without affecting the personal liability
of any person or entity for the payment of the indebtedness secured hereby and
without affecting the lien of this Mortgage upon the Mortgaged Property for the
full amount of all amounts secured hereby, Mortgagee may (a) release all or any
part of the Mortgaged Property, (b) consent to the making of any map or plat
thereof, (c) join in granting any easement thereon or in creating any covenants
or conditions restricting use or occupancy thereof, or (d) join in any extension
agreement or in any agreement subordinating the lien or charge hereof.

 

B.4          Certain Definitions.  The term “Mortgagee” means the original
Mortgagee hereunder, its successors or assigns, and any future owner and holder,
including pledgee, of the Note.  All obligations of each Mortgagor hereunder are
joint and several, and this Mortgage in all its parts applies to and binds the
heirs, personal representatives, administrators, executors, successors and
assigns of all and each of the parties hereto.  If Mortgagor is two or more
entities or persons, the term “Mortgagor” as used herein shall refer to them
collectively, as well as individually.

 

B.5          Financial Statements and Other Disclosures.  Mortgagor represents
and warrants to Mortgagee that all financial statements and credit applications
delivered by Mortgagor to Mortgagee accurately reflect the financial condition
and operations of Mortgagor at the times and for the periods therein stated.  So
long as this Mortgage is in force and effect, Mortgagor agrees to deliver to
Mortgagee, within 120 days after the end of each of Mortgagor’s fiscal years, an
income statement on the use and operation of the Mortgaged Property, a complete
and accurate copy of Mortgagor’s federal tax returns and financial statements,
including a balance sheet, profit and loss statement and aging of accounts
receivable and accounts payable, all schedules, all prepared in accordance with
generally accepted accounting principles certified by an officer of the
Mortgagor, showing the consolidated financial position of Mortgagor at the close
of such fiscal year, and concurrently therewith a certificate of its Managing
Member or chief financial officer to the effect that such officer is not aware
of any condition or event which constitutes a default under this Mortgage or a
default under any franchise agreement to which Mortgagor is a party, or under
any notes or obligations or which, with the mere passage of time or notice, or

 

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both, would constitute a default under this Mortgage or a default under any such
franchise agreement or under any notes or obligations of the Mortgagor. 
Mortgagor hereby agrees to immediately notify Mortgagee in writing as to the
existence of any notes payable by Mortgagor, or any related person or entity, to
any franchisor for unpaid royalties or other unpaid obligations to such
franchisor.

 

B.6          Amendment.  No alteration, amendment or waiver of this Mortgage, or
the Note shall be effective unless in writing and signed by the parties sought
to be charged or bound thereby.

 

B.7          Governing Law.  This Mortgage will be governed by, construed and
enforced in accordance with federal law and the laws of the State of Georgia,
except and only to the extent of procedural matters related to the creation,
perfection, priority and enforcement of Mortgagee’s rights and remedies against
the Mortgaged Property, which matters shall be governed by the laws of the State
of Arkansas.  However, in the event that the enforceability or validity of any
provision of this Mortgage is challenged or questioned, such provision shall be
governed by whichever applicable state or federal law would uphold or would
enforce such challenged or questioned provision.  The loan transaction which is
evidenced by the Note and this Mortgage has been applied for, considered,
approved and made, and all necessary loan documents have been accepted by
Mortgagee in the State of Georgia.

 

B.8          Statement Fee.  For any statement requested by Mortgagor regarding
the obligations and indebtedness secured by this Mortgage, or regarding the
amounts held in any impound or reserve fund established hereunder, Mortgagee may
charge a reasonable fee, not to exceed any maximum amount provided by any
applicable law at the time of the request therefor.

 

B.9          Notices.

 

(a)           All notices required or permitted to be given hereunder shall be
delivered in person or by United States mail, postage prepaid, registered or
certified with return receipt requested.  If any written notice is mailed, it
shall be deemed effective on the earlier of actual receipt or on the third (3rd)
calendar day following the date of mailing.  Notice given in person shall be
effective only if, and when, received.  The addresses of the parties for
delivery of notices shall be the addresses set forth above.

 

(b)           Any party may change its address for notice hereunder to any other
location within the continental United States by giving ten (10) days notice to
other parties in the manner set forth above.

 

B.10        Representations and Warranties of Mortgagor.  Mortgagor and each
signatory who signs on Mortgagor’s behalf hereby represents and warrants as
follows:

 

(a)           That this Mortgage, the Note and all other documents executed and
delivered to Mortgagee in connection herewith were executed in accordance with
the requirements of law and are valid, binding and enforceable in accordance
with their terms.

 

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(b)           That the execution of this Mortgage, the Note and any other
document executed and delivered to Mortgagee in connection herewith, and the
full and complete performance of the provisions hereof and thereof, will not
result in any breach of, or constitute a default under any indenture, mortgage,
bank loan or credit agreement or other agreement or instrument to which
Mortgagor is a party or by which Mortgagor is bound, and will not result in the
creation of any lien, charge or encumbrance (other than those in favor of
Mortgagee) upon any property or assets of Mortgagor.

 

(c)           That as of the date of execution of this Mortgage, Mortgagor is
the owner of the Mortgaged Property.

 

(d)           The improvements on the Premises, existing and proposed, and their
intended use will, when completed, comply fully with all applicable
environmental, air quality, zoning, planning, building, subdivision and other
governmental laws and requirements.  Mortgagor specifically warrants that the
existing improvements on each property listed on Exhibit “A” attached hereto and
made a part hereof by reference, complies with all local zoning ordinances.

 

(e)           The Premises are composed of one or more whole tax parcels with a
separate tax assessment, independent of any land or improvements not encumbered
by this Mortgage.

 

(f)            There is no litigation pending or, to the best of Mortgagor’s
knowledge, threatened against the Mortgaged Property.  There is no litigation
pending or, to the best of Mortgagor’s knowledge, threatened against Mortgagor,
which might, so far as Mortgagor can now reasonably foresee, have a material
adverse effect on Mortgagor’s ability to repay the Note or to perform the
provisions of this Mortgage or of any other document delivered to Mortgagee in
connection herewith.  Mortgagor has disclosed all litigation pending and
threatened against Mortgagor to Mortgagee in writing, and will disclose all
future such litigation to Mortgagee in writing within thirty (30) days of its
receipt of notice thereof.

 

(g)           The Mortgaged Property complies with all applicable subdivision
laws, ordinances, regulations, rules and other requirements.

 

(h)           Mortgagor is not in default with respect to any existing
indebtedness or obligation.

 

(i)            Mortgagor has the power and authority to enter into and perform
all terms and conditions of this Mortgage, the Note, and all other documents
executed in connection with this transaction, and to incur the obligations
herein and therein provided for.

 

(j)            Unless previously disclosed to Mortgagee in writing, Mortgagor
has not made any agreement or taken any action which may cause anyone to become
entitled to a commission or finder’s fee as a result of the making of any loan
to Mortgagor by Mortgagee.

 

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These representations and warranties may be relied upon by Mortgagee with or
without investigation by Mortgagee and they shall survive any such
investigation, and shall continue and may be relied upon by Mortgagee until all
obligations secured by this Mortgage have been paid in full.

 

B.11        Extensions and Modifications.  From time to time, without affecting
the obligation of Mortgagor or Mortgagor’s successors or assigns to pay the sums
secured by this Mortgage and to observe the obligations of Mortgagor contained
herein, without affecting the guaranty of any person, corporation, partnership
or other entity for payment of the indebtedness secured hereby, and without
affecting the lien or priority of lien hereof on the Mortgaged Property,
Mortgagee may, at Mortgagee’s option, without giving notice to or obtaining the
consent of Mortgagor, Mortgagor’s successors or assigns or of any other
lienholders or guarantors, and without liability on Mortgagee’s part, extend the
time for payment of said indebtedness or any part thereof, reduce the payments
thereon, release anyone liable on any of said indebtedness, accept a renewal
note or notes therefor, modify the terms and time of payment of said
indebtedness, release from this Mortgage any part of the Mortgaged Property,
take or release other or additional security, reconvey any part of the Mortgaged
Property, consent to the granting of any easement or dedication, join in any
extension or subordination agreement and agree in writing with any person
obligated to pay the same to modify the rate of interest or period of
amortization of any indebtedness secured hereby or change the amount of the
installments payable thereon.  Mortgagor shall pay Mortgagee a reasonable
service charge, together with such title insurance premiums and attorneys’ fees
as may be incurred by Mortgagee in connection with any such action.

 

B.12        Waiver by Mortgagor.  Mortgagor waives any requirement of
presentment, demand for payment, notice of nonpayment or late payment, protest,
notice of protest, notice of dishonor, and all other formalities.  Mortgagor
waives and releases all right of appraisement, sale, and redemption allowed
under any law or laws of the State of Arkansas, or the laws of any other state
or jurisdiction, including particularly all right of redemption under Ark. Code
Ann. § 18-49-106 or Ark. Code Ann. § 16-66-502.  Mortgagor waives all rights
and/or privileges it might otherwise have to require Mortgagee to proceed
against or to pursue any remedy available to Mortgagee in any particular manner
or order as to any particular collateral, person or entity under any legal or
equitable doctrine or principle including, without limitation, marshalling of
assets and/or suretyship principles, and further agrees that Mortgagee may
proceed against any or all of the assets encumbered hereby or by any other
security document or instrument in the event of Default in such order and manner
as Mortgagee in its sole discretion may determine.  Any Mortgagor that has
signed this Mortgage as a surety or accommodation party, or that has subjected
its property to this Mortgage to secure the indebtedness of another, hereby
expressly waives any defense arising by reason of the cessation from any cause
whatsoever of the liability of Mortgagor, and waives the benefit of any statutes
of limitation affecting the enforcement hereof.

 

B.13        Corrections.  Mortgagor will, upon request of Mortgagee, promptly
correct any defect, error or omission which may be discovered in the contents of
this Mortgage or in the

 

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execution or acknowledgment hereof, and will execute, acknowledge and deliver
such further documents and do such further acts as may be necessary or as may be
reasonably requested by Mortgagee to carry out more effectively the purposes of
this Mortgage, to subject to the liens and security interests hereby created any
of Mortgagor’s properties, rights or interest covered or intended to be covered
hereby, and to perfect and maintain such liens and security interests.

 

B.14        Mortgagee Indemnification.  Mortgagor shall and does hereby agree to
indemnify and to hold Mortgagee and Mortgagee’s affiliates and parent companies,
and all of its and their respective officers, directors, employees and agents
(the “Indemnified Parties”), harmless from and against all claims, demands,
liabilities, losses or damages (including all related costs, expenses, and
reasonable attorney’s fees) asserted against, imposed on or incurred by the
Indemnified Parties in connection with or as a result of this Mortgage or the
exercise of any rights or remedies under this Mortgage or by reason of any
alleged obligations or undertakings of Mortgagee to perform or discharge any of
the terms, covenants or agreements contained in this Mortgage.  Should Mortgagee
incur any such liability, the amount thereof, together with interest thereon at
the Default Rate stated in the Note, shall be secured hereby and Mortgagor shall
reimburse the Mortgagee therefor immediately upon demand.

 

B.15        Late Payment Charge.  Mortgagor acknowledges that late payment to
Mortgagee will cause Mortgagee to incur costs not contemplated by this
Mortgage.  Such costs include, without limitation, processing and accounting
charges.  Therefore, if any payment required by the Note or this Mortgage is not
received by Mortgagee within ten (10) days after the due date, Mortgagee hereby
may assess a late charge in the amount of five percent (5.0%) of the unpaid
amount of the payment, or the maximum permitted by applicable law, whichever is
less.

 

The parties agree that this late charge represents a reasonable sum considering
all of the circumstances existing on the date of this Mortgage and represents a
fair and reasonable estimate of the costs that Mortgagee will incur by reason of
the late payment.  The parties further agree that proof of actual damages would
be costly or inconvenient.  Acceptance of any late charge shall not constitute a
waiver of the Default with respect to the overdue amount, and shall not prevent
Mortgagee from exercising any of the other rights and remedies available to
Mortgagee.

 

B.16        Exhibits.  All of the provisions in each of the attached Exhibits
are incorporated herein by this reference for all purposes.

 

B.17        Acknowledgment of Notice.  THIS WRITTEN AGREEMENT REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

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C.            DEFAULT PROVISIONS.

 

C.1          Events of Default.  Any of the following shall constitute a
“Default” hereunder:

 

(a)           The failure of Mortgagor to pay any payment required under the
Note or on any other indebtedness to Mortgagee or any payment required hereunder
or under any other agreement securing the Note;

 

(b)           The filing of any petition, or the commencement of any case or
proceeding, or the entry of any order for relief, under the Federal Bankruptcy
Code or any other federal or state law relating to insolvency, bankruptcy,
reorganization, or composition of debts by Mortgagor or any guarantor or
endorser of the Note or any other obligation of Mortgagor to Mortgagee; or any
adjudication that Mortgagor or any such guarantor or endorser is insolvent or
bankrupt;

 

(c)           If Mortgagee, in good faith, believes that a substantial part of
Mortgagor’s property is in danger of loss, misuse, seizure or confiscation;

 

(d)           (i) The filing of any petition or the commencement of any case or
proceeding described in subparagraph C.1(b) above against Mortgagor or against
any endorser or guarantor of the Note or any other obligation of Mortgagor to
Mortgagee, unless such petition and the case or proceeding initiated thereby are
dismissed within thirty (30) days from the date of such filing; the filing of an
answer by Mortgagor or such endorser or guarantor admitting the allegations of
any such petition; or (ii) the appointment of or the taking of possession by a
custodian, trustee or receiver for all or any assets of Mortgagor or any such
endorser or guarantor, unless such appointment is vacated or dismissed or such
possession is terminated within thirty (30) days from the earlier of the date of
such appointment or commencement of such possession, but not later than five
(5) days before the proposed sale of any assets of Mortgagor or any such
endorser or guarantor by such custodian, trustee or receiver;

 

(e)           The insolvency of Mortgagor or of any guarantor or endorser of the
Note or any other obligation of Mortgagor to Mortgagee; or the execution by
Mortgagor or any such guarantor or endorser of an assignment for the benefit of
creditors; or the convening by Mortgagor or any such guarantor or endorser of a
meeting of its creditors, or any class thereof, for purposes of effecting a
moratorium upon or extension or composition of its debts; or the failure of
Mortgagor or of any such guarantor or endorser to pay its debts as they mature;
or if Mortgagor or any such guarantor or endorser is generally not paying its
debts as they mature;

 

(f)            The admission in writing by Mortgagor or any endorser or
guarantor of the Note or any other obligation of Mortgagor to Mortgagee that it
is unable to pay its debts as they mature or that it is generally not paying its
debts as they mature;

 

(g)           The liquidation, termination or dissolution of Mortgagor or any
guarantor or endorser of the Note or any other obligation of Mortgagor to
Mortgagee which are corporations, partnerships or joint ventures;

 

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(h)           The sale, lease, exchange, conveyance or transfer, of any legal or
equitable interest in and to the Mortgaged Property, or the agreement to do so;
or the mortgage, assignment, pledge or encumbrance, either voluntarily or
involuntarily, or the agreement to do so, without the prior written consent of
Mortgagee being first obtained, or the levy, attachment, foreclosure, or
seizure, of (i) any right, title or interest of Mortgagor or of any successor to
Mortgagor, in and to the Mortgaged Property; or (ii) any material portion of the
assets of Mortgagor or of any successor to Mortgagor;

 

(i)            The falsity or misleading nature of any representation or
warranty contained herein or any representation to Mortgagee concerning the
financial condition or credit standing of either Mortgagor or any endorser or
guarantor of the Note or any other obligation of Mortgagor to Mortgagee;

 

(j)            The failure of Mortgagor to make any deposit of funds required
hereunder or under the Note within the time period provided herein or in the
Note, or in the absence of such a provision, within five (5) days after written
demand therefor from Mortgagee;

 

(k)           The existence of any encroachment upon the Premises which has
occurred without the approval of Mortgagee and which is not removed or corrected
within thirty (30) days after its creation, or if litigation to remove or
correct such encroachment is not instigated by Mortgagor within such thirty (30)
day period and thereafter diligently prosecuted;

 

(l)            The filing of any claim of lien against the Premises, any
improvements thereon or any part thereof, or any interest or right made
appurtenant thereto or the service on Mortgagee, as a disburser, of any notice
to withhold funds and the continued maintenance of said claim of lien or notice
to withhold for a period of ten (10) days without discharge or satisfaction
thereof or provision therefor satisfactory to Mortgagee in its sole discretion,
including the posting of a bond or indemnification satisfactory to Mortgagee;

 

(m)          The obtaining by any person of an order or decree in any court of
competent jurisdiction enjoining the construction or development of any
improvements needed for the operation of Mortgagor’s business on the Premises or
enjoining or prohibiting Mortgagor or Mortgagee or both of them from performing
any of their agreements or obligations with respect to this Mortgage, which
proceedings are not discontinued and such decree is not vacated within fifteen
(15) days after the granting thereof;

 

(n)           The demolition, destruction or substantial damage of the Mortgaged
Property unless Mortgagor either (i) commences and completes restoration or
rebuilding within a reasonable time, not to exceed ten (10) months, or
(ii) prepays the Note, by the amount equal to the percentage of reduction of
leasable or otherwise productive area of the Premises caused by such demolition,
destruction or substantial damage; provided, however, that the loan to value
ratio after giving effect to the demolition, destruction or substantial damage,
the restoration or repair thereof and the prepayment as a result thereof shall
not be greater than eighty percent (80%);

 

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(o)           The failure of Mortgagor to perform any obligations constituting,
set forth in, or relating to (a) this Mortgage, the Note, or any other
obligation of Mortgagor to Mortgagee now existing or hereafter arising (b) any
other agreement or indebtedness of Mortgagor to any affiliate of Mortgagee now
existing or hereafter arising irrespective of whether Mortgagee or such
affiliate elects pursuant to a provision thereof to declare immediately due and
payable the entire unpaid principal sum together with all interest, or other
balance thereon, plus any other sums due thereunder;

 

(p)           If Mortgagor is a corporation, the sale, pledge, transfer or
assignment by the shareholders of Mortgagor of any shares of the stock of
Mortgagor without the prior written consent of Mortgagee, the merger or
consolidation of Mortgagor with another company or entity, the liquidation of
Mortgagor, the issuance of any new stock or warrants, or the transfer of issued
and outstanding treasury stock or warrants of Mortgagor.  If Mortgagor is a
corporation, the sale, pledge, transfer or assignment of any of the members of
Mortgagor of any of their interest in Mortgagor, or the withdrawal or the
admittance of any members into Mortgagor without the prior written consent of
Mortgagee;

 

(q)           Any guaranty of the obligations and indebtedness secured by this
Mortgage ceases to be effective, except pursuant to a written release from
Mortgagee, or any guarantor denies liability thereunder or any default occurs
under any such guaranty; or

 

C.2          Remedies Upon Default.  At any time after a Default hereunder,
Mortgagee may, at its option, declare all indebtedness secured by this Mortgage
immediately due and payable, and collectible without notice, regardless of
maturity, and irrespective of whether Mortgagee exercises such option, and
regardless of (i) Mortgagee’s delay in exercising such option, (ii) Mortgagee’s
failure to exercise such option on the occasion of any prior Default  or
(iii) the adequacy of Mortgagee’s security, Mortgagee may, at its option and in
its sole discretion, without prior notice or demand to or upon Mortgagor, do any
one or more of the following:

 

(a)           Mortgagee may in person or by agent enter upon, take possession
of, manage and operate the Mortgaged Property or any part thereof, make repairs
and alterations, and do any acts which Mortgagee deems proper to protect the
security hereof or to operate and maintain the Mortgaged Property and the
business operated thereon; and either with or without taking possession, in its
own name, sue for or otherwise collect and receive rents, issues, and profits as
well as the fees, charges, accounts, or other payments for the use or occupancy
of rooms and other public facilities including those past due and unpaid, and
apply the same less costs and expenses of operation and collection, including
reasonable attorneys’ fees, upon any indebtedness secured hereby, and in such
order as Mortgagee may determine.  Upon request of Mortgagee, Mortgagor shall
assemble and make available to Mortgagee at the Premises any of the Mortgaged
Property which has been removed therefrom.  The entering upon and taking
possession of the Mortgaged Property, the collection of any rents, issues and
profits as well as the fees, charges, accounts, or other payments for the use or
occupancy of rooms and other public facilities and the application thereof as
aforesaid, shall not cure or waive any Default theretofore or thereafter
occurring, or affect any notice of Default hereunder or invalidate any act done

 

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pursuant to any such notice.  Mortgagee or Mortgagee’s agent shall have access
to the books and records used in the operation and maintenance of the Mortgaged
Property and the business operated thereon and shall be liable to account only
for those rents, issues and profits as well actually received by Mortgagee. 
Mortgagee shall not be liable to Mortgagor, anyone claiming by, from, under or
through Mortgagor or anyone having an interest in the Mortgaged Property by
reason of anything done or undone by Mortgagee.  Nothing contained in this
paragraph shall require Mortgagee to incur any expense or do any act.  If the
rents, issues and profits of the Mortgaged Property and the business operated
thereon are not sufficient to meet the costs of taking control of and managing
the Mortgaged Property and collecting the rents, issues and profits, any funds
expended by Mortgagee for such purposes shall become indebtedness of Mortgagor
to Mortgagee secured by this Mortgage.  Such amounts, together with interest and
attorneys’ fees if applicable as provided in Paragraph B.2. hereof, shall be
immediately due and payable in accordance with the provisions of Paragraph B.2.
hereof.  Notwithstanding Mortgagee’s continuance in possession or receipt and
application of rents, issues or profits, Mortgagee shall be entitled to exercise
every right provided for in this Mortgage or by law upon or after the occurrence
of a default, including any right to exercise the power of sale.  Any of the
actions referred to in this Paragraph may be taken by Mortgagee at such time as
Mortgagee is so entitled, without regard to the adequacy of any security for the
indebtedness hereby secured.

 

(b)           Mortgagee shall, without regard to the adequacy of any security
for the indebtedness hereby secured, be entitled to the appointment of a
receiver by any court having jurisdiction, without notice, to take possession of
and protect the Mortgaged Property and the business operated thereon, and, in
Mortgagee’s discretion, operate the same, in whole or in part, and  collect the
rents, issues and profits as well as the fees, charges, accounts, or other
payments for the use or occupancy of rooms and other public facilities
therefrom.

 

(c)           Mortgagee may bring an action in any court of competent
jurisdiction to foreclose this Mortgage through judicial or non-judicial
foreclosure, including statutory foreclosure under Ark. Code Ann. § 18-5-101 et
seq., with notice to Mortgagor as required under applicable law, or to enforce
any of the covenants, agreements or other obligations contained in this
Mortgage.

 

(d)           Mortgagee may elect to cause the Mortgaged Property or any part
thereof to be sold as follows:

 

(i)            Mortgagee may cause any such sale or other disposition of
personal property to be conducted immediately following the expiration of any
grace period, if any, herein provided (or immediately upon the expiration of any
applicable redemption period), and may cause any such sale of real property to
be conducted as soon after foreclosure as is permitted by law, or Mortgagee may
delay any such sale or other disposition for such period of time as Mortgagee
deems to be in its best interest.  Should Mortgagee desire that more than one
such sale or other disposition be conducted, Mortgagee may at its option, cause
the same to be conducted simultaneously, or successively on the same day, or at
such different days or times and in such order as Mortgagee may deem to be in
its best interest.

 

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(ii)           Should Mortgagee elect to cause any of the Mortgaged Property to
be disposed of as personal property as permitted by subparagraph (i) above, it
may dispose of any part thereof in any manner now or hereafter permitted by
Article 9 of the Uniform Commercial Code or in accordance with any other right
or remedy provided by applicable law.  Both Mortgagor and Mortgagee shall be
eligible to purchase all or any part of such property at any such disposition. 
Any such disposition may be either by public or private sale or other
disposition as Mortgagee may elect in its sole discretion.  Mortgagee shall give
Mortgagor at least ten (10) days’ prior written notice of the time and place of
any public sale or other disposition of such property or of the time at or after
which any private sale or any other intended disposition is to be made, and if
such notice is sent to Mortgagor as provided in Paragraph B.10 hereof, it shall
constitute reasonable notice to Mortgagor.

 

(iii)          At the foreclosure sale of the Mortgaged Property which is real
property, the Mortgaged Property or any portion thereof specified by Mortgagee
shall be sold at public auction to the highest bidder for cash in lawful money
of the United States, subject, however, to the provisions of Paragraph C.6
hereof.  If the Mortgaged Property consists of several lots or parcels, it may
be sold as a whole or in separate lots or parcels, if directed by Mortgagee. 
Any person or entity, including Mortgagee, may purchase at the sale.

 

(iv)          Mortgagee may, in any manner that it deems appropriate, apply the
proceeds of any judicial foreclosure sale or sale made pursuant to the power of
sale created hereby (to the extent permitted by applicable law)  or other
disposition of any of the Mortgaged Property hereunder to payment of the
following:  (1) the expenses of such sale or disposition, together with
Mortgagee’s fees, costs and expenses and reasonable attorneys’ fees incurred by
Mortgagee, and the actual cost of publishing, recording, mailing and posting
notice; (2) the cost of any search and/or other evidence of title procured in
connection therewith and revenue stamps on any deed or conveyance; (3) the
payment of the Note secured by this Mortgage; (4) any or all other sums secured
by this Mortgage; and (5) the remainder, if any, to the person or persons
legally entitled thereto, in the order of their priority.

 

(e)           Mortgagee may take any other appropriate action permitted by
applicable law.

 

C.3          Deficiency; Liabilities and Rights After Default.  To the extent
permitted by law, Mortgagor shall be and remain liable for any deficiency
remaining after sale either pursuant to the Uniform Commercial Code, judicial
proceedings, or otherwise.  After Default or the occurrence of an event which
after the passage of time or giving of notice, or both, could become a Default,
Mortgagor shall pay Mortgagee’s reasonable attorneys’ fees, Mortgagee’s fees and
its costs and expenses incurred as a result of said Default or other such event,
and if suit is brought, all costs of suit, all of which sums shall be secured by
this Mortgage.  Mortgagor’s statutory rights of reinstatement, if any, are
expressly conditioned upon Mortgagor’s payment of all sums required under the
applicable statute and performance of all required acts.

 

C.4          Right of Setoff.  In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
Mortgagee is hereby authorized

 

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by Mortgagor at any time or from time to time, without notice to Mortgagor, any
guarantor or endorser of the Note or any other indebtedness or obligation
secured by this Mortgage, or any other person, any such notice being hereby
expressly waived, to set off any obligations or liabilities any time held or
owing by Mortgagee to or for the credit or the account of Mortgagor or any such
guarantor or endorser against the obligations and liabilities of Mortgagor or
any such guarantor or endorser to Mortgagee, including, but not limited to, all
claims of any nature or description arising out of or connected with this
Mortgage, the Note or any other indebtedness or obligation secured by this
Mortgage, irrespective of whether or not (a) Mortgagee shall have made any
demand hereunder or (b) Mortgagee shall have declared the principal of and
interest on the Note to be due and owing and although said obligations and
liabilities, or any of them, shall be contingent and unmatured.

 

C.5          Foreclosure Procedure.  Mortgagor hereby expressly waives, to the
extent permitted by law, any right which it may have to direct the order in
which any of the Mortgaged Property shall be sold in the event of any sale or
sales pursuant hereto.

 

C.6          Foreclosure Purchase.  Upon any sale of the Mortgaged Property, if
the holder of the Note is a purchaser at such sale, it shall be entitled to use
and apply all or any portion of the indebtedness then secured by this Mortgage
for or in settlement or payment of all or any portion of the purchase price of
the Mortgaged Property purchased.

 

C.7          Cumulative Remedies.  No remedy herein conferred upon or reserved
to Mortgagee is intended to be exclusive of any other remedy herein or by law
provided, but each shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute.  Every power or remedy given by this Mortgage to Mortgagee, or to which
it may be otherwise entitled, may be exercised from time to time and as often as
may be deemed expedient by Mortgagee, and Mortgagee may pursue inconsistent
remedies.  The unenforceability of any provision in this Mortgage shall not
affect the enforceability of any other provision herein.  If there exists
additional security for the performance of the obligations secured hereby, the
Mortgagee, at its sole option, and without limiting or affecting any rights or
remedies hereunder, may exercise any of the rights and remedies to which it may
be entitled hereunder either concurrently with whatever other rights it may have
in connection with such other security or in such order as it may determine.

 

C.8.  Marshalling of Assets.   Mortgagor agrees that all of the Mortgaged
Property and all other collateral or security which may be granted to Mortgagee
in connection with the obligations secured by this Mortgage constitutes equal
security for all of the obligations secured hereby, and Mortgagor agrees that
Mortgagee shall be entitled to sell, retain or otherwise deal with any or all of
the Mortgaged Property and all other collateral or security, in any order or
simultaneously as Mortgagee shall determine in its sole and absolute discretion,
free of any requirement for the marshalling of assets or other restriction upon
Mortgagee in dealing with the Mortgaged Property and all other collateral or
security.

 

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C.9.         SBA Loan.   The Loan secured by this lien was made under a United
States Small Business Administration (SBA) nationwide program which uses tax
dollars to assist small business owners.  If the United States is seeking to
enforce this document, then under SBA regulations:

 

a)             When SBA is the holder of the Note, this document and all
documents evidencing or securing this Loan will be construed in accordance with
federal law.

 

b)            Lender or SBA may use local or state procedures for purposes such
as filing papers, recording documents, giving notice, foreclosing liens, and
other purposes.  By using these procedures, SBA does not waive any federal
immunity from local or state control, penalty, tax or liability.  No Borrower or
Guarantor may claim or assert against SBA any local or state law to deny any
obligation of Borrower, or defend any claim of SBA with respect to this Loan.

 

c)             Any clause in this document requiring arbitration is not
enforceable when SBA is the holder of the Note secured by this instrument.

 

[SIGNATURE ON FOLLOWING PAGE.]

 

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IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as of the day and year
set forth above.

 

 

MORTGAGOR:

 

 

 

MT. V PROPERTY HOLDINGS, LLC

 

 

 

 

 

By:

/s/ Christopher F. Brogdon

(L.S.)

 

Christopher F. Brogdon, Manager

 

 

/s/ [ILLEGIBLE]

 

Witness

 

 

 

/s/ [ILLEGIBLE]

 

Witness

 

 

 

STATE OF GEORGIA

)

 

 

)  SS.

ACKNOWLEDGEMENT

COUNTY OF FULTON

)

 

 

On this 8th day of June, in the year 2012, before me, the undersigned, a Notary
Public in and for said County and State, personally appeared Christopher F.
Brogdon, Manager of MT. V PROPERTY HOLDINGS, LLC, a Georgia limited liability
company authorized to transact business in Arkansas, and thereupon he
acknowledged under oath to my satisfaction that he is the person who executed
the within instrument, and that he executed said instrument on behalf of the
company as its voluntary act and was authorized to do so for the consideration,
uses and purposes therein set forth.

 

 

Signature:

/s/ Ellen W. Smith

 

 

Notary Public in and for said County and State

 

 

My Commission Expires:

Jan. 30, 2016

 

(NOTARIAL SEAL)

 

 

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