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HomeMy WebLinkAbout1996 NS Deed of Trust and Security Agreement Drawn By and Return To: Stephen D. Poe, Esq. Bell, Davis & Pitt, P.A. P.O. Box 21029 Winston-Salem, North Carolina 27120-1029 STATE OF NORTH CAROLINA ) DEED OF TRUST AND COUNTY OF ORANGE ) SECURITY AGREEMENT COLLATERAL IS OR INCLUDES FIXTURES THIS DEED OF TRUST AND SECURITY AGREEMENT (this "Deed of Trust") is made and entered into as of the _th day of January, 1996, by and among THE COUNTY OF ORANGE, a political subdivision and body politic (the "Grantor") ; STEPHEN D. POE, a resident of Forsyth County, North Carolina (the "Trustee") ; and NATIONSBANK, N.A. , -a national banking association organized and existing under the laws of the United States, having an office in Chapel Hill, North Carolina (the "Beneficiary") . W I T N E S S E T H• WHEREAS, the Grantor is the owner of fee simple title to certain real property, situated in Orange County, North Carolina, and described on Exhibit A attached hereto and made a part hereof (the "Site") ; and WHEREAS, the Beneficiary has advanced or will advance to the Grantor a principal sum of TWO MILLION AND N01100 DOLLARS ($2, 000, 000.00) , pursuant to and in accordance with the terms and conditions of an Installment Purchase Contract of even date herewith (the "Contract") ; unless otherwise extended, the entire unpaid balance of the principal and interest payable by Grantor under the Contract shall be due and payable in full on or before January _, 2006. NOW, THEREFORE, to secure the payment of all sums due or to become due from the Grantor pursuant to the Contract and this Deed of Trust, and to secure the performance by the Grantor of all of its other obligations and covenants contained in the Contract and this Deed of Trust, the Grantor hereby gives, grants, sells, bargains and conveys to the Trustee, its successors and assigns, the Site, together with all structures, fixtures and other improvements thereon and all repairs thereto and replacements thereof to be located on the Site (collectively, the "Improvements") ; TOGETHER with all rights, appurtenances, easements, privileges, remainders and reversions appertaining thereto, including all of the Grantor' s right, title, and interest in and to any lease or leases now existing or hereafter made for all or any part of the Site and/or Improvements, together with all rents, income, profits, revenues, proceeds, and royalties due and becoming due therefrom (collectively, the "Rents") ; Unless specifically designated otherwise, the Site, the Improvements and all rights, appurtenances, easements, privileges, remainders and reversions appertaining thereto, including the Rents, are referred to collectively herein as the "Property"; TO HAVE AND TO HOLD the Property to the Trustee, his successors and assigns, upon the trusts and for the uses and purposes hereinafter set out; provided, however, that THIS CONVEYANCE IS MADE UPON THIS SPECIAL TRUST, that if the Grantor shall pay the sums due under the Contract secured hereby in accordance with its terms, and shall comply with all the covenants, terms and conditions of this Deed of Trust and the Contract, then this conveyance shall be null and void and may be cancelled of record at the request and at the cost of the Grantor. All fixtures that comprise a part of the Property shall, to the extent permitted by law, be deemed to be affixed to the Site and conveyed therewith. This Deed of Trust shall also be considered to be a security agreement which creates a security interest in such fixtures for the benefit of the Beneficiary. In that regard, Borrower grants to the Beneficiary all of the rights and remedies of a secured party under the North Carolina Uniform Commercial Code. Article I. General Covenants of Grantor. Grantor covenants and agrees with the Trustee and Beneficiary, or any successor in title as holder of the Contract secured hereby, as follows: 1.1 The Secured Obligations. This Deed of Trust secures (i) the payment of any amount due the Beneficiary under the Contract; (ii) the payment of any and all other amounts which this Deed of Trust by its terms secures; and (iii) the performance of the covenants and agreements contained in this Deed of Trust by Grantor. It is the intention of the parties hereto that this Deed of Trust is made and executed to comply with the provisions of N.C.G.S. § 45-67, et sea. , and shall secure any and all present and future obligations which Grantor now or may hereafter owe to the Beneficiary (but in no event incurred more than fifteen (15) years 2 after the date hereof) , including without limitation, any future loans and advances made by the Beneficiary pursuant to the Contract to or for the benefit of Grantor, up to a maximum aggregate amount of principal indebtedness outstanding at any one time of TWO MILLION DOLLARS ($2, 000, 000.00) . The amount of present obligations of Grantor to the Beneficiary secured hereby is $2, 000,000 as of the date hereof, and the amount of all present and future principal obligations of Grantor to the Beneficiary secured hereby is in the sum of $2, 000, 000.00, plus interest, costs and advances made by the Beneficiary to protect or preserve the Property or the lien hereof thereon, or for taxes, assessments or insurance premiums as herein provided. Pursuant to N.C.G.S. § 45-68 (2) , Grantor and the Beneficiary agree that at the time each obligation is incurred, it shall not be necessary for each such obligation to be evidenced by any written instrument or notation signed by Grantor and stipulating that such obligation is secured by this Deed of Trust. 1.2 Performance of Contract Documents. The Grantor shall pay or cause to be paid all sums, including all principal and interest, which become due under the Contract, and the Grantor shall observe and perform, or cause to be observed and performed, all covenants, conditions and agreements contained in the Contract and this Deed of Trust and any amendments and supplements thereto or hereto. 1.3 Title. The Grantor represents that it is seized of the entire interests in the Site in fee simple and that it has the right to convey the same in fee simple, that title is marketable and free and clear of all encumbrances except for Permitted Encumbrances (as hereinafter defined) , and that it will warrant and defend the title against the claims of all persons whomsoever. 1.4 Maintenance and Modification of Property by Grantor. Neither the Beneficiary nor the Trustee shall be under any obligation to operate, maintain or repair the Property. The Grantor agrees that until payment of the sums due to Beneficiary under the Contract, and full compliance with the provisions of this Deed of Trust it will (a) keep, or cause to be kept, the Property in as reasonably safe condition as its operations will permit and (b) keep, or cause to be kept, the Property in good repair and in good operating condition and make, or cause to be made, from time to time all necessary repairs thereto and renewals and replacements thereof. The Grantor will not permit or suffer others to commit a nuisance in connection with the use or occupancy of the Property. The Beneficiary may, at any time, during normal business hours, cause an inspection to be made of the Property by its representatives, and such representatives shall be permitted reasonable access to the Property and every part thereof. If any such inspection shows the need of restoration, repairs or maintenance and the Beneficiary makes demand therefor, the Grantor shall proceed within 30 days after such demand has been made to effect such restoration, repairs and maintenance and shall expeditiously and in good faith complete the same. 3 1.5 Grant and Release of Easements. The Grantor shall not grant easements, licenses, rights of way or any other rights or privileges in the nature of easements with respect to any part of the Property or release existing interests, easements, licenses, rights of way and other rights or privileges with or without consideration, without the prior written consent of the Beneficiary, which shall not be unreasonably withheld. 1.6 Insurance. Grantor shall keep, or cause to be kept, the Improvements on the Property insured by an insurance carrier at all times satisfactory to Beneficiary against loss by fire, hazards included within the term "extended coverage" , rent loss and such other hazards, perils, casualties, liabilities and contingencies and for such periods as Beneficiary shall require as more particularly set forth on Exhibit C to the Contract. During the term of this Deed of Trust, all such insurance shall be maintained continuously and the Grantor shall pay, or cause to be paid, as the same become due, all premiums in respect thereof. The Grantor shall also maintain, or cause to be maintained, if required by the Beneficiary, insurance against such other hazards as the Beneficiary may reasonably require. 1.7 Other Liens. The Grantor shall keep, or cause to be kept, the Property free from all other liens or encumbrances, whether or not same may have priority over the lien and encumbrance of this Deed of Trust, except any lien or other encumbrance appearing on any title opinion delivered to Beneficiary which is issued contemporaneously herewith, any lien for taxes not yet due, and any other exception, lien or other encumbrance permitted under the Contract or this Deed of Trust (collectively, the "Permitted Encumbrances") and shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, security interest, encumbrance or claim on or with respect to the Property, or any interest therein, except for Permitted Encumbrances. 1. 8 Taxes. The Grantor shall pay, or cause to be paid, all taxes and assessments, if any, levied against or which constitute liens on the Property prior to the date on which they shall become delinquent, but the Grantor may appropriately and in good faith contest the levy of any such tax or assessment provided that it makes whatever provision for the protection of the Property, including the payment of or the provision of a bond for the payment of such tax or assessment, that the Beneficiary may reasonably require. Receipts evidencing payment of all taxes and assessments, if any, levied against or that constitute liens on the Property shall be delivered to the Beneficiary prior to the delinquency thereof. 1.9 No Conveyance of Property. The Grantor will make no sale or conveyance of the Property or any part thereof or any interest therein. No conveyance will release the Grantor from its 4 obligations under the Contract. 1.10 Compliance with Environmental Laws. Grantor represents, warrants and agrees that (a) to the best of its knowledge, no Hazardous Material (as hereinafter defined) has been used or placed on the Property in violation of any applicable Environmental Laws (as hereinafter defined) ; (b) no notice has been received with regard to any Hazardous Material on the Property; (c) the Property is presently in compliance with all Environmental Laws; (d) no action, investigation or proceeding is pending or to Grantor' s knowledge threatened which seeks to enforce any right or remedy against Grantor or the Property under any Environmental Law; (e) Grantor shall permit no installation or placement of Hazardous Material on the Property in violation of Environmental Laws; (f) Grantor shall permit no release of Hazardous Material onto or from the Property in violation of Environmental Laws; (g) Grantor shall cause the Property to comply with applicable Environmental Laws and shall keep the Property free and clear of any liens imposed pursuant to any applicable Environmental Laws; (h) all licenses, permits and other governmental or regulatory actions necessary for the Property to comply with Environmental Laws (the "Permits") shall be obtained and maintained and Grantor shall assure compliance therewith; and (i) Grantor shall give the Beneficiary prompt written notice if Grantor receives any notice with regard to Hazardous Material on, from or affecting the Property and shall conduct and complete all investigations and all cleanup actions necessary to remove, in accordance with applicable Environmental Laws, such Hazardous Material from the Property. Grantor shall, to the extent permitted by law, indemnify and hold harmless the Beneficiary from and against all losses, expenses (including, without limitation, attorneys' fees) and claims of every kind suffered by or asserted against Beneficiary as a direct or indirect result of (a) the presence on or release from the Property of any Hazardous Material in violation of applicable Environmental Laws, whether or not caused by Grantor, (b) the failure by Grantor to comply fully with the terms and provisions of this Section, or (c) any warranty or representation made by Grantor in this Section being false or untrue in any material respect. For purposes of this Deed of Trust, "Hazardous Material" means polychlorinated biphenyls, petroleum, flammable explosives, radioactive materials, asbestos and any hazardous, toxic or dangerous waste, substance or material defined as such in (or for purposes of) the Environmental Laws or listed as such by the Environmental Protection Agency, other than cleaning supplies and other similar materials possessed by the Grantor for ordinary and necessary purposes, in reasonable quantities, in connection with the operation and maintenance of the Property. "Environmental Laws" means any current or future governmental law, regulation or ruling applicable to environmental conditions on, under or about the Property including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Clean Air Act and the Clean Water 5 Act. Grantor' s obligations under this Section shall survive a foreclosure of or exercise of power of sale under this Deed of Trust or delivery of a deed in lieu of foreclosure. 1.11 Compliance with Laws. Grantor covenants and warrants that the Property presently complies with and will continue to comply with all applicable federal, state and/or local laws, regulations and ordinances, including, without limitation, all applicable health laws and regulations, which affect the Property and the operations of Grantor on the Property. If Grantor receives notice from any federal, state or other governmental body that it is not in compliance with any such covenant, ordinance, code, law or regulation, Grantor will provide Beneficiary with a copy of such notice and comply with the provisions of such notice promptly. 1.12 Further Assurances. At any time and from time to time, upon Beneficiary's request, Grantor shall make, execute and deliver, or cause to be made, executed and delivered, to Beneficiary, and where appropriate shall cause to be recorded or filed, and from time to time thereafter to be re-recorded and ref iled at such time and in such offices and places as shall be deemed desirable by Beneficiary, any and all such further deeds of trust, instruments or further assurances, certificates and other documents as Beneficiary may consider necessary or desirable in order to effectuate, complete, or perfect, or to continue and preserve the obligations of Grantor under the Contract and this Deed of Trust, and the lien and encumbrance of this Deed of Trust as a lien and encumbrance upon all of the Property, whether now owned or hereafter acquired by Grantor. Upon any failure by Grantor to do so, Beneficiary may make, execute, record, file, re- record or ref ile any and all such deeds of trust, instruments, certificates and documents for and in the name of Grantor, and Grantor hereby irrevocably appoints Beneficiary the agent and attorney-in-fact of Grantor to do so. 1.13 Expenses and Indemnification. To the extent permitted by law, Grantor will pay when due and payable all costs and expenses of every character, including (without limitation) reasonable attorneys' fees and expenses which may hereafter be incurred by the Trustee or Beneficiary in accordance with and subject to the provisions of the Contract or this Deed of Trust, other than any costs or expenses arising out of the acts or omissions (constituting negligence or wilful misconduct on the part of) of Beneficiary or its officers and agents. To the extent permitted by law, Grantor will, upon demand by Beneficiary, reimburse Beneficiary for all such expenses which shall be incurred by it in connection with and will indemnify and hold harmless Beneficiary from and against, and reimburse it for, all claims, demands, liabilities, losses, damages, judgments, penalties, costs, and expenses (including, without limitation, attorneys' fees) which may be imposed upon, asserted against, or incurred or paid by Beneficiary by reason of, on account of or in connection with any 6 bodily injury or death or property damage occurring in or upon or in the vicinity of the Property through any cause whatsoever or asserted against hereunder or on account of any transaction arising out of or in any way connected with the Property or with this Deed of Trust, other than any claims arising out of the acts or omissions (constituting negligence or wilful misconduct on the part of) of Beneficiary or its officers and agents. 1.14 Beneficiary's Performance of Defaults. If Grantor defaults in the payment of any tax, assessment, encumbrance or other imposition, in its obligation to furnish insurance hereunder, or in the performance or observance of any other covenant, condition or term in this Deed of Trust or the Contract, Beneficiary may, to preserve its interest in the Property, perform or observe the same, and all payments made (whether such payments are regular or accelerated payments) , and costs and expenses incurred or paid by Beneficiary in connection therewith shall become due and payable immediately. The amounts so incurred or paid by Beneficiary, together with interest thereon at the rate set forth in the Contract from the date incurred until paid by Grantor, shall be added to the obligations of Grantor to Beneficiary which are secured by the lien and encumbrance of this Deed of Trust. Beneficiary is hereby empowered to enter, and authorize others to enter, upon the Property or any part thereof for the purpose of performing or observing any such defaulted covenant, condition or term, without thereby becoming liable to Grantor or any person in possession holding under Grantor. Article II. Events of Default. 2 .1 The term "Event of Default" or "Events of Default" , wherever used in this Deed of Trust, shall mean any one or more of the following events: (a) Default in the payment of principal or interest (or both) under the Contract or of any other amount due under the terms and conditions of the Contract secured hereby, and the expiration of any grace periods provided for therein; (b) Failure by the Grantor to observe and perform any covenant, condition or agreement on the part of the Grantor under the Contract or this Deed of Trust, or under any deed of trust listed as a Permitted Encumbrance, and such default shall not be cured within the applicable period, if any, provided for the curing thereof; or (c) There is any sale, encumbrance or other transfer or conveyance of the Property or any interest therein by the Grantor without the express written consent of Beneficiary, other than any Permitted Encumbrance. 7 Article III. Remedies of Beneficiary. 3 .1 Acceleration of Contract. If an Event of Default shall have occurred, then the principal portion of any remaining Installment Payments (as defined in the Contract) shall, at the option of the Beneficiary, become at once due and payable, regardless of the maturity date thereof. 3 .2 Right to Enter and Take Possession. Upon the occurrence and continuation of an Event of Default, the Beneficiary or the Trustee: (a) shall have the right (but not the obligation) to enter upon the aforementioned Property to such extent and as often as the Trustee or the Beneficiary, in either the Trustee' s or the Beneficiary's sole discretion, as the case may be, deems necessary or desirable in order to cure any default by the Grantor; (b) may, to the extent permitted by law, take possession of all or any part of the Property together with the books, papers and accounts of the Grantor pertaining thereto and may hold, operate and manage the same, and from time to time make all needful repairs and replacements as shall be deemed expedient by the Trustee or the Beneficiary, as the case may be; (c) may, subject to the rights of tenants, modify or cancel any lease of the Property and may lease the Property or any part thereof for such periods of time and upon such terms and conditions as the Trustee or the Beneficiary, as the case may be, may, in either of their reasonable discretion, deem proper, in the name of and for the account of the Grantor, and collect, receive and request the Rents, and out of the same and from any money received from any receiver or any part thereof pay, and set up proper' reserves for the payment of, all proper costs and expenses of so taking, holding and managing the same, including reasonable compensation to the Trustee or the Beneficiary, their or its agents and counsel, and any charges of the Trustee or the Beneficiary hereunder, as the case may be, and any taxes and assessments and other charges prior to the lien of this Deed of Trust that the Trustee or the Beneficiary, as the case may be, may deem it proper to pay, and all expenses of such repairs and replacements, and apply the remainder of the money so received in accordance with the provisions of Section 3 .8 hereof; and (d) may enforce, enjoin and restrain the violation of any of the terms and conditions of any leases of the Property in effect at such time. 3 .3 Appointment of Receiver. The Beneficiary and the Trustee shall have the right, to the extent permitted by law, after the occurrence of an Event of Default, to the appointment of a receiver to collect the Rents from the Property without consideration of the value of the Property or the solvency of any person liable for the payment of the amounts then owing, and all amounts collected by the receiver shall, after expenses of the receivership, be applied in accordance with the provisions of Section 3 .8 hereof, and the Trustee or the Beneficiary, at either the Trustee' s or the Beneficiary' s option, in lieu of an appointment of a receiver, shall have the right to do the same. If a receiver should be 8 appointed or if there should be a sale of the Property, as provided below, the Grantor or any person in possession of the Property thereunder, as tenant or otherwise, shall become a tenant at will of the receiver or of the purchaser and may be removed by a writ of ejectment, summary ejectment or other lawful remedy. 3 .4 Foreclosure. The Trustee is hereby authorized and empowered, upon the happening of an Event of Default and the application of the Beneficiary, to offer to sell and to sell the Property at one or more public sales or auctions, in whole or in part for cash, after first having complied with all applicable requirements of North Carolina law with respect to the exercise of powers of sale contained in deeds of trust. The Grantor agrees that in the event of a sale hereunder the Beneficiary shall have the right to bid at the sale and to become the purchaser at such sale. The Trustee may require the successful bidder at any sale to deposit immediately with the Trustee cash or a certified check in an amount not to exceed five percent of his bid, provided notice of such requirement is contained in the advertisement of the sale. The bid may be rejected if the deposit is not immediately made and thereupon the next highest bidder may be declared to be the purchaser. Such deposit shall be refunded in case a resale is had; otherwise it shall be applied to the purchase price. The sale of the Property or any part thereof or any interest therein, whether pursuant to foreclosure, power of sale or otherwise under this Deed of Trust, shall forever bar any claim with respect to the Property by the Grantor. In addition to the foregoing power of sale, upon the happening of any Event of Default, the Beneficiary and the Trustee, as the case may be, shall be entitled to exercise such rights as may be granted under the Uniform Commercial Code as in effect in North Carolina from time to time with respect to any portion of the Property herein conveyed as may be subject thereto. 3 .5 Waivers and Consents by Grantor. The Grantor hereby waives, to the full extent it lawfully may, the benefit of all appraisement, valuation, stay, moratorium, exemption from execution, extension and redemption laws and any statute of limitations, now or hereafter in force, and all rights of marshalling in the event of the sale of the Property or any part thereof or any interest therein. Moreover, the Grantor expressly consents to the modification of any stay arising pursuant to any bankruptcy proceeding filed by or against the Grantor to allow the exercise of any rights or remedies granted Beneficiary under this Deed of Trust. All rights of action under this Deed of Trust or in respect of the Contract, if permitted by applicable law, may be enforced by the Beneficiary or the Trustee without the production of this Deed of Trust or the Contract at any trial or other proceeding relating 9 thereto. 3 .6 Remedies Cumulative. The foregoing shall in no way be construed to limit the powers of sale or to restrict the discretion that the Trustee and the Beneficiary might have under the provisions of Article 2A of Chapter 45 of the General Statutes of North Carolina, as the same may be from time to time amended. Each legal, equitable or contractual right, power or remedy of the Trustee or the Beneficiary now or hereafter provided, herein or by statute or otherwise, shall be cumulative and concurrent and shall be in addition to every other right, power and remedy, and the exercise or beginning of the exercise by the Trustee or the Beneficiary of any one or more of such rights, powers and remedies shall not preclude the simultaneous or later exercise of any or all such other rights, powers and remedies. 3 .7 Late Charge. In the event that any payment due under this Deed of Trust or the Contract shall become overdue for a period of 15 days, a late charge of 4%- of such payment may be charged by the Beneficiary for the purpose of defraying the expense incident to handling such delinquent payment, and the Grantor covenants to pay, any such late charge, which shall become due immediately upon demand. 3 .8 Application of Proceeds. The proceeds of (a) the operation and management of the Property pursuant to Section 3 .2 hereof, (b) any sale of the Property or any interest therein, whether pursuant to foreclosure, power of sale or otherwise, and (c) any insurance policies or other sums retained by the Trustee pursuant to the Contract or this Deed of Trust or otherwise upon the occurrence of an Event of Default shall, to the extent permitted by applicable North Carolina law, be applied to pay: First: The costs and expenses of sale, reasonable attorneys' fees, the Trustee' s commission, court costs and any other expenses or advances made or incurred in the protection of the rights of the Trustee or the Beneficiary in protection of the Property, or in the pursuance of any remedies hereunder; Second: Taxes and special assessments (or installments thereof) that are due and unpaid, unless the notice of sale provides that the Property would be sold subject to taxes or assessments and the Property was so sold; Third: Any lien or encumbrance prior to the lien or encumbrance of this Deed of Trust that the Trustee or the Beneficiary may consider necessary or desirable to discharge; Fourth: Any indebtedness secured by this Deed of Trust and at the time due and payable (whether by acceleration or otherwise) , including all amounts of principal and interest at 10 the time due and payable with respect to the Installment Payments to be made under the Contract; and Fifth: The balance, if any, to the persons then entitled thereto under the Contract unless applicable law requires otherwise, in which case in accordance with such law. 3 .9 Trustee' s Commissions. In the event of a consummated sale under the power of sale contained herein, the Trustee's commission shall be as agreed by the Beneficiary and the Trustee but not more than 5%- of the sale proceeds. In the event the Trustee shall be directed, pursuant to a court order, to institute a sale under the power of sale contained herein and thereafter all defaults hereunder shall be remedied and such proceeding shall be dismissed, the Grantor shall pay to the Trustee an amount equal to 2W of the outstanding principal balance of the remaining Installment Payments due under the Contract and other fees and expenses incurred by the Trustee prior to such dismissal. 3 .10 Payment of Costs. Attorneys' Fees and Expenses. The Grantor shall pay any and all reasonable costs, attorneys' fees and other reasonable expenses of whatever kind incurred by the Trustee or the Beneficiary (and the Trustee and Beneficiary are expressly authorized to incur and make such expenditures) in connection with the preservation or protection of their interests in the Property, the enforcement of this Deed of Trust, or the exercise of the rights of the Beneficiary hereunder. If Grantor fails to perform any of the covenants and agreements contained in this Deed of Trust, or there is a legal proceeding that may significantly affect Beneficiary's rights in the Property (such as, but not limited to, a bankruptcy or insolvency proceeding (s) , probate, any proceeding for condemnation or forfeiture of the Property or any portion thereof, or to enforce any federal, state or local laws or regulations) , then Beneficiary may do and pay for whatever is necessary to protect the value of the Property and Beneficiary' s interests and rights in the Property. Beneficiary' s actions may include (without limitation) appearing in court, paying reasonable attorneys' fees and entering on the Property to make repairs. Although Beneficiary may take action under this Section, Beneficiary does not have to do so. 3 .11 Advances by Beneficiary. The Beneficiary is authorized, for the account of the Grantor, to (a) make any required payments under any lien or encumbrance prior hereto, under the Contract or this Deed of Trust, the non-payment of which would constitute a default, including but not limited to payments of principal, interest, premium, if any, taxes and insurance premiums, and (b) pay any costs, attorneys' fees and any other expenses incurred pursuant to Section 3 .10 above. All sums so advanced shall bear interest at an annual rate equal to the rate in effect under the Contract, shall attach to and become part of the debt 11 secured hereby, and shall be payable upon demand therefor, or if demand is not sooner made, on the maturity date set forth hereinabove. The failure to make payment on demand of advances made by Beneficiary pursuant to this Section 3 .11 shall, at the option of the Beneficiary, constitute an Event of Default hereunder, giving rise to all of the remedies herein provided for an Event of Default. The Beneficiary shall notify the Grantor in writing of any such advance within 30 days of the date thereof. 3 .12 Extension(s) and Releases. The Beneficiary and the Trustee (with the permission of the Beneficiary) may grant any extension, forbearance or other indulgence, and may release any part of the Property from the lien hereof without affecting the personal liability of any person for payment of the indebtedness secured hereby or the lien hereof. Article IV. Miscellaneous. 4.1 The Trustee. The Trustee shall be under no duty to take any action hereunder except as expressly required, or to perform any act which would involve it in expense or liability or to institute or defend any suit in respect hereof, unless properly indemnified to its satisfaction. All reasonable expenses, charges, counsel fees and other disbursements incurred by the Trustee in and about the administration and execution of the trusts hereby created, and the performance of its duties and powers hereunder, shall be secured by this Deed of Trust prior to the indebtedness represented by the Contract, shall bear interest at the same rate as the Contract, and shall be payable on demand by the Beneficiary. 4.2 Heirs. Successors and Assigns. This Deed of Trust shall be binding upon, inure to the benefit of and be enforceable by the Trustee and the Beneficiary and their respective heirs, successors and assigns. 4.3 Amendments and Supplements. This Deed of Trust may be amended and supplemented only with the written consent of the Beneficiary. 4.4 Applicable Law. This Deed of Trust shall be governed by, and construed in accordance with, the applicable laws of the State of North Carolina. 4.5 Execution in Counterparts. This Deed of Trust may be executed in several counterparts, each of which shall be an original and all of which shall be an original and all of which shall constitute one and the same instrument. 4.6 Notices. All notices, approvals, consents, requests and other communications hereunder shall be in writing and shall be deemed to have been given when delivered or mailed by either (i) Federal Express (or other overnight courier) , or (ii) first class registered or certified mail, return receipt requested, postage 12 prepaid, addressed as follows: If to the Grantor: County of Orange P. 0. Box 8181 Hillsborough, NC 27278 Attn: Finance Director If to the Beneficiary: NationsBank, N.A. 137 East Franklin Street Chapel Hill, NC 27514 Attn: Denise Corey If to the Trustee: Stephen D. Poe P.O. Box 21029 Winston-Salem, NC 27120-1029 The Grantor, the Trustee and the Beneficiary may, by notice given hereunder, designate any further or different addresses to which subsequent notices, approvals, consents, requests or other communications shall be sent or persons to whose attention the same shall be directed. 4.7 Headings: Definitions. The headings of the articles, sections, paragraphs and subdivisions of this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions herein. Wherever used herein and as the context requires, the singular shall be deemed to have been used in the plural, and vice versa, and the masculine gender shall include the feminine and neuter and the neuter shall include the masculine and feminine. 4. 8 Severability. Invalidation of any one or more of the provisions of this Deed of Trust shall in no way affect any of the other provisions hereof, which shall remain in full force and effect. 4.9 Priority. No release of any part of the Property herein described or extension of all or any part of the indebtedness hereby secured shall affect the priority of this Deed of Trust. 4.10 Substitution of Trustee. Beneficiary shall at any time have the irrevocable right to remove the Trustee named herein without notice or cause and to appoint a substitute trustee by filing for record in the office in which this Deed of Trust is recorded an instrument of appointment, and any substitute trustee so appointed shall possess all the powers, duties and obligations herein conferred upon Trustee in the same manner and to the same extent as though he were named herein as Trustee. 13 4.11 Complete Release. If Grantor shall pay all sums due under the Contract in accordance with its terms, together with interest thereon, and any renewals and extensions thereof, and shall comply with all of the covenants, terms and conditions of this Deed of Trust, then this conveyance shall be null and void and shall be cancelled of record at the request and expense of Grantor. 4.12 Limited Obligation of Grantor. NO PROVISION OF THIS DEED OF TRUST SHALL BE CONSTRUED OR INTERPRETED AS CREATING A PLEDGE OF THE FAITH AND CREDIT OF THE GRANTOR WITHIN THE MEANING OF ANY CONSTITUTIONAL DEBT LIMITATION. NO PROVISION OF THIS DEED OF TRUST SHALL BE CONSTRUED OR INTERPRETED AS CREATING A DELEGATION OF GOVERNMENTAL POWERS NOR AS A DONATION BY OR A LENDING OF THE CREDIT OF THE GRANTOR WITHIN THE MEANING OF THE CONSTITUTION OF THE STATE OF NORTH CAROLINA. THIS DEED OF TRUST SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE: GRANTOR TO MAKE ANY PAYMENTS BEYOND THOSE APPROPRIATED IN THE SOLE DISCRETION OF THE GRANTOR FOR ANY FISCAL YEAR IN WHICH THIS DEED OF TRUST SHALL BE IN EFFECT. NO DEFICIENCY JUDGMENT MAY BE RENDERED AGAINST THE GRANTOR IN ANY ACTION FOR BREACH OF A CONTRACTUAL OBLIGATION UNDER THE CONTRACT OR THIS DEED OF TRUST AND THE TAXING POWER OF THE GRANTOR IS NOT AND MAY NOT BE PLEDGED DIRECTLY OR INDIRECTLY OR CONTINGENTLY TO SECURE ANY MONEYS DUE UNDER THIS DEED OF TRUST. 4.13. Entire Agreement. This Deed of Trust, the Contract and any other loan documents contain the entire agreement among the parties relating to the subject matter hereof and thereof, and all prior agreements relative thereto which are not contained herein or therein are terminated. IN WITNESS WHEREOF, Grantor has caused this Deed of Trust to be duly executed and sealed the day and year first above written. COUNTY OF ORANGE, NORTH CAROLINA By: Chairman, Board of Commissioners ATTEST: Clerk to Board of Commissioners [County Seal] 14 STATE OF NORTH CAROLINA ) COUNTY OF ORANGE ) I, a Notary Public of the County and State aforesaid, certify that Beverly L. Blythe personally appeared before me this day and acknowledged that she is Clerk to the Board of Commissioner for Orange County, and that by authority duly given and as the act of said County, the foregoing instrument was signed in its name by the Chairman of the Board of Commissioners and attested by her as Clerk to said Board of Commissioners. Witness my hand and official seal, this the day of January, 1996. (Stamp/Seal) Notary Public My commission expires: 15