EXHIBIT 10.39

THIS DOCUMENT WAS PREPARED

BY AND WHEN RECORDED, RETURN

BY MAIL TO:

Erika K. Del Duca, Esq.

Milbank, Tweed, Hadley & McCloy LLP

1 Chase Manhattan Plaza

New York, NY 10005-1413

DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE
FILING dated December 1, 2005 (together with any amendments or modifications
hereto in effect from time to time, the “Deed of Trust”), by WINCUP TEXAS, LTD.,
a Texas limited partnership, having an address c/o Radnor Holdings Corporation,
Radnor Financial Center, 150 Radnor Chester Road, Building A, Suite 300, Radnor,
Pennsylvania 19087 (“Grantor”) in favor of COMMONWEALTH LAND TITLE OF FORT
WORTH, INC., having an address at 777 Taylor Street, Suite 902, Fort Worth, TX
76102 (the “Trustee”) for the benefit of TENNENBAUM CAPITAL PARTNERS, LLC,
having an address of 2951 28th Street, Suite 1000, Santa Monica, CA 90405, in
its capacity as collateral agent (together with its successors and assigns in
such capacity, “Beneficiary”).

WITNESSETH:

WHEREAS, the Lenders (as defined in the Credit Agreement (as defined below))
have extended, at the request of Radnor Holdings Corporation (the “Company”),
$92,600,000 aggregate principal amount of Tranche A Loans (the “Tranche A
Loans”) and $2,400,000 aggregate principal amount of Tranche B Loans (the
“Tranche B Loans”) (the Tranche A Loans and the Tranche B Loans are collectively
referred herein as, the “Loans”); the total aggregate principal amount of the
Loans not exceeding ninety-five million dollars ($95,000,000) and which Loans
are evidenced by the Tranche A Notes executed by the Company (the “Tranche A
Notes”) and Tranche B Notes executed by the Company (the “Tranche B Notes”)
pursuant to that certain Credit Agreement, of even date herewith (the “Credit
Agreement”), between the Company, the Company’s subsidiaries that provide
guarantees under the Credit Agreement (the “Guarantors”), the Lenders and
Tennenbaum Capital Partners, LLC, as agent and collateral agent;

WHEREAS, the Company, the Guarantors, and Beneficiary, as collateral agent, have
entered into that certain Tranche A Security Agreement (the “Tranche A Security
Agreement”) dated as of the date hereof pursuant to which the Company and the
Guarantors have granted a security interest in, and undertaken obligations with
respect to, certain collateral and other property described therein;

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WHEREAS, Grantor is the owner of fee simple title to certain tract of land
located at 400 East Minton Road, in the City of Saginaw, County of Tarrant,
State of Texas, as more particularly described in Schedule “A” attached hereto
and made a part hereof (the “Real Estate”);

WHEREAS, pursuant to the Credit Agreement, the Guarantors have unconditionally
guaranteed the repayment of the indebtedness evidenced and represented by the
Tranche A Notes (the “Indebtedness”), as well as the payment, performance,
observance and discharge by the Company of all obligations, covenants,
conditions and agreements made by the Company to, with, in favor of and for the
benefit of Beneficiary or any of the Tranche A Lenders (as defined in the Credit
Agreement) under the Credit Agreement and the Other Documents (as defined
below);

WHEREAS, Beneficiary and the Tranche A Lenders, as a condition precedent to the
transactions contemplated by the Credit Agreement, have required that Grantor
execute and deliver this Deed of Trust to the Trustee for the benefit of
Beneficiary; and

WHEREAS, Grantor is one of the Guarantors and Grantor will directly and
substantially benefit from the transactions contemplated by the Credit
Agreement.

GRANTING CLAUSES

NOW, THEREFORE, to secure to Tranche A Lenders (i) the payment or performance
and discharge of all sums due under this Deed of Trust; (ii) the payment or
performance and discharge of all terms, conditions and covenants, including the
Secured Obligations, set forth in the Credit Agreement and the Other Documents,
other than the payment of principal, prepayment premium, if any, and interest
on, the Tranche B Loans and the performance of the Guarantors with respect
thereto; and (iii) the payment or performance and discharge of all other
obligations or indebtedness of Grantor, the Company, or the other Guarantors to
Beneficiary or Tranche A Lenders of whatever kind or character and whenever
borrowed or incurred under the Credit Agreement or the Other Documents,
including without limitation, principal, prepayment premium, if any, and
interest (as the same may vary in accordance with the terms of the Credit
Agreement) on the Tranche A Loans (but excluding the payment of principal,
prepayment premium, if any, and interest on, the Tranche B Loans), fees, late
charges and expenses, including attorneys’ fees (subsections (i), (ii) and
(iii) collectively, the “Liabilities”), Grantor DOES HEREBY GRANT, BARGAIN,
SELL, CONVEY, TRANSFER, ASSIGN, MORTGAGE and SET OVER to Trustee, his/her
substitutes and assigns, for the benefit of Beneficiary and Tranche A Lenders,
all right, title and interest of Grantor in and to the following (collectively,
the “Property”):

(A) The Real Estate;

(B) Any and all buildings and improvements now or hereafter erected on, under or
over the Real Estate (the “Improvements”);

(C) Any and all fixtures, machinery, equipment and other articles of real,
personal or mixed property, belonging to Grantor, at any time now or hereafter
installed in, attached to or situated in or upon the Real Estate, or the
Improvements, or used or intended to be used in connection with the Real Estate,
or in the operation of the Improvements, plant, business or dwelling situate
thereon, whether or not such real, personal or mixed property is or shall be
affixed thereto, and all replacements, substitutions and proceeds of the
foregoing (all of the foregoing herein called the “Service Equipment”),
including without limitation: (i) all appliances, furniture and furnishings; all
articles of interior decoration, floor, wall and window coverings; all office,
restaurant, bar, kitchen and laundry fixtures, utensils, appliances and
equipment; all supplies, tools and accessories; all storm and screen windows,
shutters, doors,

 

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decorations, awnings, shades, blinds, signs, trees, shrubbery and other
plantings; (ii) all building service fixtures, machinery and equipment of any
kind whatsoever; all lighting, heating, ventilating, air conditioning,
refrigerating, sprinkling, plumbing, security, irrigating, cleaning,
incinerating, waste disposal, communications, alarm, fire prevention and
extinguishing systems, fixtures, apparatus, machinery and equipment; all
elevators, escalators, lifts, cranes, hoists and platforms; all pipes, conduits,
pumps, boilers, tanks, motors, engines, furnaces and compressors; all dynamos,
transformers and generators; (iii) all building materials, building machinery
and building equipment delivered on site to the Real Estate during the course
of, or in connection with any construction or repair or renovation of the
Improvements; (iv) all parts, fittings, accessories, accessions, substitutions
and replacements therefor and thereof; and (v) all files, books, ledgers,
reports and records relating to any of the foregoing;

(D) Any and all leases, subleases, tenancies, licenses, occupancy agreements or
agreements to lease all or any portion of the Real Estate, Improvements, Service
Equipment or all or any other portion of the Property and all extensions,
renewals, amendments, modifications and replacements thereof, and any options,
rights of first refusal or guarantees relating thereto (collectively, the
“Leases”); all rents, income, receipts, revenues, security deposits, escrow
accounts, reserves, issues, profits, awards and payments of any kind payable
under the Leases or otherwise arising from the Real Estate, Improvements,
Service Equipment or all or any other portion of the Property including, without
limitation, minimum rents, additional rents, percentage rents, parking,
maintenance and deficiency rents (collectively, the “Rents”); all of the
following personal property to the extent assignable (collectively referred to
as the “Contracts”): all accounts, general intangibles and contract rights
(including any right to payment thereunder, whether or not earned by
performance) of any nature relating to the Real Estate, Improvements, Service
Equipment or all or any other portion of the Property or the use, occupancy,
maintenance, construction, repair or operation thereof; all management
agreements, franchise agreements, utility agreements and deposits, building
service contracts, maintenance contracts, construction contracts and architect’s
agreements; all maps, plans, surveys and specifications; all warranties and
guaranties; all permits, licenses and approvals; and all insurance policies,
books of account and other documents, of whatever kind or character, relating to
the use, construction upon, occupancy, leasing, sale or operation of the Real
Estate, Improvements, Service Equipment or all or any other portion of the
Property;

(E) Any and all estates, rights, tenements, hereditaments, privileges,
easements, reversions, remainders and appurtenances of any kind benefiting or
appurtenant to the Real Estate, Improvements or all or any other portion of the
Property; all means of access to and from the Real Estate, Improvements or all
or any other portion of the Property, whether public or private; all streets,
alleys, passages, ways, water courses, water and mineral rights relating to the
Real Estate, Improvements or all or any other portion of the Property; all
rights of Grantor as declarant or unit owner under any declaration of
condominium or association applicable to the Real Estate, Improvements or all or
any other portion of the Property including, without limitation, all development
rights and special declarant rights; and all other claims or demands of Grantor,
either at law or in equity, in possession or expectancy of, in, or to the Real
Estate, Improvements or all or any other portion of the Property (all of the
foregoing described in this subsection E herein called the “Appurtenances”); and

(F) Any and all “proceeds” of any of the above-described Real Estate,
Improvements, Service Equipment, Leases, Rents, Contracts and Appurtenances,
which term “proceeds” shall have the meaning given to it in the Uniform
Commercial Code, as amended, (the “Code”) of the State in which the Real Estate
is located (collectively, the “Proceeds”) and shall additionally include
whatever is received upon the use, lease, sale, exchange, transfer, collection
or other utilization or any disposition or conversion of any of the Real Estate,
Improvements, Service Equipment, Leases, Rents, Contracts and Appurtenances,
voluntary or involuntary, whether cash or non-cash, including, subject to the
terms of this

 

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Deed of Trust, proceeds of insurance and condemnation awards, rental or lease
payments, accounts, chattel paper, instruments, documents, contract rights,
general intangibles, equipment and inventory.

TO HAVE AND TO HOLD the above granted and conveyed Property unto and to the
proper use and benefit of Trustee, its successors and assigns, in trust,
forever, to secure the payment and performance of the Liabilities.

IN TRUST, WITH THE POWER OF SALE, to secure payment and performance to
Beneficiary of the Liabilities at the time and in the manner provided for its
payment in the Credit Agreement and in this Deed of Trust.

PROVIDED, HOWEVER, these presents are upon the express condition that, if
Grantor shall well and truly perform and pay to Beneficiary the Liabilities at
the time and in the manner provided in the Credit Agreement, this Deed of Trust
and the Other Documents, and shall well and truly perform the Liabilities as set
forth in the Credit Agreement, this Deed of Trust and the Other Documents and
shall well and truly abide by and comply with each and every covenant and
condition set forth herein and in the Credit Agreement and the Other Documents,
these presents and the estate hereby granted shall cease, terminate and be void
and Beneficiary shall release the lien and security interest created by this
Deed of Trust upon the request of and at the sole cost and expense of Grantor;
provided, however, that any obligation of Grantor to indemnify and hold harmless
Beneficiary pursuant to the Credit Agreement, this Deed of Trust and/or the
Other Documents, to the extent specified herein or therein to survive, and any
other obligation that is specifically agreed to survive such full repayment,
performance and release and shall survive any such payment, performance or
release.

All capitalized terms not otherwise defined herein shall have the meaning
ascribed to them in the Tranche A Security Agreement. To the extent of any
inconsistency between the terms hereof and the terms of the Tranche A Security
Agreement, the terms of the Tranche A Security Agreement shall control, except
that with respect to the remedies of a Trustee under the law of the State of
Texas, the terms of this Deed of Trust shall govern; provided, however, that
Grantor and Trustee expressly agree that no conflict shall be deemed to exist
where one document imposes a stricter obligation than another, so long as
compliance with the stricter obligation does not make compliance with the less
strict obligation impossible. This Deed of Trust, the Tranche A Security
Agreement, the other Collateral Documents (as defined in the Credit Agreement)
and any other instrument given to evidence or further secure the payment and
performance of any of the Liabilities are sometimes hereinafter collectively
referred to as the “Other Documents”.

The present principal amount of the Liabilities secured hereby is $92,600,000;
the maximum principal amount, including present and future Liabilities, which
may be secured hereby at any one time is $92,600,000, plus interest, plus
prepayment premium, if any, plus any disbursements and taxes and insurance on
the Property and any other sums advanced in accordance with the terms hereof or
the Credit Agreement or any of the Other Documents to protect the security of
this Deed of Trust, the Credit Agreement or any of the Other Documents, plus
interest on such disbursements and advances at the rates set forth in the Credit
Agreement (the “Secured Amount”). For purposes of this Deed of Trust, so long as
the aggregate principal balance of the Liabilities outstanding equals or exceeds
the Secured Amount, the amount of the Liabilities secured by this Deed of Trust
shall at all times equal only the Secured Amount. The Secured Amount shall be
reduced only by the last and final sums that are repaid with respect to the
Liabilities so as to make the aggregate principal balance of the Liabilities
equal to an amount less than the Secured Amount, and shall not be reduced by any
intervening repayments of the Liabilities. The parties acknowledge and agree
that this Deed of Trust does not secure the Tranche B

 

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Loans as evidenced by the Tranche B Notes or the obligations of the Guarantors
under the Credit Agreement with respect to the Tranche B Loans.

AND Grantor covenants and agrees with and represents to Trustee as follows:

1. FUTURE ADVANCES; PROTECTION OF PROPERTY. This Deed of Trust shall secure any
additional loans as well as any and all present or future advances and
re-advances under the Credit Agreement or any other Liabilities made by
Beneficiary or any Tranche A Lender to or for the benefit of Grantor, the
Company, the other Guarantors or the Property, including, without limitation:
(a) principal, interest, late charges, fees and other amounts due under the
Credit Agreement, the Other Documents or this Deed of Trust; (b) all advances by
Beneficiary to Grantor or any other person to pay costs of erection,
construction, alteration, repair, restoration, maintenance and completion of any
Improvements; (c) all advances made or costs incurred by Beneficiary for the
payment of real estate taxes, assessments or other governmental charges,
maintenance charges, insurance premiums, appraisal charges, environmental
inspection, audit, testing or compliance costs, and costs incurred by
Beneficiary for the enforcement and protection of the Property or the lien of
this Deed of Trust; and (d) all legal fees, costs and other expenses incurred by
Beneficiary and/or Trustee by reason of any default or otherwise in connection
with the Liabilities. Grantor agrees that if, at any time during the term of
this Deed of Trust or following a foreclosure hereof (whether before or after
the entry of a judgment of foreclosure), Grantor fails to perform or observe any
covenant or obligation under this Deed of Trust including, without limitation,
payment of any of the foregoing, Trustee may (but shall not be obligated to)
take such steps as are reasonably necessary to remedy any such nonperformance or
nonobservance and provide payment thereof. All amounts advanced by Trustee or
Beneficiary shall be added to the amount secured by this Deed of Trust (and, if
advanced after the entry of a judgment of foreclosure, by such judgment of
foreclosure), and shall be due and payable on demand, together with interest at
the rate borne by the Tranche A Loans, such interest to be calculated from the
date of such advance to the date of repayment thereof.

2. REPRESENTATIONS, WARRANTIES AND COVENANTS.

2.1. Payment and Performance. Grantor shall (a) pay all sums required to be paid
by Grantor under the Credit Agreement and the Other Documents, in accordance
with their stated terms and conditions; (b) perform and comply with all terms,
conditions and covenants set forth in the Credit Agreement and each of the Other
Documents by which Grantor is bound; and (c) perform and comply with all of
Grantor’s obligations and duties as landlord under any Leases.

2.2. Seisin and Warranty. Grantor hereby warrants that (a) Grantor is seized of
an indefeasible estate in fee simple in, and warrants the title to, the Real
Estate and the Improvements subject only to those exceptions more particularly
described in the title pro forma Policy No. 2211001054.M issued by Commonwealth
Land Title Insurance Company and accepted by Beneficiary in connection with this
transaction (the “Permitted Exceptions”); (b) Grantor has the right, full power
and lawful authority to warrant, grant, bargain, sell, convey, transfer, assign
and set over the same to Trustee in the manner and form set forth herein; and
(c) this Deed of Trust is a valid and enforceable first lien on the Property.
Grantor hereby covenants that Grantor shall (a) preserve such title and the
validity and priority of the lien of this Deed of Trust and shall forever
warrant and defend the same, subject to the Permitted Exceptions, to Trustee
against all lawful claims whatsoever; and (b) execute, acknowledge and deliver
all such further documents or assurances as may at any time hereafter be
required by Deed of Trust to protect fully the lien of this Deed of Trust.

 

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2.3. Insurance.

(a) Grantor shall obtain and maintain at all times throughout the term of this
Deed of Trust the following insurance: (i) insurance in accordance with the
terms of the Credit Agreement; (ii) “All-Risk” fire and extended coverage hazard
insurance (non-reporting Commercial Property Policy with Special Cause of Loss
form) covering the Property in an aggregate amount not less than 100% of the
agreed upon full insurable replacement value of the tangible Property, including
coverage for loss of rents or business interruption and excluding roads,
foundations, parking areas, walkways and like improvements to the extent
customarily excluded from policies being issued by insurers of similarly
situated properties; (iii) during the course of any construction,
reconstruction, remodeling or repair of any Improvements, builders’ all-risk
extended coverage insurance (non-reporting Completed Value with Special Cause of
Loss form) in amounts based upon the completed replacement value of the
Improvements (excluding roads, foundations, parking areas, paths, walkways and
like improvements) and endorsed to provide that occupancy by any person shall
not void such coverage; and (iv) if the Improvements are required to be insured
pursuant to the National Flood Insurance Reform Act of 1994, and the regulations
promulgated thereunder, flood insurance in an amount at least equal to the
lesser of the agreed upon full insurable replacement value of the Improvements
or the maximum limit of coverage available.

(b) Each insurance policy required under this Section shall: (i) be written by
an insurance company authorized or licensed to do business in the state within
which the Real Estate is located having an Alfred M. Best Company, Inc. rating
of “A-” or higher and a financial size category of not less than IX; (ii) be for
terms of a least one year, with premium prepaid; (iii) be subject to the
reasonable approval of Beneficiary as to insurance companies, amounts, content,
forms of policies and expiration dates; and (iv) name Beneficiary, Trustee,
their successors and assigns: (1) as additional insureds under all liability
insurance policies, and (2) as the first mortgagee, under a standard
non-contributory mortgagee clause, on all property insurance policies and all
loss of rents or loss of business income insurance policies.

(c) Grantor further agrees that each insurance policy: (i) shall provide at
least thirty (30) days’ prior written notice to Beneficiary prior to any policy
reduction or cancellation for any reason; (ii) shall contain an endorsement or
agreement by the insurer that any loss shall be payable to Beneficiary in
accordance with the terms of such policy notwithstanding any act or negligence
of Grantor which might otherwise result in forfeiture of such insurance;
(iii) shall waive all rights of setoff, counterclaim, deduction or subrogation
against Grantor; and (iv) shall exclude Beneficiary from the operation of any
coinsurance clause.

(d) On or before the date hereof, Grantor will deliver to Beneficiary
certificates of insurance reasonably satisfactory to Beneficiary evidencing the
existence of all insurance required to be maintained by Grantor hereunder
setting forth the respective coverages, limits of liability, carrier, policy
number and period of coverage and showing that such insurance will remain in
effect through the December 31 falling at least six months after the date
hereof, subject only to the payment of premiums as they become due, together
with an Officers Certificate stating that such insurance complies with the
provisions hereof. At least thirty (30) days prior to the expiration of any
insurance policy, Grantor shall furnish evidence satisfactory to Beneficiary
that such policy has been renewed or replaced or is no longer required. Nothing
in this Section 2.3 shall be deemed to limit in any respect the obligations of
the Grantor under any applicable provision of the Tranche A Security Agreement.

2.4. Transfer of Title. Except as expressly provided in the Credit Agreement,
without the prior written consent of Beneficiary in each instance, Grantor shall
not cause or permit any transfer of the Property or any part thereof, whether
voluntarily, involuntarily (other than by reason of condemnation) or by
operation of law, nor shall Grantor enter into any agreement or transaction to
transfer, or accomplish

 

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in form or substance a transfer, of the Property. A “transfer” of the Property
includes: (a) the direct or indirect sale, transfer or conveyance of the
Property or any portion thereof or interest therein; (b) the execution of an
installment sale contract or similar instrument affecting all or any portion of
the Property; (c) if Grantor, or any general partner or member of Grantor, is a
corporation, partnership, limited liability company or other business entity,
the transfer (whether in one transaction or a series of transactions) of any
stock, partnership, limited liability company or other ownership interests in
such corporation, partnership, limited liability company or entity other than
the transfer of any such interest between or among the members of Grantor, or to
the estate of its current owner, upon the death of such owner; (d) if Grantor,
or any general partner or member of Grantor, is a corporation, the creation or
issuance of new stock by which an aggregate of more than 10% of such
corporation’s stock shall be vested in a party or parties who are not now
stockholders; and (e) an agreement by Grantor leasing all or a substantial part
of the Property for other than actual occupancy by a space tenant thereunder or
a sale, assignment or other transfer of or the grant of a security interest in
and to any Leases.

2.5. No Encumbrances. Except as permitted in the Credit Agreement and for the
Permitted Exceptions, Grantor shall not create or permit to exist any mortgage,
deed of trust, pledge, lien, security interest (including, without limitation, a
purchase money security interest), encumbrance, attachment, levy, distraint or
other judicial process on or against the Property or any part thereof
(including, without limitation, fixtures and other personalty), whether superior
or inferior to the lien of this Deed of Trust.

2.6. Removal of Fixtures. Except as permitted in the Credit Agreement or the
Tranche A Security Agreement, Grantor shall not remove or permit to be removed
from the Real Estate any fixtures presently or in the future owned by Grantor as
the term “fixtures” is defined by the law of the state where the Property is
located (unless such fixtures have been replaced with similar fixtures of equal
or greater utility and value).

2.7. Compliance with Applicable Laws. Grantor agrees to observe, conform and
comply, and to cause its tenants to observe, conform and comply in all material
respects with all applicable federal, state, county, municipal and other
governmental or quasi-governmental laws, rules, regulations, ordinances, codes,
requirements, covenants, conditions, orders, licenses, permits, approvals and
restrictions, including without limitation, Environmental Laws (as defined
below) and the Americans with Disabilities Act of 1990 (collectively, the “Legal
Requirements”), now or hereafter affecting all or any part of the Property, its
occupancy or the business or operations now or hereafter conducted thereon and
the personalty contained therein, within such time as required by such Legal
Requirements to the extent the non-observance, non-conformance or non-compliance
with the Legal Requirements could have a Material Adverse Effect. Grantor
represents and warrants that the Property currently is in compliance in all
material respects with all Legal Requirements applicable to the Property.

2.8. Damage, Destruction and Condemnation.

(a) If all or any part of the Property shall be damaged or destroyed, or if
title to or the temporary use of the whole or any part of the Property shall be
taken or condemned by a competent authority for any public or quasi-public use
or purpose, subject to the terms of the Credit Agreement, there shall be no
abatement or reduction in the amounts payable by Grantor under the Credit
Agreement and Grantor shall continue to be obligated to make such payments.

(b) If all or any part of the Property is partially or totally damaged or
destroyed, Grantor shall give prompt notice thereof to Beneficiary, and
Beneficiary may make proof of loss if not made promptly by Grantor. Grantor
hereby authorizes and directs any affected insurance company to make payment in
excess of $500,000 under such insurance, including return of unearned premiums,
to

 

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Beneficiary instead of to Grantor and Beneficiary jointly, and Grantor appoints
Beneficiary as Grantor’s attorney-in-fact to endorse any draft thereof, which
appointment, being for security, is coupled with an interest and irrevocable.
Beneficiary is hereby authorized and empowered by Grantor to settle, adjust or
compromise, any claim for loss, damage or destruction to the Property if Grantor
does not promptly settle, adjust or compromise such claim. Grantor shall pay all
costs of collection of insurance proceeds payable on account of such damage or
destruction. Grantor shall have no claim against the insurance proceeds, or be
entitled to any portion thereof, and all rights to the insurance proceeds are
hereby assigned to Beneficiary as security for payment of the Liabilities.
Beneficiary and Grantor shall pay or apply all or any part of the insurance
proceeds in accordance with the terms of the Credit Agreement.

(c) Promptly upon obtaining knowledge of the institution of any proceeding for
the condemnation of all or any part of the Property, Grantor shall give notice
to Beneficiary. Grantor shall, at its sole cost and expense, diligently
prosecute any such proceeding and shall consult with Beneficiary, its attorneys
and experts, and shall cooperate with it in the defense of any such proceeding.
Beneficiary may participate in any such proceeding and Grantor shall from time
to time deliver to Beneficiary all instruments requested by it to permit such
participation. Grantor shall not, without Beneficiary’s prior written consent in
accordance with the Credit Agreement, enter into any agreement (i) for the
taking or conveyance in lieu thereof of all or any part of the Property, or
(ii) to compromise, settle or adjust any such proceeding. All awards and
proceeds of condemnation in excess of $500,000 are hereby assigned to
Beneficiary, and Grantor, upon request by Beneficiary, agrees to make, execute
and deliver any additional assignments or documents necessary from time to time
to enable Beneficiary to collect the same. Such awards and proceeds shall be
paid or applied by Beneficiary and Grantor, in accordance with the applicable
provisions of the Credit Agreement.

(d) Nothing herein shall relieve Grantor of its duty to repair, restore, rebuild
or replace the Property following damage or destruction or partial condemnation
if no or inadequate insurance proceeds or condemnation awards are available to
defray the cost of repair, restoration, rebuilding or replacement.

(e) Nothing in this Section 2.8 shall be deemed to limit in any respect the
obligations of the Grantor under any applicable provision of the Credit
Agreement or Other Documents. In the event of any conflict between the terms of
this Section 2.8 and the terms of the Credit Agreement, the term of the Credit
Agreement shall apply.

2.9. Required Notices. Grantor shall notify Beneficiary within five (5) days of:
(a) receipt of any notice from any governmental or quasi-governmental authority
relating to the structure, use or occupancy of the Property or alleging a
violation of any Legal Requirement; (b) a substantial change in the occupancy or
use of all or any part of the Property; (c) receipt of any default notice from
the holder of any lien or security interest in all or any part of the Property;
(d) commencement of any litigation that could have a Material Adverse Effect;
(e) a pending or threatened condemnation of all or any part of the Property;
(f) a fire or other casualty causing damage in excess of $10,000 to all or any
part of the Property; (g) receipt of any notice with regard to any Release of
Hazardous Substances (as such terms are defined below) or any other
environmental matter which could have a Material Adverse Effect; (h) receipt of
any request for information, demand letter or notification of potential
liability from any entity relating to potential responsibility for investigation
or clean-up of Hazardous Substances on the Property or at any other site owned
or operated by Grantor; (i) receipt of any notice from any tenant of all or any
part of the Property alleging a default, failure to perform or any right to
terminate its lease or to set-off rents; or (j) receipt of any notice of the
imposition of, or of threatened or actual execution on, any lien on or security
interest in all or any part of the Property.

 

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3. SECURITY AGREEMENT. This Deed of Trust (i) shall be construed as a Deed of
Trust on real property, and (ii) shall also constitute and serve as a “Security
Agreement” on personal property within the meaning of the Code, and shall
evidence until the grant of this Deed of Trust shall terminate, a first and
prior security interest under the Code as to property within the scope thereof
and in the state where the Property is situated with respect to the Service
Equipment, fixtures, Contracts, Rents and Leases. To this end, Grantor GRANTS
to, has GRANTED, BARGAINED, CONVEYED, ASSIGNED, TRANSFERRED and SET OVER, and by
these presents does GRANT, BARGAIN, CONVEY, ASSIGN, TRANSFER and SET OVER, unto
Trustee and Beneficiary, a first and prior security interest and all of
Grantor’s right, title and interest in, to, under and with respect to the
Service Equipment, fixtures, Contracts, Rents, Leases and Proceeds to secure the
full and timely payment of the Tranche A Notes, and the full and timely
performance and discharge of the Liabilities. It is the intent of Grantor,
Beneficiary and Trustee that this Deed of Trust encumber all Leases and that all
items contained in the definition of “Leases” which are included within the Code
be covered by the security interest granted in this Section 3; and all items
contained in the definition of “Leases” which are excluded from the Code be
covered by the provisions of the grant to Trustee herein. Grantor hereby agrees
with Beneficiary to deliver to Beneficiary, in form and substance reasonably
satisfactory to Beneficiary, such “Financing Statements”, as such term is used
in the Code, and execute and deliver such further assurances as Beneficiary may,
from time to time, reasonably consider necessary to create, perfect, and
preserve Beneficiary’s security interest herein granted, and Tranche A Lenders
may cause such statements and assurances to be recorded and filed, as such times
and places as may be required or permitted by law to so create, perfect and
preserve such security interest. Grantor authorizes Beneficiary to file such
Financing Statements describing such parts of the Property as Beneficiary may
desire. This Deed of Trust shall also constitute a “fixture filing” for the
purposes of the Code. All or part of the Property are or are to become fixtures;
information concerning the security interest herein granted may be obtained from
either party at the address of such party set forth herein. For purposes of the
security interest herein granted, the addresses of debtor (Grantor) and the
secured party (Beneficiary) are set forth in the first paragraph of this Deed of
Trust.

4. ASSIGNMENT OF LEASES.

4.1. Assignment: For good and valuable consideration, including the indebtedness
evidenced by the Tranche A Notes, the receipt and sufficiency of which are
hereby acknowledged and confessed, Grantor has absolutely GRANTED, BARGAINED,
SOLD and CONVEYED, and by these presents does absolutely and unconditionally
GRANT, BARGAIN, SELL and CONVEY the Rents and Leases unto Beneficiary, in order
to provide a source of future payment of the Tranche A Notes and the
Liabilities, subject only to the Permitted Exceptions applicable thereto and the
License (herein defined), it being the intention of Grantor and Beneficiary that
this conveyance be presently effective; TO HAVE AND TO HOLD the Rents and Leases
unto Beneficiary, forever, and Grantor does hereby bind itself, its successors
and assigns to warrant and forever defend the title to the Rents and Leases unto
Beneficiary against every Person whomsoever lawfully claiming or to claim the
same or any part thereof; provided, however, that if Grantor shall pay or cause
to be paid the Tranche A Notes as and when same shall become due and payable and
shall perform and discharge or cause to be performed and discharged the
Liabilities on or before the date same are to be performed and discharged, then
this assignment shall terminate and be of no further force and effect.

4.2. Limited License. Beneficiary hereby grants to Grantor a limited license
(the “License”) subject to termination of the License and the other terms and
provisions of Section 4, to exercise and enjoy all incidences of the status of a
lessor with respect to the Rents and Leases, including the right to collect,
demand, sue for, attach, levy, recover and receive the Rents, and to give proper
receipts, releases and acquittances therefor. Grantor hereby agrees to lawfully
receive all Rents and hold the same as

 

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Beneficiary’s agent (for the limited purposes set forth herein) to be applied,
and to apply the Rents so collected, first to the payment of the Tranche A
Notes, next to the performance and discharge of the Liabilities, and next to the
payment of any operating expenses of the Property. Thereafter, Grantor may use
the balance of the Rents collected in any manner not inconsistent with this Deed
of Trust, the Credit Agreement and the Other Documents. Neither this assignment
nor the receipt of Rents by Beneficiary (except to the extent, if any, that the
Rents are actually applied to the Tranche A Notes by Beneficiary upon and after
such receipt) shall effect a pro tanto payment of the debt evidenced by the
Tranche A Notes, and such Rents shall be applied as provided in Section 4.4
below. Furthermore, and notwithstanding the provisions of Section 4.4, no credit
shall be given by Beneficiary for any Rents until the money collected is
actually received by Beneficiary at its principal office, or at such other place
as Beneficiary shall designate in writing, and no such credit shall be given for
any Rents after termination of the License, after foreclosure or other transfer
of the Property (or part thereof from which Rents are derived pursuant to this
Deed of Trust) to Beneficiary or any other third party.

4.3. Lease Representations and Warranties. Grantor shall timely perform all of
its obligations under the Leases. Grantor represents and warrants that:
(a) Grantor has title to and full right to assign presently, absolutely and
unconditionally the Leases and Rents; (b) no other assignment of any interest in
any of the Leases or Rents has been made; (c) there are no leases or agreements
to lease all or any portion of the Property now in effect except the Leases,
true and complete copies of which have been furnished to Beneficiary, and no
written or oral modifications have been made thereto; (d) there is no existing
default by Grantor or by any tenant under any of the Leases, nor has any event
occurred which due to the passage of time, the giving or failure to give notice,
or both, would constitute a default under any of the Leases and, to the best of
Grantor’s knowledge, no tenant has any defenses, set-offs or counterclaims
against Grantor; (e) the Leases are in full force and effect; and (f) Grantor
has not accepted Rent under any Lease more than thirty (30) days in advance of
its accrual, and payment thereof has not otherwise been forgiven, discounted or
compromised.

4.4. Reliance Upon Lease Rent Notice. Upon receipt from Beneficiary of a Lease
Rent Notice (as defined in Section 10.9 hereof), each lessee under the Leases is
hereby authorized and directed to pay directly to Beneficiary all Rents
thereafter accruing and the receipt of Rents by Beneficiary shall be a release
of such lessee to the extent of all amounts so paid. The receipt by a lessee
under the Leases of a Lease Rent Notice shall be sufficient authorization for
such lessee to make all future payments of Rents directly to Beneficiary and
each such lessee shall be entitled to rely on such Lease Rent Notice and shall
have no liability to Grantor for any Rents paid to Beneficiary after receipt of
such Lease Rent Notice. Rents so received by Beneficiary for any period prior to
foreclosure under this Deed of Trust or acceptance of a deed in lieu of such
foreclosure shall be applied by Beneficiary to the payment of the following (in
such order and priority as Beneficiary shall determine): (i) all expenses
relating to the operation of the Property; (ii) all expenses incident to taking
and retaining possession of the Property and/or collecting Rent as it becomes
due and payable; and (iii) the Secured Obligations in the manner set forth in
Section 5.08 of the Tranche A Security Agreement. In no event will the
provisions of this Section 4 reduce the Tranche A Notes except to the extent, if
any, that Rents are actually received by Beneficiary and applied upon or after
said receipt to the Tranche A Notes in accordance with the preceding sentence.
Without impairing its rights hereunder, Beneficiary may, at its option, at any
time and from time to time, release to Grantor, Rents so received by Beneficiary
or any part thereof. As between Grantor and Beneficiary, and any person claiming
through or under Grantor, other than any lessee under the Leases who has not
received a Lease Rent Notice, this assignment is intended to be absolute,
unconditional and presently effective (and not an assignment for additional
security), and the Lease Rent Notice hereof is intended solely for the benefit
of each such lessee and shall never inure to the benefit of Grantor or any
person claiming through or under Grantor, other than a lessee who has not
received such notice. It shall never be necessary for Beneficiary to institute
legal proceedings of any

 

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kind whatsoever to enforce the provisions of this Deed of Trust with respect to
Rents. GRANTOR SHALL HAVE NO RIGHT OR CLAIM AGAINST ANY LESSEE FOR THE PAYMENT
OF ANY RENTS TO BENEFICIARY HEREUNDER, AND GRANTOR HEREBY INDEMNIFIES AND AGREES
TO HOLD FREE AND HARMLESS EACH LESSEE FROM AND AGAINST ALL LIABILITY, LOSS,
COST, DAMAGE OR EXPENSE SUFFERED OR INCURRED BY SUCH LESSEE BY REASON OF SUCH
LESSEE’S COMPLIANCE WITH ANY DEMAND FOR PAYMENT OF RENTS MADE BY BENEFICIARY
CONTEMPLATED BY THIS DEED OF TRUST.

5. DECLARATION OF NO OFFSET. Grantor represents to Beneficiary that Grantor has
no knowledge of any offsets, counterclaims or defenses to the Liabilities either
at law or in equity. Grantor shall, within ten (10) days after written request,
furnish to Beneficiary or Beneficiary’s designee a written statement in form
reasonably satisfactory to Beneficiary stating the amount due under the
Liabilities and whether, to Grantor’s knowledge, there are offsets or defenses
against the same, and if so, the nature and extent thereof.

6. ENVIRONMENTAL MATTERS.

6.1. Definitions. As used herein, “Environmental Laws” shall mean all applicable
existing or future federal, state and local statutes, ordinances, regulations,
rules, executive orders, standards and requirements, including the requirements
imposed by common law, concerning or relating to industrial hygiene and the
protection of health and the environment including but not limited to: (a) those
relating to the generation, manufacture, storage, transportation, disposal,
release, emission or discharge of Hazardous Substances (as hereinafter defined);
(b) those in connection with the construction, fuel supply, power generation and
transmission, waste disposal or any other operations or processes relating to
the Property; and (c) those relating to the atmosphere, soil, surface and ground
water, wetlands, stream sediments and vegetation on, under, in or about the
Property. Any terms mentioned herein which are defined in any Environmental Law
shall have the meanings ascribed to such terms in said laws; provided, however,
that if any of such laws are amended so as to broaden any term defined therein,
such broader meaning shall apply subsequent to the effective date of such
amendment.

6.2. Representations, Warranties and Covenants. Except as disclosed in that
certain Phase I Environmental Site Assessment Update dated February 18, 2003
prepared by URS Corporation (a copy of which has been provided to Beneficiary by
Grantor), Grantor represents, warrants, covenants and agrees as follows:

(a) To Grantor’s knowledge, neither Grantor nor the Property or any occupant
thereof is in material violation of or subject to any existing, pending or
threatened investigation or inquiry by any governmental authority pertaining to
any Environmental Law. Grantor shall not cause or permit the Property to be in
violation in any material respect of, or do anything which would subject the
Property to any remedial obligations under, any Environmental Law, and shall
promptly notify Beneficiary in writing of any existing, pending or threatened
investigation or inquiry of which Grantor has knowledge by any governmental
authority in connection with any Environmental Law. In addition, Grantor shall
provide Beneficiary with copies of any and all material written communications
with any governmental authority in connection with any violation of any
Environmental Law, concurrently with Grantor’s giving or promptly after
Grantor’s receiving of same.

(b) To Grantor’s knowledge, no material release, spill, discharge, leak,
disposal or emission (individually a “Release” and collectively, “Releases”) of
a Hazardous Materials (as defined in the Credit Agreement), including gasoline,
petroleum products, explosives, toxic substances, solid wastes

 

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and radioactive materials in any material amount (collectively, “Hazardous
Substances”) has occurred, nor are there any visible signs of, any Release(s)
at, upon, under or within the Property. During the term of this Deed of Trust,
to the extent required by any Environmental Laws, Grantor shall remove or
remediate any Release at the Property promptly upon discovery at its sole cost
and expense.

(c) To Grantor’s knowledge, the Property has never been used by the previous
owners and/or operators nor has it or will it be used by Grantor during the term
of this Deed of Trust to refine, produce, store, handle, transfer, process,
transport, generate, manufacture, heat, treat, recycle or dispose of Hazardous
Substances, except for such quantities as are handled in accordance with
applicable manufacturers’ instructions and Environmental Laws and in proper
storage containers as are necessary for the operation of the commercial business
of Grantor or its tenants (“Permitted Substances”).

(d) The Property: (i) is being and has been operated by Grantor in compliance in
all material respects with all Environmental Laws, and all permits required
thereunder have been obtained and complied with in all material respects; and
(ii) does not have any Hazardous Substances present excepting Permitted
Substances.

(e) Grantor will, and will cause its tenants to, operate the Property in
material compliance with all Environmental Laws and, other than Permitted
Substances, will not place or permit to be placed any Hazardous Substances on
the Property.

(f) During Grantor’s period of ownership of the Real Estate, and to Grantor’s
knowledge prior thereto, no lien has been attached to or threatened to be
imposed upon the Property, and, to Grantor’s knowledge, there is no basis for
the imposition of any such lien based on any governmental action under
Environmental Laws. In the event that any environmental lien is filed against
the Property, Grantor shall, within thirty (30) days from the date that Grantor
is given notice of such lien (or within such shorter period of time as is
appropriate in the event that steps have commenced to have the Property sold),
either: (i) pay the claim and remove the lien from the Property; or (ii) furnish
a cash deposit, bond or other security reasonably satisfactory in form and
substance to Beneficiary in an amount sufficient to discharge the claim out of
which the lien arises.

6.3. Right to Inspect and Cure. To the extent provided in the Tranche A Security
Agreement, Beneficiary shall have the right to conduct or have conducted by its
agents or contractors such environmental inspections, audits and tests as
Beneficiary shall deem necessary or advisable from time to time at the sole cost
and expense of Grantor.

Nothing in this Article 6 shall be deemed to limit in any respect the
obligations of the Grantor under any applicable provision of the Tranche A
Security Agreement.

7. INTENTIONALLY DELETED

8. REMEDIES. If an Event of Default (as defined in the Credit Agreement) shall
have occurred, Beneficiary may take any of the following actions:

8.1. Acceleration. Beneficiary may exercise all rights and remedies under the
Credit Agreement.

8.2. Possession. Beneficiary may enter upon and take possession of the Property,
with or without legal action, lease the Property and, after deducting all
out-of-pocket costs of collection and administration expense, apply the net
rentals to any one or more of the following items in such manner and in such
order of priority as Beneficiary, in Beneficiary’s sole discretion, may elect:
the payment of

 

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any sums due under any prior lien, taxes, water and sewer rents, charges and
claims, insurance premiums and all other carrying charges, to the maintenance,
repair or restoration of the Property, or on account of the Liabilities.
Beneficiary is given full authority to do any act which Grantor could do in
connection with the management and operation of the Property. This covenant is
effective either with or without any action brought to foreclose this Deed of
Trust and without applying for a receiver of such rents. In addition to the
foregoing, upon the occurrence of an Event of Default, Grantor shall pay monthly
in advance to Beneficiary or to any receiver appointed to collect said rents the
fair and reasonable rental value for Grantor’s use and occupation of the
Property, and upon default in any such payment Grantor shall vacate and
surrender the possession of the Property to Beneficiary or to such receiver. If
Grantor does not vacate and surrender the Property then Grantor may be evicted
by summary proceedings.

8.3. Foreclosure. Beneficiary may institute any one or more actions of
foreclosure against all or any part of the Property, or take such other action
at law, equity or by contract for the enforcement of this Deed of Trust and
realization on the security herein or elsewhere provided for, as the law may
allow, and may proceed therein to final judgment and execution for the entire
unpaid balance of the Liabilities. The unpaid balance of any judgment shall bear
interest at the greater of (a) the statutory rate provided for judgments, or
(b) the rate borne by the Tranche A Loans. Without limiting the foregoing,
Beneficiary may cause the foreclosure of this Deed of Trust and exercise its
rights as a secured party for all or any portion of the Liabilities which are
then due and payable, subject to the continuing lien of this Deed of Trust for
the balance not then due and payable. In case of any sale of the Property by
judicial proceedings, the Property may be sold in one parcel or in such parcels,
manner or order as Beneficiary in its sole discretion may elect. Grantor, for
itself and anyone claiming by, through or under it, hereby agrees that
Beneficiary shall in no manner, in law or in equity, be limited, except as
herein provided, in the exercise of its rights in the Property or in any other
security hereunder or otherwise appertaining to the Liabilities or any other
obligation secured by this Deed of Trust, whether by any statute, rule or
precedent which may otherwise require said security to be marshalled in any
manner and Grantor, for itself and others as aforesaid, hereby expressly waives
and releases any right to or benefit thereof. The failure to make any tenant a
defendant to a foreclosure proceeding shall not be asserted by Grantor as a
defense in any proceeding instituted by Beneficiary to collect the Liabilities
or any deficiency remaining unpaid after the foreclosure sale of the Property.

8.4. Appointment of Receiver. Upon the occurrence of an Event of Default,
Beneficiary, as a matter of right and without regard to the then value of the
Property or the adequacy of any security for the Liabilities, shall have the
right to apply to any court having jurisdiction to appoint a receiver or
receivers for the Property, and Grantor hereby irrevocably consents to such
appointment. Any such receiver or receivers shall have all the usual powers and
duties of receivers in like or similar cases and all the powers and duties of
Beneficiary in case of entry as provided herein. Grantor agrees to promptly
deliver to any such receiver all Leases, Rents, Contracts, documents, financial
data and other information requested by such receiver in connection with the
Property and, without limiting the foregoing, Grantor hereby authorizes
Beneficiary to deliver to any such receiver any or all of the Leases, Rents,
Contracts, documents, data and information in Beneficiary’s possession relating
to the Property.

8.5. Rights as a Secured Party. Beneficiary shall have, in addition to other
rights and remedies available at law or in equity, the rights and remedies of a
secured party under the Code. Beneficiary may elect to foreclose such of the
Property as then comprise fixtures pursuant either to the law applicable to
foreclosure of an interest in real estate or to that applicable to personal
property under the Code. To the extent permitted by law, Grantor waives the
right to any stay of execution and the benefit of all exemption laws now or
hereafter in effect.

 

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8.6. Excess Monies. Beneficiary may apply on account of the Liabilities any
unexpended monies still retained by Beneficiary that were paid by Grantor to
Beneficiary: (a) for the payment of, or as security for the payment of taxes,
assessments or other governmental charges, insurance premiums, or any other
charges; or (b) to secure the performance of some act by Grantor.

8.7. Other Remedies. Beneficiary shall have the right, from time to time, to
bring an appropriate action to recover any sums required to be paid by Grantor
under the terms of this Deed of Trust, as they become due, without regard to
whether or not any other Liabilities shall be due, and without prejudice to the
right of Beneficiary or Trustee thereafter to bring an action of foreclosure, or
any other action, for any default by Grantor existing at the time the earlier
action was commenced. In addition, Beneficiary shall have the right to set-off
all or any part of any amount due by Grantor to Beneficiary under any of the
Liabilities, against any indebtedness, liabilities or obligations owing by
Beneficiary in any capacity to Grantor, including any obligation to disburse to
Grantor any funds or other property on deposit with or otherwise in the
possession, control or custody of Beneficiary.

8.8. Attorney-In-Fact. Grantor hereby constitutes Beneficiary its
attorney-in-fact with full power of substitution to take possession of the
Property upon any Event of Default and, as Beneficiary in its sole discretion
deems necessary or proper, to execute and deliver all instruments required by
Beneficiary to accomplish the disposition of the Property; this power of
attorney is a power coupled with an interest and is irrevocable while any of the
Liabilities are outstanding.

8.9. Waiver. Grantor waives, to the extent permitted by law, (a) the benefit of
all laws now existing or that may hereafter be enacted providing for any
appraisement before sale of any portion of the Property, (b) all rights of
reinstatement, redemption, valuation, appraisement, homestead, moratorium,
exemption, extension, stay of execution, notice of election to mature or declare
due the whole of the Liabilities in the event of foreclosure of the liens hereby
created, (c) all rights and remedies which Grantor may have or be able to assert
by reason of the laws of the State of Texas pertaining to the rights and
remedies of sureties, and (d) any rights, legal or equitable, to require
marshaling of assets or to require foreclosure sales in a particular order.
Without limiting the generality of the preceding sentence, Grantor, on its own
behalf and on behalf of each and every person acquiring any interest in or title
to the Property subsequent to the date of this Deed of Trust, hereby irrevocably
waives, to the extent permitted by law, any and all rights of reinstatement or
redemption from sale or from or under any order, judgment or decree of
foreclosure of this Deed of Trust or under any sale pursuant to any statute
order decree or judgment of any court. Grantor, for itself and for all persons
hereafter claiming through or under it or who may at any time hereafter become
holders of liens junior to the lien of this Deed of Trust, hereby expressly
waives and releases all rights to direct the order in which any of the Property
shall be sold in the event of any sale or sales pursuant hereto and to have any
of the Property and/or any other property now or hereafter constituting security
for any of the indebtedness secured hereby marshaled upon any foreclosure of
this Deed of Trust or of any other security for any of said indebtedness.
Beneficiary shall have the right to determine the order in which any or all of
the Property shall be subjected to the remedies provided herein. Beneficiary
shall have the right to determine the order in which any or all portions of the
Liabilities are satisfied from the proceeds realized upon the exercise of the
remedies provided herein, in accordance with the applicable provisions of the
Tranche A Security Agreement.

8.10. No Liability on Beneficiary. Notwithstanding anything contained in this
Deed of Trust, Beneficiary shall not be obligated to perform or discharge, and
does not undertake to perform or discharge, any obligation, duty or liability of
Grantor, whether under this Deed of Trust, under any of the Leases, under any
Contract or under any other Property, and Grantor shall and does hereby agree to
indemnify against and hold Beneficiary harmless of and from: any and all
liabilities, losses or damages which Beneficiary may incur or pay under or with
respect to any of the Property or under or by reason of

 

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its exercise of rights hereunder; and any and all claims and demands whatsoever
which may be asserted against it by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants or
agreements contained in any of the Property or in any of the contracts,
documents or instruments evidencing or creating any of the Property. Beneficiary
shall not have responsibility for the control, care, management or repair of the
Property or be responsible or liable for any negligence in the management,
operation, upkeep, repair or control of the Property resulting in loss, injury
or death to any tenant, licensee, employee, stranger or other person. No
liability shall be enforced or asserted against Beneficiary in its exercise of
the powers herein granted to it, and Grantor expressly waives and releases any
such liability. Should Beneficiary incur any such liability, loss or damage
under any of the Leases or under or by reason hereof, or in the defense of any
claims or demands, Grantor agrees to reimburse Beneficiary within ten (10) days
after demand for the full amount thereof, including costs, expenses and
reasonable attorneys’ fees. Notwithstanding the foregoing, Beneficiary shall not
be released of liability nor entitled to be indemnified by Grantor for any
liability, loss or damage to the extent arising from any act or omission of
Beneficiary after Beneficiary takes physical possession of the Property or
becomes owner of the Property.

9. MISCELLANEOUS.

9.1. Notices. All notices and communications under this Deed of Trust shall be
in writing and shall be given by either (a) hand-delivery, (b) first class mail
(postage prepaid), or (c) reliable overnight commercial courier (charges
prepaid), to the addresses listed in the preamble of this Deed of Trust. Notice
shall be deemed to have been given and received: (a) if by hand delivery, upon
delivery; (b) if by mail, three (3) business days after the date first deposited
in the United States mail; and (c) if by overnight courier, on the date
scheduled for delivery. A party may change its address by giving written notice
to the other party as specified herein.

9.2. No Property Manager Lien. Any property management agreement for or relating
to all or any part of the Property, whether now in effect or entered into
hereafter by Grantor or on behalf of Grantor, shall contain a subordination
provision whereby the property manager forever and unconditionally subordinates
to the lien of this Deed of Trust any and all mechanic’s lien rights and claims
that it or anyone claiming through or under it may have at any time pursuant to
any statute or law. Such property management agreement or a short form thereof,
including such subordination, shall, at Beneficiary’s request, be recorded with
the office of the recorder of deeds for the county in which the Property is
located. Grantor’s failure to cause any of the foregoing to occur shall
constitute an Event of Default under this Deed of Trust.

9.3. Remedies Cumulative. The rights and remedies of Beneficiary as provided in
this Deed of Trust, in the Credit Agreement or in any Other Document shall be
cumulative and concurrent, may be pursued separately, successively or together,
may be exercised as often as occasion therefor shall arise, and shall be in
addition to any other rights or remedies conferred upon Beneficiary at law or in
equity. The failure, at any one or more times, of Beneficiary to assert the
right to declare the Liabilities due, grant any extension of time for payment of
the Liabilities, take other or additional security for the payment thereof,
release any security, change any of the terms of the Credit Agreement or any of
the Other Documents, or waive or fail to exercise any right or remedy under the
Credit Agreement or any Other Document shall not in any way affect this Deed of
Trust or the rights of Beneficiary.

9.4. No Implied Waiver. Beneficiary shall not be deemed to have modified or
waived any of its rights or remedies hereunder unless such modification or
waiver is in writing and signed by Beneficiary, and then only to the extent
specifically set forth therein. A waiver in one event shall not be construed as
continuing or as a waiver of or bar to such right or remedy on a subsequent
event.

 

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9.5. Partial Invalidity. The invalidity or unenforceability of any one or more
provisions of this Deed of Trust shall not render any other provision invalid or
unenforceable. In lieu of any invalid or unenforceable provision, there shall be
added automatically a valid and enforceable provision as similar in terms to
such invalid or unenforceable provision as may be possible.

9.6. Binding Effect. The covenants, conditions, waivers, releases and agreements
contained in this Deed of Trust shall bind, and the benefits thereof shall inure
to, the parties hereto and their respective heirs, executors, administrators,
successors and assigns and are intended and shall be held to be real covenants
running with the land; provided, however, that, except in connection with a
transfer expressly permitted by the Credit Agreement or consented to in writing
by Beneficiary, this Deed of Trust cannot be assigned by Grantor without the
prior written consent of Beneficiary, and any such assignment or attempted
assignment by Grantor shall be void and of no effect with respect to
Beneficiary.

9.7. Modifications. This Deed of Trust may not be supplemented, extended,
modified or terminated except by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification or discharge is
sought.

9.8. Governing Law. This Deed of Trust shall be governed, construed, interpreted
and enforced in accordance with the laws of the State of New York, without
regard to principles of conflicts of law, except as to matters relating to the
creation, perfection and enforcement of the liens on and security interests in
the Property (including, without limitation, requests for injunctive relief or
appointment of a receiver) which shall be governed by the laws of the state
where the Property is located.

9.9. Non-Merger. In the event Beneficiary shall acquire title to the Property by
conveyance from Grantor or as a result of foreclosure, this Deed of Trust shall
not merge in the fee estate of the Property but shall remain and continue as an
existing and enforceable lien for the Liabilities secured hereby until the same
shall be released of record by Beneficiary in writing.

9.10. Tax Identification Number. Grantor hereby represents and warrants to
Beneficiary that Grantor’s Federal Tax Identification Number is 52-2140955.

10. STATE SPECIFIC PROVISIONS. If there is any inconsistency in the terms and
provisions elsewhere in this Deed of Trust and the terms and provisions of
Sections 10 and 11, the terms and provisions of those Sections 10 and 11 shall
control.

10.1. Beneficiary’s Remedies Upon Default. Upon the occurrence of an Event of
Default, Beneficiary may, at Beneficiary’s option, and by or through Trustee, by
Beneficiary itself or otherwise, do any one or more of the following actions set
forth in Sections 10.2 through 10.10 hereof:

10.2. Right to Perform Grantor’s Covenants. If Grantor has failed to keep or
perform any covenant whatsoever contained in this Deed of Trust, the Credit
Agreement or the Other Documents, Beneficiary may, but shall not be obligated to
any person to do so, perform or attempt to perform said covenant, and any
payment made or expense incurred in the performance or attempted performance of
any such covenant shall be and become a part of the Liabilities, and Grantor
promises, upon demand, to pay to Beneficiary, at the place where the Liabilities
are payable, all sums so advanced or paid by Beneficiary, with interest from the
date when paid or incurred by Beneficiary at the rate borne by the Tranche A
Loans. No such payment by Beneficiary shall constitute a waiver of any Event of
Default. In addition to the liens and security interests hereof, Beneficiary
shall be subrogated to all rights, titles, liens

 

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and security interests securing the payment of any debt, claim, tax or
assessment for the payment of which Beneficiary may make an advance, or which
Beneficiary may pay.

10.3. Right of Entry. Beneficiary may, prior or subsequent to the institution of
any foreclosure proceedings, enter upon the Property, or any part thereof, and
take exclusive possession of the Property and of all books, records and accounts
relating thereto and to exercise without interference from Grantor any and all
rights which Grantor has with respect to the management, possession, operation,
protection, or preservation of the Property. GRANTOR SHALL AND DOES HEREBY AGREE
TO INDEMNIFY BENEFICIARY FOR, AND TO HOLD BENEFICIARY HARMLESS FROM, ANY AND ALL
LIABILITY, LOSS OR DAMAGE (INCLUDING REASONABLE ATTORNEYS’ FEES), WHICH MAY OR
MIGHT BE INCURRED BY BENEFICIARY UNDER ANY SUCH LEASE OR UNDER OR BY REASON
HEREOF OR THE EXERCISE OF RIGHTS OR REMEDIES HEREUNDER, AND FROM ANY AND ALL
CLAIMS AND DEMANDS WHATSOEVER WHICH MAY BE ASSERTED AGAINST BENEFICIARY BY
REASON OF ANY ALLEGED OBLIGATIONS OR UNDERTAKINGS ON ITS PART TO PERFORM OR
DISCHARGE ANY OF THE TERMS, COVENANTS OR AGREEMENTS CONTAINED IN ANY SUCH LEASE;
PROVIDED, HOWEVER, THAT THE FOREGOING INDEMNITY SHALL NOT APPLY TO ANY ACT OR
OMISSION OF BENEFICIARY OCCURRING AFTER BENEFICIARY BECOMES THE OWNER OF, OR
TAKES POSSESSION OF, THE PROPERTY. Should Beneficiary incur any such liability,
loss or damage, the amount thereof, including costs, expenses and reasonable
attorneys’ fees, together with interest thereon from the date of expenditure
until paid at the rate borne by the Tranche A Loans, shall be secured hereby,
and Grantor shall reimburse Beneficiary therefor immediately upon demand.
Nothing in this subsection shall impose any duty, obligation or responsibility
upon Beneficiary for the control, care, management, leasing or repair of the
Property, nor for the carrying out of any of the terms and conditions of any
such Lease; nor shall it operate to make Beneficiary responsible or liable for
any waste committed on the Property by the tenants or by any other parties, or
for any Hazardous Substances in, on or under the Property, or for any dangerous
or defective condition of the Property or for any negligence in the management,
leasing, upkeep, repair or control of the Property resulting in loss or injury
or death to any tenant, licensee, employee or stranger. Grantor hereby assents
to, ratifies and confirms any and all actions of Beneficiary with respect to the
Property taken under this subsection. The remedies in this subsection are in
addition to other remedies available to Beneficiary and the exercise of the
remedies in this subsection shall not be deemed to be an election of nonjudicial
or judicial remedies otherwise available to Beneficiary. The remedies in this
Section are available under and governed by the real property laws of Texas and
are not governed by the personal property laws of Texas, including the power to
dispose of personal property in a commercially reasonable manner under the Code.
No action by Beneficiary, taken pursuant to this subsection, shall be deemed to
be an election to retain personal property under the Code. Any receipt of
consideration received by Beneficiary pursuant to this subsection shall be
immediately credited against the Liabilities and the value of said consideration
shall be treated like any other payment against the Liabilities.

10.4. Right to Accelerate. Except as expressly provided in the Credit Agreement
and this Deed of Trust, Beneficiary may, without notice, demand, presentment,
notice of nonpayment or nonperformance, protest, notice of protest, notice of
intent to accelerate, notice of acceleration or any other notice or any other
action, all of which are hereby waived by Grantor and all other parties
obligated in any manner whatsoever on the Liabilities, declare the entire unpaid
balance of the Tranche A Notes immediately due and payable, and upon such
declaration, the entire unpaid balance of the Tranche A Notes shall be
immediately due and payable. The failure to exercise any remedy available to
Beneficiary

 

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shall not be deemed to be a waiver of any rights or remedies of Beneficiary
under the Credit Agreement or Other Documents, at law or in equity.

10.5. Foreclosure-Power of Sale. Beneficiary may request Trustee to proceed with
foreclosure under the power of sale which is hereby conferred, such foreclosure
to be accomplished in accordance with the following provisions:

(a) Public Sale. Trustee is hereby authorized and empowered, and it shall be
Trustee’s special duty, upon such request of Beneficiary, to sell the Property,
or any part thereof, at public auction to the highest bidder for cash, with or
without having taken possession of same. Any such sale (including notice
thereof) shall comply with the applicable requirements, at the time of the sale,
of Section 51.002 of the Property Code or, if and to the extent such statute is
not then in force, with the applicable requirements, at the time of the sale, of
the successor statute or statutes, if any, governing sales of Texas real
property under powers of sale conferred by deeds of trust. If there is no
statute in force at the time of the sale governing sales of Texas real property
under powers of sale conferred by deeds of trust, such sale shall comply with
applicable law, at the time of the sale, governing sales of Texas real property
under powers of sale conferred by deeds of trust.

(b) Partial Foreclosure. Sale of a part of the Property shall not exhaust the
power of sale, but sales may be made from time to time until the Liabilities are
paid and the Liabilities are performed and discharged in full. It is intended by
each of the foregoing provisions of this subsection that Trustee may, after any
request or direction by Beneficiary, sell not only the Real Estate and the
Improvements, but also the fixtures and Service Equipment and other interests
constituting a part of the Property or any part thereof, along with the Real
Estate and the Improvements or any part thereof, as a unit and as a part of a
single sale, or may sell at any time or from time to time any part or parts of
the Property separately from the remainder of the Property. It shall not be
necessary to have present or to exhibit at any sale any of the Property.

(c) Trustee’s Deeds. After any sale under this subsection, Trustee shall make
good and sufficient deeds, assignments and other conveyances to the purchaser or
purchasers thereunder in the name of Grantor, conveying the Property or any part
thereof so sold to the purchaser or purchasers with special warranty of title by
Grantor. It is agreed that in any deeds, assignments or other conveyances given
by Trustee, any and all statements of fact or other recitals therein made as to
the identity of Beneficiary, the occurrence or existence of any Event of
Default, the notice of intention to accelerate, or acceleration of, the maturity
of the Indebtedness, the request to sell, notice of sale, time, place, terms and
manner of sale, and receipt, distribution, and application of the money realized
therefrom, the due and proper appointment of a substitute Trustee, and without
being limited by the foregoing, any other act or thing having been duly done by
or on behalf of Beneficiary or by or on behalf of Trustee, shall be taken by all
courts of law and equity as prima facie evidence that such statements or
recitals state true, correct and complete facts and are without further question
to be so accepted, and Grantor does hereby ratify and confirm any and all acts
that Trustee may lawfully do in the premises by virtue hereof.

10.6. Beneficiary’s Judicial Remedies. Beneficiary, or Trustee, upon written
request of Beneficiary, may proceed by suit or suits, at law or in equity, to
enforce the payment of the Liabilities and the performance and discharge of the
Liabilities in accordance with the terms hereof, of the Credit Agreement and the
Other Documents, to foreclose the liens and security interests of this Deed of
Trust as against all or any part of the Property, and to have all or any part of
the Property sold under the judgment or decree of a court of competent
jurisdiction. This remedy shall be cumulative of any other nonjudicial remedies
available to Beneficiary with respect to the Credit Agreement or the Other
Documents.

 

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Proceeding with a request or receiving a judgment for legal relief shall not be
or be deemed to be an election of remedies or bar any available nonjudicial
remedy of Beneficiary.

10.7. Beneficiary’s Right to Appointment of Receiver. Beneficiary, as a matter
of right and without notice to Grantor, without any showing of insolvency, fraud
or mismanagement on the part of Grantor, and without the necessity of filing any
judicial or other proceeding other than the proceeding for appointment of a
receiver, shall be entitled to the appointment of a receiver or receivers of the
Property.

10.8. Beneficiary’s Uniform Commercial Code Remedies. Beneficiary may exercise
its rights of enforcement with respect to Service Equipment, fixtures,
Contracts, Leases, Rents and Proceeds under the Code. Beneficiary may appoint or
delegate any one or more persons as agent to perform any act or acts necessary
or incident to any sale held by Beneficiary, including the sending of notices
and the conduct of the sale, but in the name and on behalf of Beneficiary, and
Beneficiary shall have the right at any time to enforce Grantor’s rights against
account debtors and obligors.

10.9. Rights Relating to Rents. Grantor has, pursuant to this Deed of Trust,
assigned absolutely to Beneficiary all Rents under each of the Leases.
Beneficiary, or Trustee on Beneficiary’s behalf, may at any time, and without
notice, either in person, by agent or by receiver to be appointed by a court,
enter and take possession of the Property or any part thereof, and in its own
name, sue for or otherwise collect the Rents. Grantor hereby agrees that, upon
the occurrence of an Event of Default, the License granted to Grantor shall
automatically terminate, and thereafter Beneficiary may direct the lessees under
the Leases (“Lease Rent Notice”) to pay directly to Beneficiary the Rents due
and to become due under the Leases and attorn in respect of all other
obligations thereunder directly to Beneficiary, or Trustee on Beneficiary’s
behalf, without any obligation on the part of Trustee or Beneficiary to
determine whether an Event of Default does in fact exist or has in fact
occurred. All Rents collected by Beneficiary, or Trustee acting on Beneficiary’s
behalf, shall be applied as provided for in this Deed of Trust; provided,
however, that if the costs, expenses and attorneys’ fees shall exceed the amount
of Rents collected, the excess shall be added to the Liabilities, shall bear
interest at the rate borne by the Tranche A Loans and shall be immediately due
and payable. The entering upon and taking possession of the Property, the
collection of Rents and the application thereof as aforesaid shall not cure or
waive any Event of Default or notice of default, if any, hereunder nor
invalidate any act done pursuant to such notice, except to the extent any such
default is fully cured. Failure or discontinuance by Beneficiary, or Trustee on
Beneficiary’s behalf, at any time or from time to time, to collect said Rents
shall not in any manner impair the subsequent enforcement by Beneficiary, or
Trustee on Beneficiary’s behalf, of the right, power and authority herein
conferred upon it. Nothing contained herein, nor the exercise of any right,
power or authority herein granted to Beneficiary, or Trustee on Beneficiary’s
behalf, shall be, or shall be construed to be, an affirmation by it of any
tenancy, lease, or option, nor an assumption of liability under, nor the
subordination of, the lien or charge of this Deed of Trust, to any such tenancy,
lease or option, nor an election of judicial relief, if any such relief is
requested or obtained as to Leases or Rents, with respect to the Property or any
collateral given by Grantor to Beneficiary. In addition, from time to time
Beneficiary may elect, and notice hereby is given to each lessee under any
Lease, to subordinate the lien of this Deed of Trust to any Lease by
unilaterally executing and recording an instrument of subordination, and upon
such election the lien of this Deed of Trust shall be subordinate to the Lease
identified in such instrument of subordination; provided, however, in each
instance such subordination will not affect or be applicable to, and expressly
excludes any lien, charge, encumbrance, security interest, claim, easement,
restriction, option, covenant and other rights, titles, interests or estates of
any nature whatsoever with respect to all or any part of the Property to the
extent that the same may have arisen or intervened during the period between the
recordation of this Deed of Trust and the execution of the Lease identified in
such instrument of subordination.

 

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10.10. Beneficiary as Purchaser. Beneficiary may be the purchaser of the
Property or any part thereof, at any sale thereof, whether such sale be under
the power of sale herein vested in Trustee or upon any other foreclosure of the
liens and security interests hereof, or otherwise, and Beneficiary shall, upon
any such purchase, acquire good title to the Property so purchased, free of the
liens and security interests hereof, unless the sale was made subject to an
unmatured part of the Indebtedness. Beneficiary, as purchaser, shall be treated
in the same manner as any third party purchaser and the proceeds of
Beneficiary’s purchase shall be applied in accordance with Section 10.11 of this
Deed of Trust.

10.11. Application of Proceeds. The proceeds from any sale, lease or other
disposition made pursuant to this Section 10, or the proceeds from the surrender
of any insurance policies pursuant hereto, or any Rents collected by Beneficiary
from the Property (following any application of such Rents in accordance with
the assignment herein) or sums received pursuant hereto, or proceeds from
insurance which Beneficiary elects to apply to the Liabilities pursuant to this
Deed of Trust, shall be applied by Trustee, or by Beneficiary, as the case may
be, to the Liabilities in the following order and priority: (i) to the payment
of all expenses of advertising, selling and conveying the Property or part
thereof, and/or prosecuting or otherwise collecting rents, proceeds, premiums or
other sums; (ii) to the remainder of the Liabilities, unless otherwise required
by the applicable provisions of the Tranche A Security Agreement, as follows:
first, to the remaining accrued but unpaid interest, second, to the matured part
of principal of the Tranche A Notes, and third, to prepayment of the unmatured
part, if any, of principal of the Tranche A Notes applied to installments of
principal in inverse order of maturity; (iii) the balance, if any and to the
extent applicable, remaining after the full and final payment of the Tranche A
Notes and full performance and discharge of the Liabilities to the holder of any
inferior liens covering the Property, if any, in order of the priority of such
inferior liens (Trustee and Beneficiary shall hereby be entitled to rely
exclusively upon a commitment for title insurance issued to determine such
priority); and (iv) the cash balance, if any, to Grantor. The application of
proceeds of sale or other proceeds as otherwise provided herein shall be deemed
to be a payment of the Liabilities like any other payment. The balance of the
Liabilities remaining unpaid, if any, shall remain fully due and owing in
accordance with the terms of the Credit Agreement or the Other Documents.

10.12. Abandonment of Sale. If a foreclosure hereunder is commenced by Trustee
in accordance with Section 10 of this Deed of Trust, at any time before the
sale, Trustee may abandon the sale, and Beneficiary may then institute suit for
the collection of the Liabilities and for the foreclosure of the liens and
security interests hereof, the Credit Agreement and the Other Documents. If
Beneficiary should institute a suit for the collection of the Liabilities and
for a foreclosure of the liens and security interests, Beneficiary may, at any
time before the entry of a final judgment in said suit, dismiss the same and
require Trustee to sell the Property or any part thereof in accordance with the
provisions of this Deed of Trust.

10.13. Miscellaneous.

(a) Discontinuance of Remedies. In case Beneficiary shall have proceeded to
invoke any right, remedy or recourse permitted under the Credit Agreement or the
Other Documents and shall thereafter elect to discontinue or abandon same for
any reason, Beneficiary shall have the unqualified right so to do, and in such
event, Grantor and Beneficiary shall be restored to their former positions with
respect to the Liabilities, the Credit Agreement and the Other Documents, the
Property or otherwise, and the rights, remedies, recourses and powers of
Beneficiary shall continue as if same had never been invoked.

 

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(b) Other Remedies. In addition to the remedies set forth in this Section 10,
upon the occurrence of an Event of Default, Beneficiary and Trustee shall, in
addition, have all other remedies available to them at law or in equity.

(c) Remedies Cumulative; Non-Exclusive; Etc. All rights, remedies and recourses
of Beneficiary granted in this Deed of Trust, the Credit Agreement and the Other
Documents, any other pledge of collateral or otherwise available at law or
equity: (i) shall be cumulative and concurrent; (ii) may be pursued separately,
successively or concurrently against Grantor, the Property or any one or more of
them, at the sole discretion of Beneficiary; (iii) may be exercised as often as
occasion therefor shall arise, it being agreed by Grantor that the exercise or
failure to exercise any of same shall in no event be construed as a waiver or
release thereof or of any other right, remedy or recourse; (iv) shall be
nonexclusive; (v) shall not be conditioned upon Beneficiary exercising or
pursuing any remedy in relation to the Property prior to Beneficiary bringing
suit to recover the Liabilities or suit on the Liabilities; and (vi) if
Beneficiary elects to bring suit on the Liabilities and/or the Liabilities and
obtains a judgment against Grantor prior to exercising any remedies in relation
to the Property, all liens and security interests, including the lien of this
Deed of Trust, shall remain in full force and effect and may be exercised at
Beneficiary’s option.

(d) Partial Release; Etc. Beneficiary may release, regardless of consideration,
any part of the Property without, as to the remainder, in any way impairing,
affecting, subordinating or releasing the lien or security interests evidenced
by this Deed of Trust, the Credit Agreement or the Other Documents or affecting
the obligations of Grantor or any other party to pay the Liabilities or perform
and discharge the Liabilities. For payment of the Liabilities, Beneficiary may
resort to any of the collateral therefor in such order and manner as Beneficiary
may elect. No collateral heretofore, herewith or hereafter taken by Beneficiary
shall in any manner impair or affect the collateral given pursuant to this Deed
of Trust, the Credit Agreement and the Other Documents, and all collateral shall
be taken, considered and held as cumulative.

(e) Waiver and Release by Grantor. Grantor hereby irrevocably and
unconditionally waives and releases: (i) all benefits that might accrue to
Grantor by virtue of any present or future law exempting the Property from
attachment, levy or sale on execution or providing for any appraisement,
valuation, stay of execution, exemption from civil process, redemption or
extension of time for payment; (ii) except as expressly provided in this Deed of
Trust, the Credit Agreement or the Other Documents, all notices of any Event of
Default or of Trustee’s exercise of any right, remedy or recourse provided for
under this Deed of Trust, the Credit Agreement and the Other Documents; and
(iii) any right to a marshaling of assets or a sale in inverse order of
alienation.

(f) Real Property Laws Govern. The remedies in this Section shall be available
under and governed by the real property laws of Texas and shall not be governed
by the personal property laws of Texas provided Beneficiary elects to proceed as
to the Service Equipment, Contracts, Rents, Leases, Proceeds and fixtures
together with the other Property under and pursuant to the real property
remedies of this Section.

11. CONCERNING THE TRUSTEE

11.1. No Required Action. Trustee shall not be required to take any action
toward the execution and enforcement of the trust hereby created or to
institute, appear in or defend any action, suit or other proceeding in
connection therewith where, in Trustee’s opinion, such action would be likely to
involve Trustee in expense or liability, unless requested so to do by a written
instrument signed by Beneficiary and, if Trustee so requests, unless Trustee is
tendered security and indemnity satisfactory to

 

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Trustee against any and all cost, expense and liability arising therefrom.
Trustee shall not be responsible for the execution, acknowledgment or validity
of this Deed of Trust, the Credit Agreement or the Other Documents, or for the
proper authorization thereof, or for the sufficiency of the lien and security
interest purported to be created hereby, and Trustee makes no representation in
respect thereof or in respect of the rights, remedies and recourses of
Beneficiary.

11.2. Certain Rights. With the approval of Beneficiary, Trustee shall have the
right to take any and all of the following actions: (i) to select, employ and
advise with counsel (who may be, but need not be, counsel for Beneficiary) upon
any matters arising hereunder, including the preparation, execution, and
interpretation of this Deed of Trust, the Credit Agreement and the Other
Documents, and shall be fully protected in relying as to legal matters on the
advice of counsel; (ii) to execute any of the trusts and powers hereof and to
perform any duty hereunder either directly or through his agents or attorneys;
(iii) to select and employ, in and about the execution of his duties hereunder,
suitable accountants, engineers and other experts, agents and attorneys-in-fact,
either corporate or individual, not regularly in the employ of Trustee, and
Trustee shall not be answerable for any act, default, negligence or misconduct
of any such accountant, engineer or other expert, agent or attorney-in-fact, if
selected with reasonable care, or for any error of judgment or act done by
Trustee in good faith, or be otherwise responsible or accountable under any
circumstances whatsoever, except for Trustee’s gross negligence or bad faith;
and (iv) any and all other lawful action as Beneficiary may instruct Trustee to
take to protect or enforce Beneficiary’s rights hereunder. Trustee shall not be
personally liable in case of entry by Trustee, or anyone entering by virtue of
the powers herein granted to Trustee, upon the Property for debts contracted for
or liability or damages incurred in the management or operation of the Property.
Trustee shall have the right to rely on any instrument, document or signature
authorizing or supporting any action taken or proposed to be taken by Trustee
hereunder, believed by Trustee in good faith to be genuine. Trustee shall be
entitled to reimbursement for expenses incurred by Trustee in the performance of
Trustee’s duties hereunder and to reasonable compensation for such of Trustee’s
services hereunder as shall be rendered.

11.3. Retention of Money. All monies received by Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated in any manner from any other monies
(except to the extent required by applicable law) and Trustee shall be under no
liability for interest on any monies received by Trustee hereunder.

11.4. Successor Trustees. Trustee may resign by the giving of notice of such
resignation in writing or verbally to Beneficiary. If Trustee shall die, resign
or become disqualified from acting in the execution of this trust, or if, for
any reason, Beneficiary shall prefer to appoint a substitute trustee or multiple
substitute trustees, or successive substitute trustees or successive multiple
substitute trustees, to act instead of the aforenamed Trustee, Beneficiary shall
have full power to appoint a substitute trustee (or, if preferred, multiple
substitute trustees) in succession who shall succeed (and if multiple substitute
trustees are appointed, each of such multiple substitute trustees shall succeed)
to all the estates, rights, powers and duties of the aforenamed Trustee. Such
appointment may be executed by any authorized agent of Beneficiary, and if such
Beneficiary be a corporation and such appointment be executed in its behalf by
any officer of such corporation, such appointment shall be conclusively presumed
to be executed with authority and shall be valid and sufficient without proof of
any action by the board of directors or any superior officer of the corporation.
Grantor hereby ratifies and confirms any and all acts which the aforenamed
Trustee, or Trustee’s successor or successors in this trust, shall do lawfully
by virtue hereof. If multiple substitute trustees are appointed, each of such
multiple substitute trustees shall be empowered and authorized to act alone
without the necessity of the joinder of the other multiple

 

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substitute trustees, whenever any action or undertaking of such substitute
trustees is requested or required under or pursuant to this Deed of Trust or
applicable law.

11.5. Perfection of Appointment. Should any deed, conveyance, or instrument of
any nature be required from Grantor by any Trustee or substitute trustee to more
fully and certainly vest in and confirm to Trustee or the substitute trustee
such estates, rights, powers and duties, then, upon request by Trustee or the
substitute trustee, any and all such deeds, conveyances and instruments shall be
made, executed, acknowledged, and delivered and shall be caused to be recorded
and/or filed by Grantor.

11.6. Succession Instruments. Any substitute trustee appointed pursuant to any
of the provisions hereof shall, without any further act, deed or conveyance,
become vested with all the estates, properties, rights, powers, and trusts of
its or his predecessor in the rights hereunder with like effect as if originally
named as Trustee herein; but nevertheless, upon the written request of
Beneficiary or of the substitute trustee, the trustee ceasing to act shall
execute and deliver any instrument transferring to such substitute trustee, upon
the trusts herein expressed, all the estates, properties, rights, powers, and
trusts of the trustee so ceasing to act, and shall duly assign, transfer and
deliver any of the property and monies held by such trustee to the substitute
trustee so appointed in the trustee’s place.

11.7. No Representation by Trustee or Beneficiary. By accepting or approving
anything required to be observed, performed or fulfilled or to be given to
Trustee or Beneficiary pursuant to this Deed of Trust, the Credit Agreement and
the Other Documents, including any officer’s certificate, balance sheet,
statement of profit and loss or other financial statement, survey, appraisal or
insurance policy, neither Trustee nor Beneficiary shall be deemed to have
warranted, consented to or affirmed the sufficiency, legality, effectiveness or
legal effect of the same, or of any term, provision or condition thereof, and
such acceptance or approval thereof shall not be or constitute any warranty or
affirmation with respect thereto by Trustee or Beneficiary.

[Continued on following page]

 

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IN WITNESS WHEREOF, Grantor, intending to be legally bound, has duly executed
and delivered this Deed of Trust as of the day and year first above written.

 

GRANTOR:

WINCUP TEXAS, LTD., a Texas limited partnership

By:  

WinCup GP, L.L.C., a Delaware limited liability

company, its general partner

  By:   WinCup Holdings, Inc., a Delaware corporation, its sole member    

By:

 

/s/ Michael T. Kennedy

   

Name:

 

Michael T. Kennedy

   

Title:

 

President and CEO

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COMMONWEALTH OF PENNSYLVANIA

   )         )      SS.

COUNTY OF DELAWARE

   )     

I CERTIFY that Michael T. Kennedy, the President and CEO of WinCup Holdings,
Inc., a Delaware corporation which is the sole member of WinCup GP, L.L.C., a
Delaware limited liability company which is the sole general partner of WINCUP
TEXAS, LTD., a Texas limited partnership, personally appeared before me, who is
known to me or satisfactorily proven to be the person who signed the foregoing
instrument and acknowledged that he/she was authorized to execute the same on
behalf of said corporation in such capacity.

GIVEN under my hand and official seal this 1st day of December, 2005.

 

     

/s/ Susan E. Dear

    Notary Public

Commission expires January 8, 2009.

    [SEAL]

Notarial Seal

Susan E. Dear, Notary Public

Bethel Twp., Delaware County

My commission expires January 8, 2009

   

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SCHEDULE A

Legal Description

That certain real property located at 400 East Minton Road, in the City of
Saginaw, County of Tarrant, State of Texas 76131, more particularly described as
follows:

TRACT 1:

Description of a 8.360 acre tract of land out of the David C. Strickland Survey,
Abstract No. 1408, Tarrant County, Texas, and being part of a 309.7 acre tract
of land conveyed to the Fort Worth and Denver Railway Company by deed recorded
in Volume 3260, Page 85, Deed Records, Tarrant County, Texas, said 8.360 acre
tract of land being that tract conveyed to Texstyrene Plastics, Inc. by deed
recorded in Volume 7085, Page 1712, Deed Records, Tarrant County, Texas, and to
TPI Plastics Company by Deed recorded in Volume 7318, Page 2165, Deed Records,
Tarrant County, Texas, and being Part of Lot 1, Block 1, of the TEXSTYRENE
ADDITION, an Addition to the City of Saginaw, recorded by plat in Volume
388-206, Page 13 Plat Records, Tarrant County, Texas, said 8.360 acre tract
being situated in the City of Saginaw and being more particularly described as
follows:

BEGINNING at a  1/2 inch iron rod found on the Easterly right of way line of
County Road 4043 (Jarvis Road) and the Westerly line of said 309.7 acre tract,
said point being North 02 degrees 13 minutes 00 seconds East, a distance of
95.00 feet from the intersection of said line of County Road 4043 with the
Northwesterly right of way line of Minton Road, said reference point being
called a distance of 92.96 feet from the Westerly Southwest corner of said 309.7
acre tract and the Northwest corner of a 37.15 acre tract conveyed to Willard W.
Garvey by deed recorded in Volume 3020, Page 608, Deed Records, Tarrant County,
Texas;

THENCE North 02 degrees 13 minutes 00 seconds East, with the said Easterly right
of way line of County Road 4043 and the Westerly line of said 309.7 acre tract,
a distance of 829.62 feet (plat distance 830.08 feet) to a  1/2 inch iron rod
found for corner;

THENCE South 88 degrees 05 minutes 00 seconds East, a distance of 352.11 feet
(Deed distance 351.77 feet) to a point for corner;

THENCE South 34 degrees 00 minutes 00 seconds East, a distance of 539.43 feet
(Deed distance 540.00 feet) to a  1/2 inch iron rod with a cap found for corner;

THENCE South 56 degrees 00 minutes 00 seconds West, a distance of 198.30 feet to
a  3/4 inch iron rod found for corner, said point being at the Beginning of a
curve to the left whose center bears South 10 degrees 08 minutes 12 seconds
East, a distance of 393.06 feet from said point;

THENCE in a Westerly direction with said curve to the left through a central
angle of 23 degrees 49 minutes 36 seconds, an arc length of 163.46 feet to a
 1/2 inch iron rod found at the end of said curve, said point being 10 feet
North of and perpendicular to the centerline of a railroad spur track;

THENCE South 56 degrees 03 minutes 00 seconds West, 10 feet from and parallel to
the centerline of said railroad spur track, a distance of 202.04 feet to a  1/2
inch iron rod found at the beginning of a non-tangent curve to the right whose
center bears North 34 degrees 03 minutes 39 seconds West, a distance of 563.69
feet from said point;

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THENCE in a Westerly direction with said curve to the right through a central
angle of 22 degrees 33 minutes 06 seconds, an arc length of 221.87 feet to the
POINT OF BEGINNING, containing 364,161 square feet or 8.360 acres of land, more
or less.

TRACT 2:

Description of a 1.931 acre tract of land out of the David C. Strickland Survey,
Abstract No. 1408, Tarrant County, Texas, and bring part of a 309.7 acre tract
of land conveyed to the Fort Worth and Denver Railway Company by deed recorded
in Volume 3260, Page 85, Deed Records, Tarrant County, Texas, said 1.931 acre
tract of land being that tract conveyed to Texstyrene Plastics, Inc. by deed
recorded in Volume 8725, Page 478, Deed Records, Tarrant County, Texas, and
being Part of Lot 1, Block 1, of the TEXSTYRENE ADDITION, an Addition to the
City of Saginaw, recorded by plat in Volume 388-206, Page 13 Plat Records,
Tarrant County, Texas, said 1.931 acre tract being situated in the City of
Saginaw and being more particularly described as follows:

BEGINNING at a  1/2 inch iron rod found on the Easterly right of way line of
County Road 4043 (Jarvis Road) and the Westerly line of said 309.7 acre tract,
said point being North 02 degrees 13 minutes 00 seconds East, a distance of
924.62 feet from the intersection of said line of County Road 4043 with the
Northwesterly right of way line of Minton Road, said referenced point being
called a distance of 92.96 feet from the Westerly Southwest corner of said 309.7
acre tract and the Northwest corner of a 37.15 acre tract conveyed to Willard W.
Garvey by deed recorded in Volume 3020, Page 608, Deed Records, Tarrant County,
Texas;

THENCE North 02 degrees 13 minutes 15 seconds East, with said Easterly right of
way line of County Road 4043 and the Westerly line of said 309.7 acre tract, a
distance of 180.73 feet to a  1/2 inch iron rod found for corner, said point
being on the Southerly line of a 50 foot drainage easement as recorded in Volume
388-176, Page 12, Plat Records, Tarrant County, Texas;

THENCE South 87 degrees, 56 minutes, 53 seconds East, with the South line of
said drainage easement, a distance of 396.58 feet to a  1/2 -inch iron rod found
for corner;

THENCE South 42 degrees 56 minutes 49 seconds East, with the South line of said
drainage easement (70 feet wide along this line) a distance of 40.23 feet to a
 1/2 inch iron rod found for corner;

THENCE South 02 degrees 03 minutes 07 seconds West, leaving the said south line
of said drainage easement, a distance of 47.05 feet to a  1/2 inch iron rod
found at the beginning of a non-tangent curve to the left whose center bears
South 87 degrees 59 minutes 24 seconds East, a distance of 639.59 feet from said
point;

THENCE in a Southerly direction and with said curve to the left through a
central angle of 32 degrees 14 minutes 01 seconds, an arc length of 359.82 feet
(plat length 360.29 feet) to a  1/2 inch iron rod with cap found at the end of
said curve for corner; said point being on the Easterly line of a 8.381 acre
tract conveyed to Texstyrene Plastics, Inc. by deed recorded in Volume 7085,
Page 1712, Deed Records, Tarrant County, Texas;

THENCE North 34 degrees 00 minutes 00 seconds West, with the said Easterly line
of said 8.381 acre tract, a distance of 292.73 feet (deed Call North 34 degrees
02 minutes 09 seconds West, 295.17 feet) to a point for corner;

THENCE North 88 degrees 05 minutes 00 seconds West, with the North line of said
8.381 acre tract, a distance of 352.11 feet (Deed called North 88 degrees 06
minutes 46 seconds West, 351.31 feet) to the POINT OF BEGINNING, Containing
84,127 square feet or 1.931 acres of land, more or less.